[Federal Register Volume 74, Number 19 (Friday, January 30, 2009)]
[Rules and Regulations]
[Pages 5740-5779]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-1835]
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Part II
Reader Aids
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Cumulative List of Public Laws
110th Congress, Second Session
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CUMULATIVE LIST OF PUBLIC LAWS
This is the cumulative list of public laws for the 110th Congress,
Second Session. Other cumulative lists (1993-2008) are available online
at http://www.archives.gov/federal-register/laws/past/index.html.
Comments may be addressed to the Director, Office of the Federal
Register, Washington, DC 20408 or send e-mail to [email protected].
The text of laws may be ordered in individual pamphlet form
(referred to as ``slip laws'') from the Superintendent of Documents,
U.S. Government Printing Office, Washington, DC 20402 (phone, 202-512-
2470). The text will also be made available on the Internet from GPO
Access at http://www.gpoaccess.gov/plaws/index.html. Some laws may not
yet be available online or for purchase.
Public Law Title Approved 122 Stat.
110-181......... National Defense Authorization Act for Fiscal Year 2008.... Jan. 28, 2008........ 3
110-182......... To extend the Protect America Act of 2007 for 15 days...... Jan. 31, 2008........ 605
110-183......... Commission on the Abolition of the Transatlantic Slave Feb. 5, 2008......... 606
Trade Act.
110-184......... To designate the facility of the United States Postal Feb. 6, 2008......... 612
Service located at 427 North Street in Taft, California,
as the ``Larry S. Pierce Post Office''.
110-185......... Economic Stimulus Act of 2008.............................. Feb. 13, 2008........ 613
110-186......... Military Reservist and Veteran Small Business Feb. 14, 2008........ 623
Reauthorization and Opportunity Act of 2008.
110-187......... Do-Not-Call Improvement Act of 2007........................ Feb. 15, 2008........ 633
110-188......... Do-Not-Call Registry Fee Extension Act of 2007............. Feb. 15, 2008........ 635
110-189......... Cameron Gulbransen Kids Transportation Safety Act of 2007.. Feb. 28, 2008........ 639
110-190......... Airport and Airway Extension Act of 2008................... Feb. 28, 2008........ 643
110-191......... Andean Trade Preference Extension Act of 2008.............. Feb. 29, 2008........ 646
110-192......... To provide for the continued minting and issuance of Feb. 29, 2008........ 648
certain $1 coins in 2008.
110-193......... To make technical corrections to the Federal Insecticide, Mar. 6, 2008......... 649
Fungicide, and Rodenticide Act.
110-194......... To designate the facility of the United States Postal Mar. 11, 2008........ 651
Service located at 59 Colby Corner in East Hampstead, New
Hampshire, as the ``Captain Jonathan D. Grassbaugh Post
Office''.
110-195......... To designate the facility of the United States Postal Mar. 12, 2008........ 652
Service known as the Southpark Station in Alexandria,
Louisiana, as the John ``Marty'' Thiels Southpark Station,
in honor and memory of Thiels, a Louisiana postal worker
who was killed in the line of duty on October 4, 2007.
110-196......... To extend agricultural programs beyond March 15, 2008, to Mar. 14, 2008........ 653
suspend permanent price support authorities beyond that
date, and for other purposes.
110-197......... Providing for the appointment of John W. McCarter as a Mar. 14, 2008........ 655
citizen regent of the Board of Regents of the Smithsonian
Institution.
110-198......... Higher Education Extension Act of 2008..................... Mar. 24, 2008........ 656
110-199......... Second Chance Act of 2007: Community Safety Through Apr. 9, 2008......... 657
Recidivism Prevention.
110-200......... To amend Public Law 110-196 to provide for a temporary Apr. 18, 2008........ 695
extension of programs authorized by the Farm Security and
Rural Investment Act of 2002 beyond April 18, 2008.
110-201......... To preserve existing judgeships on the Superior Court of Apr. 18, 2008........ 696
the District of Columbia.
110-202......... Safety of Seniors Act of 2007.............................. Apr. 23, 2008........ 697
110-203......... Congratulating the Army Reserve on its centennial, which Apr. 23, 2008........ 701
will be formally celebrated on April 23, 2008, and
commemorating the historic contributions of its veterans
and continuing contributions of its soldiers to the vital
national security interests and homeland defense missions
of the United States.
110-204......... Newborn Screening Saves Lives Act of 2007.................. Apr. 24, 2008........ 705
110-205......... To amend Public Law 110-196 to provide for a temporary Apr. 25, 2008........ 713
extension of programs authorized by the Farm Security and
Rural Investment Act of 2002 beyond April 25, 2008.
110-206......... Traumatic Brain Injury Act of 2008......................... Apr. 28, 2008........ 714
110-207......... Purple Heart Family Equity Act of 2007..................... Apr. 30, 2008........ 719
110-208......... To amend Public Law 110-196 to provide for a temporary May 2, 2008.......... 720
extension of programs authorized by the Farm Security and
Rural Investment Act of 2002 beyond May 2, 2008.
110-209......... To award a congressional gold medal to Daw Aung San Suu Kyi May 6, 2008.......... 721
in recognition of her courageous and unwavering commitment
to peace, nonviolence, human rights, and democracy in
Burma.
110-210......... To designate the facility of the United States Postal May 7, 2008.......... 723
Service located at 20 Sussex Street in Port Jervis, New
York, as the ``E. Arthur Gray Post Office Building''.
110-211......... To designate the facility of the United States Postal May 7, 2008.......... 724
Service located at 1704 Weeksville Road in Elizabeth City,
North Carolina, as the ``Dr. Clifford Bell Jones, Sr. Post
Office''.
110-212......... To designate the facility of the United States Postal May 7, 2008.......... 725
Service located at 5815 McLeod Street in Lula, Georgia, as
the ``Private Johnathon Millican Lula Post Office''.
110-213......... To designate the facility of the United States Postal May 7, 2008.......... 726
Service located at 424 Clay Avenue in Waco, Texas, as the
``Army PFC Juan Alonso Covarrubias Post Office Building''.
110-214......... To designate the facility of the United States Postal May 7, 2008.......... 727
Service located at 3100 Cashwell Drive in Goldsboro, North
Carolina, as the ``John Henry Wooten, Sr. Post Office
Building''.
110-215......... To designate the facility of the United States Postal May 7, 2008.......... 728
Service located at 116 Helen Highway in Cleveland,
Georgia, as the ``Sgt. Jason Harkins Post Office
Building''.
110-216......... To designate the facility of the United States Postal May 7, 2008.......... 729
Service located at 3701 Altamesa Boulevard in Fort Worth,
Texas, as the ``Master Sergeant Kenneth N. Mack Post
Office Building''.
110-217......... To designate the facility of the United States Postal May 7, 2008.......... 730
Service located at 701 East Copeland Drive in Lebanon,
Missouri, as the ``Steve W. Allee Carrier Annex''.
110-218......... To designate the facility of the United States Postal May 7, 2008.......... 731
Service located at 3035 Stone Mountain Street in Lithonia,
Georgia, as the ``Specialist Jamaal RaShard Addison Post
Office Building''.
110-219......... To designate the facility of the United States Postal May 7, 2008.......... 732
Service located at 725 Roanoke Avenue in Roanoke Rapids,
North Carolina, as the ``Judge Richard B. Allsbrook Post
Office''.
110-220......... To designate the facility of the United States Postal May 7, 2008.......... 733
Service located at 10799 West Alameda Avenue in Lakewood,
Colorado, as the ``Felix Sparks Post Office Building''.
110-221......... To designate the facility of the United States Postal May 7, 2008.......... 734
Service located at 3050 Hunsinger Lane in Louisville,
Kentucky, as the ``Iraq and Afghanistan Fallen Military
Heroes of Louisville Memorial Post Office Building'', in
honor of the servicemen and women from Louisville,
Kentucky, who died in service during Operation Enduring
Freedom and Operation Iraqi Freedom.
[[Page 5733]]
110-222......... To designate the facility of the United States Postal May 7, 2008.......... 735
Service located at 201 West Greenway Street in Derby,
Kansas, as the ``Sergeant Jamie O. Maugans Post Office
Building''.
110-223......... To designate the facility of the United States Postal May 7, 2008.......... 736
Service located at 3800 SW. 185th Avenue in Beaverton,
Oregon, as the ``Major Arthur Chin Post Office Building''.
110-224......... To designate the facility of the United States Postal May 7, 2008.......... 737
Service located at 160 East Washington Street in Chagrin
Falls, Ohio, as the ``Sgt. Michael M. Kashkoush Post
Office Building''.
110-225......... To designate the facility of the United States Postal May 7, 2008.......... 738
Service located at 2650 Dr. Martin Luther King Jr. Street,
Indianapolis, Indiana, as the ``Julia M. Carson Post
Office Building''.
110-226......... To designate the facility of the United States Postal May 7, 2008.......... 739
Service located at 6892 Main Street in Gloucester,
Virginia, as the ``Congresswoman Jo Ann S. Davis Post
Office''.
110-227......... Ensuring Continued Access to Student Loans Act of 2008..... May 7, 2008.......... 740
110-228......... To provide for extensions of leases of certain land by May 8, 2008.......... 753
Mashantucket Pequot (Western) Tribe.
110-229......... Consolidated Natural Resources Act of 2008................. May 8, 2008.......... 754
110-230......... To temporarily extend the programs under the Higher May 13, 2008......... 877
Education Act of 1965.
110-231......... To amend Public Law 110-196 to provide for a temporary May 18, 2008......... 878
extension of programs authorized by the Farm Security and
Rural Investment Act of 2002 beyond May 16, 2008.
110-232......... Strategic Petroleum Reserve Fill Suspension and Consumer May 19, 2008......... 879
Protection Act of 2008.
110-233......... Genetic Information Nondiscrimination Act of 2008.......... May 21, 2008......... 881
110-234......... Food, Conservation, and Energy Act of 2008................. May 22, 2008......... 923
110-235......... To provide for an additional temporary extension of May 23, 2008......... 1552
programs under the Small Business Act and the Small
Business Investment Act of 1958, and for other purposes.
110-236......... To ratify a conveyance of a portion of the Jicarilla Apache May 27, 2008......... 1553
Reservation to Rio Arriba County, State of New Mexico,
pursuant to the settlement of litigation between the
Jicarilla Apache Nation and Rio Arriba County, State of
New Mexico, to authorize issuance of a patent for said
lands, and to change the exterior boundary of the
Jicarilla Apache Reservation accordingly, and for other
purposes.
110-237......... To make technical corrections regarding the Newborn May 27, 2008......... 1556
Screening Saves Lives Act of 2007.
110-238......... To temporarily extend the programs under the Higher May 30, 2008......... 1558
Education Act of 1965.
110-239......... To amend title 4, United States Code, to encourage the June 3, 2008......... 1559
display of the flag of the United States on Father's Day.
110-240......... Protecting Our Children Comes First Act of 2007............ June 3, 2008......... 1560
110-241......... Credit and Debit Card Receipt Clarification Act of 2007.... June 3, 2008......... 1565
110-242......... To make technical corrections to section 1244 of the June 3, 2008......... 1567
National Defense Authorization Act for Fiscal Year 2008,
which provides special immigrant status for certain
Iraqis, and for other purposes.
110-243......... Directing the United States to initiate international June 3, 2008......... 1569
discussions and take necessary steps with other Nations to
negotiate an agreement for managing migratory and
transboundary fish stocks in the Arctic Ocean.
110-244......... SAFETEA-LU Technical Corrections Act of 2008............... June 6, 2008......... 1572
110-245......... Heroes Earnings Assistance and Relief Tax Act of 2008...... June 17, 2008........ 1624
110-246......... Food, Conservation, and Energy Act of 2008................. June 18, 2008........ 1651
110-247......... Federal Food Donation Act of 2008.......................... June 20, 2008........ 2314
110-248......... Local Preparedness Acquisition Act......................... June 26, 2008........ 2316
110-249......... To amend the International Center Act to authorize the June 26, 2008........ 2317
lease or sublease of certain property described in such
Act to an entity other than a foreign government or
international organization if certain conditions are met.
110-250......... To reform mutual aid agreements for the National Capital June 26, 2008........ 2318
Region.
110-251......... Kendell Frederick Citizenship Assistance Act............... June 26, 2008........ 2319
110-252......... Supplemental Appropriations Act, 2008...................... June 30, 2008........ 2323
110-253......... Federal Aviation Administration Extension Act of 2008...... June 30, 2008........ 2417
110-254......... To grant a Federal charter to Korean War Veterans June 30, 2008........ 2419
Association, Incorporated.
110-255......... To authorize the Administrator of the Environmental June 30, 2008........ 2423
Protection Agency to accept, as part of a settlement,
diesel emission reduction Supplemental Environmental
Projects, and for other purposes.
110-256......... To temporarily extend the programs under the Higher June 30, 2008........ 2425
Education Act of 1965.
110-257......... To remove the African National Congress from treatment as a July 1, 2008......... 2426
terrorist organization for certain acts or events, provide
relief for certain members of the African National
Congress regarding admissibility, and for other purposes.
110-258......... To revise the short title of the Fannie Lou Hamer, Rosa July 1, 2008......... 2428
Parks, and Coretta Scott King Voting Rights Act
Reauthorization and Amendments Act of 2006.
110-259......... To award posthumously a Congressional gold medal to July 1, 2008......... 2430
Constantino Brumidi.
110-260......... Edward William Brooke III Congressional Gold Medal Act..... July 1, 2008......... 2433
110-261......... Foreign Intelligence Surveillance Act of 1978 Amendments July 10, 2008........ 2436
Act of 2008.
110-262......... To designate the United States bankruptcy courthouse July 15, 2008........ 2479
located at 271 Cadman Plaza East in Brooklyn, New York, as
the ``Conrad B. Duberstein United States Bankruptcy
Courthouse''.
110-263......... To redesignate Lock and Dam No. 5 of the McClellan-Kerr July 15, 2008........ 2480
Arkansas River Navigation System near Redfield, Arkansas,
authorized by the Rivers and Harbors Act approved July 24,
1946, as the ``Colonel Charles D. Maynard Lock and Dam''.
110-264......... To designate the station of the United States Border Patrol July 15, 2008........ 2482
located at 25762 Madison Avenue in Murrieta, California,
as the ``Theodore L. Newton, Jr. and George F. Azrak
Border Patrol Station''.
110-265......... To designate the facility of the United States Postal July 15, 2008........ 2483
Service located at 1190 Lorena Road in Lorena, Texas, as
the ``Marine Gunnery Sgt. John D. Fry Post Office
Building''.
110-266......... To designate the Port Angeles Federal Building in Port July 15, 2008........ 2484
Angeles, Washington, as the ``Richard B. Anderson Federal
Building''.
110-267......... To designate the facility of the United States Postal July 15, 2008........ 2485
Service located at 11151 Valley Boulevard in El Monte,
California, as the ``Marisol Heredia Post Office
Building''.
110-268......... To designate the facility of the United States Postal July 15, 2008........ 2486
Service located at 19101 Cortez Boulevard in Brooksville,
Florida, as the ``Cody Grater Post Office Building''.
110-269......... To designate the facility of the United States Postal July 15, 2008........ 2487
Service located at 11001 Dunklin Drive in St. Louis,
Missouri, as the ``William `Bill' Clay Post Office
Building''.
[[Page 5734]]
110-270......... To designate the facility of the United States Postal July 15, 2008........ 2488
Service located at 117 North Kidd Street in Ionia,
Michigan, as the ``Alonzo Woodruff Post Office Building ''.
110-271......... To designate the facility of the United States Postal July 15, 2008........ 2489
Service located at 7231 FM 1960 in Humble, Texas, as the
``Texas Military Veterans Post Office''.
110-272......... To designate the facility of the United States Postal July 15, 2008........ 2490
Service located at 120 Commercial Street in Brockton,
Massachusetts, as the ``Rocky Marciano Post Office
Building''.
110-273......... District of Columbia Water and Sewer Authority Independence July 15, 2008........ 2491
Preservation Act.
110-274......... To amend the Water Resources Development Act of 2007 to July 15, 2008........ 2493
clarify the authority of the Secretary of the Army to
provide reimbursement for travel expenses incurred by
members of the Committee on Levee Safety.
110-275......... Medicare Improvements for Patients and Providers Act of July 15, 2008........ 2494
2008.
110-276......... To designate the United States customhouse building located July 15, 2008........ 2598
at 31 Gonzalez Clemente Avenue in Mayaguez, Puerto Rico,
as the ``Rafael Martinez Nadal United States Customhouse
Building''.
110-277......... American Veterans Disabled for Life Commemorative Coin Act. July 17, 2008........ 2599
110-278......... Children's Gasoline Burn Prevention Act.................... July 17, 2008........ 2602
110-279......... To provide for certain Federal employee benefits to be July 17, 2008........ 2604
continued for certain employees of the Senate Restaurants
after operations of the Senate Restaurants are contracted
to be performed by a private business concern, and for
other purposes.
110-280......... Maritime Pollution Prevention Act of 2008.................. July 21, 2008........ 2611
110-281......... National Fish and Wildlife Foundation Establishment Act July 21, 2008........ 2617
Amendment of 2008.
110-282......... To designate a portion of United States Route 20A, located July 23, 2008........ 2618
in Orchard Park, New York, as the ``Timothy J. Russert
Highway''.
110-283......... New and Emerging Technologies 911 Improvement Act of 2008.. July 23, 2008........ 2620
110-284......... To designate the United States courthouse located at 1716 July 23, 2008........ 2627
Spielbusch Avenue in Toledo, Ohio, as the ``James M.
Ashley and Thomas W.L. Ashley United States Courthouse''.
110-285......... Caroline Pryce Walker Conquer Childhood Cancer Act of 2008. July 29, 2008........ 2628
110-286......... Tom Lantos Block Burmese JADE (Junta's Anti-Democratic July 29, 2008........ 2632
Efforts) Act of 2008.
110-287......... Approving the renewal of import restrictions contained in July 29, 2008........ 2649
the Burmese Freedom and Democracy Act of 2003.
110-288......... Clean Boating Act of 2008.................................. July 29, 2008........ 2650
110-289......... Housing and Economic Recovery Act of 2008.................. July 30, 2008........ 2654
110-290......... Regulatory Improvement Act of 2007......................... July 30, 2008........ 2914
110-291......... Over-the-Road Bus Transportation Accessibility Act of 2007. July 30, 2008........ 2915
110-292......... To name the Department of Veterans Affairs outpatient July 30, 2008........ 2917
clinic in Ponce, Puerto Rico, as the ``Euripides Rubio
Department of Veterans Affairs Outpatient Clinic''.
110-293......... Tom Lantos and Henry J. Hyde United States Global July 30, 2008........ 2918
Leadership Against HIV/AIDS, Tuberculosis, and Malaria
Reauthorization Act of 2008.
110-294......... To authorize the Edward Byrne Memorial Justice Assistance July 30, 2008........ 2971
Grant Program at fiscal year 2006 levels through 2012.
110-295......... DTV Transition Assistance Act.............................. July 30, 2008........ 2972
110-296......... Criminal History Background Checks Pilot Extension Act of July 30, 2008........ 2974
2008.
110-297......... Soboba Band of Luiseno Indians Settlement Act.............. July 31, 2008........ 2975
110-298......... Law Enforcement Congressional Badge of Bravery Act of 2008. July 31, 2008........ 2985
110-299......... To clarify the circumstances during which the Administrator July 31, 2008........ 2995
of the Environmental Protection Agency and applicable
States may require permits for discharges from certain
vessels, and to require the Administrator to conduct a
study of discharges incidental to the normal operation of
vessels.
110-300......... To temporarily extend the programs under the Higher July 31, 2008........ 2998
Education Act of 1965.
110-301......... Libyan Claims Resolution Act............................... Aug. 4, 2008......... 2999
110-302......... To designate the Department of Veterans Affairs outpatient Aug. 12, 2008........ 3003
clinic in Wenatchee, Washington, as the Elwood ``Bud''
Link Department of Veterans Affairs Outpatient Clinic.
110-303......... To designate the facility of the United States Postal Aug. 12, 2008........ 3004
Service located at 401 Washington Avenue in Weldon, North
Carolina, as the ``Dock M. Brown Post Office Building''.
110-304......... To name the Department of Veterans Affairs medical center Aug. 12, 2008........ 3005
in Miami, Florida, as the ``Bruce W. Carter Department of
Veterans Affairs Medical Center''.
110-305......... To designate the facility of the United States Postal Aug. 12, 2008........ 3006
Service located at 120 South Del Mar Avenue in San
Gabriel, California, as the ``Chi Mui Post Office
Building''.
110-306......... To designate the facility of the United States Postal Aug. 12, 2008........ 3007
Service located at 10449 White Granite Drive in Oakton,
Virginia, as the ``Private First Class David H. Sharrett
II Post Office Building''.
110-307......... To designate the facility of the United States Postal Aug. 12, 2008........ 3008
Service located at 1155 Seminole Trail in Charlottesville,
Virginia, as the ``Corporal Bradley T. Arms Post Office
Building''.
110-308......... To designate the facility of the United States Postal Aug. 12, 2008........ 3009
Service located at 219 East Main Street in West Frankfort,
Illinois, as the ``Kenneth James Gray Post Office
Building''.
110-309......... To designate the facility of the United States Postal Aug. 12, 2008........ 3010
Service located at 42222 Rancho Las Palmas Drive in Rancho
Mirage, California, as the ``Gerald R. Ford Post Office
Building''.
110-310......... To designate the facility of the United States Postal Aug. 12, 2008........ 3011
Service located at 14500 Lorain Avenue in Cleveland, Ohio,
as the ``John P. Gallagher Post Office Building''.
110-311......... To designate the Federal building and United States Aug. 12, 2008........ 3012
courthouse located at 300 Quarropas Street in White
Plains, New York, as the ``Charles L. Brieant, Jr.,
Federal Building and United States Courthouse''.
110-312......... United States Parole Commission Extension Act of 2008...... Aug. 12, 2008........ 3013
110-313......... To amend title 35, United States Code, and the Trademark Aug. 12, 2008........ 3014
Act of 1946 to provide that the Secretary of Commerce, in
consultation with the Director of the United States Patent
and Trademark Office, shall appoint administrative patent
judges and administrative trademark judges, and for other
purposes.
110-314......... Consumer Product Safety Improvement Act of 2008............ Aug. 14, 2008........ 3016
110-315......... Higher Education Opportunity Act........................... Aug. 14, 2008........ 3078
[[Page 5735]]
110-316......... To amend the Federal Food, Drug, and Cosmetic Act to revise Aug. 14, 2008........ 3509
and extend the animal drug user fee program, to establish
a program of fees relating to generic new animal drugs, to
make certain technical corrections to the Food and Drug
Administration Amendments Act of 2007, and for other
purposes.
110-317......... Hubbard Act................................................ Aug. 29, 2008........ 3526
110-318......... To amend the Internal Revenue Code of 1986 to restore the Sept. 15, 2008....... 3532
Highway Trust Fund balance.
110-319......... To designate the United States courthouse located at 225 Sept. 17, 2008....... 3533
Cadman Plaza East, Brooklyn, New York, as the ``Theodore
Roosevelt United States Courthouse''.
110-320......... To designate the United States courthouse located in the Sept. 18, 2008....... 3534
700 block of East Broad Street, Richmond, Virginia, as the
``Spottswood W. Robinson III and Robert R. Merhige, Jr.,
United States Courthouse''.
110-321......... To provide for extensions of certain authorities of the Sept. 19, 2008....... 3535
Department of State, and for other purposes.
110-322......... To amend the Federal Rules of Evidence to address the Sept. 19, 2008....... 3537
waiver of the attorney-client privilege and the work
product doctrine.
110-323......... Government Accountability Office Act of 2008............... Sept. 22, 2008....... 3539
110-324......... Veterans' Compensation Cost-of-Living Adjustment Act of Sept. 24, 2008....... 3549
2008.
110-325......... ADA Amendments Act of 2008................................. Sept. 25, 2008....... 3553
110-326......... To amend title 18, United States Code, to provide secret Sept. 26, 2008....... 3560
service protection to former Vice Presidents, and for
other purposes.
110-327......... Need-Based Educational Aid Act of 2008..................... Sept. 30, 2008....... 3566
110-328......... SSI Extension for Elderly and Disabled Refugees Act........ Sept. 30, 2008....... 3567
110-329......... Consolidated Security, Disaster Assistance, and Continuing Sept. 30, 2008....... 3574
Appropriations Act, 2009.
110-330......... Federal Aviation Administration Extension Act of 2008, Part Sept. 30, 2008....... 3717
II.
110-331......... To designate the facility of the United States Postal Sept. 30, 2008....... 3720
Service located at 301 Commerce Street in Commerce,
Oklahoma, as the ``Mickey Mantle Post Office Building''.
110-332......... To designate the Department of Veterans Affairs clinic in Sept. 30, 2008....... 3721
Alpena, Michigan, as the ``Lieutenant Colonel Clement C.
Van Wagoner Department of Veterans Affairs Clinic''.
110-333......... To designate the facility of the United States Postal Sept. 30, 2008....... 3722
Service located at 1717 Orange Avenue in Fort Pierce,
Florida, as the ``CeeCee Ross Lyles Post Office Building''.
110-334......... To designate the Federal Bureau of Investigation building Oct. 1, 2008......... 3723
under construction in Omaha, Nebraska, as the ``J. James
Exon Federal Bureau of Investigation Building''.
110-335......... To amend title 11, District of Columbia Official Code, to Oct. 2, 2008......... 3724
implement the increase provided under the District of
Columbia Appropriations Act, 2008, in the amount of funds
made available for the compensation of attorneys
representing indigent defendants in the District of
Columbia courts, and for other purposes.
110-336......... Library of Congress Sound Recording and Film Preservation Oct. 2, 2008......... 3726
Programs Reauthorization Act of 2008.
110-337......... To amend title 49, United States Code, to expand passenger Oct. 2, 2008......... 3729
facility fee eligibility for certain noise compatibility
projects.
110-338......... John F. Kennedy Center Reauthorization Act of 2008......... Oct. 3, 2008......... 3731
110-339......... Healthy Start Reauthorization Act of 2007.................. Oct. 3, 2008......... 3733
110-340......... Child Soldiers Accountability Act of 2008.................. Oct. 3, 2008......... 3735
110-341......... To amend Public Law 108-331 to provide for the construction Oct. 3, 2008......... 3738
and related activities in support of the Very Energetic
Radiation Imaging Telescope Array System (VERITAS) project
in Arizona.
110-342......... Expressing the consent and approval of Congress to an Oct. 3, 2008......... 3739
interstate compact regarding water resources in the Great
Lakes--St. Lawrence River Basin.
110-343......... To provide authority for the Federal Government to purchase Oct. 3, 2008......... 3765
and insure certain types of troubled assets for the
purposes of providing stability to and preventing
disruption in the economy and financial system and
protecting taxpayers, to amend the Internal Revenue Code
of 1986 to provide incentives for energy production and
conservation, to extend certain expiring provisions, to
provide individual income tax relief, and for other
purposes.
110-344......... Emmett Till Unsolved Civil Rights Crime Act of 2007........ Oct. 7, 2008......... 3934
110-345......... Drug Endangered Children Act of 2007....................... Oct. 7, 2008......... 3938
110-346......... North Korean Human Rights Reauthorization Act of 2008...... Oct. 7, 2008......... 3939
110-347......... To designate the facility of the United States Postal Oct. 7, 2008......... 3944
Service located at 101 West Main Street in Waterville, New
York, as the ``Cpl. John P. Sigsbee Post Office''.
110-348......... To designate the facility of the United States Postal Oct. 7, 2008......... 3945
Service located at 101 Tallapoosa Street in Bremen,
Georgia, as the ``Sergeant Paul Saylor Post Office
Building''.
110-349......... To designate the facility of the United States Postal Oct. 7, 2008......... 3946
Service located at 200 North Texas Avenue in Odessa,
Texas, as the ``Corporal Alfred Mac Wilson Post Office''.
110-350......... To extend the authority of the Secretary of Education to Oct. 7, 2008......... 3947
purchase guaranteed student loans for an additional year,
and for other purposes.
110-351......... Fostering Connections to Success and Increasing Adoptions Oct. 7, 2008......... 3949
Act of 2008.
110-352......... To designate the facility of the United States Postal Oct. 7, 2008......... 3982
Service located at 18 S. G Street, Lakeview, Oregon, as
the ``Dr. Bernard Daly Post Office Building''.
110-353......... To designate the facility of the United States Postal Oct. 7, 2008......... 3983
Service located at 1700 Cleveland Avenue in Kansas City,
Missouri, as the ``Reverend Earl Abel Post Office
Building''.
110-354......... Breast Cancer and Environmental Research Act of 2008....... Oct. 8, 2008......... 3984
110-355......... Health Care Safety Net Act of 2008......................... Oct. 8, 2008......... 3988
110-356......... Federal Protective Service Guard Contracting Reform Act of Oct. 8, 2008......... 3996
2008.
110-357......... National Infantry Museum and Soldier Center Commemorative Oct. 8, 2008......... 3998
Coin Act.
110-358......... To amend title 18, United States Code, to provide for more Oct. 8, 2008......... 4001
effective prosecution of cases involving child
pornography, and for other purposes.
110-359......... Old Post Office Building Redevelopment Act of 2008......... Oct. 8, 2008......... 4005
110-360......... Debbie Smith Reauthorization Act of 2008................... Oct. 8, 2008......... 4008
110-361......... Paul D. Wellstone Muscular Dystrophy Community Assistance, Oct. 8, 2008......... 4010
Research, and Education Amendments of 2008.
110-362......... To extend for 5 years the program relating to waiver of the Oct. 8, 2008......... 4013
foreign country residence requirement with respect to
international medical graduates, and for other purposes.
110-363......... Boy Scouts of America Centennial Commemorative Coin Act.... Oct. 8, 2008......... 4015
[[Page 5736]]
110-364......... Oregon Surplus Federal Land Act of 2008.................... Oct. 8, 2008......... 4018
110-365......... Great Lakes Legacy Reauthorization Act of 2008............. Oct. 8, 2008......... 4021
110-366......... To extend the waiver authority for the Secretary of Oct. 8, 2008......... 4025
Education under section 105 of subtitle A of title IV of
division B of Public Law 109-148, relating to elementary
and secondary education hurricane recovery relief, and for
other purposes.
110-367......... Defense Production Act Extension and Reauthorization of Oct. 8, 2008......... 4026
2008.
110-368......... To make a technical correction in the NET 911 Improvement Oct. 8, 2008......... 4027
Act of 2008.
110-369......... United States-India Nuclear Cooperation Approval and Oct. 8, 2008......... 4028
Nonproliferation Enhancement Act.
110-370......... Native American Heritage Day Act of 2008................... Oct. 8, 2008......... 4035
110-371......... Appalachian Regional Development Act Amendments of 2008.... Oct. 8, 2008......... 4037
110-372......... Senior Professional Performance Act of 2008................ Oct. 8, 2008......... 4043
110-373......... ALS Registry Act........................................... Oct. 8, 2008......... 4047
110-374......... Prenatally and Postnatally Diagnosed Conditions Awareness Oct. 8, 2008......... 4051
Act.
110-375......... To repeal the provision of title 46, United States Code, Oct. 8, 2008......... 4055
requiring a license for employment in the business of
salvaging on the coast of Florida.
110-376......... To reauthorize the United States Fire Administration, and Oct. 8, 2008......... 4056
for other purposes.
110-377......... Poison Center Support, Enhancement, and Awareness Act of Oct. 8, 2008......... 4063
2008.
110-378......... Reconnecting Homeless Youth Act of 2008.................... Oct. 8, 2008......... 4068
110-379......... QI Program Supplemental Funding Act of 2008................ Oct. 8, 2008......... 4075
110-380......... To provide that funds allocated for community food projects Oct. 8, 2008......... 4080
for fiscal year 2008 shall remain available until
September 30, 2009.
110-381......... Michelle's Law............................................. Oct. 9, 2008......... 4081
110-382......... Military Personnel Citizenship Processing Act.............. Oct. 9, 2008......... 4087
110-383......... Pechanga Band of Luiseno Mission Indians Land Transfer Act Oct. 10, 2008........ 4090
of 2007.
110-384......... Let Our Veterans Rest in Peace Act of 2008................. Oct. 10, 2008........ 4094
110-385......... To improve the quality of Federal and State data regarding Oct. 10, 2008........ 4096
the availability and quality of broadband services and to
promote the deployment of affordable broadband services to
all parts of the Nation.
110-386......... Hydrographic Services Improvement Act Amendments of 2008... Oct. 10, 2008........ 4106
110-387......... Veterans' Mental Health and Other Care Improvements Act of Oct. 10, 2008........ 4110
2008.
110-388......... To provide for the appointment of the Chief Human Capital Oct. 10, 2008........ 4144
Officer of the Department of Homeland Security by the
Secretary of Homeland Security.
110-389......... Veterans' Benefits Improvement Act of 2008................. Oct. 10, 2008........ 4145
110-390......... White Mountain Apache Tribe Rural Water System Loan Oct. 10, 2008........ 4191
Authorization Act.
110-391......... Special Immigrant Nonminister Religious Worker Program Act. Oct. 10, 2008........ 4193
110-392......... Comprehensive Tuberculosis Elimination Act of 2008......... Oct. 13, 2008........ 4195
110-393......... To authorize the Secretary of Commerce to sell or exchange Oct. 13, 2008........ 4203
certain National Oceanic and Atmospheric Administration
property located in Norfolk, Virginia, and for other
purposes.
110-394......... National Sea Grant College Program Amendments Act of 2008.. Oct. 13, 2008........ 4205
110-395......... To designate the facility of the United States Postal Oct. 13, 2008........ 4210
Service located at 245 North Main Street in New City, New
York, as the ``Kenneth Peter Zebrowski Post Office
Building''.
110-396......... To designate the facility of the United States Postal Oct. 13, 2008........ 4211
Service located at 2523 7th Avenue East in North Saint
Paul, Minnesota, as the ``Mayor William `Bill' Sandberg
Post Office Building''.
110-397......... To designate the facility of the United States Postal Oct. 13, 2008........ 4212
Service located at 4233 West Hillsboro Boulevard in
Coconut Creek, Florida, as the ``Army SPC Daniel Agami
Post Office Building''.
110-398......... To amend the commodity provisions of the Food, Oct. 13, 2008........ 4213
Conservation, and Energy Act of 2008 to permit producers
to aggregate base acres and reconstitute farms to avoid
the prohibition on receiving direct payments, counter-
cyclical payments, or average crop revenue election
payments when the sum of the base acres of a farm is 10
acres or less, and for other purposes.
110-399......... To designate the facility of the United States Postal Oct. 13, 2008........ 4223
Service located at 156 Taunton Avenue in Seekonk,
Massachusetts, as the ``Lance Corporal Eric Paul
Valdepenas Post Office Building''.
110-400......... Keeping the Internet Devoid of Sexual Predators Act of 2008 Oct. 13, 2008........ 4224
110-401......... Providing Resources, Officers, and Technology To Eradicate Oct. 13, 2008........ 4229
Cyber Threats to Our Children Act of 2008.
110-402......... To extend the authority of the United States Supreme Court Oct. 13, 2008........ 4254
Police to protect court officials off the Supreme Court
Grounds and change the title of the Administrative
Assistant to the Chief Justice.
110-403......... Prioritizing Resources and Organization for Intellectual Oct. 13, 2008........ 4256
Property Act of 2008.
110-404......... Presidential Historical Records Preservation Act of 2008... Oct. 13, 2008........ 4281
110-405......... Air Carriage of International Mail Act..................... Oct. 13, 2008........ 4287
110-406......... Judicial Administration and Technical Amendments Act of Oct. 13, 2008........ 4291
2008.
110-407......... Drug Trafficking Vessel Interdiction Act of 2008........... Oct. 13, 2008........ 4296
110-408......... Criminal History Background Checks Pilot Extension Act of Oct. 13, 2008........ 4301
2008.
110-409......... Inspector General Reform Act of 2008....................... Oct. 14, 2008........ 4302
110-410......... To designate the Department of Veterans Affairs Outpatient Oct. 14, 2008........ 4318
Clinic in Hermitage, Pennsylvania, as the Michael A.
Marzano Department of Veterans Affairs Outpatient Clinic.
110-411......... Native American Housing Assistance and Self-Determination Oct. 14, 2008........ 4319
Reauthorization Act of 2008.
110-412......... Personnel Reimbursement for Intelligence Cooperation and Oct. 14, 2008........ 4336
Enhancement of Homeland Security Act of 2008.
110-413......... Stephanie Tubbs Jones Gift of Life Medal Act of 2008....... Oct. 14, 2008........ 4338
110-414......... Mercury Export Ban Act of 2008............................. Oct. 14, 2008........ 4341
110-415......... Methamphetamine Production Prevention Act of 2008.......... Oct. 14, 2008........ 4349
110-416......... Mentally Ill Offender Treatment and Crime Reduction Oct. 14, 2008........ 4352
Reauthorization and Improvement Act of 2008.
110-417......... Duncan Hunter National Defense Authorization Act for Fiscal Oct. 14, 2008........ 4356
Year 2009.
110-418......... To designate a portion of the Rappahannock River in the Oct. 14, 2008........ 4772
Commonwealth of Virginia as the ``John W. Warner Rapids''.
110-419......... To clarify the boundaries of Coastal Barrier Resources Oct. 15, 2008........ 4773
System Clam Pass Unit FL-64P.
110-420......... Code Talkers Recognition Act of 2008....................... Oct. 15, 2008........ 4774
110-421......... Bulletproof Vest Partnership Grant Act of 2008............. Oct. 15, 2008........ 4778
110-422......... National Aeronautics and Space Administration Authorization Oct. 15, 2008........ 4779
Act of 2008.
[[Page 5737]]
110-423......... To provide that Federal employees receiving their pay by Oct. 15, 2008........ 4818
electronic funds transfer shall be given the option of
receiving their pay stubs electronically.
110-424......... To authorize funding to conduct a national training program Oct. 15, 2008........ 4819
for State and local prosecutors.
110-425......... Ryan Haight Online Pharmacy Consumer Protection Act of 2008 Oct. 15, 2008........ 4820
110-426......... Stephanie Tubbs Jones Organ Transplant Authorization Act of Oct. 15, 2008........ 4835
2008.
110-427......... To authorize the Administrator of General Services to take Oct. 15, 2008........ 4837
certain actions with respect to parcels of real property
located in Eastlake, Ohio, and Koochiching County,
Minnesota, and for other purposes.
110-428......... Inmate Tax Fraud Prevention Act of 2008.................... Oct. 15, 2008........ 4839
110-429......... To authorize the transfer of naval vessels to certain Oct. 15, 2008........ 4842
foreign recipients, and for other purposes.
110-430......... Appointing the day for the convening of the first session Oct. 15, 2008........ 4846
of the One Hundred Eleventh Congress and establishing the
date for the counting of the electoral votes for President
and Vice President cast by the electors in December 2008.
110-431......... To authorize funding for the National Crime Victim Law Oct. 15, 2008........ 4847
Institute to provide support for victims of crime under
Crime Victims Legal Assistance Programs as a part of the
Victims of Crime Act of 1984.
110-432......... To amend title 49, United States Code, to prevent railroad Oct. 16, 2008........ 4848
fatalities, injuries, and hazardous materials releases, to
authorize the Federal Railroad Safety Administration, and
for other purposes.
110-433......... To extend through 2013 the authority of the Federal Oct. 16, 2008........ 4971
Election Commission to impose civil money penalties on the
basis of a schedule of penalties established and published
by the Commission.
110-434......... Vessel Hull Design Protection Amendments of 2008........... Oct. 16, 2008........ 4972
110-435......... Webcaster Settlement Act of 2008........................... Oct. 16, 2008........ 4974
110-436......... To extend the Andean Trade Preference Act, and for other Oct. 16, 2008........ 4976
purposes.
110-437......... Capitol Visitor Center Act of 2008......................... Oct. 20, 2008........ 4983
110-438......... National Guard and Reservists Debt Relief Act of 2008...... Oct. 20, 2008........ 5000
110-439......... To designate the facility of the United States Postal Oct. 21, 2008........ 5003
Service located at 2150 East Hardtner Drive in Urania,
Louisiana, as the ``Murphy A. Tannehill Post Office
Building''.
110-440......... To designate the facility of the United States Postal Oct. 21, 2008........ 5004
Service located at 100 West Percy Street in Indianola,
Mississippi, as the ``Minnie Cox Post Office Building''.
110-441......... To designate a portion of California State Route 91 located Oct. 21, 2008........ 5005
in Los Angeles County, California, as the ``Juanita
Millender-McDonald Highway''.
110-442......... To designate the facility of the United States Postal Oct. 21, 2008........ 5007
Service located at 1750 Lundy Avenue in San Jose,
California, as the ``Gordon N. Chan Post Office Building''.
110-443......... To designate the facility of the United States Postal Oct. 21, 2008........ 5008
Service located at 300 Vine Street in New Lenox, Illinois,
as the ``Jacob M. Lowell Post Office Building''.
110-444......... To designate the facility of the United States Postal Oct. 21, 2008........ 5009
Service located at 4 South Main Street in Wallingford,
Connecticut, as the ``CWO Richard R. Lee Post Office
Building''.
110-445......... To designate the facility of the United States Postal Oct. 21, 2008........ 5010
Service located at 801 Industrial Boulevard in Ellijay,
Georgia, as the ``First Lieutenant Noah Harris Ellijay
Post Office Building''.
110-446......... To designate the facility of the United States Postal Oct. 21, 2008........ 5011
Service located at 513 6th Avenue in Dayton, Kentucky, as
the ``Staff Sergeant Nicholas Ray Carnes Post Office''.
110-447......... To designate the facility of the United States Postal Oct. 21, 2008........ 5012
Service located at 210 South Ellsworth Avenue in San
Mateo, California, as the ``Leo J. Ryan Post Office
Building''.
110-448......... To designate the facility of the United States Postal Oct. 22, 2008........ 5013
Service located at 7095 Highway 57 in Counce, Tennessee,
as the ``Pickwick Post Office Building''.
110-449......... Unemployment Compensation Extension Act of 2008............ Nov. 21, 2008........ 5014
110-450......... United States Army Commemorative Coin Act of 2008.......... Dec. 1, 2008......... 5017
110-451......... Civil Rights Act of 1964 Commemorative Coin Act............ Dec. 2, 2008......... 5021
110-452......... Child Safe Viewing Act of 2007............................. Dec. 2, 2008......... 5025
110-453......... To direct the Secretary of the Interior to take into trust Dec. 2, 2008......... 5027
2 parcels of Federal land for the benefit of certain
Indian Pueblos in the State of New Mexico, and for other
purposes.
110-454......... To designate the facility of the United States Postal Dec. 19, 2008........ 5035
Service located at 1501 South Slappey Boulevard in Albany,
Georgia, as the ``Dr. Walter Carl Gordon, Jr. Post Office
Building''.
110-455......... Ensuring that the compensation and other emoluments Dec. 19, 2008........ 5036
attached to the office of Secretary of State are those
which were in effect on January 1, 2007.
110-456......... America's Beautiful National Parks Quarter Dollar Coin Act Dec. 23, 2008........ 5038
of 2008.
110-457......... William Wilberforce Trafficking Victims Protection Dec. 23, 2008........ 5044
Reauthorization Act of 2008.
110-458......... Worker, Retiree, and Employer Recovery Act of 2008......... Dec. 23, 2008........ 5092
110-459......... Short-term Analog Flash and Emergency Readiness Act........ Dec. 23, 2008........ 5121
110-460......... To make a technical correction in the Paul Wellstone and Dec. 23, 2008........ 5123
Pete Domenici Mental Health Parity and Addiction Equity
Act of 2008.
[[Page 5739]]
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Part III
Department of Justice
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28 CFR Part 25
National Motor Vehicle Title Information System (NMVTIS); Final Rule
Federal Register / Vol. 74 , No. 19 / Friday, January 30, 2009 /
Rules and Regulations
[[Page 5740]]
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DEPARTMENT OF JUSTICE
28 CFR Part 25
[Docket No. FBI 117; AG Order No. 3042-2009]
RIN 1110-AA30
National Motor Vehicle Title Information System (NMVTIS)
AGENCY: Department of Justice.
ACTION: Final rule.
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SUMMARY: The National Motor Vehicle Title Information System (NMVTIS)
has been established pursuant to 49 U.S.C. 30502 and has the
participation, or partial participation, of at least 36 states. The
purpose of NMVTIS is to assist in efforts to prevent the introduction
or reintroduction of stolen motor vehicles into interstate commerce,
protect states and individual and commercial consumers from fraud,
reduce the use of stolen vehicles for illicit purposes including
fundraising for criminal enterprises, and provide consumer protection
from unsafe vehicles. 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: Effective Date: This rule is effective March 2, 2009.
FOR FURTHER INFORMATION CONTACT: Alissa Huntoon, 810 7th Street, NW.,
Washington, DC 20531, 202-616-6500, www.NMVTIS.gov.
SUPPLEMENTARY INFORMATION:
Background
The Anti-Car Theft Act of 1992, Public Law No. 102-519, 106 Stat.
3384, 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, Public Law No. 104-
152, 110 Stat. 1384. The Anti-Car Theft Improvements Act of 1996
renamed the automobile titling system the ``National Motor Vehicle
Title Information System'' and transferred responsibility for
implementing the system from DOT to the Department of Justice (DOJ).
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''or the ``Act.''
While the overall purpose of the Anti-Car Theft Act is to prevent
and deter auto theft, title II of the Act, which authorizes NMVTIS, is
intended to address automobile title fraud. Accordingly, the primary
purpose of NMVTIS is to prevent various types of theft and fraud by
providing an electronic means for verifying and exchanging title,
brand, theft, and other data among motor vehicle administrators, law
enforcement officials, prospective and current purchasers (individual
or commercial), and insurance carriers.\1\ Currently, 37 states are
actively involved with NMVTIS, representing nearly 75% of the U.S.
motor vehicle population. Specifically, 13 states are participating
fully in NMVTIS, 14 states are regularly providing data to the system,
and an additional 10 states are actively taking steps to provide data
or participate fully.\2\ States that participate fully in the system
provide data to the system on a daily or real-time basis and make
NMVTIS inquiries before issuing a new title on a vehicle from out of
state and preferably before every title verification, regardless of its
origin or reason. Participating states also pay user fees to support
the system and the services provided to the state.
---------------------------------------------------------------------------
\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, Virgina, Washington, and
Wisconsin. Fourteen states are providing regular data updates to
NMVTIS: Alabama, California, Delaware, Georgia, Idaho, Louisiana,
Nebraska, New Jersey, New York, North Carolina, Pennsylvnia,
Tennesses, Texas, and Wyoming. Ten states are actively taking steps
to provide data or participate fully: Arkansas, Michigan, Minnesota,
Missouri, Montaina, New Mexico, Oklahoma, South Carolina, Vermont,
and West Virginia. See www.NMVTIS.gov for a map of current
participation status.
---------------------------------------------------------------------------
In 2006, the Integrated Justice Information Systems (IJIS)
Institute, a nonprofit membership 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.''
In addition to this study, the Government Accountability Office (GAO)
also found NMVTIS to hold benefit potential for states, and a private
cost-benefit study also determined that NMVTIS could provide benefits
in the range of $4 to $11 billion dollars annually if fully
implemented. NMVTIS and its benefits to states, law enforcement,
consumers, and others have been widely touted by motor vehicle or auto-
industry organizations including AAMVA and the National Automobile
Dealers Association (NADA), by law enforcement organizations such as
the International Association of Chiefs of Police and the National
Sheriffs Association, by the North American Export Committee (NAEC),
and by the International Association of Auto Theft Investigators.
NMVTIS's benefits have also been recognized by national consumer
advocacy organizations, and by industry-affiliated groups including the
National Salvage Vehicle Reporting Program and many others, as
identified in the public comments.
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. Using a secure connection, states then receive all
required information or the complete title of record from the state of
record. States can then use this information to verify information on
the paper title being presented.
Verification of this data allows fully participating states to
reduce the issuance of fraudulent titles and reduce
[[Page 5741]]
odometer fraud. Once the inquiring jurisdiction receives the
information, a state is able to decide whether to issue a title. For
states fully participating through integrated, online access, 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
and eliminates the need for these agencies to conduct these processes
manually. This service provides a measurable benefit to states in terms
of cost savings. In 2007, over 18.4 million title-update transactions
were initiated and over 45 million messages were generated via NMVTIS,
which allows states to work and communicate securely and to perform
electronic title transactions between states.
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
and with other states that may have previously issued titles on the
vehicle to determine if it has any existing brands not shown on the
paper title. Because NMVTIS keeps a history of brands applied by any
state to the motor vehicle at any time, it protects individual and
corporate consumers by helping ensure full disclosure so that
purchasers are not defrauded or placed at risk by purchasing an unsafe
motor vehicle. Currently, there are approximately 300,000,000 VINs in
NMVTIS with over 40,000,000 brands included. NMVTIS also prevents
``clean title'' vehicles that are actually a total loss or salvage from
being used to generate a paper title that is later attached to a stolen
vehicle that is ``cloned'' to the destroyed ``clean title'' vehicle.
Criminal enterprises seek these ``clean title'' vehicles, which are low
cost to them (because they are destroyed or salvage), because it
increases their return when they sell a cloned stolen vehicle. It has
been noted that criminal profits in such a case can more than quadruple
if a ``clean title'' vehicle is used for cloning. Even worse, because
these cloned vehicles are able to get into the titling systems of the
non-participating states, they often continue to be sold to new and
unsuspecting owners. There have been cases involving car dealers who
had purchased stolen cloned vehicles and resold them to individual
consumers. NMVTIS also provides protections from other types of related
theft and fraud that ultimately place lives at risk and cost states,
consumers, and the private sectors billions of dollars each year. The
proceeds from these illicit activities support additional crime and
fraud and even serious and violent crime. For more information on the
benefits of NMVTIS, visit www.NMVTIS.gov.
Discussion of Comments
On September 22, 2008, the Department of Justice published a
proposed rule to implement various requirements concerning NMVTIS. See
National Motor Vehicle Title Information System (NMVTIS), 73 FR 54544
(Sept. 22, 2008). The rule proposed the imposition of reporting
requirements on junk yards, salvage yards, and insurance carriers. In
addition, the rule clarified the funding process for NMVTIS and the
responsibilities of the operator of NMVTIS, states, junk yards, salvage
yards, and insurance carriers. The comments and the Department's
responses are discussed below:
1. General Comments
Comment: Several commenters suggested that NMVTIS will deter
various types of crime and fraud and suggested that since the passage
of the Anti-Car Theft Act, the types of crime and fraud, as well as the
methods, have evolved. These commenters noted that the purpose of
NMVTIS remains to address these types of crime and fraud.
Response: DOJ agrees that since the passage of the Anti-Car Theft
Act, crimes and crime techniques have evolved. DOJ, therefore, has
updated the stated purpose of NMVTIS to be more reflective of the crime
and expansive direct and indirect fraud NMVTIS was intended to address
and is addressing today.
Comment: The American Salvage Pool Association (ASPA) commented
that junk and salvage yards have an exemption for reporting where and
when a non-stolen verification is obtained under 49 U.S.C. 33110, which
authorizes a system that has never been implemented. The ASPA commented
that this exemption ``is telling, however, in linking NMVTIS'[s]
statutory purpose to theft prevention, as opposed to brand
information.''
Response: In addition to the fact that title II of the Anti-Car
Theft Act addresses fraud, it is clear that brand information can be
directly linked to vehicle theft in addition to fraud. Law enforcement
investigations have repeatedly shown that ``clean title'' total loss
vehicles are a preferred commodity among car cloning and car theft
rings, as they bring a higher return on investment. The Anti-Car Theft
Act exemption, which is in 49 U.S.C. 33111, provides that junk and
salvage yards are not required to report on an automobile 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.
2. Effectiveness
Comment: Several submissions questioned the effectiveness of NMVTIS
in eliminating or preventing fraud and theft. Several of these
commenters suggested the need for quantitative proof of the system's
effectiveness before the law should be followed. At the same time,
however, several submissions recognized the value of NMVTIS. As one
commenter noted, ``NMVTIS would undoubtedly cut down on the number of
rebuilt wreck fraud cases.'' And the State of Texas Department of
Transportation noted that ``[t]he system provides numerous obvious
benefits to titling agencies, law enforcement[,] and vehicle sellers,
as well as consumer protection to the buying public.''
Response: The Anti-Car Theft Act's participation requirements were
established based on analyses presented at the time of the bill's
introduction and passing. Further, an extensive cost-benefit analysis
and a Government Accountability Office study both have independently
determined that NMVTIS will produce a significant public benefit that
greatly exceeds the costs of implementing the program. The cost-benefit
study found that the system is only as effective as the number of
vehicles represented in the system. Non-participating states create
``loopholes'' where brands can be washed, allowing further fraud in any
state--participating or not. Discussions with private-vehicle-history-
report providers and ongoing law enforcement investigations at the
state, local, and federal levels have shown that non-participating
states are targeted for exploitation because their vehicle titling
information is not immediately shared with other states and because
they have no efficient ability to inquire with all other states that
may have previously titled the vehicle.
Feedback from participating states points to other positive
outcomes of the program. One state reports a 17%
[[Page 5742]]
decrease in motor vehicle thefts; another reports a 99% recovery rate
on vehicles identified as stolen; three states have identified cloned
vehicles by working together, prior to issuing new titles; and another
state reports cracking a car theft ring responsible for cloning more
than 250 cars worth $8 million. Aside from these results, it is clear
that if all states comply with the Anti-Car Theft Act requirements,
brand washing in the way it is most commonly conducted today will be
eliminated because there is no other way to title a vehicle other than
going through a state titling process. The same goes for vehicle
cloning, which would be virtually eliminated if every state
participated as required.
Moreover, Experian Automotive reported that in the first six months
of 2008 alone, there have already been more than 185,000 titles that
initially were branded in one state, and were then transferred and re-
titled in a second state in a way that resulted in a purportedly clean
title. Given all these facts, we can be sure that NMVTIS will be
effective in eliminating this type of fraud, preventing a significant
number of crimes, and potentially saving the lives of citizens who
would otherwise purchase unsafe vehicles.
In addition to the system's documented value in reducing theft and
fraud in protecting consumers, the system also has been shown to create
greater efficiencies within the titling process when the inquiry and
response are integrated into the states' titling processes.
Comment: NAEC commented that ``the effectiveness [of NMVTIS] can
only be truly measured [when] all jurisdictions are participating,
because of the holes that are currently in the system due to lack of
full participation.'' The State of California Department of Motor
Vehicles seemingly agreed with this comment when it noted that ``these
beneficial outcomes can only be achieved when all 50 states and the
District of Columbia are participating.'' The Virginia Department of
Motor Vehicles commented that ``the system provides a great value to
participating states, and that value will exponentially increase as
each jurisdiction begins fully participating.''
Response: DOJ agrees in part with these assessments. As discussed
above, partial participation creates loopholes that criminal
organizations exploit, and, therefore, measuring the full benefit of a
comprehensive NMVTIS is difficult without participation by all states.
However, NMVTIS provides significant benefits to participating states
even when state participation is not at 100%.
Comment: One commenter asked if the information would have much
``practical utility,'' or whether it would only serve as further
documentation of a market that is only broadly related to secondary
criminal enterprises. The commenter further noted that ``the rule will
only spur increased sophistication of organized crime. This increased
sophistication must be balanced against the proposed benefits from the
small contraction in the secondary criminal market that is assumed to
occur under this rule. One of the benefits of the proposed rule is the
documentation of salvage pool sales. But this benefit is limited: it
will only require criminals to go through more steps, steps that
require increased organizational skills. Hence, although the rule may
push some criminals out of the market overall (the less sophisticated
and organized), it will also indirectly spur increased sophistication
and organization of the surviving criminal organizations. Although one
of the primary goals of NMVTIS is theft deterrence, there is no data to
support the conclusion that this portion of the criminal market will be
affected by the proposed rule.''
Response: DOJ disagrees with these comments. Substantial evidence,
statements, and documentation indicate that NMVTIS will impact vehicle
theft and fraud.
Comment: Several commenters, including law enforcement, consumer
advocates, industry associations, and state motor vehicle
administrators, including California's, noted that NMVTIS is needed and
will be effective in addressing the threats of auto theft, cloning, and
fraud, and in providing protection for consumers against fraud.
Response: DOJ agrees with these comments and notes that the
expected benefits and positive outcomes of NMVTIS have been confirmed
not only by government and private research, but also by multiple
representatives of every stakeholder community affected by the system,
including state titling agencies, state and local law enforcement,
consumers, insurance carriers, and junk-or salvage-yard operators.
Comment: The NAEC commented that law enforcement successes to date
can validate the benefits and costs associated with NMVTIS and that
``the NAEC is solid in its belief that NMVTIS is a fundamentally sound
approach to `title washing,' title fraud, vehicle theft[,] and public
safety related to the `branding' of un-road worthy vehicles in this
Country.'' The NAEC provided data from one state that uses NMVTIS and,
as a result, has identified and recovered hundreds of stolen vehicles.
The NAEC further commented that to suggest that the system should be
cancelled ``demonstrates a lack of understanding [of] the magnitude of
the vehicle theft problem in North America and Public Safety issues
surrounding `branded' vehicles.''
Response: DOJ agrees with the NAEC's assessment of NMVTIS.
Comment: The State of Illinois Motor Vehicle Administration
commented that other services have become available since the Anti-Car
Theft Act was passed and that NMVTIS should ``be put on hold'' while an
analysis on the need for NMVTIS can be conducted. The Maine Bureau of
Motor Vehicles suggested that NMVTIS was not needed because ``consumers
have other options for checking vehicle title status prior to
purchase.''
Response: While other fee-based options for checking vehicle title
status are available for consumers, the ability of consumers to check
NMVTIS for vehicle title status is required by federal law and a
federal court order. When fully implemented, NMVTIS will provide
assurances that no other option can provide--complete and timely
information on all vehicles in the U.S. The Anti-Car Theft Act provided
no flexibility for states, insurance carriers, or junk or salvage yards
to filter information shared with NMVTIS; thus NMVTIS will be the most-
reliable source of information once fully implemented. Several
providers of vehicle history information have agreed to make NMVTIS
data available as a way of enhancing their products, demonstrating that
NMVTIS does have unique value. DOJ is not in a position to put NMVTIS
on hold, as recent litigation was based on the complaint that DOJ had
waited too long to issue NMVTIS regulations. A court has ordered DOJ to
publish these regulations by January 30, 2009. See Public Citizen, Inc.
v. Mukasey, No. 3:08-cv-00833-MHP, 2008 WL 4532540 (N.D. Cal. Oct. 9,
2008).
Comment: One commenter noted that ``it is beyond the scope of the
NMVTIS regulations to reform the process by which insurers assign title
designations; however having the sales reported in a timely fashion,
and by including appropriate identification of both international,
domestic (out of state) and domestic (in state) buyers, it will help
the Law Enforcement Community in its effort to control crime and
protect the public.''
Response: It is beyond the scope of NMVTIS and DOJ's intentions to
alter insurance carrier policies and procedures in terms of title
designations. While transfers of vehicles from insurance carriers to
others would
[[Page 5743]]
likely be captured in the NMVTIS reporting process due to subsequent
reporting by junk and salvage yards, it is unlikely that the names of
buyers will be reported or captured in the system because this is not a
required data field. Requiring the name of such buyers is of
significant value to law enforcement for preventing and investigating
automobile theft and fraud. Additionally, as is pointed out elsewhere
in these comments, establishing a ``chain of possession or custody'' is
important for effective and efficient law enforcement investigations.
Comment: One commenter noted that ``[a]ccording to Experian
Automotive, (PR Newswire August 25, 2008 Experian, Schaumburg, IL), in
the first 6 months of 2008 alone, there have already been more than
185,000 titles that initially were branded in the first state, and were
then transferred and re-titled in a second state in a way that resulted
in a `clean' title. This situation cannot be addressed without much
stronger controls and full reporting. There is a great deal of abuse of
the title system and we regularly observe severely damaged units that
have been given clean title designations to vehicles that have massive
damage. As a result, criminals regularly buy these vehicles for the
paper, and steal a like vehicle and engage in cloning or VIN
swapping.''
Response: Once all states comply with the law, NMVTIS will protect
against these types of abuses by creating a brand history (a record of
the various brands associated with a particular VIN) for every vehicle,
which will prevent a future title-issuing agent from being unaware of a
vehicle's brand history and will eliminate the possibility of a vehicle
being titled in more than one state (a common occurrence today).
Comment: Maine Bureau of Motor Vehicles commented that Maine
``already has procedures in place to check for stolen status prior to
issuing a title and for carrying forward out-of-state brands.''
Response: NMVTIS is designed to provide more than a simple stolen-
vehicle check. Further, neither carrying forward out-of-state brands
based on paper titles presented, nor checking the paper documentation
against a third-party data provider, eliminates brand washing. Washed
brands may not appear on paper or in third-party databases. Because
states are required to report title transactions to NMVTIS and to check
NMVTIS prior to issuing a new title, NMVTIS is the only system that can
eliminate such brand washing when fully implemented. No state, except
those participating in NMVTIS when fully implemented, has any ability
to fully verify brand histories and carry forward out-of-state brands
without manually contacting every state and the District of Columbia
prior to issuing a new title.
Comment: One commenter noted that ``the benefits of NMVTIS are also
not illogical simply because concrete figures do not exist concerning
its limited implementation.'' ``Given NMVTIS'[s] [implementation]
status, any figures outlining the benefits would prove highly
conservative even if found. It is not difficult to imagine though that
illegal reselling of salvaged vehicles takes advantage [of] reporting
gaps by moving across state lines. Statistics concerning such
operations are well-documented even if the benefits of NMVTIS are
not.'' ``Being able to verify the success and results of NMVTIS thus
depends critically on the provision of information from all states.''
Response: DOJ agrees with this comment.
Comment: The Missouri Department of Revenue commented that the
system is only as good as the number of jurisdictions participating,
and in light of current participation levels, the state is expending
resources for data that may not be inclusive or accurate.
Response: As of December 2008, NMVTIS includes nearly 75% of the
U.S. vehicle population. At the same time, several states are actively
working towards participation in NMVTIS, which will take NMVTIS closer
to 100% participation. With the inclusion of insurance and junk- and
salvage-yard information, and given that many states report to NMVTIS
in ``real time,'' NMVTIS is likely to be as inclusive as any vehicle
title history database available, even before 100% state participation.
As for accuracy, the system currently includes only data from state
motor vehicle administrations, and DOJ is aware of no errors in NMVTIS.
As stated in this rule, procedures and safeguards will be put into
place to ensure identification and correction of any errors identified.
Non-participating states, on the other hand, are expending their
resources based on fraudulent information when they issue titles in
many situations.
3. Need and Purpose
Comment: One commenter asked ``To what extent is consumer
protection and the prevention of fraud in the secondary car market
domestically and internationally a high priority for the agency?''
Response: The prevention of fraud that affects U.S. citizens,
whether it be here or abroad, and consumer protection are priorities
for DOJ and for NMVTIS. DOJ's Strategic Plan includes in its second
goal ``Strategic Objective 2.5: Combat public and corporate corruption,
fraud, economic crime, and cybercrime.'' U.S. Department of Justice
Strategic Plan, Fiscal Years 2007-2012.
Comment: One commenter noted that states often sell their vehicle
history records to private, third-party organizations who then resell
the data. The commenter requested that the final rule spell out that
the states own the data and that the operator of the system may not
resell the data to other providers without authorization of the states.
Response: While NMVTIS may contain a subset of data on vehicles
titled within the U.S., it does not include all of the information a
state motor vehicle administration may possess. DOJ agrees that the
state-maintained vehicle history databases are the province of the
states, and that the intent of the Anti-Car Theft Act was not to create
a database of information for bulk resale. The operator of the system,
therefore, will not resell the NMVTIS database in its entirety to
anyone. Two key goals of the Anti-Car Theft Act, however, are consumer
access to the data and a self-funded system. For these reasons, the
operator will be allowed to charge consumers for use.
Comment: The State of Illinois motor vehicle administration
questioned how NMVTIS will interface with law enforcement data systems
within the state that are used to identify and ``flag'' stolen
vehicles.
Response: NMVTIS is not expected to ``interface'' with law
enforcement systems within the state. Information in NMVTIS related to
a vehicle's ``theft status'' or history emanates from one of two
places--state brands and the theft file of the National Insurance Crime
Bureau (NICB), which is derived from the FBI's National Crime
Information Center (NCIC). Law enforcement systems will be able to link
or connect to the NMVTIS law enforcement access site, however, which
will include all NMVTIS information without restriction. NCIC will
always be the primary repository of active theft files for law
enforcement. Stolen vehicle information in NMVTIS is provided only for
state titling purposes for those states that cannot access NCIC or
state-based law enforcement systems.
4. Prospective Purchaser Inquiries
Comment: The Idaho Transportation Department commented that the
proposed rules included several data elements in the requirement for
prospective-purchaser inquiry responses
[[Page 5744]]
or consumer access reports that would effectively eliminate the need
for an actual state record to be requested by a consumer or prospective
purchaser, thereby reducing state revenues realized from the sale of
motor vehicle records.
Response: At a minimum, NMVTIS will provide the following pieces of
information in response to an inquiry, if that data is present in
NMVTIS: (a) The current state of title; (b) the brand history of the
vehicle; (c) the latest reported odometer reading; and (d) information
about the vehicle's reported appearance in the inventory of a covered
junk or salvage yard or on any insurance carrier determination of total
loss related to that vehicle. There are several reasons, however, why
states are likely to continue to experience demand for their full title
records. First, states often possess additional information that is not
anticipated to be within NMVTIS but that is of interest to many
purchasers. This information may include ownership information, lien-
holder information, registration information, safety-inspection data,
and other details that the states may have but are not required to
report to NMVTIS. Second, by providing consumers with the current state
of title, NMVTIS actually serves as a nationwide pointer that will
result in an increase in requests for state records. And DOJ will
direct the operator to ensure that all consumer access portal providers
provide consumers with a link to the state's site or to the state's
designated vehicle history report access point, enabling consumers to
purchase the full state record. Third, states are eligible to become
portal providers, thereby capturing an opportunity to increase revenues
by providing access to NMVTIS data and to the states' records for a
state-determined fee.
Comment: The State of Nevada Department of Motor Vehicles commented
that ``Nevada will not allow the unauthorized release of the title data
we send to NMVTIS. Nevada statutes limit what data can be released and
to whom. Will AAMVA have the capability and assume the responsibility
of prescreening those who want to access Nevada title data to ensure
the disclosure complies with Nevada statutes? Will AAMVA have the
capability of collecting and forwarding the fees currently charged for
accessing and receiving Nevada's title records without Nevada becoming
a third party?''
Response: Neither NMVTIS nor the operator will be releasing any
state's vehicle title records. The information that will be shared via
NMVTIS is not a state's vehicle title record and is generated from the
index maintained by NMVTIS, with limited information on the identified
vehicle, as authorized and directed by the Anti-Car Theft Act. This
federal statute provides the necessary authorization and direction
concerning what information will be shared, how it will be shared, and
to whom it can be shared. After providing the NMVTIS information in
response to a consumer inquiry, NMVTIS, through the third-party portal
providers, will offer consumers the ability to be directed to the state
of record's Web site in order to purchase the state's full vehicle
title record from the current state of record. Once that ``handoff''
occurs, any decision by consumers to purchase the state's title record
will be governed by applicable state statutes, policies, and processes,
and by the state's vehicle-history-report provider's policies and
processes. NMVTIS prospective purchaser inquiry was designed in this
way in an effort to point consumers to state Web sites for state
vehicle title histories from that state should they be desired and
available, thus enabling consumers to purchase the full record and
generating revenues for the states.
Comment: Several motor vehicle administration agencies and other
organizations commented that if personal information is released by
NMVTIS to non-government organizations, it may be in conflict with the
provisions of the Driver's Privacy Protection Act of 1994 (DPPA).
Several of these commenters recommended that this information only be
available to law enforcement or government organizations, while others
indicated that they would be prohibited from sharing personal
information with prospective purchasers.
Response: According to the DPPA, 18 U.S.C. 2721(b)(2), permitted
uses of information protected by the DPPA include ``[f]or use in
connection with matters of motor vehicle or driver safety and theft;
motor vehicle emissions; motor vehicle product alterations, recalls, or
advisories; performance monitoring of motor vehicles, motor vehicle
parts and dealers; motor vehicle market research activities, including
survey research; and removal of non-owner records from the original
owner records of motor vehicle manufacturers.'' In addition, 18 U.S.C.
2721(b)(3) provides additional authorizations ``[f]or use in the normal
course of business by a legitimate business or its agents, employees,
[or] contractors.'' These exceptions include sufficient authorization
for states to provide access to personal identifying information, and
many commenters agreed. Nonetheless, NMVTIS includes personal
information primarily for the benefit of law enforcement agencies,
including governmental regulatory and compliance-monitoring agencies
that may not have immediate access to such data or to state motor
vehicle-history files. NMVTIS will not provide personal information in
the NMVTIS central file to individual prospective purchasers and may
not provide access to any other type of user without securing DOJ
approval of such access.
Comment: Several commenters, notably from the consumer-advocacy
community, encouraged DOJ to ``minimize, to the greatest extent
possible[,] any cost to consumers for accessing the data base.''
Response: By statute, the fees NMVTIS charges will not be more than
the costs of operating the system. Although NMVTIS does not control
what portal providers will charge for consumer access to the data, by
making that data available to all potential portal providers at the
same price, it will be difficult for any provider to charge too high a
premium for access to that data.
Comment: One commenter noted that NMVTIS will make it possible for
users to understand either what a state-issued brand (i.e., statement
of the condition or prior use of a vehicle) means or to which state
they need to go to understand the brand's meaning. ``Even if in some
circumstances NMVTIS can say nothing more than `branded in jurisdiction
X,' at least the NMVTIS user will know which [state] jurisdiction to
consult.''
Response: Because neither the Anti-Car Theft Act nor NMVTIS creates
universal brands, DOJ will direct the NMVTIS operator to ensure that
consumer-access portal providers provide a link to brand definitions
and any available related explanations, so that consumers can be aware
of how brands may be defined. One of NMVTIS's benefits is that it will
identify which states have branded a vehicle, informing consumers of
which jurisdiction to consult for further information.
Comment: The State of Alaska commented that neither DOJ nor the
NMVTIS operator should be permitted to discount transaction fees for
volume purchasers. This commenter stated that not discounting the price
will maximize revenue collected to offset NMVTIS operational costs,
resulting in reduced rates charged to the states.
Response: The volume discounts established by the current operator
have been more effective in securing consumer-access portal providers
than the non-discounted rates. DOJ will continue to monitor the fee
structure to
[[Page 5745]]
ensure that it is effective in securing participating providers without
increasing reliance on state fees. Fees generated through the portal
providers will offset the financial impact on states.
Comment: One commenter noted that the NMVTIS prospective-purchaser
inquiry is redundant of similar services that already exist.
Response: A significant number of consumer advocacy, law
enforcement, and other organizations submitted comments arguing that
NMVTIS's prospective-purchaser inquiry is not redundant with existing
services. For example, NMVTIS receives certain state data more
frequently than some of the third-party databases, and the data NMVTIS
receives includes information that some of the third-party databases do
not have.
Comment: The Institute of Scrap Recycling Industries, Inc. (ISRI)
argued that the law does not give DOJ the authority to expand NMVTIS
data collection to further the interests of a particular group of
stakeholders. The ISRI expressed concern that certain stakeholders
would promise smooth and easy implementation of the rule if DOJ were to
demand collection of additional data for NMVTIS.
Response: No individual or entity has made such claims or promises,
and DOJ has not expanded the scope of data to be collected beyond that
which was intended or demonstrated to be necessary to accomplish the
program's goals as set forth in statute.
5. Privacy
Comment: One commenter noted that ``[t]here are provisions in law
in regards to privacy of individual identity that do not appear to be
satisfactorily addressed in this document.'' Another commenter noted
that it will not send any names to NMVTIS because names do not validate
a title and because of concerns over compliance with the DPPA. The
Virginia Department of Motor Vehicles commented that NMVTIS was
intended as a pointer system, and it is not necessary for that pointer
system to include all data fields, particularly private information.
AAMVA also recommended against requiring owner name in the NMVTIS
central file for privacy and cost reasons.
Response: DOJ takes these concerns very seriously and agrees that
privacy interests must be protected. While names may not be needed to
validate a title, names are relevant and necessary from a law
enforcement perspective, and in certain other situations. To ensure the
protection of privacy, however, DOJ has amended the rule to provide
that no privacy fields shall be available without DOJ approval to any
NMVTIS user, other than state-titling, law enforcement, or other
government agency. Additionally, the operator shall ensure that no
individual prospective purchaser has access to any personal
information. DOJ will require that the operator of NMVTIS have an
approved privacy policy in place that describes how the operator will
ensure adequate privacy protections, consistent with the DPPA and other
relevant statutes.
Comment: NAEC noted that data privacy fields should be available
for law enforcement purposes.
Response: DOJ agrees with this comment.
Comment: The Automotive Recyclers Association (ARA) and ISRI both
emphasized that confidential business information, such as the number
and type of automobiles processed by individual junk and salvage yards
in a given period of time, the sources of those vehicles, and related
information, should not be released to the public or other data
providers.
Response: The operator will not disseminate this type of
information to any non-governmental entity or individual, and this
information will not be available to prospective purchasers. DOJ will
closely monitor this aspect of the system to ensure that access to
sensitive or personal data only proceeds with DOJ approval.
Comment: Several commenters requested clarification in the final
rule on any liability or immunity for providing data to NMVTIS as the
Anti-Car Theft Act requires.
Response: The Anti-Car Theft Act grants certain immunity for those
reporting data to the system. The scope of this immunity is described
in the Act at 49 U.S.C. 30502(f) and does not require clarification.
Comment: Several commenters recommended maintaining provisions for
accessing personal information to qualified DPPA commercial consumers,
so that entities that currently work with the states to access this
information could continue to do so, which would benefit the states and
NMVTIS.
Response: Providing continued access to these entities may
facilitate effective and efficient service to the states, but such
access may only occur with DOJ approval, and may also require
compliance with state application and certification processes and
procedures. In most cases, these entities will only use NMVTIS as a
pointer to connect with and access the state's data, including personal
information, if the state provides for that access.
6. Timely Reporting
Comment: Several commenters, including several national consumer-
advocacy organizations, requested that dispositions by insurance, junk,
or salvage sales to other entities be reported at the time of the sale
and include the identity of the buyer, which would support law
enforcement investigations into fraud and theft. The National Salvage
Vehicle Reporting Program also commented that salvage pools should be
required to report sales within one business day of the sale in order
to reduce fraud and theft.
Response: The reporting of dispositional information is critical
and needs to be timely, but the DOJ cannot require that the reporting
be anything other than monthly in accordance with the requirements of
the Anti-Car Theft Act. DOJ has added a requirement for such entities
to report the name of the primary buyer of such vehicles.
Comment: ARA and ISRI commented that junk- and salvage-yard
operators have an interest in reporting efficiency and recommended that
such entities be permitted to report the ultimate intended disposition
of the vehicle at the time of initial reporting. ASPA also reported
that requiring an entity to continuously report that a vehicle is in
its inventory is inefficient and pointless.
Response: In cases where the ultimate disposition is known with
certainty, junk- and salvage-yard operators now will be permitted to
report disposition in their initial report. The reporting entity is
responsible for ensuring that the vehicle is disposed of in the manner
reported or for filing an updated report to account for a different
disposition. In response to concerns of reporting inefficiency, DOJ
notes that entities report once when the vehicle enters the inventory
and are only required to report again on that vehicle if they need to
update the record. Should the disposition be known at the time of
initial reporting (e.g., ``sale''), the entity would only be reporting
once on each vehicle.
Comment: One state motor vehicle administration and other
commenters asked that insurance carriers report more frequently. That
state motor vehicle administration noted that ``if a vehicle is damaged
on the 5th day of the month and the insurance carrier has already sent
[its] file for the month, the state will not know of the damage until
the following month's update.'' Several commenters representing nearly
every stakeholder group noted that it was important for the reporting
into NMVTIS to be timely, ideally in ``real time.'' Experian Automotive
commented
[[Page 5746]]
that a monthly reporting requirement would be slower than the current
industry practice for insurers.
Response: The 16-year-old language of the Anti-Car Theft Act is no
longer consistent with business practices in an electronic age.
Nonetheless, the language of the Anti-Car Theft Act provides no
flexibility with regard to this reporting requirement. DOJ does
strongly encourage, however, that all reporters provide data to the
system as quickly as possible, preferably within 24 hours of
acquisition, determination, or other reporting trigger. DOJ expects to
highlight such reporting efficiencies and stakeholder participation on
its official NMVTIS site, www.NMVTIS.gov.
7. Third-Party Reporting and Reporting Exceptions
Comment: Two commenters argued that an exception allowing junk- and
salvage-yard reporting to occur through a state titling agency was
flawed. One of these commenters suggested that all junk and salvage
yards should be required to report directly into NMVTIS. The NADA also
commented that allowing this exemption would only serve to create a
loophole, particularly in cases of conflicting definitions among the
states and between states and the Anti-Car Theft Act. Instead, NADA
suggested allowing an exemption in cases where an insurance carrier
reports to a third party that has no definitional restrictions, such as
the NICB, that can transmit the information to NMVTIS without concern
for conflicting definitions.
Response: While DOJ will take steps to ensure data integrity and
quality, it would be unreasonable to prevent third-party reporting.
Ultimately, insurance carriers and junk and salvage yards are
responsible for their compliance with the Act, including the reporting
of required information. These reporters must ensure that they are
compliant with the reporting requirements for every vehicle handled. If
such reporters cannot be certain of a third party's ability to provide
the required information into NMVTIS, the reporter must report through
a different third-party provider. Additionally, certain states require
this reporting, and therefore, a duplicate reporting structure would
continue to exist even if DOJ did not allow junk or salvage yards to
report through states. For purposes of clarification, however, the
Anti-Car Theft Act does not provide a specific exemption for insurance
carriers to report through states, as it does for junk- and salvage-
yard operators. Instead, DOJ has provided an exemption for insurance
carriers to report to NMVTIS through an identified third party that is
approved by the system operator. DOJ and the operator have attempted to
identify potential third parties that can report to NMVTIS who already
receive this type of information from insurance carriers and junk- and
salvage-yard operators.
Comment: ARA commented that pursuant to the Act, ``junk and salvage
yard operators are not required to report on a vehicle when they are
issued a verification stating that the automobile or parts from the
automobile are not reported as stolen.'' ARA argued against the
exemption's implement on the grounds that the exemption is ``completely
unworkable'' without time limits on the verification and other
controls, and because the exemption creates a ``significant loophole
that could foster additional illegal activity.''
Response: Pursuant to the Anti-Car Theft Act, a junk or salvage
yard that is issued a verification under 49 U.S.C. 33110 stating that
an automobile or parts from that automobile are not reported as stolen
is not required to report to NMVTIS. Therefore, the Department has
retained this exemption from NMVTIS reporting in these regulations.
Comment: The ARA commented that it appreciates attempts to exempt
reporting by junk and salvage yards that already report to a third-
party organization that is sharing its information with NMVTIS. The ARA
further commented, however, that yards not currently participating with
a cooperating third party will need a separate reporting mechanism that
is labor efficient and economical in order to report NMVTIS
information.
Response: DOJ agrees. The operator will designate at least three
third-party organizations that have expressed a willingness to share
with NMVTIS information that they receive from insurers and junk and
salvage yards. In addition, DOJ will endeavor to identify a reporting
mechanism that is ``sector'' and ``stakeholder'' neutral. Third-party
providers need to be identified who will provide the information to the
stakeholders or allow such third-party providers to charge a nominal
fee for collecting and reporting the information on behalf of junk and
salvage yards. DOJ hopes to identify providers that do not charge fees,
but this is difficult with sector-or stakeholder-neutral providers.
Comment: Several state motor vehicle administrations commented on
the third-party exemptions provided in the proposed rule. One state
motor vehicle administration commented that it currently has some but
not all of the information required for junk and salvage reporting. The
state suggested that it does not have the resources available to accept
and report all of the information required from junk and salvage yards.
Another state motor vehicle administration made a similar point and
stated that the requirements effectively establish an inefficient dual-
reporting requirement. Another suggested that the phrase ``or cause to
be provided on its behalf'' be clarified so that it is clear that
states do not have a responsibility to report insurance, junk, or
salvage information to NMVTIS on behalf of these organizations. The
State of New York commented that it receives reports from junk and
salvage yards in paper, that it does not process all of the reports
received, and that the processing time may be beyond the reporting
timeframes required of junk and salvage yards. Another asked that
entities reporting to states as their chosen method of compliance be
required to certify that they are meeting their reporting requirements
by reporting to a specific state or states.
Response: A state's willingness to make such alterations to
accommodate third-party reporting is strictly voluntary. Junk and
salvage yards in states that cannot accommodate third-party reporting
as required by the Anti-Car Theft Act and the rules will have other
options for compliance reporting. While DOJ is committed to avoiding
inefficient processes, DOJ is not able to eliminate data fields for the
sake of efficiency alone and is not willing to impose additional
requirements on the states to expand data collection and reporting on
behalf of junk- and salvage-yard operators.
Comment: ASPA commented that while the proposed rule allows states
to share junk and salvage information with NMVTIS, the inclusion of
this data in state title information systems would be based on the
state's definition of ``salvage'' and ``junk'' vehicles. ASPA
questioned how the state would report data that it may not have because
that state does not require submission of that data.
Response: The rule requires that junk- and salvage-yard reporting
by or through states must include all of the data that junk- and
salvage-yard operators are required to report. State definitions of
``salvage'' or ``junk'' do not alter a junk-or salvage-yard operator's
responsibility to report vehicles in its inventory. If junk- and
salvage-yard operators are not reporting all of the required data to
the state, or the state is not able to report all of the data to NMVTIS
as required of the yard, the junk or salvage yard must report
independently of the state.
[[Page 5747]]
Comment: ASPA contended that the provisions of the proposed rule
with regard to the direct-reporting exemptions for junk or salvage
yards that already report inventories to the states appear to conflict
with the wording of the statute that ASPA described as ``only
requir[ing] the reporting of acquisition'' of such vehicles.
Response: The Act specifically spells out what information is to be
reported by junk and salvage yards and requires junk and salvage yards
to report more than the mere acquisition of the vehicle.
8. Total Loss Definition/Fair Salvage Value
Comment: One commenter expressed concern at the reference to ``fair
salvage value.'' Any vehicle with a high salvage value will be totaled
with a lower damage appraisal, and any vehicle with a low salvage value
will be totaled with a high damage appraisal. The commenter noted that
without uniformity as to the assignment of the salvage declaration,
consumer protection cannot be guaranteed. The commenter argued for a
more uniform definition of total loss that is not driven by the salvage
value, noting that ``[t]his proposed market assessment of the vehicle
value can either make or break the rule.'' Others commented positively
on the use of a ``value-based'' definition.
Response: DOJ used this reference because it was required by the
Anti-Car Theft Act. DOJ understands that there are different ways or
bases for determining total loss, and that different stakeholders may
argue for different standards based on their interests.
Comment: Nationwide Mutual Insurance Company commented that
Congress specifically granted the DOJ authority to collect information
from insurers on vehicles that such insurers have ``obtained possession
of'' and determined to be ``junk automobiles or salvage automobiles.''
Nationwide further commented that ``[i]t is not logical that declaring
a vehicle a total loss should trigger reporting of the total loss
automobiles as salvage and/or junk. The determination of [a] vehicle as
a total loss can be based upon other economic considerations not
reflective solely on the actual cost of reporting the vehicle.
Therefore, we assert that the inclusion of total loss information in
the proposed rule is inconsistent with our understanding of the intent
of the statute.''
Response: DOJ disagrees. DOJ is mandated to require reporting of
``salvage'' vehicles, which DOJ has determined to include those
vehicles determined to be a ``total loss.'' DOJ recognizes that, in
certain circumstances, the decision to declare a vehicle a ``total
loss'' may be based on other determinations, such as the fact that a
vehicle has been stolen. To address this issue, insurance carriers are
strongly encouraged to include with ``total loss'' reporting the
primary reason for the determination. Doing so not only would provide a
better position for insurance carriers, but it also would allow the
consumer to be aware of the specific circumstances for the
determination. DOJ does not agree that ``obtained'' should be defined
in such a limited way to include only ownership.
Comment: Nationwide Mutual Insurance Company commented that DOJ
should clarify the definitions of junk and salvage by requiring
insurers to report on those automobiles titled as ``junk'' or
``salvage'' under the laws of the state where the insurer obtains title
to the motor vehicle.
Response: DOJ disagrees and notes that not even half of the states
require such titles or brands (see Texas's comment below). Such a
definition, therefore, would create a significant loophole that would
be counter to the consumer-protection intentions of the Anti-Car Theft
Act.
Comment: The State of Texas Department of Transportation commented
that `` `Total loss' is not a term used in Texas salvage motor vehicle
law and has no bearing on whether a vehicle is determined to be a
salvage vehicle. A vehicle can be considered a `total loss' by an
insurance company, but not be branded as salvage because the vehicle
does not meet the definition of salvage in the title state. * * * Use
of this term could be problematic if NMVTIS shows a vehicle as a total
loss and the Texas records indicate nothing.''
Response: The requirement for insurance carriers to report ``total
loss'' information is put in place for exactly this reason--vehicles
that are salvage may not be branded as salvage by many states. To
resolve this discrepancy, NMVTIS blends reported information from
multiple sources so that prospective purchasers are aware of the
vehicle's true history and can avoid being defrauded and placed in an
unsafe vehicle. The presence of ``total loss'' information in the
absence of a state salvage brand will need to be explained by portal
providers, so that prospective purchasers (and others) are aware of
what the apparent discrepancy means, and how it occurs. DOJ does not
expect states to take any action based on this information that is not
authorized in state law and does not believe that it was the intention
of the Anti-Car Theft Act to require them to do so.
Comment: Several insurance-related associations commented that
``[t]he statute requires that insurers report junk and salvage
automobiles, yet the regulation would require reporting of `total
losses,' a term that would include some automobiles that are not junk
or salvage. It is axiomatic that a regulation cannot expand the limits
of a statute, and especially if in doing so, the regulation imposes
added burdens and costs. Not only is such expansion inconsistent with
the underlying statute but there is also nothing in the Court's order
in Public Citizen et al. v. Michael Mukasey that mandates or authorizes
any such expansion of the statutory definition of automobiles to be
reported.''
These commenters further noted ``that the statutory definitions of
`junk' and `salvage' in 49 U.S.C. 30501 are not used by most state or
insurance carriers. To enable consistency with the existing state laws
and data systems and thereby to expeditiously implement NMVTIS, we
request that the last sentence of Section 25.55(a) be amended to read
in the final regulation: `An insurance carrier shall report on any
automobile that it has determined to be a junk or salvage automobile
under the law of the applicable jurisdiction.' This approach makes
sense because since the Congress enacted this statute in 1992, most
states have defined the meaning of `junk' or `salvage.' These state
laws represent the best understanding of these terms today. Requiring
their use by regulation would implement the spirit of the law in a
practical way. Data reported by insurers in this manner will also be
consistent with data reported by the states.''
Opposing this view, consumer-advocate litigators commented that
``[t]he Insurers comment that `any expansion via regulation of the
categories of automobiles for which reporting is mandated * * * would
be unauthorized. * * *' However, they do not suggest that it is outside
the scope of the Department's authority to provide construction for
such terms in the statutes. It is obviously the duty and the province
of the Department to use its broad discretion in construing these
terms.'' The consumer-advocate litigators further commented that the
rule's enabling of electronic reporting through third parties that may
already have access to the data addresses the need for reporting in the
least-burdensome and least-costly fashion. These commenters further
argued that ``[t]he Insurers take issue with the Department's proposal
to provide that a vehicle treated as a total loss is deemed
[[Page 5748]]
a salvage vehicle. However, it is squarely with the Department's
province to make the determination that the fact that a vehicle has
been treated as a total loss indeed is evidence that it is a `salvage'
vehicle, and that both legally and practically the vehicle is a
`salvage' vehicle. Similarly, it is necessary, in carrying out the
clear protective purposes of the statutes, that this construction be
given to these terms. * * * The Insurers next propose amending the last
line of Sec. 25.55(a) to state `An insurance carrier shall report on
any automobile that it has determined to be a junk or salvage
automobile under the law of the applicable jurisdiction.' Such a change
would incorporate the limitation they seek of disregarding total loss
vehicles. It also appears to be an attempt to require that state
definitions of `junk' or `salvage' be substituted for the definitions
in the statutes, rather than additional to and supplementary of them.
That would be entirely improper, of course, defeating the central
purpose of providing a national definition of `salvage' that sets a
floor for reporting, not a ceiling.'' These commenters further noted
the ``extraordinary patchwork of state laws regarding title `brands'
and even the terms used for labeling `salvage' or `total loss'
vehicles. The uniform minimal reporting standard provided by the NMVTIS
statutes is of critical importance.''
Response: DOJ agrees that it possesses authority and responsibility
to provide the definition of these terms. Additionally, in order to
meet the requirements of the Act with regard to providing prospective
purchasers with the information needed to make an informed purchase
decision, and in order to inform state title administrations and law
enforcement of that vehicle's history, full disclosure of total-loss
information is needed regardless of a state's action or inaction on
that vehicle.
Comment: Several insurance-related organizations and associations
commented that ``[s]ection 25.55(a) states that the insurer must report
automobiles that it has obtained `possession of and has decided are
junk automobiles or salvage automobiles.' The term possession is not
clear. To be workable, `possession' should be construed as `the titled
owner' as represented on the certificate of title, because insurers
would only be able to report on those automobiles to which they are
titled owners. Otherwise, they do not record `possession' of
automobiles and could not report them.''
The insurance-related organizations further commented that
``[r]eplacing `possession' in the regulation with `titled owner' would
also be workable and consistent with the remainder of the sentence
which requires that insurers must report automobiles which they possess
and have decided they are junk or salvage automobiles. Both the
`possession' and `decision' are manifested by re-titling, which is
reportable by insurers in an efficient manner. Therefore, the language
would read, `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 is the titled owner and has decided are
junk automobiles or salvage automobiles.' ''
Opposing this view, several consumer-advocate litigators commented
that while the term is not clear and needs construction in furtherance
of the protective purposes of the statute, they disagreed with the
insurers' proposed substitution of ``is the titled owner of'' for ``has
obtained possession of'' in section 25.55(a). These commenters further
noted that the effect of the insurers' comments would be to ``eliminate
any reporting requirement of salvage vehicles by insurance carriers
whatsoever for all but those vehicles that they do in fact actually
title in their name. There are innumerable reasons why, and methods by
which, they may legally in many instances not obtain titles to salvage
vehicles in their names under the existing hole-laden patchwork of
state laws. In addition, if this change were made, and if they
blatantly violated a state law by failing to get a salvage title issued
in their names, they would appear not to be in violation of the federal
law by not reporting to NMVTIS, because they would not have been the
`titled owner.' The opposite construction of `possession' is crucial.
In fact, the very example they provide of a salvage vehicle that comes
into their possession but that they do not title shows how NMVTIS
should work to be effective: They should report such vehicles. If there
are multiple reports on the same vehicle, there is no harm done; but if
such salvage vehicles are not reported, there is every harm done.''
Other consumer advocates commented that ``possession'' should be
defined to include both actual and constructive possession and should
include exercising control over an automobile directly or indirectly.
Response: Limiting insurance reporting to those vehicles owned by
insurance companies would create a large loophole through which total-
loss or salvage vehicles would remain under ``clean title.'' Such a
loophole was clearly not intended to exist under NMVTIS, and in order
to provide consumer protection against fraud, insurance carriers must
be required to report on all vehicles that they determine to be a total
loss.
Comment: Several insurance-related organizations and associations
commented that ``[s]ection 25.55(b) sets forth the mandatory data
elements. We believe that applying the following interpretations will
allow a reporting system to be put in place that complies with all
aspects of the statute, including the `least burdensome and costly'
directive and that can reasonably meet the Court's deadline in Public
Citizen et al. v. Mukasey.
``a. VIN. This can be reported.
``b. The date on which the automobile was obtained or designated as
a junk or salvage automobile. Again, interpreting this requirement to
mean the date on which the automobile was re-titled `junk' or `salvage'
comports with legal and practical considerations and would be most cost
effective.
``c. 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. Again, as set forth above, the only cost
effective way for insurers to meet this obligation is to construe it to
mean the name of the insurer when the automobile was re-titled.
Providing the name of the individual or entity from whom the automobile
was obtained does not provide useful information to law enforcement or
consumers.
``d. The name of the owner of the automobile at the time of the
filing of the report. In most instances, this will be the buyer of the
salvage or junk automobile, or the insurance company when the insurance
company retains ownership, for instance to crush a junk vehicle.''
Opposing this view, several consumer-advocate litigators commented
that the insurers suggest `that the regulations should provide that
they do not have to report the name of the person from whom a salvage
vehicle was obtained. This is directly contrary to 49 U.S.C.
30504(b)(3). The ownership trail of all of these vehicles is critical
for law enforcement and consumer investigative purposes, and Congress
noted that by writing it into law.'''
The consumer-advocate litigators further commented that ``[t]he
Insurers also suggest that the `owner of the automobile at the time of
the filing of the report' would normally be the buyer of the salvage
vehicle, and would only be the insurance carrier if it retained
[[Page 5749]]
ownership to crush a vehicle. I submit that it is important that both
the buyer and the insurance carrier be identified under the
regulations.''
Response: DOJ agrees with the comments of the consumer-advocacy
organizations and has retained the total-loss reporting requirements
that were included in the proposed rule.
Comment: Several commenters, including the NADA, ARA, Experian
Automotive, the National Salvage Vehicle Reporting Program, insurance
services organizations, consumer advocate attorneys, and others,
expressed strong support for DOJ's ``modernization and clarification of
language found in the Anti-Car Theft Act related to salvage and junk
vehicles, to include within this the requirement to report on all total
loss vehicles, including those recognized by the state and those not
recognized by the state but determined a total loss by an insurance
carrier.'' Several of these commenters also pointed out that many
total-loss vehicles do not receive salvage brands due to varied and
unreliable state definitions and criteria. Relying on state definitions
of ``salvage,'' therefore, would be highly inconsistent, would
perpetuate fraud and theft, and would fail to accomplish the objective.
Comments submitted by Amica Mutual Insurance Co. underscore the need to
collect ``total loss'' data. Such data provides additional consumer
protection, potentially decreases fraudulent activity, and reduces the
number of unsafe vehicles in the marketplace.
Response: DOJ agrees with these comments.
Comment: The NADA, ARA, National Salvage Vehicle Reporting Program,
several national consumer-advocacy organizations, and other
organizations commented that the proposed rules fail to require
insurance carriers to report all vehicles that they declare a total
loss, including those retained by insureds. Often, individuals who
retain possession of their ``total loss'' vehicle can avoid disclosure,
or they may not apply for salvage titles. The NADA commented that the
final rule should be revised to eliminate the concept of possession and
instead focus on those insured motor vehicles that the insurance
company declares, or the applicable jurisdiction defines, to be a
``total loss.''
Response: DOJ disagrees that the proposed rule puts such a
limitation in place. DOJ requires that insurance carriers who declare a
vehicle a total loss and allow the insured to retain the vehicle must
still be required to report such declarations.
Comment: The NADA commented that ``total loss'' should be defined
broadly to capture all total-loss vehicles. ``The final rule should not
define `total loss' in Section 25.52, but rather should define `total
loss motor vehicle' as `those motor vehicles determined to be a total
loss under the laws of the applicable jurisdictions and those
designated as a total loss by each insurance company under the terms of
its policies.' ''
Response: DOJ appreciates this clarification and agrees that
``total loss'' includes all total-loss vehicles.
Comment: ASPA commented that ``[w]hen an automobile is classified
as a total loss by an insurance company, it does not necessarily mean
that the automobile is a `salvage automobile.' On page 54546 of the
Federal Register, in Section 2 `Insurance Carriers,' the explanation of
the Proposed Rule expands the definition of `salvage automobiles' when
it states: `For purposes of clarification, the Department of Justice
has determined that this definition [salvage automobiles] 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.' ''
``In common usage, `salvage' is not synonymous with `total loss.'
There are many circumstances in which an insurance company may declare
a vehicle a `total loss,' but the vehicle does not meet the `salvage'
definition of the relevant state. If a stolen vehicle is not recovered
quickly, the insured may be paid for the missing vehicle. If the
vehicle is later recovered in a largely undamaged condition, the
vehicle, although a `total loss' due to its late recovery, may not meet
the relevant `salvage' definition and, often, is sold by the insurer
with a `clear' (i.e., not branded) title. The definition in the
Proposed Rule lumps this undamaged theft recovery into the `salvage'
definition, thus devaluing the vehicle and, again, creating confusion
about the applicability of the laws of the relevant state.''
ASPA further commented that ``[m]ore generally, pursuant to 49
U.S.C. 30501(7), `salvage automobile' is clearly defined as `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.'
This definition is both clear and unambiguous on its face and,
therefore, requires no `clarification.' ''
``In the Proposed Rule, the DOJ is attempting to expand the
definition of salvage automobile `[f]or purposes of clarification' to
include automobiles determined to be a total loss under the law of the
applicable jurisdiction or designated as a total loss by the insurer
under the terms of its policies. We contend that this significant
expansion of the definition is not necessary, and that the proposed
definition actually contradicts accepted custom and usage within the
insurance and salvage industries.
``The DOJ's proposed amendment to the definition of salvage
automobile would subject many clear title automobiles to the reporting
requirements of NMVTIS. This is problematic, and is clearly not what
Congress envisioned when it created the definition for salvage
automobile. In Chevron U.S.A., Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837 (1984), the Court implemented a two-part
analysis to determine the appropriate standard of review towards a
government agency that attempts to amend statutory language. Here,
since the current definition of salvage automobile is not ambiguous,
the proposed `clarification' by the DOJ is not based on a permissible
construction of the statute and should not be allowed.''
Response: DOJ disagrees. Total-loss vehicles are just that--a total
loss--at the time the determination is made. Total-loss vehicles fall
within the definition of ``salvage'' and must be reported. In response
to other comments, DOJ notes that insurance carriers are strongly
encouraged by the final rule to report to NMVTIS the primary reason for
the determination of total loss, addressing this commenter's concerns
specifically and providing much-improved disclosure for consumers.
Comment: One submission argues for ``the necessity of all states to
adhere to the Uniform Certificate of Title Act.'' ``If the state has a
different definition of a Salvage vehicle the branding now becomes an
arbitrary issue.''
Response: The Uniform Certificate of Title Act and the benefits of
uniform titling procedures aside, the Anti-Car Theft Act does not
require States to adopt standard brand labels or definitions. NMVTIS
has a process in place to record each state's unique brand label and to
relate it to one of the 78 brand types used in the NMVTIS database. The
state's brand labels and definitions remain unchanged in NMVTIS.
[[Page 5750]]
9. Chain of Custody/Names of Those Who Provided/Those Who Purchased
Comment: One commenter noted that ``[t]he reporting requirement of
the junk and salvage yards may need some change. There are many
different routes for a vehicle to come into a yard, very often it is
not by the `owner of record' or the titled owner. A more definitive
approach to recording the information of the entity placing the vehicle
into the salvage yard should be taken, more identifying information
regarding the entity placing the vehicle into the salvage yard should
be captured. * * * How does the system handle this in a manner that
will notify the title State of a cancel record and provide a bona-fide
chain of events leading to the yard?''
Response: The reporting requirement for junk and salvage yards
applies to every vehicle regardless of what ``route'' it took into the
yard or who brought in the vehicle. Further, it is the responsibility
of the junk or salvage yard to provide, among other data, the name of
the individual or entity from whom the automobile was obtained. The
NMVITIS reporting requirements do not affect existing state-level
requirements for junk- and salvage-yard operators to provide states
with a notice of title or record cancellation and any data fields
required in such notifications. NMVTIS will not issue such
notifications to states, but states will be able to view the reported
salvage- or junk-yard status of any vehicle at any time. With the
cumulative vehicle histories constructed in NMVTIS, states and law
enforcement can identify the ``chain of events'' with reliability once
there is full system participation.
Comment: One commenter noted that ``stolen'' designations or
notifications sometimes are not made when a vehicle is first reported
stolen. In these instances, the commenter suggested that law
enforcement may receive a false negative response on a stolen check due
to this delay. The commenter suggested that the system provide a
notification to law enforcement officers filing a report on a stolen
vehicle that a prior stop and ``stolen'' check was made on the vehicle,
providing notification and an investigative lead to the reporting
officer of where the vehicle was stopped and who made the stolen
inquiry. Another commenter noted that stolen-vehicle information is not
required to be in NMVTIS, and nothing in the regulations requires a
state to check NCIC before issuing a title.
Response: NMVTIS is not intended or expected to replace the
information or services available to law enforcement through NCIC. NCIC
is and will remain the primary system used and relied upon by local law
enforcement to check the ``stolen'' status of a vehicle. NMVTIS's
capturing of ``stolen'' status and history information is to inform
state titling agencies and others who may not have access to NCIC that
a vehicle was at one time reported as ``stolen.'' Stolen vehicle
information is included in NMVTIS via NICB so that states that do not
have access to NCIC can be apprised of a vehicle's questionable status
before issuing a new title.
Comment: The National Auto Auction Association commented that
``NMVTIS should include lien holder names and license plate numbers''
for various reasons.
Response: While DOJ will authorize the operator to seek additional
information for NMVTIS as may be necessary to accomplish program goals,
DOJ will not require these data fields to be included in NMVTIS.
Comment: The National Auto Auction Association commented that DOJ
should clarify in the final rule whether data maintained in the NMVTIS
central file is to be considered the official legal record of a
jurisdiction's data.
Response: The official record for any vehicle will be determined by
the state. However, NMVTIS is expected to be a reliable source of title
information that users can rely on to make decisions.
10. Brand Definitions
Comment: One commenter asked, ``[h]ow is the branding procedure
determined? Is there a preexisting national standard for what brands
exist and how a vehicle is classified under such brands or is the
determination made on a state-by-state basis? If the standard is
national (which would make sense given the national objective), maybe a
list of definitions of the applicable brands should be placed in the
rule's definition section.'' Another commenter noted that the
development of standardized definitions and brands for all states would
be extremely beneficial in ensuring that the intent of NMVTIS is fully
recognized. Several state motor vehicle administrations pointed out
that the definitions of ``salvage'' and ``total loss'' in the proposed
rule are different from state definitions. Another commenter noted that
to add information based on the definitions in the proposed rule will
conflict with State definitions of brands, compromise the integrity of
the NMVTIS database, and reduce the value of the information in the
database.
Response: NMVTIS does not affect state branding procedures, and the
Anti-Car Theft Act did not require a national standard for branding.
Although differing definitions may create complexity in deciphering a
vehicle's brand history, NMVTIS will accept any official state brand
and will share that brand with other states, thereby relating that
brand to a brand type or ``NMVTIS Brand.'' Users of NMVTIS will notice
state brands as well as a separate category for insurance, junk, and
salvage information, if any is available. The differences in these
reporting streams also will be defined so that users will know if a
vehicle has been or is a junk or salvage automobile by virtue of a
state brand indicating such, or by an insurer's determination that the
vehicle was a total loss. Consumers and others also will be advised if
a vehicle has been in the possession of a junk or salvage yard.
Information is reported by multiple data sources and is reported in a
segregated fashion with links for explanations.
Comment: ASPA provided the following example as evidence of the
problems that would be created by the proposed rule: ``Michigan's
salvage law covers current model year passenger vehicles and those of
the preceding five model years. Therefore, a 2002 passenger motor
vehicle does not become a `salvage vehicle' or a `scrap vehicle' in
Michigan, regardless of the fact that the vehicle has been damaged and
`totaled' by an insurance carrier. In this situation, Michigan, when
reporting to NMVTIS, presumably would not include the car in the
state's branded title submissions. An insurance carrier reporting to
NMVTIS presumably would not include the car because it is outside of
the age limitations applicable to insurance carriers. However, a
salvage yard or junk yard, using the definitions in the Proposed Rule,
presumably would report the vehicle as a `salvage automobile' or a
`junk automobile,' when reporting to NMVTIS. So, for a state or other
inquirer of NMVTIS, NMVTIS will show that the vehicle has a salvage or
junk history. This occurs regardless of the fact that the relevant
state did not deem the vehicle salvage or scrap.''
Response: This comment offers an excellent example of how NMVTIS
reporting will fill the holes that currently allow salvage or junk
vehicles to remain unbranded, creating opportunities for theft and
consumer fraud.
11. Brand Washing
Comment: One commenter asked ``if brand information is already
collected by states, how exactly would brand `washing' occur? If the
retitling state
[[Page 5751]]
checks the title of the previous state wouldn't that information be
included with the title?'' Another commenter recommended that NMVTIS
retain a prior state's brand history even when a state does not accept
a previous state's brand.
Response: Brand histories or designations are not always carried
forward by the states. Retitling states do not necessarily check with
the previous states before issuing a new title. In some states, the
paper title from the previous state of record is accepted as the basis
for the new title to be issued. Because of the reliance in some states
on paper titles as evidence of prior titling history, and because not
all states check with the prior states of record, brand washing occurs
regularly. NMVTIS will create a nationwide brand history for every
vehicle, requiring that all states check with NMVTIS rather than simply
relying on paper documentation. Brand washing will be significantly
reduced, if not eliminated. A state's decision not to acknowledge a
prior state's branding will not affect the NMVTIS brand history.
12. Self Insurers Included in the Definition
Comment: Several commenters expressed disappointment that self
insurers were left out of the rule. One commenter noted that the
definitions should encompass a ``self insurer,'' be it a municipality,
lease company, or large corporation, and that this is a current
``hole'' in the system.
Response: DOJ agrees that the Anti-Car Theft Act's definition of
``insurance carrier'' includes entities that underwrite their own
insurance, such as certain rental car companies. The definition,
however, excludes any organization that does not underwrite its own
insurance.
13. Salvage Automobile Defined
Comment: One commentator noted that the definition of a ``salvage
automobile'' should also include any automobile that an insurance
company has taken ownership of in settlement of a claim and any vehicle
that a state has issued a title to an insurer for. Another commenter
noted that ``[t]he responsibilities of the insurance carriers should
include, in the area of the reporting, if the insurance company
obtained a title from the state in their name, the state in which they
obtained it and the type of title.'' Several consumer-advocacy
organizations commented that every automobile obtained by a salvage
yard or junk yard that the salvage yard or junk yard knows, or has
reason to know, has come from an insurance carrier, or from any person
or entity in connection with the resolution of insurance claims, should
be deemed as a salvage automobile or junk automobile and must be
reported as such. These commenters suggested that the rules should
provide for a presumption that any automobile obtained or sold by a
salvage or junk yard, and that has known unrepaired wreck or flood
damage, is either a salvage automobile or junk automobile, and that
such a vehicle must be reported as such. Similarly, the rules should
include a presumption that any automobile obtained or sold by a salvage
yard or junk yard, without knowledge as to the automobile's physical
condition, is either a salvage automobile or junk automobile, and must
be reported as such. This would prevent salvage yards or junk yards
from maintaining an ``empty head'' to avoid compliance. The commenters
suggested that ``these presumptions (as to automobiles not obtained
from insurers) can be overcome if and only if the salvage or junk yard
has qualified appraisal personnel employees or others acting solely on
its behalf, entirely independent of any other persons or entities,
perform a good-faith physical and value appraisal of the automobile and
determine that the automobile does not meet the definition of `salvage'
or `junk.' ''
Response: Based on the proposed rule, a ``salvage auto'' is defined
as ''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. By definition, this would mean that every automobile obtained
by a salvage yard or junk yard that the salvage yard or junk yard
knows, or has reason to know, has come from an insurance carrier, or
from any person or entity in connection with the resolution of
insurance claims, should be deemed as a salvage automobile or junk
automobile and must be reported as such. DOJ does not agree that any
automobile with unknown damage or any automobile obtained without
knowledge of its physical condition should be considered a junk or
salvage automobile. DOJ agrees that a junk or salvage yard may be
excepted from reporting any vehicle that a qualified independent
appraiser determines does not meet the definition of a salvage or junk
automobile. This determination by the appraiser must be in writing and
made after performing a good-faith physical and value appraisal.
Although not required, the Department recommends that junk and salvage
yards retain the reports and written appraisals for a period of ten
years from the date of the report. Additionally, a salvage auction or
salvage pool that does not handle any vehicles from or on behalf of
insurance carriers is categorically exempted from this rule until such
time as they may handle a vehicle from an insurance carrier.
Comment: One commenter noted that the lack of common terms will
undermine the clarity and usefulness of the information provided: ``How
will NMVTIS reconcile the differences in law as to what constitutes a
`total loss?' How will this undermine or effect achievement of
NMVTIS'[s] goals? How will NMVTIS reconcile the differences amongst
insurance company policies as to what constitutes a `total loss?' How
will this undermine or effect achievement of NMVTIS'[s] goals?'' The
West Virginia Department of Transportation also commented that the rule
should establish a standard for establishing total loss as opposed to
relying on the rules of insurance carriers and states.
Response: NMVTIS will not attempt to ``reconcile'' differences in
definitions. Rather, NMVTIS recognizes that different definitions and
criteria are in place within different insurance companies and states.
NMVTIS accepts these ``native'' determinations and notifies users that
``X company'' or ``X state'' has made a determination that the vehicle
is a ``total loss,'' ``salvage vehicle,'' etc. NMVTIS will provide all
users with full disclosure and explanation on the differences in
definitions and determinations and how this may or may not affect a
vehicle. NMVTIS's mandate is to notify users of the determinations made
in a vehicle's history, not to make such determinations uniform or
conforming.
14. Junk Yard Definition
Comment: ISRI commented that it objects to the presumption in the
rule that vehicle recyclers operate only one of two things, a ``junk
yard'' or a ``salvage yard,'' and suggests that DOJ clarify the full
scope of entities to be included under the general heading of ``junk or
salvage yards.''
[[Page 5752]]
Response: While DOJ relied upon the language in the Anti-Car Theft
Act to describe the category of required entities, DOJ acknowledges
that the terms do not adequately reflect the professional and varied
nature of the vehicle-recycling industry. In general terms, any entity
that owns, controls, handles, or acquires salvage vehicles is included
in the reporting requirements of this rule, which is consistent with
current business practices. Similarly, scrap-vehicle shredders, scrap-
metal processors, ``pull- or pick-apart yards,'' salvage pools, salvage
auctions, and other types of auctions handling salvage vehicles
(including vehicles declared a ``total loss'') are included in the
definition of ``junk or salvage yards.''
Comment: ISRI also requested that new definitions of ``scrap
vehicle,'' ``scrap-vehicle shredder,'' and ``scrap-metal processor'' be
added to the rule to exclude these entities from the reporting
requirement.
Response: DOJ has clarified the rule, but rather than eliminate the
reporting requirements for these entities, DOJ revised the regulations
to establish an exemption that would cover prohibitive reporting
circumstances that these entities face.
Comment: One commenter argued that the definition of ``junk yard''
is too broad and may unnecessarily include used car dealers and others
who may rebuild vehicles with the intention of reselling them. The
commenter suggested that having such entities report these vehicles
into NMVTIS would potentially label these vehicles as ``junk or
salvage'' and preclude the vehicles from being retitled in some states.
Response: One of the main purposes of NMVTIS is to provide
prospective purchasers and others with reliable histories of a
vehicle's previous and current condition as it relates to salvage and
loss. Vehicles reported as having been in the possession of a ``junk''
or ``salvage yard'' may not be viewed in the same way that vehicles
with a ``junk'' or ``salvage'' brand may be viewed in state titling
processes. Each state will continue to make its own determinations
regarding vehicle titling based on state law. Although any individual
or business engaged in the business of acquiring ``junk'' or
``salvage'' automobiles (which includes motor vehicles determined by an
insurance carrier to be a ``total loss'') generally must by law report
such vehicles to NMVTIS, there are two exceptions to this requirement.
First, an automobile that is determined to not meet the definition of
salvage or junk after a good-faith physical and value appraisal
conducted by a qualified independent appraiser is not required to be
reported. Second, DOJ has added a clarification that individuals and
entities that handle less than five salvage or total-loss vehicles per
year need not report under the salvage-yard requirements, which is
consistent with existing standards that used car dealers are familiar
with.
Comment: Many commenters, including Iowa Attorney General Thomas J.
Miller, noted that the inclusion of salvage pools in the reporting
requirements for junk and salvage yards ``will help close a significant
loophole'' and will ``further deter fraudulent used car sales, vehicle
theft,'' and other crimes.
Response: Requiring salvage pools or auto auctions to report on
salvage or insurance claim vehicles will increase the effectiveness of
the program, ensuring that consumers and others are not defrauded by
sellers who conceal salvage or ``total loss'' histories.
Comment: Several commenters, including the ISRI, the Virginia
Department of Motor Vehicle Administrators, and other industry
associations and representatives, commented that the proposed rules do
not clearly indicate that scrap-metal processors, shredders, pull-apart
yards, and others who often receive and demolish many end-of-life
vehicles are included in the reporting requirements.
Response: The regulations have been revised to clarify that the
definition of junk and salvage yards includes not only salvage pools,
but also scrap-metal processors, shredders, pull-apart yards, and
others who handle or control total-loss, junk, or salvage automobiles,
otherwise described as end-of-life vehicles.
Comment: ASPA commented that DOJ should recognize that VIN
inspections conducted in most states would make a salvage automobile an
unattractive choice for criminals, and that cloning a salvage vehicle
would result in the cloned vehicle having a ``salvage'' branded title.
Response: DOJ recognizes that some states require vehicle
inspections upon retitling, and some states place a ``brand'' on
salvage vehicles. In these states, a salvage vehicle may not make an
attractive choice for VIN cloning. However, not every state has these
requirements, and VIN inspections typically do not inspect or verify
hidden VINs. As a result, cloned vehicles go undetected. Even
electronic diagnostic modules that would otherwise display the VIN can
be defeated, allowing the clone to be virtually undetectable. Most
often, the criminal activity that DOJ referred to in the proposed rule
is related to total-loss or ``end-of-life'' vehicles that are purchased
because they have a ``clean title'' that is then fraudulently connected
with a stolen vehicle, which ``clones'' the stolen vehicle to the non-
stolen, ``clean title'' vehicle. Because the non-stolen vehicle was
destroyed and sold to an individual, it no longer appears on the road
and no notification of its destruction may be made to the current state
of title.
Comment: Copart, Inc. argued that because salvage pools do not own
the vehicles sold at salvage pools or auto auctions, and therefore by
definition do not ``resell'' them, they do not meet the definition of
salvage yard and are therefore not required to report. Copart further
contended that salvage pools should be required to report only those
vehicles that they purchase for resale, and that any other
interpretation goes beyond the plain language of the statute.
Response: DOJ disagrees with this interpretation and notes that
salvage pools do in fact handle and cause to be resold (on behalf of
their current owner, who ``bought'' the vehicle from another) salvage
and total-loss vehicles.
Comment: Copart, Inc. argued that salvage pools do not typically
have access to the information needed to determine whether a vehicle
meets the NMVTIS definition of junk vehicle or salvage vehicle. Copart
further contended that junk and salvage yards should only be required
to report to NMVTIS those vehicles sold on a salvage or junk
certificate under applicable state law.
Response: Allowing junk and salvage yards to report only on
vehicles with salvage titles would perpetuate the problems described
elsewhere, including fraud and theft. Nonetheless, DOJ has addressed
this issue in the definition of a ``salvage auto'' that now includes
exceptions for vehicles that are not salvage, including total-loss
vehicles.
Comment: Copart, Inc. argued that requiring salvage pools to report
to NMVTIS is wasteful and duplicative because they function as an
intermediary between other entities that are required to report, such
as insurance carriers, dismantlers, and scrap-metal processors.
Response: Criminal organizations exploit salvage-pool services,
purchasing total-loss vehicles with ``clean titles'' to facilitate the
cloning and resale of stolen vehicles. To address this issue, law
enforcement and other organizations require information on the vehicles
handled by salvage pools. Additionally, many if not most vehicles
[[Page 5753]]
sold by salvage pools do not end up in a junk or salvage yard, and not
all vehicles sold by salvage pools, including those with significant
damage, are determined to be a total loss by insurance carriers. For
these reasons, it is essential that salvage pools report to NMVTIS.
Comment: Copart, Inc. argued that DOJ should interpret ``junk
yard'' and ``salvage yard'' to include all vehicle auction companies so
as not to discriminate against ``salvage pools'' that sell both clean-
titled and salvage vehicles.
Response: All vehicle auction companies should not be required to
report on all vehicles handled or in their inventory. Instead, those
organizations that handle or resell vehicles on behalf of insurance
carriers after a determination of total loss, regardless of salvage
title, should be required to report. This should hold true regardless
of whether the entity operates as a ``salvage pool'' or refers to
itself as an ``auto auction,'' ``salvage auction,'' ``abandoned-vehicle
auction,'' ``tow-lot auction,'' ``scratch-and-dent'' sale or auction,
etc. As the National Salvage Vehicle Reporting Program noted, ``the
recommended guideline for determining that an entity is required to
report * * * should be if the entity owns or acquires, [or handles]
total loss/salvage vehicles in whole or in part.'' Under such
circumstances, it should be required to report all vehicles to NMVTIS.
DOJ will clarify this requirement in the final rule.
15. Salvage Brand
Comment: One commenter noted that ``[i]f the NMVTIS project is to
succeed it would be a reasonable assumption to require a uniform
approach to the assignment of the `salvage' brand by any member state.
The system is only as good as the data in it, if the data is not
applicable to uniform situations there will always be discrepancies.''
Response: A uniform approach to branding would be advantageous in
many respects. The Anti-Car Theft Act, however, does not provide the
authority for DOJ to develop or mandate uniform branding, which would
be a significant and potentially costly change for states to implement.
As each state makes its own determinations, and NMVTIS relates state
brands to an aggregated brand or brand category within NMVTIS, the non-
uniform approach does not create an insurmountable problem. DOJ will
ensure that those who access NMVTIS information have the opportunity to
learn about the different state brands that exist and the impact of
other reporting on these brands to create greater awareness and
understanding of their meaning.
16. Definition of Automobile
Comment: NAEC argued that the rule should require the inclusion of
``trucks, SUVs and other non-automobiles as prescribed by the Federal
Anti-Car Theft Act for Parts Marking'' because of their popularity with
vehicle thieves. Other organizations, including the Idaho
Transportation Department, contended that ``NMVTIS records should also
include all vehicles that a state may title, and not be limited to
standard types of vehicles.'' The Minnesota Department of Public Safety
stated that if it is required to report on all vehicles in its
database, ``it might well grind to a halt,'' and costs would increase
considerably.
Response: Although DOJ cannot extend the Act's definition to
include all motor vehicles, it is important to note that many states
currently include such vehicles in their reporting to NMVTIS. DOJ
strongly encourages this continued reporting practice in light of
supporting comments, the value to law enforcement, and the need to
protect citizens against fraud and theft. Moreover, it may be more
costly or burdensome for states to filter out those vehicles not
meeting the statutory requirement than to submit all motor vehicles to
NMVTIS.
Comment: One commenter recommended that DOJ clarify when a vehicle
is no longer a vehicle for purposes of reporting, especially in junk or
salvage yards that often do not receive a complete vehicle.
Response: DOJ offers two clarifications in response to this
comment. First, a vehicle is thought to be present for reporting
purposes when a vehicle frame is present. Similarly, in cases where
questions as to the ``true VIN'' of a vehicle arise, DOJ has determined
that the true VIN for NMVTIS's purposes is the VIN on the frame of the
vehicle.
State Responsibilities
17. Start Dates
Comment: In reference to the proposed June 1, 2009, start date for
state reporting and inquiries into the system, several states and AAMVA
noted that the states would have difficulty meeting this date. One
state commented that ``[t]he requirement to budget, upgrade and work to
complete compliance requirements for NMVTIS cannot be met by this
timeline--it is simply not doable even with the political will and
funds available. To arbitrarily select a date that is not workable in
any manner is unfair and unrealistic.'' Other commenters noted that it
would take time to accomplish the necessary statutory and regulatory
changes that may be required, and that their states had not budgeted
for NMVTIS and could not pay NMVTIS fees in light of current economic
circumstances. AAMVA further commented that DOJ should establish a
process for approving ``temporary exemptions from the deadline where a
reasonable timeline for compliance is presented and approved by the
Department.'' The State of California proposed a ``phasing in'' of
participants. The dates proposed by states as alternative start dates
ranged from 2010 to ``1 year from the date funding is secured'' by the
state.
Response: Although DOJ has worked closely with the system operator
to reduce the need for state system modifications, and although the
requirements of the Act have been in place since 1992, DOJ understands
that it will take time for states to implement some provisions of the
regulation. To provide relief in this regard, DOJ has elected to extend
the compliance date for states not yet participating to January 1,
2010. By this date, all states and the District of Columbia will be
required to provide daily title transaction updates to NMVTIS, make
inquiries into NMVTIS before issuing a title on a vehicle coming in
from out-of-state, and paying any user fees that may be billed by the
operator. The Department believes that the states can comply by that
date. Similarly, DOJ has decided against a ``phasing in'' approach to
state participation commencement because there is no equitable way of
selecting phasing dates and participants in each phase. DOJ points out
that most of the provisions required to be implemented by January 1,
2010, are essentially the same requirements that have been a part of
the Anti-Car Theft Act since either 1992 or 1996, and states,
therefore, have had at least 12 years to implement the provisions of
the Act. Thirteen states have already done so without regulations in
place.
Comment: One commenter noted that the proposed start date is just
prior to an AAMVA-announced decision to continue as the operator of the
system and therefore creates a conflict for states should AAMVA decide
not to continue as the operator.
Response: AAMVA has assured DOJ that should a decision be made in
August of 2009 to discontinue its role as the operator, AAMVA will
continue to provide transition services and continuity until a new
operator is identified and is able to assist states that
[[Page 5754]]
rely on NMVTIS in their daily operations.
Comment: One commenter asked how the proposed start date had been
determined and has requested justification for the date. The commented
wrote that in the absence of this justification, the date appears
arbitrary. The State of Illinois motor vehicle administration
maintained that ``the proposed timeframe for implementing the NMVTIS
program under these rules is unrealistic to the point of being
absurd.'' Although that Illinois agency conceded that the start date
was likely driven by ongoing litigation and a court order, the
commenter noted ``that [the] order is either currently under appeal and
a stay of enforcement should be sought pending appeal, or the
Department of Justice [may have] chose[n] not to seek an appeal.''
Response: The proposed start date was chosen after an analysis of
historical timelines to provide batch data to the system, the number of
states that currently have implementation funding from DOJ either
directly or through AAMVA, the number of states that have indicated
previously that they were working towards implementation already, and
an expected release of stand-alone access to facilitate title
verifications. As noted previously, however, the Anti-Car Theft Act has
been in place for over 16 years, and many states have already
implemented the provisions beyond the minimum specifications. Finally,
the court order does not affect the state-implementation date in any
way, and in fact is not even mentioned in that order.
Comment: Several state motor vehicle administrations asked what
penalties are in place for states that do not implement prior to the
required start date and what provisions will be made for jurisdictions
that are in process or intend to implement at a later date.
Response: While DOJ will place its priority on supporting state
implementation, DOJ would review state refusals to participate to
determine the proper response. DOJ also will work with state officials
in support of NMVTIS to encourage state compliance. This outreach could
include contacts with state legislatures, governors, consumer-action
networks, and law enforcement associations.
Comment: One commenter suggested that DOJ publish a map of
participating and non-participating states, so that citizens can
observe the participation status of every state.
Response: DOJ will make this map available on www.NMVTIS.gov and
also will notify every consumer that accesses the site which states are
not participating.
Comment: The State of Alaska commented that ``there should be a
process in place that allows states to continue to issue titles when
NMVTIS is not operational during states' normal business days and
hours.'' Alaska recommended that states be permitted to ``issue titles
when NMVTIS is not operational, hold the inquiries in a queue and
submit the queued inquiries when NMVTIS is operational. If a problem is
detected with a title, it would be revoked.'' The State of Illinois
commented that standards of performance should be established to
address these issues.
Response: While NMVTIS is typically only down for various reasons
between 1 a.m. and 6 a.m. Eastern Time and one Sunday morning each
month, there are processes in place for unexpected down time during
state business hours. While specific processes vary by state according
to state business processes, there are methods of continuing offline,
such as mailing the new title at a later time, issuing a temporary
title, etc. DOJ cannot alter the Anti-Car Theft Act's requirement to
make a NMVTIS inquiry prior to issuing a new title. Therefore, new
titles should not issue when NMVTIS is unavailable. Current system
response time is less than three seconds per inquiry, and the number of
unexpected system down times has been minimal. DOJ notes that the
NMVTIS connection has not been ``down'' for 30 minutes or more at any
time during the last three years, demonstrating that it is a reliable
connection and service.
Comment: A state motor vehicle administration agency suggested that
the requirement for an ``instant title verification check'' is
problematic for states that do not issue titles over-the-counter. The
commenter suggested that the word ``instant'' be removed from the final
rule.
Response: Some states do not issue titles ``instantly.'' The
``instant title verification check,'' therefore, may take place after
the customer has left the title administration agency but before a new
title is issued. In these cases, states may make the NMVTIS inquiry
when appropriate in the titling process, so long as the inquiry is made
and title verified before a new permanent title issues.
Comment: One commenter asked if a title-verification check would
need to be performed on a state title that was being reassigned after
being purchased from an out-of-state dealer.
Response: It is unclear from the comment if the commenter was
referring to a title being transferred out-of-state or into the state.
States are required to check incoming titles related to vehicles from
out-of-state. States are not required to check titles being transferred
out of the state. With regard to the need to verify titles during
dealer reassignment or the transfer of vehicles from one dealer to
another, the Act requires that states verify the title of any
automobile coming from another state, which DOJ has determined includes
dealer reassignments when involving dealers in different states.
Comment: One commenter argued that the system should provide state
motor vehicle titling agencies with sufficient information to resolve
discrepancies during the title-verification process.
Response: NMVTIS provides state motor vehicle-title administrations
with all relevant data in the system and a seamless and secure
electronic connection to other online state title records. NMVTIS will
make available any additional information within NMVTIS that may be
needed to resolve such discrepancies. In the last year alone, the
system generated 45 million secure messages and notifications and made
18.4 million update transactions.
Comment: One commenter noted that information gleaned from a
state's ``instant title verification,'' such as reports of prior
removal of a vehicle from the vehicle population by export,
destruction, reported existence in a salvage or junk yard, or other
indication that the vehicle should not be present, should result in a
physical inspection of the vehicle to determine the validity of the
title and the vehicle.
Response: While DOJ agrees that such reports or results will flag
for states the title transactions and vehicles that should be further
reviewed prior to undertaking a new title transaction, DOJ cannot
require such inspections. It is each state's responsibility to
institute policies and procedures for resolving such concerns. This
comment does illustrate how NMVTIS can ``flag'' for states those
vehicles and transactions that should be carefully reviewed to prevent
fraud and theft.
Comment: One state motor vehicle administration asked how NMVTIS
will obtain data from the insurance companies and junk and salvage
yards.
Response: Insurance carriers, junk yards, and salvage yards are
required to report the data enumerated in the Act and regulations. The
operator will identify more than one reporting mechanism for electronic
reporting, in a format prescribed by the operator. AAMVA and DOJ will
identify the
[[Page 5755]]
official reporting mechanisms and processes via www.NMVTIS.gov.
Comment: The Nevada Department of Motor Vehicles complained that
requiring states to provide ``the date the vehicle was obtained is an
expensive and time consuming process'' and that states should be
permitted to continue sending the title-issue date instead.
Response: There is no requirement proposed for states to submit the
date a vehicle was obtained. This requirement is in relation to
insurance carrier and junk and salvage reporting.
Comment: The Oregon Department of Motor Vehicles commented that it
currently only collects odometer information on those vehicles subject
to federal odometer requirements and would be burdened to collect such
information on all vehicles. The National Salvage Vehicle Reporting
Program argued that states and insurers should be required to include
mileage reporting in their data provided to NMVTIS.
Response: States are only required to provide odometer information
on those vehicles subject to federal odometer requirements, 49 U.S.C.
32705, and not on all vehicles unless already recorded by the state.
States are required to provide to NMVTIS the most recent odometer
reading for such vehicles and any later odometer information contained
within state title records. DOJ strongly encourages all reporting
entities to include odometer readings where available.
Comment: One commenter recommended that the final rules spell out
what is actually required from the states and how (i.e., in which
format) this information is to be provided. Another commenter, the
California State Motor Vehicle Title Administration, recommended that
the rule be revised to require information that is consistently
available across all states and that only information held by state
titling agencies be subject to reporting requirements.
Response: DOJ will clarify what is required of each state and will
describe format issues to the extent practical and appropriate. DOJ
cannot simply choose to use only information that is available in every
state consistently for purposes of populating the system, as doing so
would limit the included data and significantly reduce the system's
value.
Comment: One commenter recommended that DOJ require that the
operator be responsible for developing at least two approaches for
NMVTIS inquiries and that DOJ should prepare a cost study relating to
the expenses associated with the fully integrated, online approach to
compliance.
Response: There are already at least two approaches for state
compliance with NMVTIS: (1) A fully integrated, online approach,
whereby a state's title information system automatically queries
NMVTIS, and NMVTIS provides real-time updates to both states involved
in the transaction; and (2) a stand-alone approach, whereby title
clerks send inquiries to NMVTIS via a web access point, and their state
sends daily updates through a batch upload. A third option, serving
central site states, entailing a process whereby verifications are
performed via batch inquiry, will be explored and may be implemented
soon. However, DOJ disagrees with the need to prepare a cost study
because an extensive cost-benefit study of this issue already exists,
and cost data from other state implementations is already available for
estimation purposes.
Comment: The NADA and at least one state motor vehicle
administration commented that DOJ should clarify that states are
required to submit all brands to NMVTIS for all automobiles titled
within the state.
Response: DOJ agrees and has clarified this requirement under
25.54(a)(2), consistent with statutory requirements.
Comment: The Minnesota Department of Public Safety argued that
states should be required to provide title numbers, ``since it would be
nearly impossible to establish the `validity and status' of purported
titles without them.''
Response: Participating states already have access through NMVTIS
to observe the full title of record, including the title numbers and
other information needed to establish the validity and status of titles
presented. However, DOJ encourages the states to voluntarily submit
that information to NMVTIS with the approval of the operator and the
Department.
Comment: The Minnesota Department of Public Safety commented that
``the proposed rule also would require states to provide [`t]he name of
the state that issued the most recent certificate of title' and `[t]he
name of the individual or entity to whom [it] was issued' when making
an inquiry to NMVTIS. This information is not, and cannot be, recorded
in MnDVS' current title information system.''
Response: This language was taken from the Anti-Car Theft Act to
describe what information would be needed in order for states to make
an inquiry into NMVTIS. Since the passage of the Anti-Car Theft Act,
and with the very recent development of a standalone access model that
only requires a VIN to search, these requirements have changed and this
information is no longer needed. At the present time, only the VIN is
needed to make an inquiry. This update will be reflected in the final
rule.
Comment: The West Virginia Department of Transportation argued that
some states exempt vehicles that reach a certain age from the
requirements of titling, and that these vehicles should be exempt from
reporting.
Response: The rule requires states to report on all automobiles
included in the states' titling systems, regardless of age. However, if
state law exempts certain vehicles from titling, those vehicles need
not be reported to NMVTIS. The state should make the operator aware of
these exceptions, however, so that consumers in the state and in other
states are advised of this exception, which they may take into account
when checking the history of vehicles through NMVTIS.
18. Unfunded Mandate
Comment: Commenters argued that the mandate for NMVTIS has not been
funded, and that the requirement for compliance has not been applied or
enforced for the 15 years of this process. On the other hand, one
commenter noted that NMVTIS is not an unfunded mandate in view of DOJ's
investment of over $15 million in the system since its inception and in
view of DOJ grants to states to support system participation.
Response: The Anti-Car Theft Act explicitly requires that user
fees, rather than federal funding, sustain NMVTIS. Although no funds
have been appropriated to DOJ for NMVTIS, DOJ has invested over $15
million in NMVTIS, with a substantial portion going to states to assist
them with compliance. The U.S. Department of Transportation previously
provided funding during the period it was responsible for the system,
which ended in 1996.
Comment: One commenter noted that DOJ's determination that the rule
does not meet the threshold cost or burden requirements of the Unfunded
Mandate Reform Act of 1995 is not sufficient in and of itself to
satisfy the legal responsibilities. Specifically, the commenter noted
that ``[t]he fact that the Department of Justice (DOJ) has decided that
it is a small enough amount of money that the Unfunded Mandate Reform
Act of 1995 does not apply, or that the DOJ has determined that per
Executive Order 13132, the cost imposed does not provide sufficient
cause for a Federalism issue, is not sufficient.''
[[Page 5756]]
Response: The Department of Justice, based on its own analysis,
made appropriate determinations based on law and regulation. The White
House Office of Management and Budget reviewed and approved this
analysis.
Comment: The City and County of Honolulu Division of Motor Vehicle,
Licensing and Permits disagreed with the aggregate amount estimated by
DOJ in the ``Unfunded Mandates Reform Act of 1995'' section of the
proposed rule ``because their estimate is based on the less expensive
standalone web solution which operationally degrades customer service
and increases the work of our over-the-counter staff.'' The commenter
further noted that the aggregate amount should ``factor in the
development and deployment of the much more costly integrated on-line
solution option that will ultimately be the final solution that states
will move towards'' and should include the additional costs that will
result ``from the increased load on the system to each jurisdiction
when all jurisdictions, insurance companies, salvage yards, consumers,
law enforcement, etc. are given access to the system.'' The commenter
concluded by stating that using this methodology, the aggregate costs
will ``easily exceed the $100 million resulting in the applicability of
the Unfunded Mandates Reform Act.''
Response: The methodology employed to calculate the aggregate costs
of the program uses the minimum requirements for system participation.
DOJ sees no purpose in using a level of participation not required by
DOJ as the basis for the cost calculations. While states ultimately may
move towards an integrated, online solution for efficiency, and
although this method of participation does benefit NMVTIS, DOJ does not
require it for compliance. It is DOJ's responsibility to determine the
least-costly, most-effective way for implementing the solution, and
that is the methodology used in the proposed rule. Further, a fully
implemented system, with all jurisdictions, insurance carriers, junk
and salvage yards, consumers, and law enforcement personnel accessing
and reporting, does not translate directly into an increase in costs
for states. In fact, it could very well decrease state costs through
offset fees.
Comment: The City and County of Honolulu Division of Motor Vehicle,
Licensing and Permits further maintained that because the combined
city/county government is a ``small'' government, it is uniquely
impacted by the regulations and is entitled to relief. Additionally,
this commenter contended that the operator's requirements for
extracting and mapping the required data are burdensome, and that
should the operator undertake these responsibilities, batch data
submission would be much easier to achieve.
Response: The Unfunded Mandates Reform Act and 5 U.S.C. 601(5)
define ``small governmental jurisdiction'' generally as rural
jurisdictions, those with populations under 50,000, and areas of
limited revenues. Based on this definition, the city/county identified
by the commenter would not appear to qualify as a ``small governmental
jurisdiction.'' In terms of the operator's requirements and the burden
associated with such requirements, DOJ will continue to direct the
operator to provide as much flexibility in requirements as is feasible,
and DOJ will continue to provide technical assistance upon request to
identify alternative solutions where necessary.
19. Inquiring Into NMVTIS Versus Other Systems
Comment: More than one state motor vehicle administration commented
that NMVTIS will not provide a more substantial benefit than checking
third-party vehicle history databases which some states already check.
One state motor vehicle administration suggested that the law was
unclear as to whether the Anti-Car Theft Act required states to check
NMVTIS or another third-party database, stating that ``[t]he previous
intent was to provide a system that a state may utilize to verify title
before titling a vehicle. This left open the use of other systems, such
as Carfax, to research titles. The requirement to mandate use of NMVTIS
to verify titles is unrealistic, unworkable and unfair. The intent of
the process is to protect citizens against fraud. NMVTIS is not the
only system that supports this intent. Limiting research to this system
could also lead to misinformation and misapplication of process.''
Response: The Anti-Car Theft Act requires states to verify titles
through NMVTIS. No other system, public or private, can provide the
same level of assurance as NMVTIS once full compliance is reached. DOJ
also points to comments submitted by several organizations that
highlighted concerns with the reliability of third-party databases.
States wishing to provide increased protections for consumers are
encouraged to continue to check such private databases in addition to
making the NMVTIS inquiry as required by federal law.
Comment: One commenter noted that ``the fully implemented system *
* * will also provide consumers with a source of comprehensive
information. Current services such as Carfax have partially filled the
need for information, but these providers do not offer as current and
complete titling information as the proposed NMVTIS system.''
Response: NMVTIS provides a unique service in terms of the source
of its data, its comprehensiveness, and its timeliness. Services such
as CARFAX will continue to provide information to the public that is
not intended to be included in NMVTIS, such as vehicle repair
histories, etc. For this reason, these private services will continue
to offer unique and beneficial services.
20. Time Lags
Comment: Several commenters noted that allowing states to upload
data (e.g., batch uploading) may create a ``time lag'' that could
impact law enforcement investigations and impede the ability of the
system to accomplish its goals. One commenter suggested that it would
be better to wait until states secure the necessary funding before
proceeding with implementation.
Response: DOJ has examined this issue closely with the system
operator and with third-party vehicle-history providers. While many
third-party databases experience lag time of several weeks or months in
getting state updated data, NMVTIS is designed to significantly reduce
or eliminate the lag time entirely to provide reliable information to
users. For this reason, states choosing the stand-alone method of
participation and batch uploads will be required after initial set-up
to establish batch updates at least every 24 hours. This requirement
will greatly diminish the possibility of exploitation of lag time and
provide a more up-to-date vehicle history check than is currently
available. States do have the option of implementing in fully online
mode where data transmission is in real time. DOJ does not have the
flexibility to delay implementation until states have funding to
implement the fully online mode. Pursuant to a federal district court
order, DOJ is required to have the rules published and system available
by January 30, 2009.
Comment: One state motor vehicle administration noted that when
using the stand-alone method of making inquiries before issuing a new
title on out-of-state vehicles, an impact on customer service is
expected. Specifically, the commenter stated that an additional ``three
to five minutes of processing time'' is expected due to the fact that
title clerks in this administration are using a mainframe that does not
allow simultaneous internet access, and that to make such
[[Page 5757]]
a check, the clerk would have to log out, make the NMVTIS inquiry, and
log back in to the mainframe for each out-of-state title transfer.
Response: The lower cost stand-alone method of participation is not
as timely as the fully integrated online method. DOJ is committed to
working with states and the operator to identify new alternative
methods to reduce or eliminate such inefficiencies, such as dedicating
one internet-capable PC that could be available to all clerks with the
NMVTIS page continuously running. With system response time currently
at three seconds or less, this alternative may impact customer service
less. Ultimately, however, although the stand-alone method of making
inquiries is far less costly for states to implement, it may be less
efficient than the fully integrated, online method.
Comment: One state motor vehicle administration recommended that
``all surrendered titles should be verified when being transferred[,]
and the rule should not limit this requirement only to `purchased'
vehicles. Without verifying all surrendered titles it is not known
whether the title surrendered is the latest title issued[,] and there
are many reasons titles are transferred other than through a sale.''
Response: DOJ agrees with this recommendation and notes that the
final rule clarifies that the requirement to make verifications
pertains to any title or vehicle coming in from another state,
including transfers. States are also strongly encouraged to perform
such verifications on every title transaction, which is most effective
when implementing via the online, integrated approach.
Comment: One state motor vehicle administrator asked if
manufacturers' certificates of origin (MCOs) must be verified as well.
Response: Because MCOs are not vehicle titles per se, states are
not required to verify MCOs in NMVTIS. However, DOJ strongly recommends
that state motor vehicle administrators make inquiries on all title
transactions, including initial registration of an MCO, to identify and
eliminate fraud and to protect consumers.
Insurance Carriers
21. Reporting on Recent-Year Vehicles
Comment: One commenter asked ``[w]hat is the reason to require
insurance carriers to report only vehicles manufactured within the past
five model years that they consider junk or salvage? If these vehicles
will always go directly to junk or salvage yards, won't the vehicle be
reported there anyway? Conversely if there is an opportunity for other
disposal of the vehicles, shouldn't the insurance carriers be required
to report all vehicles since the VINs could still be stolen for
swapping?'' Other commenters noted that vehicles older than five years
are often involved in consumer fraud and encouraged provisions for the
database to cover the same ten-year age range as is used for odometer
reporting.
Response: The Anti-Car Theft Act only required insurance carriers
to report vehicles in the current and four prior model years. DOJ is
not able to reverse or alter this limitation by increasing the
reporting parameters. Junk and salvage yards later may report some
vehicles that insurance carriers are not required to report. The
Department, however, encourages insurance carriers to report older
vehicles.
Comment: ASPA commented that section 25.55(b)(3) of the proposed
rule requires insurance carriers to report ``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,''
which would seem to be two different individuals or entities in most
cases. Further, ASPA notes that it is unclear if the insurance carrier
would know the name of the owner when it files the report.
Response: Although the proposed rule required reporting of the name
of the individual or entity either from whom the automobile was
obtained or who possessed it when the automobile was designated as a
junk, salvage, or total-loss automobile, the Anti-Car Theft Act
specifically states that both names are required. Reporting both names
is necessary to establish a ``chain of custody'' and for other law
enforcement and consumer-protection purposes. DOJ changed this language
in the final rule to require both names pursuant to the Anti-Car Theft
Act. In reference to the concern that insurers may not know the name of
the owner, most carriers do possess this information, as this would be
the owner of the automobile at the time the vehicle was determined a
total loss, salvage, or junk.
Comment: Farmers Insurance commented that the ``trigger'' for
insurance-carrier reporting should be when the insurance carrier sells
the vehicle or when the customer determines it will retain ownership of
the vehicle, because such dispositions may not be known for as much as
90 days after the loss occurs.
Response: Because disposition may not be known at the time of
initial reporting, this rule allows the insurance carrier to file a
supplemental disposition or update. Many comments emphasized the
importance of timely reporting, even when the named owner in the
initial report is the insurance company.
Comment: Farmers Insurance suggested that a 12-month grace period
should be granted for insurance reporting to begin in light of ``proper
system upgrades'' that may be required.
Response: DOJ is not able to provide a grace period, as the court
has ordered the reporting to begin by March 31, 2009. Additionally,
because DOJ aims to enable third-party reporting through organizations
that may already receive such data from insurance carriers, the burden
of any system changes should be minimal.
22. Non-Required Data
Comment: One commenter argued that ``[t]he proposed rule overstates
the benefits provided to consumers. Particularly, the fact that
insurance carriers are only `strongly encouraged to provide * * * other
information relevant to a motor vehicle's title' undermines the broad
benefits implied by the rule.'' ``The type of information not reported
includes the reason why the insurance carrier may have obtained
possession of the motor vehicle--flood, water, collision, fire damage,
or theft.'' The NADA further recommended that the rule should require
insurers to report the reasons they obtained possession of the vehicle
to prevent brand washing and fraud. Additionally, this information
would assist in cases where a vehicle is considered a total loss for
purely economic reasons (e.g., theft). Several insurance-related
organizations contended that for any voluntary reporting that may be
contemplated, immunity provisions must apply to this voluntary
reporting as well.
Response: DOJ disagrees that the rule overstates the benefits of
NMVTIS. DOJ does agree, however, that the reason for the total-loss or
salvage designation by insurance carriers may be of importance to a
prospective purchaser and to others. Not only does this protect the
consumer's interest, but the additional reporting criteria also benefit
insurance carriers. Therefore, the Department strongly encourages
insurance carriers to report this data element.
Comment: AAMVA commented that unless the rule requires ``junk and
salvage dealers'' to report the percentage of damage sustained by each
vehicle in their inventories to the states, the states would not be
able to consider applying a state junk or salvage brand on these
vehicles.
[[Page 5758]]
Response: States will not be in a position to make such judgments
based on junk- and salvage-yard operator reporting. Insurance carriers
have ready access to this information, which is the typical basis for a
state's designation. Although the reporting of junk- and salvage-yard
inventories was likely not intended to support state-branding
decisions, reporting of junk- and salvage-yard inventories may be
helpful to states in making brand decisions, but likely not conclusive.
Although such vehicles may not end up branded by the states, consumers
and other states have the benefit of knowing that the vehicle was in
the possession of a junk or salvage yard and therefore may wish to
inspect the vehicle or to require an inspection before making purchase
or titling decisions. DOJ is not in a position to require reporting of
the percentage of damage. However, insurance carriers and others are
encouraged to report this information.
Comment: One commenter asked ``[h]ow will DOJ know which states,
junk, salvage, and insurance companies are reporting information and
reporting all the information that is required? Will someone audit
their reports? I recommend that the system operator and the DOJ both
make a list of who is reporting and publish that list * * * and audit
reporting compliance.'' The commenter also suggested that DOJ require
entities to report the company name, address, and phone number for any
reports submitted. Another commenter asked who would inform insurance
carriers and junk and salvage yards of the requirement to report
information to NMVTIS, and who would identify those organizations
required to report.
Response: DOJ will instruct the operator to publish and maintain a
list of the entities reporting information to NMVTIS. The list will
include the name of the reporting entity, city and state of the
reporting entity, the date that data was last submitted by the entity,
and any contact information for the reporting entity. With regard to
who would inform reporting entities of the requirements, DOJ will work
with the operator, state-licensing authorities, and affected
associations and advocacy organizations to ensure proper outreach and
education.
Comment: Several state motor vehicle administrations argued that
DOJ should limit what non-required data the operator could ask for and
receive (e.g., address of the vehicle owner). Another believed that the
value of encouraging non-required data is unknown, and that reporting
may only increase the number of discrepancies or errors. ISRI contended
that DOJ should limit the ability of the operator to request
additional, non-required data, because the current operator would be
encouraged to request additional information that would generate
revenues to the benefit of the association and its members, creating a
conflict of interest. The Minnesota Department of Vehicle Services
(MnDVS) argued that the provisions of section 25.53(c), which allow the
providers of non-required data to query the system if beneficial in
addressing motor vehicle theft, ``exceeds the authority conferred by
Congress, is overly broad, and as such represents an arbitrary and
capricious exercise of rulemaking power.'' Other commenters, however,
reported that other data may be needed for specific purposes and argued
in support of this flexibility.
Response: It would be difficult to describe what data the operator
is restricted from asking for or accepting, other than social security
number, dates of birth, and addresses. DOJ points out that states need
not provide data that is not specifically required in these regulations
or the Act, and DOJ will need to approve the acceptance of non-required
data. Moreover, the non-required data that is readily available would
add great value to some consumers, to law enforcement, and to others
(e.g., NICB flood vehicle database, vehicle export data, other North
American vehicle history records, NICB theft file, etc.). While more
data always increases the chances of discrepancies, DOJ does not want
to discourage this voluntary reporting. While the current operator does
have the best interests of its membership in mind, however, it also has
expressed concern for others affected by the rule and will represent
the concerns of all stakeholders, not as a trade association, but as
the operator of a DOJ system. In response to MnDVS's comment, DOJ is of
the opinion that if not in violation of the Anti-Car Theft Act or other
federal privacy statutes, such cooperation is necessary and not
arbitrary or capricious.
Comment: Several commenters, including at least one from the state
motor vehicle administration community, encouraged the inclusion of
lien-holder information in the data provided to NMVTIS in light of the
difficulty of obtaining this information on out-of-state titles and the
associated budget impact on states. Other commenters, including
insurance-related organizations, Assurant Solutions, and the NADA,
suggested that additional data (including lien-holder information) will
provide a crosscheck of information, close up loopholes, and improve
NMVTIS.
Response: This comment demonstrates the importance of allowing the
operator of the system to request and accept additional information
beyond the NMVTIS requirements. While states and others are not
required to comply, there may be good reason to do so that would result
in cost savings among the stakeholders. In terms of lien-holder
information, while DOJ is not in a position to require that lien-holder
information be included in the central file, DOJ notes that the
existing secure network could be used in conjunction with the NMVTIS
central-file information to query the current state of record and to
access lien-holder information in that state's title record through the
secure network provided by the current operator. Queries of and access
to the actual state records should only be permitted when a state has
agreed to provide such access, when any state application or
certification procedures are completed, and when such access is in
conformance with the Anti-Car Theft Act, the DPPA, etc.
Comment: One commenter suggested that DOJ include registration
information in the list of required data as a means to ensure accurate
tracking of vehicle ownership.
Response: Including registration information is beyond the scope of
NMVTIS. Although it may be useful, DOJ cannot require such information.
Comment: The National Salvage Vehicle Reporting Program commented
that insurance-carrier reporting should commence on or before March 31,
2009, as required by the federal district court, and that initial
reporting by all covered entities should include historical data to the
extent available, so that NMVTIS is complete beginning on March 31.
Several insurance-related organizations or associations reported that
``[t]he start date for insurers should be clarified. We believe the
best approach is to provide that the system applies to automobiles
declared junk or salvage on or after April 1, 2009, [and that] the
system must be established by March 31, 2009. However, we prefer that
more time is provided for insurers to comply.''
Response: DOJ will require that all vehicles declared junk or
salvage (including ``total loss'') on or after April 1, 2009, be
reported to NMVTIS. However, DOJ strongly encourages insurance carriers
and junk- and salvage-yard operators to provide data on vehicles that
were declared junk, salvage, or total loss before that date and as far
back as 1992, if such data is available.
[[Page 5759]]
Comment: The National Salvage Vehicle Reporting Program commented
that ``NSVRP strongly endorses the inclusion in the rules of 3rd party
enhanced standards that allow for data generators to report to NMVTIS
more completely and more frequently than minimally specified in the
rules.''
Response: While DOJ is not in a position to articulate data-
reporting requirements or standards regarding data that is not
statutorily or otherwise required, DOJ notes that the National Salvage
Vehicle Reporting Program has worked with nearly every stakeholder
group affected by NMVTIS to develop standards for voluntary reporting
to NMVTIS that would benefit states, law enforcement, consumers, and
others. DOJ applauds the National Salvage Vehicle Reporting Program and
strongly encourages the operator to adopt these standards as suggested
voluntary compliance standards. While the standards cannot be mandated
on any reporting entity, those entities that adopt the standards and
report voluntarily in a manner that is consistent with the standards
will be providing a significant public benefit.
Comment: The National Salvage Vehicle Reporting Program commented
that NMVTIS must support the electronic MCO process and should serve as
a catalyst for implementation of the electronic MCO system nationwide.
Response: DOJ is in favor of supporting an electronic MCO process
as a way of eliminating and preventing fraud and reducing theft. In
addition to NMVTIS, the use of the secure AAMVAnet communications
network for states would likely be necessary, and it would be AAMVA's
responsibility to authorize its use for this purpose.
Junk Yards and Salvage Yards
23. Salvage Pools
Comment: Several law enforcement and related commenters strongly
agreed with the assessment that Salvage Pools are one of the most
significant sources used by criminal groups as a source of paperwork
and as a way to fund their operations. These commenters agree that
Salvage Pools must report vehicles to NMVTIS both when they receive
vehicles for sale, and when they sell those vehicles. These commenters
further noted that such salvage pools have sophisticated technological
capabilities and should not have any problem meeting the reporting
requirements. Several of these commenters noted that in some cases,
individuals purchase severely damaged units at or via these pools and
then steal a similar make and model for cloning purposes. For this
reason, these commenters also recommended reporting the buyer's name
for these vehicles. Several national consumer-advocacy organizations
also supported the constructive definition including salvage pools and
the requirement to add buyer name in the reporting requirements.
Response: DOJ reaffirms its determination to include ``salvage
pools'' and ``salvage auctions'' in the definition of junk or salvage
yards, thereby requiring them to comply with the corresponding
reporting requirements. The name of the buyer is not reported elsewhere
despite being very valuable for law enforcement and other purposes.
DOJ, therefore, added the name of the buyer as required data to report.
Because many of the purchasers are reportedly international buyers,
some of whom have been linked to fraud and theft rings that purchase
such vehicles for clean paper to use on stolen vehicles in the U.S.,
DOJ also will add to the requirements an indication whether the vehicle
is intended for export.
Comment: The Nevada Department of Motor Vehicles commented that by
statute, Nevada requires wreckers and salvage pools to apply and
transfer their salvage titles, junk certificates, and non-repairable
certificates within 10 to 30 days. Nevada suggested that these
organizations should be exempt from reporting because the DMV already
sends this data to NMVTIS.
Response: Junk and salvage yards, including salvage pools, are not
required to report data to NMVTIS if the state already reports the
required junk- and salvage-yard information to NMVTIS pursuant to this
regulation.
Comment: One commenter asked whether ``the definitions of junk yard
and salvage yard, which include even a single individual, [are] a
substantial overstep?'' Several consumer-protection organizations also
suggested that, with respect to the definition of ``in the business
of,'' junk and salvage yards should be defined as any entity or
individual meeting the description in the definition that acquires or
owns five or more salvage or junk automobiles within the preceding 12
months, which is analogous to other similar reporting standards.
Response: DOJ modified the final rule consistent with the comment
from the consumer-protection organizations. The qualifier of five or
more vehicles is taken from federal odometer law, and its definition of
``car dealers'' from 49 U.S.C. 32702(2).
Comment: One commenter (CARS of Wisconsin) argued that
``information about who owned the vehicle prior to it being junked is
unnecessary.'' The Wisconsin Department of Transportation contended
that requiring junk and salvage yards to report the name of the vehicle
supplier is unnecessary, as is the disposition of such vehicles.
Wisconsin DOT commented that because these vehicles are scrapped or
destroyed by these entities and cannot be returned to road use, it is
unnecessary to report this information.
Response: Comments from law enforcement entities on the proposed
rule demonstrates that this information is of significant value.
Additionally, even when a vehicle cannot return to the road, the VIN
can be used to clone a stolen vehicle. In states that do not have the
same junk-branding requirements as Wisconsin, a junked vehicle can
``live on'' through a cloned stolen vehicle, which will only cease once
NMVTIS is fully implemented.
Comment: The Virginia Department of Motor Vehicles expressed
concern that the proposed rule seemed to encourage junk- and salvage-
yard operators to submit data via FTP or facsimile that potentially
would include personal identifying information.
Response: DOJ encourages all reporters to report electronically
whenever possible. In cases where electronic reporting is not an
option, DOJ will direct the operator to identify a reporting procedure
to accommodate the situation. Regardless of the reporting method, DOJ
and the operator will ensure that all possible safeguard measures are
taken, including secure FTP wherever possible.
Comment: One commenter requested that DOJ require the operator to
accept junk- and salvage-yard data from any junk or salvage yard
directly or through a third party on their behalf to minimize
administrative burden.
Response: DOJ has provided the operator with flexibility in
identifying the specific methods of reporting to NMVTIS. It is not in
the system's best interest for all required reporters to report
directly into the system, due to technical and business reasons. The
operator is expected to identify three or more different methods of
transmitting information to NMVTIS and will make this information
available via its Web site, as will DOJ via www.NMVTIS.gov.
Comment: Several commenters have noted that, similar to insurance-
carrier reporting, junk and salvage reporting of vehicle presence in
inventory on a 30-day basis leaves a significant amount of time for
fraud and theft to occur. These commenters recommended that DOJ require
reporting of not only presence in
[[Page 5760]]
inventory, but also disposition of the vehicle. The recommendations for
the revised reporting timeline varied in the recommendations from
immediately to several business days.
Response: The Anti-Car Theft Act defines the reporting timeline,
and, therefore, DOJ can only require reporting on a monthly basis. DOJ
does strongly encourage all reporters to report data as soon as
possible or on a daily basis.
Comment: ASPA commented that ``while `salvage pools' were not
included by Congress in the `Anti-Car Theft Act of 1992' as an entity
with reporting requirements, the DOJ sweeps our industry into the group
which has these reporting requirements. * * * The salvage pool industry
wants to be helpful in combating vehicle theft, but we want to insure
that any reporting requirements imposed on our industry are reasonable,
in light of the fact that Congress did not specifically place reporting
requirements on salvage pools.''
Response: DOJ appreciates ASPA's declaration and will work to
ensure that reporting requirements on every industry are reasonable.
The reporting requirements proposed for salvage pools are the same
requirements placed on salvage yards, which also handle salvage
vehicles. Because a salvage pool is in the business of acquiring
(constructively defined to include handling or controlling on behalf
of) salvage automobiles for resale, it fits well within the statutory
definition of salvage yards.
Comment: ASPA commented that because salvage pools generally serve
as ``agents'' for insurance carriers, salvage pools should only be
subject to the reporting requirements of insurance carriers as they
relate to the age of automobile to be reported.
Response: DOJ disagrees with this recommendation because salvage
pools are included in the definition of salvage yards, as opposed to
insurance carriers.
Comment: ISRI and the National Salvage Vehicle Reporting Program
both suggested an exemption from reporting for vehicles acquired from
an entity that is obligated to meet the reporting requirements of the
Act and rule. They argued that this exemption is necessary, not because
of the burden of double reporting, but because, in the case of the
scrap-metal-recycling industry, many vehicles are acquired after being
flattened or crushed to an extent that a VIN cannot be reasonably
obtained.
Response: Many scrap-metal processors and shredders do receive
flattened and bundled vehicles and vehicle parts. In those cases,
recording a VIN for every vehicle is nearly impossible. Both ISRI and
the National Salvage Vehicle Reporting Program assert that such
entities are at the ``end of the line'' in handling end-of-life
vehicles, and almost always receive vehicles from those who are
required to report on the vehicle before it is crushed or bundled.
Additionally, with scrap-metal processors and shredders, there is no
possibility that the vehicle will be subsequently purchased for
operation on public roads by an unsuspecting consumer. However, cloning
and destruction of stolen vehicles remain a threat. For these reasons,
DOJ created an exception for reporting to NMVTIS in cases where a
scrap-metal processor or shredder confirms that the vehicle supplier
reported the required data to NMVTIS. Scrap-metal processors and
shredders that receive automobiles for recycling in a condition that
prevents identification of the VINs need not report the vehicles to the
operator if the source of each vehicle has already reported the vehicle
to NMVTIS. In cases where a supplier's compliance with NMVTIS cannot be
ascertained, however, scrap-metal processors and shredders must report
these vehicles to the operator based on a visual inspection, if
possible. If the VIN cannot be determined based on this inspection,
scrap-metal processors and shredders may rely on primary documentation
(i.e., title documents) provided by the vehicle supplier.
Lenders and Automobile Dealers
Comment: Iowa Attorney General Thomas J. Miller supported the DOJ
proposal that lenders and auto dealers have access to NMVTIS in order
to further NMVTIS's goals of reducing crime, especially fraud.
Response: Commercial consumers will have access to NMVTIS.
Comment: Assurant Solutions argued that lenders and dealers need
not only the ability to query NMVTIS for information, but also need the
ability to communicate and electronically exchange motor vehicle
information to achieve greater efficiencies in title processing, and to
limit the number and type of paper-based transactions as a strategy to
significantly decrease fraud. Specifically, the commenter suggested
that lenders and dealers communicate errors or changes to NMVTIS.
Response: Communication to and from NMVTIS is currently facilitated
through the use of the current operator's secure and proprietary
network, AAMVANet. This network is not a component of NMVTIS per se,
and therefore the operator governs use of this network for
communication between NMVTIS and its users. In terms of providing
lenders and dealers with the ability to make corrections and changes,
DOJ notes that it has concerns with authorizing any user other than a
state motor vehicle administration or its agents (where applicable) to
make corrections directly or changes to NMVTIS data. However, DOJ
directed the operator to develop a process for reporting possible
errors and requesting changes that may also be used by lenders and
dealers.
Responsibilities of the Operator of NMVTIS
24. Consumer Access Methods
Comment: One commenter argued that ``[t]he Web-based access should
be open to private individuals who wish to check the status of a
prospective purchase.'' And the NADA supported the provisions in the
proposed rule allowing dealers to access NMVTIS as prospective
purchasers, which is likely to help thwart motor vehicle-title fraud. A
consumer-advocate attorney commented that if this information becomes
widely and readily available, the vehicle-fraud industry will be
significantly reduced.
Response: Prospective purchasers (including dealers who purchase
vehicles for resale) are required to have access to information
necessary to make an informed purchase decision, and DOJ will require
that consumer access be available by January 30, 2009.
Comment: Experian Automotive argued that DOJ should not overlook
the significant costs involved in marketing and distributing vehicle-
history information, and suggested that these costs are beyond what the
operator can provide.
Response: These costs are significant. Under the model of third-
party portal providers (as opposed to a single, operator-provided
consumer access model), the third parties, not the operator or DOJ,
will bear the most significant marketing and distribution costs. It is
partly because of these costs that the third-party model was selected.
Comment: Experian Automotive argued that NMVTIS is not chartered to
provide the level of information and support that Experian or other
private vehicle-history report companies provide.
Response: DOJ has no intention of competing with private vehicle-
history-report companies. Those private services possess data that
NMVTIS does not intend to provide (e.g., vehicle repair and service
histories). NMVTIS is simply intended as a government-sponsored service
to verify the title and
[[Page 5761]]
brand history of a vehicle reliably, thereby preventing fraud and
theft.
Comment: Several motor vehicle administrations and one services
organization argued that the operator should not be permitted to sell
bulk vehicle data from any state, which would effectively allow private
information resellers to bypass contractual agreements and seek the
state's database from the NMVTIS operator. Additionally, at least one
state motor vehicle administration suggested that the operator should
conduct regular program and security audits and should screen potential
access providers.
Response: The operator will not sell the NMVTIS central file or any
particular state's dataset (i.e., all VINs from a particular state).
All information provided will be in response to VIN queries, except in
cases of law enforcement queries, which could include searches of
NMVTIS by reporting entity name, names associated with reports,
location, etc. Data provided to NMVTIS will remain in the possession of
the operator and any contractors supporting the operator (i.e., data
center hosting or backup). Consumer-access providers are restricted
from downloading and storing bulk NMVTIS data for resale or reuse and
must use data in accordance with the Anti-Car Theft Act. Any entity
using NMVTIS data in a manner inconsistent with these regulations may
not be covered under the Act's immunity provisions. The operator shall
conduct regular reviews and audits of security arrangements and program
compliance and shall work with DOJ to establish access-provider
standards to ensure that the access providers are professional and
reputable, and that information and access are provided according to
the Act.
Comment: One commenter argued that ``[t]he responsibilities of the
operator of the NMVTIS system are confusing in subsection (b)(3) and
(b)(5), [as] they appear to have the same meaning and impact.''
Response: These subsections describe what the operator of NMVTIS is
statutorily required to provide to users of the system, including
information regarding a vehicle's current or past status as a junk or
salvage vehicle. In other words, NMVTIS will make information about
vehicle history available to consumers, state titling agencies, law
enforcement, and others through an electronic (e.g., Web-based)
inquiry. Although subsections (b)(3) and (b)(5) overlap somewhat, it is
possible that the operator may have information indicating that a
vehicle has been branded a junk or salvage that did not arise from a
report submitted by a junk or salvage yard or insurance carrier.
Comment: One commenter noted that ``[w]ith the expected low
implementation costs for this consumer system, there are major benefits
to centralizing the system within a government Web site in order to
reduce further consumer misinformation. In the alternative, a detailed
scheme prohibiting third-parties from charging certain fees for
accessing the system'' would be desirable. The commenter further
emphasized the importance of regulating third-party involvement.
Response: Third-party involvement will be regulated and monitored
by the operator and DOJ. DOJ believes that this is the most sensible
manner of implementing consumer access. DOJ has established
www.NMVTIS.gov as a central source of reliable information concerning
NMVTIS, providers, requirements, etc.
Comment: One commenter suggested that the operator be required to
establish a data-quality plan that may rely on technological tools to
scan for and flag errors in VINs that may be reported to the system.
Response: DOJ agrees with this comment and will direct the operator
to adopt all reasonable strategies and techniques for ensuring data
quality.
Comment: In response to DOJ's request for comments on methods of
NMVTIS access, several commenters agreed that third-party providers may
be better suited for handling information access than a single
provider. The Minnesota Department of Public Safety argued, however,
that private third parties should not be permitted to have access to
NMVTIS data in the manner proposed, with little oversight, or to
generate profit from the data contributed by the states. Additionally,
the commenter stated that this would violate the provisions of the
Anti-Car Theft Act that restrict the operator from taking a profit from
its role as the NMVTIS operator.
Response: The third-party providers are not given open access to
NMVTIS data. Rather, they are only provided access to that data that
the Anti-Car Theft Act requires to be available to prospective
purchasers. Additionally, the operator will maintain much more than
``little'' oversight over these contractors. Last, while the Anti-Car
Theft Act restricts the operator from making a profit, the Anti-Car
Theft Act provides no restrictions on third-party contractors,
including states that wish to be a portal provider. DOJ will move
forward with a third-party provider approach to consumer access.
Comment: The NADA commented on the importance of providing access
to NMVTIS information for the wholesale vehicle market: ``If wholesale
auctions have access to NMVTIS data, fraudulently titled vehicles could
be easily flagged and reported to law enforcement officials
expeditiously and efficiently. * * * Transparency at the wholesale
level will only help to deter motor vehicle title fraud and enhance the
NMVTIS system.''
Response: DOJ agrees and notes that enabling this type of access
also will assist in generating revenues to sustain the system and
possibly offset or eliminate state fees. So long as this access is on
an inquiry basis, and NMVTIS data is not sold in bulk as previously
described, DOJ will authorize and direct the operator to provide such
access to dealers and other commercial consumers, consistent with the
Anti-Car Theft Act.
Comment: Several commenters expressed concern that the operator
must provide robust security protections for the information to be
included in NMVTIS.
Response: DOJ will ensure that the operator relies on industry-
standard security and related protections, including any relevant
policy recommendations of the Global Justice Information Sharing
Initiative that relate to security and privacy protections of
information systems used in the criminal-justice environment.
Comment: ISRI argued that DOJ's authorization for the operator to
identify third-party organizations to receive and provide data to
NMVTIS in lieu of allowing all required entities to report directly to
NMVTIS is problematic. ISRI believes that allowing third-party
organizations to handle the information creates a security risk,
provides an opportunity for market participants to access confidential
business information, and could create a cost burden for reporting
entities. ISRI recommended additional security protections and
restrictions that would prevent these potential problems.
Response: The current operator's information architecture is not
designed to allow hundreds, and possibly thousands, of reporting
entities to report directly to NMVTIS. In light of this, and because
many of the covered reporting entities are already reporting to third-
party entities, such as the Insurance Services Office (ISO), allowing a
third party to receive and provide the required information is
effective and reduces burden on reporting entities by allowing their
current reporting to be used in NMVTIS compliance. DOJ will require the
operator to designate at least
[[Page 5762]]
three third-party organizations for reporting purposes, so that covered
entities can choose which third party they are most comfortable with.
Additionally, any third-party organization that develops a reporting
application at the operator's request will agree to terms and
conditions restricting the sale or use of the data, consistent with the
Anti-Car Theft Act.
Comment: Auto Data Direct, Inc. suggested creating a policy to
prevent free dissemination of prospective-purchaser-inquiry data by any
entity and suggested charging all consumer-access providers the same
fees in order to maintain a level playing field.
Response: DOJ agrees and will direct the operator to ensure that
all consumer-access portal providers are charged the same fees for
NMVTIS information, notwithstanding volume discounts. Consumer-access
providers, however, are currently not restricted in what they can
charge the end user (prospective purchaser) for an inquiry, as DOJ has
determined that the ``market'' can determine this better than any
artificial caps or minimums.
Comment: The Minnesota Department of Public Safety commented that
section 30504 of the Act requires DOJ to prescribe by regulation the
procedures and practices to facilitate reporting to NMVTIS. The
commenter suggests that DOJ is merely placing this burden on the
operator to circumvent the DOJ's own responsibilities.
Response: DOJ strongly disagrees with this assessment. Requiring
that these procedures, which are subject to change and modification as
technology advances, be published in federal regulations is unwise and
inefficient and would only serve to restrict the states and other
covered participants from working with the operator to improve
reporting practices. It is in everyone's best interest that such
detailed procedures are not codified in regulation beyond the
procedures and practices that are described herein (i.e., third-party
reporting, reporting via batch upload or realtime, etc.).
Comment: AAMVA asserted that it cannot support the development and
implementation of a third-party reporting mechanism to support
insurance, junk, and salvage reporting. AAMVA reports that to establish
this connection with the required two or three third-party
organizations would require $1 million to $1.5 million in development
costs and up to $400,000 in annual operating costs from federal funds
to implement this provision.
Response: DOJ is under court order to establish this mechanism by
March 31, 2009. DOJ has recently provided AAMVA with federal funds of
nearly $300,000, and AAMVA expects to receive approximately $1,500,000
in user fees by end of year 2008. Much of these funds are spent on
other activities, including and especially support for currently
participating states. DOJ expects to work with AAMVA on cost controls
and to intervene to ensure that the basic connection is established as
required by the court. The Anti-Car Theft Act specifies that NMVTIS
will not depend on federal funds and is to be supported by user fees.
Comment: The National Salvage Vehicle Reporting Program commented
that commercial consumers such as auto dealers would desire the ability
to inquire on multiple VINs at the same time in a ``batch'' format at
an appropriate cost. Consumer-advocate attorney Bernard Brown commented
that ``such broad access to NMVTIS data should be provided for all of
these businesses and entities to level the playing field'' in the
competitive market place. Other consumer-advocacy organizations
commented that such commercial consumers should not be permitted to
provide the NMVTIS vehicle history to other consumers without also
notifying such consumers of the NMVTIS disclaimers and warnings.
Response: Similar to the need for central-issue states to inquire
against multiple VINs at the same time, commercial consumers should
have the same service available at a cost commensurate with the
service. Because DOJ is directing the operator to make such a batch-
inquiry process available for central-issue states, this same service
should be available to dealers and other commercial consumers. DOJ
points out, however, that these searches will require a VIN for each
vehicle to be searched. That is, no bulk data will be made available to
any consumers. DOJ will require the operator to require all third-party
portal providers to make a NMVTIS Notice and Disclaimer available to
all consumers accessing the system. Additionally, DOJ has collaborated
with the Federal Trade Commission on its Used Car Buyers Guide
regulations to ensure that the FTC is aware of NMVTIS and the
accompanying notice and disclaimer.
Comment: Several commenters, including the National Salvage Vehicle
Reporting Program, stated that the inclusion of specific disclaimers
for limitations to the data reported by the system is essential for
consumer protection purposes.
Response: DOJ agrees and will work collaboratively with the
operator and others to ensure that appropriate notices and disclaimers
are in place.
Comment: One commenter noted the need for proactive efforts by DOJ
and the operator in the areas of public awareness and education on
NMVTIS and the issues it addresses.
Response: DOJ will work with the operator and the various
stakeholder communities to develop and distribute information through
www.NMVTIS.gov and other means.
Comment: Several consumer-advocacy organizations argued that
consumers should be provided access either at no cost or nominal cost
without onerous access requirements and allowed to make multiple
inquiries for a fixed price. Similarly, these organizations contended
that consumers who have completed vehicle purchases should be able to
verify their vehicles' history, and that the Department should take
into account consumers' lack of access to credit and the ``digital
divide.''
Response: DOJ agrees that consumers should be able to access NMVTIS
at nominal cost, that there should be no onerous access requirements,
and that any consumer--including those who recently purchased a vehicle
and those who may be considering purchasing a vehicle in the future--
should be permitted access. DOJ will take into account the comments on
pricing structures and the issues of credit access and ``digital
divide'' while working with the operator to establish the consumer-
access provisions.
25. Operator Accountability
Comment: Several state departments of Motor Vehicle Administration
argued that the operator must provide a reasonable and timely process
for correction and amendment of records that contain errors, and that
the operator must take responsibility for notifying users of the
erroneous information. Another asked who would be responsible for
working with insurance carriers and junk and salvage yards when their
data is questionable or incorrect. The commenter also asked how the
data would be corrected.
Response: DOJ agrees that an error-verification and correction
process is vital to the success of the program. However, in some
circumstances, it may be impossible to fully verify the facts of some
situations (e.g., vehicles disposed of). The operator will be required
to work with data reporters to identify and resolve potential data
errors, to note within the central file any discrepancies reported or
the findings of any investigations of errors, and to notify those who
accessed the information of any confirmed erroneous information.
[[Page 5763]]
No entity, including the operator, may remove any data reported by
another organization, and only state motor vehicle-title
administrations can unilaterally change their data, which will update
in NMVTIS. Insurance carriers and junk- and salvage-yard operators do
not have access to modify data in the system, but are required to
notify the operator immediately of erroneous information that they
previously reported and to immediately report corrected information,
which will be flagged or noted in the system as an update. Although the
erroneous information may be retained in the file, it will be noted as
corrected via update, and the updated, correct information will be
available. In releasing insurance, junk, or salvage information, the
operator may include the name of the reporting organization and its
contact information, so that anyone questioning the validity of the
report can go directly to the source of the information. It is
important to point out that while NMVTIS is authorized to serve as a
data repository and data provider, NMVTIS was not expected to serve as
an arbitrator of questionable or even conflicting information. It is
the responsibility of the data reporters (including states and
insurance, junk, and salvage organizations) to provide correct
information, and to provide updates and corrections as soon as they are
identified. Although the operator should not remove previously reported
information, the operator can add a ``note'' to the record regarding
the corrected information, along with the corrected information.
Additionally, DOJ added a section to the regulation (section 25.57)
that provides for error correction in exceptional circumstances.
Comment: One commenter stated that ``[t]he GAO report stated that
there have been problems with funding NMVTIS through AAMVA, including:
excessive consultant fees; lack of documentation for payments; failing
to maintain records supporting financial reports; and failing to
adequately administer contractual arrangements with the states. GAO
report at 10. How has the track record for management of NMVTIS
improved since then? What type of financial oversight is expected for
the system? And what type of compensation structure does NMVTIS propose
for its labor costs?''
Response: Because the current operator (AAMVA) has received grant
funding from DOJ, the operator is responsible for complying with all
grant requirements, including financial and programmatic requirements
relating to contracting, documentation, and performance. Also, DOJ will
play an active role in overseeing the administration of the system. DOJ
also has added requirements for the operator to publish an annual
report to include revenues and expenses by category. DOJ leaves
operator labor cost structures up to the operator to determine what is
most advantageous and cost-effective while complying with DOJ financial
requirements. DOJ also has added a requirement (should DOJ not be the
operator) for an annual independent audit of NMVTIS revenues and
expenses, the results of which will be publicly available. DOJ also may
terminate the operator status of any organization (if not the
Department of Justice) for cause, should that be necessary. DOJ also
has coordinated with another federal agency, the Office of the
Inspector General (OIG), which recently completed audits of the
operator's financial recordkeeping and practices and will continue to
monitor these issues. DOJ also notes that the GAO study was completed
many years ago, and that AAMVA has undergone many changes since that
time.
Comment: One commenter asked ``to what extent is the potential for
corruption of those who manage the system a concern? What internal
controls will be implemented? Is this why access provided by the
operator to users of NMVTIS must be approved by the Department of
Justice? Sec. 25.53(d).''
Response: DOJ has no basis for any concerns of corruption. The
internal controls in place to protect the integrity of the system are
many and varied, including technological controls, transparency, and
oversight from a variety of stakeholders.
Comment: One commenter noted that ``[t]he estimates in the
regulations give the impression that the operator doesn't know exactly
how much the system costs to operate[.] The estimates provided all seem
pretty high. Why does it cost so much to operate the system? Is DOJ
sure that the operator has the experience and ability to run the system
well?''
Response: DOJ is very concerned about current system costs. DOJ
will continue to monitor and encourage cost-saving options and will
look to the annual independent audits to inform the operator and DOJ of
additional cost-saving strategies. DOJ notes that the current operator,
AAMVA, already administers other federal-state systems successfully.
DOJ will continue to encourage AAMVA to seek cost savings by
outsourcing technological solutions as appropriate and by adopting
current and less-costly technological solutions.
Comment: One commenter asked ``[h]ow will DOJ oversee the program
and the operator? Because these questions are obvious and because
others have already asked questions about the same issues, I recommend
that DOJ create some kind of governance model to oversee the project.
The current operator has close ties to the states, but other groups
required to participate don't have a seat at the table. A board of
governors that has people from the groups that use the system or need
the system is definitely needed.'' Similarly, one state motor vehicle
administration noted that ``the proposed rules and the options AAMVA is
willing to provide do not match. The lack of flexibility on the part of
AAMVA results in many options set forth in the proposed rule not
actually being available to the states.'' The California motor vehicle
administration commented that a board or commission made up of state
representatives, DOJ, and the operator should be engaged to discuss and
agree upon the requirements relating to consumer access. Other
commenters also recommended the establishment of a steering committee
to govern operation of NMVTIS outside of the rules.
Response: It is DOJ's responsibility to oversee the program and
make or approve all policy decisions regarding the implementation of
NMVTIS. To ensure input from all stakeholders, the Department may
establish a NMVTIS Advisory Board to make recommendations to DOJ
regarding the system and its operation.
Comment: Several commenters recommended that DOJ publish the NMVTIS
system budget on an annual basis for review as a part of an annual
report, and another commented that the operator should be required to
provide quarterly reports on the number of vehicles reported on during
each quarter, along with dispositional information, in order to give
better insight into the effectiveness and compliance rates within the
system. Another state motor vehicle-title administration recommended
that the operator be required to have procured an independent audit of
the fees generated and expenses incurred on an annual basis.
Response: DOJ will require the operator (if not the Department of
Justice) to prepare and publish electronically a detailed annual report
that includes many of these items, and DOJ also will require an annual
independent audit of NMVTIS revenues, costs, expenditures, and
financial controls and practices, which shall also be available.
Comment: The California motor vehicle administration suggested that
[[Page 5764]]
DOJ should identify its responsibility for oversight of the system and
operator performance, and that specific performance measures should be
established along with a minimum-performance period such as a year. The
commenter further suggested that the review of operator performance
should include solicited comments from the various system stakeholders.
Response: As previously stated in these comments, the Anti-Car
Theft Act provides that NMVTIS is a DOJ system over which DOJ has sole
responsibility and control. As necessary, DOJ will enter into an
Memorandum of Understanding (MOU) with the operator that addresses
these issues in greater detail.
Comment: Several commenters noted the need to require the operator
to provide information to reporters and others on its compliance and
the compliance of others in the program.
Response: DOJ will work with the operator to establish the specific
compliance monitoring, management-control functions, and
administrative-dashboard features that will be required. In its annual
report, the operator will provide compliance data and information on
which states, insurance carriers, and junk- and salvage-yard entities
are reporting to the system and participating, if available.
User Fees
26. Per Transaction
Comment: Several commenters noted that the user fees should be
based on a ``per transaction'' basis: ``The fee structure based on a
pro-rata share to states based on the number of registered vehicles is
not an equitable structure. States put information into the system and
all the states involved in the system benefit from this. Under a pro-
rata system, states that have a low number of title transfers but a
high number of vehicles ha[ve] to pay in more for the system for
marginal benefit. Other states, for example states that act as dealer
hubs and have a large number of title transfers but a small number of
registered vehicles[,] would be benefitting disproportionately. For
those reasons, the fees should be applied on a per transaction basis.''
Response: Several commenters, including state motor vehicle-title
administrations, noted that fees based on a ``transaction'' basis could
serve as a disincentive for states to participate and to make NMVTIS
inquiries, which would leave consumers and others vulnerable.
Additionally, several commenters noted that fees based on a pro rata
basis provided the ability to know fees in advance, which would assist
in budget planning and requests. Finally, a transaction-based fee
structure would require the operator of NMVTIS to revise its billing
process and would likely be more costly to implement. For these reasons
primarily, DOJ has determined that state user fees will be based on the
number of motor vehicles titled or registered as reported by the U.S.
Department of Transportation's Federal Highway Administration through
its Highway Statistics Program and reports. With full state
participation mandated beginning January 1, 2010, the operator will
invoice all states regardless of their level of participation. State
fees shall be reviewed biennially and announced to the states as soon
as possible, preferably more than one year in advance of becoming
effective.
Comment: Experian Automotive commented that some aspects of the
proposed rule could be read to allow the establishment of a fee beyond
what would be reasonable for the records, which would be essentially
the same as prohibiting the disclosure of information outright.
Response: The current inquiry fee used in consumer-access pricing
is based on market assessments, and with volume discounts included, has
been effective in securing consumer-access provider-organization
agreements. However, DOJ will carefully monitor consumer access pricing
to ensure that the average consumer is not ``priced out.''
Comment: AAMVA and the States of California, New York, and Alaska
commented that user fees based on the number of vehicles registered in
the state are the preferred basis, as this will enable states to
determine the fees in advance, which will support budget planning. At
the same time, states such as Texas, Oregon, South Carolina, and Hawaii
have recommended a fee structure other than the number of registered
vehicles because of the high number of registered vehicles in some
states. The State of California recommended that the fees be the
subject of a separate, future rulemaking, that the operator be required
to make its expenses publicly available, and that a stakeholder group
comprising the operator, DOJ, and states provide input into the fees.
Response: DOJ agrees with AAMVA and several states in making the
basis for state fees the number of vehicles registered or titled. DOJ
cannot defer rulemaking on fees because the operator has indicated
extensively that funding for NMVTIS is critical. In fact, in the
operator's public comments on this rule, it acknowledges that it cannot
implement key aspects of NMVTIS in accordance with a federal court's
order without critical funding. For these reasons, DOJ must resolve
this issue now. DOJ agrees that all expenses and revenues for NMVTIS be
made publicly available annually.
Comment: More than one commenter argued that ``[c]harging a `user
fee' to a state for the information they are required to upload to the
system is simply unfair. If anything, the states are providing this
information as a courtesy to enable the NMVTIS process to function. As
such, a state should not be charged a fee for providing data. Rather,
anyone, including a state, which uses the system to process requests,
should pay fees for system use.''
Response: The user fee is not charged to a state solely for sharing
its data with the system and other states. The user fees are assessed
in light of the states' use of the system overall as is required by
law, including making inquiries into the system, relying on the system
to maintain a national brand history, and facilitating the secure
exchange of title information and updates between states to protect the
states' consumers. Additionally, all states receive a level of added
protection from fraud via participation by other states.
Comment: The State of South Carolina Department of Motor Vehicles
suggested that ``states could be charged for inquiries prior to the
issuance of a new jurisdictional title based on an out-of-state title;
however, states should be reimbursed for these charges based on the
number of third-party inquiries that the system receives. If such a
model is not developed, then states will take a double hit: the cost of
full participation in the program, as well as the loss of revenue
resulting from third parties being able to obtain current
jurisdictional data through alternative means.''
Response: Regardless of the fee model, DOJ has taken steps with the
operator of the system to ensure that impact on states is minimized. In
fact, the model that South Carolina proposes is very similar to the
model being considered by DOJ and the operator. The model DOJ is
proposing for generating revenue includes a component designed to
``point'' consumers to the full title history in the state of record,
thereby potentially generating additional revenues for the state, and
the model includes a strategy of using revenue to cover system
operational costs as well as offsetting state user fees. Once system
operational costs are covered, DOJ anticipates offsetting or
eliminating state fees entirely with revenues generated by the
[[Page 5765]]
system. Should NMVTIS ever reach the point where an unexpected surplus
of user fee revenue exists, DOJ could direct the operator to reduce
user fees the following year or could use the funds to support state
upgrades to motor vehicle title information systems. This latter use of
funds would be directed by DOJ exclusively.
Comment: The State of Illinois motor vehicle administration
commented that in order for NMVTIS to be effective, NMVTIS should
purchase vehicle-history data from the state, ``mark up'' the price of
the data, and sell the data to third parties. Illinois suggested that
``with this model, everyone wins,'' and that ``consumers win because
they can rely on the complete, consistent, and efficient flow of
information about motor vehicles.''
Response: While this concept may be appealing to some, the concept
has several major flaws. First, the Anti-Car Theft Act does not
authorize or even suggest that DOJ should purchase state data. Had this
been contemplated by Congress, funds would have to have been
appropriated or at least authorized to make the purchases.
Additionally, government agencies are not in a position to engage in
speculative purchases. Consumers would not win under this scenario
because they would be left to pay high prices for vehicle-history
information, which many cannot afford and should not have to do to be
protected. Last, this is not what is required under the Anti-Car Theft
Act.
Comment: The State of California recommended that the states be
charged a flat fee for participation that would cover NMVTIS operating
expenses, and that all revenues generated from consumer access be
returned to the states.
Response: DOJ believes that, based on the arguments presented by
the states in response to the proposed rule, there is no equitable way
to charge a flat fee due to variances in the number of vehicles in the
states, number of title transactions, number of out-of-state transfers
into the states, etc. DOJ believes that the fees must be based on a
factor that is correlated to a state's required use of the system. In
terms of returning revenues generated from consumer access to the
states, this is not too dissimilar to what DOJ has proposed--offsetting
state fees (potentially entirely) with revenues from consumer access
once system operating costs are covered.
Comment: One commenter stated that ``states should not be charged
simply for submitting their title data to NMVTIS. States that choose to
use NMVTIS should not be charged for assisting the DOJ.''
Response: States are not charged for simply submitting data to
NMVTIS. States are required to use NMVTIS for inquiries prior to
issuing new titles for out-of-state vehicles, and NMVTIS can provide
real-time updates and corrections as well as a secure method of sharing
title information between states. In fact, for the 13 states currently
online, 45 million messages or exchanges have been processed by NMVTIS,
and the State of California has commented that NMVTIS is an ``integral
part of state operational activities,'' demonstrating that NMVTIS does
provide services to the states. The purpose of NMVTIS is not to assist
DOJ, and DOJ has limited use for the data in NMVTIS. NMVTIS is a
service to states that provides greater consumer protection, reduces
crime, and can improve titling process efficiencies, all three of which
ultimately reduce costs to the states overall as well as to consumers.
Comment: One commenter noted that ``the Department of Justice does
possess a legitimate interest in incentivizing full state participation
in NMVTIS.'' All states receive a benefit from NMVTIS. ``Title washing
and rebranding of vehicles remain a national problem, not somehow
confined merely within state borders. Providing information to NMVTIS
allows law enforcement agencies to confront crimes that may have
originated or affected states outside of their jurisdiction.''
Response: DOJ agrees with this comment.
Commenter: One commenter expressed disappointment regarding state
concerns over user fees and system costs and recommended that DOJ
pursue enforcement against non-participating states.
Response: DOJ appreciates the concern and will monitor state
compliance with the Anti-Car Theft Act and the NMVTIS rules.
Comment: One commenter noted that the fee structure should be based
on the activities generating the most costs, such as storing vehicle
data, performing verifications, etc.
Response: DOJ agrees that the fees should match the costs of the
system. In asking for comments on the fee structure, however, DOJ was
attempting to solicit input from the field regarding the most equitable
manner of developing the fees and applying them to all states. As for
costs, the majority of current expenses are for supporting online
states and states in the process of implementation and data storage.
Comment: The State of New York Department of Motor Vehicles
commented that a transaction-based fee could serve as a disincentive to
states to query the system often. The state further commented that a
flat fee may be more effective.
Response: DOJ appreciates this input and assumes that the
commenters' reference to a ``flat fee'' could include a tiered fee
structure, such as what is in place today, as this results in a flat
fee for the states in each tier.
Comment: One commenter noted that ``[w]e remain convinced that if
this is a program that is as effective as it is pronounced to be, if it
will truly accomplish all of the goals it is said to have, then it
should be fully funded and supported by the Department of Justice.
Otherwise, it should be funded by fees charged for those states,
individuals and organizations who request data from the system, based
on a transaction fee as determined by AAMVA to sustain the system. If
that is not possible and the DOJ will not fund it, it should be
cancelled.''
Response: The Anti-Car Theft Act explicitly states that NMVTIS
should not be dependent on federal funds for operation. DOJ has awarded
over $15 million to NMVTIS and participating states, in addition to the
funds awarded by the Department of Transportation prior to 1996. Since
1992, no more than $2 million has been collected in user fees by the
operator. DOJ will comply with the Anti-Car Theft Act in requiring a
system of user fees to support system development, operation, and
maintenance. Because the Anti-Car Theft Act requires that DOJ implement
the system so that it is sustained by user fees, DOJ has no ability to
``cancel'' the program.
27. Tier Structure
Comment: Several commenters, including AAMVA, noted that a tiered
structure is the most workable structure from a budgeting perspective,
given that this type of basis or structure will lessen the need for
annual changes to fees, which are unworkable for states with biennial
budgets. However, some states, such as Oregon, Virginia, Alaska,
Minnesota, and others, noted that a non-tiered structure is preferred.
Response: DOJ appreciates this input and has elected to keep the
tier structure in place. While there is still disparity between small
and large states, and between those states that have significant
differences in the number of titled vehicles, the tiered structure does
help in reducing disparities between states of similar size.
Additionally, the tier structure allows the per-vehicle
[[Page 5766]]
basis fee structure to remain relatively stable, rather than
fluctuating constantly, and because it acts as a stabilizer, it results
in a stable fee that states can budget for appropriately. Last, the
tier structure is the structure that the AAMVA Board has adopted as a
workable method for establishing fees.
Comment: AAMVA commented that in addition to retaining the tiered
fee structure, DOJ should modify the final rule to allow changes to the
fee structure to be determined through a mutual agreement between DOJ
and the operator.
Response: DOJ firmly believes that issues such as the structure of
mandatory fee systems should be addressed in a public manner, as
opposed to handled informally and without input from stakeholders.
28. Per Vehicle
Comment: More than one commenter noted that user fees should be
based on the number of ``automobiles'' titled versus the number of
``motor vehicles'' titled in a particular state.
Response: While DOJ understands the comment and agrees in
principle, the ``basis'' for calculating such fees has no impact when
fees are adjusted to cover system costs. In other words, charging a
user fee of $0.02 based on the number of ``motor vehicles,'' versus
$0.04 based on number of ``automobiles,'' is academic. Because NMVTIS
already includes and services titles on all motor vehicles that a state
may provide data on, many stakeholders and DOJ encourage states to make
verifications on all motor vehicle transactions. States have been
paying fees based on number of motor vehicles, and because the number
of motor vehicles (a more comprehensive figure) is easier to calculate
for states and the operator, DOJ authorizes the operator to continue
the practice of charging user fees based on the number of motor
vehicles titled in the states.
29. Charging Non-Participants
Comment: Several commenters, including the current operator,
expressed concern with charging fees to all states regardless of
participation. The North Dakota Department of Transportation noted that
the proposal to allow the operator to charge the user fee to all
states, even if a state is not a current participant in NMVTIS, is
``unfair'' and that there has been no evidence provided that
demonstrates the enhanced effectiveness of NMVTIS when all states
participate. That commenter also argued that there is no evidence that
criminals have targeted non-participating states. The commenter noted
that ``paying for the privilege of participating * * * is patently
unfair and simply ludicrous.'' Another commenter stating the same
conclusion described the system as ``an unfunded mandate where the
particular costs to states are vague, and the total costs ill-
defined.'' The State of Texas commented that this would not represent a
true ``user fee,'' and the State raised the possibility of
``constitutional problems'' in paying such a fee.
Response: DOJ disagrees with each of these comments. Because all
states are required to participate fully in NMVTIS and all states
receive benefits from the system, all states must pay the user fees.
There is no option for states to not participate in NMVTIS, which
includes paying user fees to support the system as required by the
Anti-Car Theft Act. Existing research demonstrates NMVTIS's
effectiveness. Moreover, state and local law enforcement organizations,
as well as automotive insurance experts, agree that non-participating
states are being targeted for exploitation. It is important to note
that the operator of the system has no discretion with regard to
charging user fees, as this is the economic model established by the
Anti-Car Theft Act. The operator has been steadfast in ensuring that
DOJ understands and appreciates the perspective of its members and has
worked closely with DOJ to identify ways of lessening the burden of
implementation on state agencies. Additionally, states have multiple
options for implementation in order to best manage the costs of
participation, and certain cost-saving and potential state-revenue-
enhancing features have been established or planned.
Comment: The State of California commented that ``we agree with the
recommendation to charge all states. If the fee is charged to all
states regardless of participation, there will likely be greater
participation by all states. This could increase the value of the
database, generating additional consumer transactions, which can then
be used to offset the user fees charged to states.''
Response: DOJ agrees that by charging all states a user fee in
light of the requirement for all states to participate and the benefits
all receive, any disincentive to make title verifications or use the
system in the manner required is eliminated.
Comment: One commenter noted that his or her state ``will not
voluntarily pay user fees.''
Response: User fees will not be voluntary. Because the Anti-Car
Theft Act requires that NMVTIS be self-sustaining through user fees,
the final rule requires the operator to issue invoices and charge users
of the system a user fee based on system operating costs and other
factors that affect the costs, such as necessary upgrades or
enhancements. Payment of the user fee is required for compliance with
Federal law.
Comment: One commenter noted that all users of the system should be
charged user fees, including entities reporting data.
Response: At this time, DOJ is not in favor of this recommendation
because of the increased financial burden it would place on junk and
salvage yards and insurance carriers, and the disincentive it would
impose on their reporting of data.
30. Enforcement
Comment: Several commenters from various stakeholder groups asked
who would be responsible for enforcement of the provisions of the rule
and how enforcement responsibilities will be conducted.
Response: Responsibility for enforcement of this rule resides with
the Department of Justice overall. Within DOJ, several component
organizations (including the Bureau of Justice Assistance, the Federal
Bureau of Investigation, and the Civil Division's Federal Programs
Branch) will collaborate with each other, with the operator, and with
state and local law enforcement to ensure compliance and to respond to
allegations of non-compliance.
Comment: ARA commented that an ``amnesty period'' should be
provided because most automotive recyclers will depend on inventory-
management vendors to provide a reporting mechanism.
Response: While an ``amnesty period'' per se is not established,
DOJ will work closely with the ARA and other organizations including
the operator (if not the Department of Justice) to ensure that the
commencement of reporting is not impeded. During the initial period of
reporting, DOJ will be focused on implementation as opposed to purely
enforcement.
Comment: Several insurance carriers suggested language for
clarifying the enforcement aspects of the rule, recommending that a
``violation'' be defined as ``an act in flagrantly and in conscious
disregard of this chapter'' and that the rule include a statement
limiting liability of insurance carriers for what is reported and not
reported.
Response: DOJ will not define ``violation'' in this regulation
because such a definition is unnecessary. The Anti-Car Theft Act
provides DOJ with
[[Page 5767]]
sufficient discretion to seek and assess penalties, including a
requirement that DOJ consider the size of the business of the person
charged and the gravity of the violation.
Comment: The National Salvage Vehicle Reporting Program commented
that any penalties levied against a required reporter should be
determined in a way that will result in a material fine that could
force a modification in behavior. This comment was supported by
comments from consumer-advocate attorneys who noted that ``[t]he
Department should construe the enforcement provisions of the statutes
to make them as strong as possible with respect to any potential
deliberate violations by insurance carriers or salvage yards.''
Response: DOJ will carefully consider any penalties applied as
required by the Anti-Car Theft Act.
Comment: The National Salvage Vehicle Reporting Program commented
that ``the establishment of regular document procedures by an entity to
provide compliance should be considered a mitigating factor to
demonstrate good intent.''
Response: The Department did not propose any regulations governing
its enforcement efforts in the proposed rule. At this time, the
Department believes that enforcement concerns are adequately addressed
by the Anti-Car Theft Act and other applicable statutes and
regulations.
Comment: Several insurance-related organizations or associations
commented that ``49 U.S.C. 40505 sets forth a $1000 civil penalty for
`each violation of the chapter.' With millions of data points reported
from and to many sources, there needs to be an interpretation of this
provision that makes clear that good faith efforts to comply would be
enough to avoid the penalty. For example, we request that the
Department include language along these lines in the final regulation:
`A violation for purposes of 49 U.S.C. 30505 means an act that is
committed flagrantly and in conscious disregard of this chapter.' ''
Opposing this view, several national consumer organizations
commented that ``the Department should flatly reject the American
Insurance Association's proposal that its enforcement authority be
limited by a `flagrant disregard' standard. Nothing in the Anti-Car
Theft Act authorizes or contemplates such a standard, and the AIA does
not adequately explain why such a standard is necessary, or how it
would be satisfied. Consistent with congressional intent, the
Department should preserve its full enforcement authority with respect
to the reporting requirements of the Anti-Car Theft Act and its
implementing regulations.''
Response: As a matter of policy, DOJ will preserve its full
enforcement authority and discretion, including the ability to
determine what constitutes a violation of the Act. As noted above, the
Department believes that enforcement concerns are adequately addressed
by the Anti-Car Theft Act and other applicable statutes and
regulations.
31. Liability
Comment: Several commenters requested that DOJ clarify liability
and immunity protections for all users of the system--those using the
data to make decisions and those providing the data to the NMVTIS. At
least one of these commenters indicated that without such
clarification, some data reporters may be hesitant to comply. Some
commenters requested that DOJ clarify protections from both criminal
and civil liability.
Response: DOJ does not believe that the applicable immunity
provisions require clarification. Pursuant to 49 U.S.C. 30502(f): ``Any
person performing any activity under this section or sections 30503 or
30504 in good faith and with the reasonable belief that such activity
was in accordance with this section or section 30503 or 30504, as the
case may be, shall be immune from any civil action respecting such
activity which is seeking money damages or equitable relief in any
court of the United States or a State.''
32. System Operating Costs
Comment: One commenter noted that the operator should examine its
financial records and projections more closely in order to narrow the
estimated system operating cost projections of $3,000,000 to $5,000,000
annually. Such examination would create greater reliability and equity
in determining user fees. The commenter further suggested that ``an
outside bidding process should be enacted to shift the entire program
onto a contractor.''
Response: Because the system has not yet been fully implemented,
and because costs are driven in part by system usage, the annual
operating costs vary annually and therefore are estimates at this time.
DOJ agrees, however, that it is imperative that more robust and tighter
financial procedures and controls be put in place, and that
transparency be encouraged through an annual publication of an operator
report of progress and costs, as well as budget projections for the
coming years. DOJ will ensure that these goals are reflected in the
requirements of the system operator. While the operator is free to
consider outsourcing opportunities for operational components (e.g.,
technology, financial oversight, etc.), the Anti-Car Theft Act requires
that the operator of the system, if it is not the DOJ, be an
organization that represents the interests of the states. The Act also
restricts the ability of the operator to make any profit from the
operation of the system. Based on the current operator's statements
regarding continued participation as the operator, DOJ is currently
exploring outside bidding processes that could result in moving the
program to another operator or to DOJ.
33. Concerns With Cost-Benefit Study
Comment: Several commenters noted concerns with the cost-benefit
study cited in the proposed rule and completed by Logistics Management
Institute (LMI). Concerns include overstatement of the benefits of
NMVTIS, lack of details regarding the study's methodology, vague
presentation of findings and issues, and a noted possibility that
underreported costs were not well addressed. One commenter argued that
``the LMI study is thoroughly unconvincing, and its methodology is not
sufficiently revealed as to permit rebuttal.''
Response: The LMI study was commissioned in 1999 by the National
Institute of Justice (NIJ). The reports cited are the only reports
available to DOJ at this time. Although more details may be desirable,
the LMI study's findings clearly indicate that NMVTIS's benefits
outweigh the costs. Comparing an individual state's cost estimates for
implementation with the financial benefits of eliminating even a modest
number of thefts and brand washings demonstrates the same thing.
Moreover, the LMI study likely overestimated the costs of participation
because the only method of participation known at the time of the study
was the fully integrated method, which required a state to reconfigure
title information systems to integrate NMVTIS inquiries and updates
into their automated title processes. With a new ``stand alone'' method
of participation available, the most costly aspect of known
participation at that time (i.e., major modifications to title
information systems) has been eliminated as a requirement.
Comment: One commenter noted that ``many improvements will remain
theoretical without full participation. The expected benefits however
are not illogical; states will only fully gain from NMVTIS once most
states are full participants.'' ``The best interests of
[[Page 5768]]
states, through their consumers, lies with full participation in
NMVTIS.'' In agreement with this, the Virginia Department of Motor
Vehicles commented that ``the system provides a great value to
participating states and that value will exponentially increase as each
jurisdiction begins fully participating.''
Response: NMVTIS will not achieve its full value until there is
100% state participation. However, some states, such as California,
have commented very favorably on the benefits of the system, even
though all states do not yet participate.
34. Cost Calculations
Comment: One commenter noted that ``[t]here are specific examples
of laxity in the cost-accounting figures for this rule. For instance,
although the proposed rule states that average fees charged to states
by the operator should be less than 3 cents per vehicle, it goes on to
say that `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.' It would seem that
* * * a ballpark figure for this `onetime upgrade' is needed. Further,
the cost of this `one-time upgrade' may not be insignificant, as
suggested by the fact that `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.' This would bring with it, however, a definite loss in
efficiency.''
Response: It is important to note that there is no requirement in
this rule or otherwise that states integrate NMVTIS processes into
their title-information systems. Because doing so would be strictly and
totally voluntary on the part of the states, DOJ does not see the need
to attempt to estimate the costs for this type of implementation.
Requests from states for DOJ grant funds have ranged from $17,000 to
nearly $500,000 to implement various aspects of NMVTIS, e.g., data
provision only, full implementation, etc. While implementing NMVTIS
through the stand-alone method eliminates the need for nearly all
system modifications, DOJ agrees that this approach may still affect
business processes and could therefore impact overall operating costs.
However, given that NMVTIS inquiries are only required on out-of-state
vehicles coming into the state, and given that system response time is
less than three seconds on average, we can reasonably estimate that the
cost is minimal for a title clerk to enter the VIN, wait approximately
3 seconds for the response, and review the response (a process
estimated to take as little as 60 seconds or as much as 3 minutes). DOJ
has included this estimation in the costs described in the proposed
rule. Clearly, if discrepancies are found, the time required to process
the transaction could increase substantially. However, DOJ notes that
this is not a new cost, but a cost that states already have today.
Comment: One commenter asked ``has the agency considered the day-
to-day cost of requiring a title clerk to `switch to an internet
enabled PC to perform a Web search of NMVTIS via a secure virtual
private network' for every single title check of every single day?
(Section 25.54(c) requires that each state shall perform an instant
title verification check through NMVTIS before issuing a certificate of
title.) Is this additional cost something an underfunded state is
supposed to bear simply because it is underfunded? What is the actual
cost of having a clerk provide such a search based on the total number
of title checks that a state will do in a year?'' A state motor vehicle
administration commented on the need to provide a ``batch''
verification method via stand-alone access, so that many title
verifications can be conducted as part of a ``back room'' operation.
Response: The estimated costs for this function have been included
in the overall cost calculations for the system as described in the
response above. It is important to point out, however, that a state is
only required to check NMVTIS when an out-of-state title is presented.
Although states are encouraged to make NMVTIS inquiries before all
transactions, it is only required in these limited instances.
Additionally, states that determine that this process is unworkable may
make a one-time system modification to automate the NMVTIS inquiry
function. While most states may opt to use the individual title-
verification method for over-the-counter operations, DOJ will encourage
the operator to make available a ``batch'' verification method as
quickly as possible to make compliance more flexible for central-issue
states.
Comment: One commenter asked ``what are the anticipated costs of
causing an insurance carrier to provide the requested information `in a
format acceptable to the operator?' Sec. 25.55(a). Where is the study
indicating this cost? How was this cost determined? And was this cost
balanced against the benefit of consumer protection? This rule will
increase insurance costs.'' The commenter also asked why insurance
carriers should have to provide the information at its own cost. If the
information was being collected under the ``guise'' of consumer
protection, when it will provide ``any real benefit?''
Response: DOJ estimated the costs to insurance companies and
presented these costs and a description of how they were determined in
the proposed rule. These costs were not balanced against the benefit of
consumer protection. For insurance carriers already reporting to a
third party that provides the required information to NMVTIS, no
additional costs will be incurred. Amica Mutual Insurance and other
insurance organizations that have begun reporting this information on
their own have publicly stated the benefits of such reporting. The
benefits of NMVTIS in terms of consumer protection are well founded and
common sense.
Comment: The State of Illinois motor vehicle administration
commented that compliance in the first year of the program would cost
the state an estimate $3,700,000, including start-up costs, user fees,
and the loss of approximately $2,600,000 in annual sales of vehicle
information. Illinois commented that these costs and the model being
implemented by the operator is ``nonsensical.'' Other states estimated
their costs at approximately $200,000. The NADA added that ``[a]ny
state claims of excessive reporting costs should be weighed against the
huge costs associated with vehicles with hidden histories entering the
stream of used vehicle commerce.''
Response: DOJ disagrees with Illinois's assessment of start-up
costs. Because the proposed rule did not prescribe a specific user-fee
model, Illinois's estimate of $700,000 in user fees is not reliable.
Additionally, organizations that typically purchase state motor vehicle
records have signaled that they will continue to purchase state data,
as they are unable to purchase the bulk state data from or through
NMVTIS. For this reason, Illinois's assertion that it will loose
$2,600,000 in revenues likely is unfounded. The only place these
organizations can purchase bulk vehicle data from Illinois is from
Illinois--NMVTIS will not sell data in this manner. While DOJ is not in
a position to address Illinois's estimate of start-up costs, DOJ issued
a solicitation in fiscal years 2007 and 2008 to provide funds to states
to support NMVTIS start-up costs and encouraged states to apply under
other unrestricted, eligible funding programs as well. For many years
between FY 1997 and FY 2004, AAMVA also offered funding support to
states based on DOJ grant awards to the operator.
[[Page 5769]]
Comment: AAMVA contended that although the Anti-Car Theft Act
states that NMVTIS should be self sustaining, NMVTIS represents an
unfunded mandate that has serious impact on states. AAMVA went on to
assert that to achieve full implementation and long-term success,
federal funding of the remaining development work and support for
system operation is needed.
Response: The Anti-Car Theft Act requires NMVTIS to be self-
sustaining and ``not dependent on federal funds'' for its operation. To
date, DOJ has invested more than $15 million in NMVTIS development,
combined with investments from the U.S. Department of Transportation,
as well as a reported $30 million investment from AAMVA. Since 1992,
less than $2 million has been collected from user fees. DOJ is
concerned that additional investments of federal funds will be used to
support the required ``services to states'' and will not lead to
additional development of the system. Additionally, DOJ notes that much
of the federal funds provided to states through AAMVA remains
unexpended even years after being provided to facilitate participation.
From 2003 to date, AAMVA and the states have strongly encouraged DOJ to
implement the rules for NMVTIS as a necessary step to system
implementation. With rules now published, system operation and user
fees established, and third-party providers generating additional user
fees, it is DOJ's hope that additional federal funding may not be
needed, and that the system can begin to be self sustaining as
originally envisioned.
Comment: AAMVA commented that its Board of Directors recently
concluded that AAMVA will not be able to continue as the system
operator if it must subsidize the ongoing development and operation
costs of NMVTIS. As a result, AAMVA expects a decision by August 2009
from its Board of Directors as to its continued participation as the
operator of the system.
Response: DOJ acknowledges AAMVA's position and, in response,
developed a Request for Information (RFI) that was published to
identify prospective new operators and organizations that could support
DOJ should DOJ become the operator. DOJ expects that any new operator,
if not DOJ, will comply with the same provisions of this rule and will
work with DOJ, AAMVA, and the NMVTIS stakeholders to perform a seamless
transition. The results from the RFI are being used to identify new
ideas and capabilities to accomplish the program objectives while
minimizing the burden on states.
Provisions of This Rule
The continued implementation of NMVTIS and its effectiveness depend
on the participation and cooperation of a number of parties. According
to the cost-benefit study conducted by the Logistics Management
Institute: ``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. This finding has been repeatedly confirmed by law
enforcement at the local, state, and federal levels, and by national
anti-theft organizations based on experience and active investigations.
Even private vehicle-history providers have agreed that criminals
exploit these and similar weaknesses in the vehicle-titling system in
the U.S., particularly the lack of communication between state motor
vehicle title and registration agencies. The Anti-Car Theft Act also
referred to the ``weakest link'' in referring to this problem as it
relates to brand washing. See Public Law No. 102-519, section
140(a)(1).
Participation in NMVTIS must be expanded to all states. In
addition, insurance carriers, junk yards, and salvage yards also need
to provide certain information relevant to the life-cycle of an
automobile in order for NMVTIS to function properly and achieve the
intended benefits. The Anti-Car Theft Act requires junk yards, salvage
yards, and insurance carriers to report at least 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 the
required information 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, consistent
with section 202(a)(1) of the Act, the title and related information to
be included in the system to determine its adequacy, timeliness,
reliability, and capability of aiding in efforts to prevent theft and
fraud. The rule also 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 provides a means by which user fees will be imposed
to fund NMVTIS, consistent with the requirements of the Anti-Car Theft
Act and its requirement that NMVTIS be self sustaining and ``not
dependent on Federal funds.''
1. State Responsibilities
The effectiveness of NMVTIS increases as more states fully
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 to begin title verifications and reporting title
information to NMVTIS as soon as possible. While the immediate
requirement of this rule is to, at a minimum, have all states make
verifications on incoming, out-of-state titles and provide regular (at
least daily) data updates to NMVTIS, the ultimate goal is for all
states to participate in the system via an integrated, online method
that provides real-time data updates, making inquiries into NMVTIS
prior to issuing new titles on vehicles coming from out-of-state, and
sharing other information and data electronically, via NMVTIS. All
states must be fully participating as required by the Act and this rule
by January 1, 2010. However, for purposes of continuity and to ensure
that there is no degradation of services currently provided by NMVTIS,
the final rule requires all states to maintain at least the level of
participation (data provision, title verifications, remitting fees)
that they had established as of January 1, 2009 for the remainder of
that year and until the full compliance date for all states arrives on
January 1, 2010.
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 its titling information
available to NMVTIS. 49 U.S.C. 30503(a). Each state also 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
rule clarifies the procedures for verifying title information and the
information
[[Page 5770]]
states must report to NMVTIS pursuant to the Anti-Car Theft Act, and
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 perform an ``instant'' title verification check before issuing a
certificate of title to an individual or entity bringing a vehicle into
the state. Because several states are ``central issue'' states where
titles are produced at a central location after an application for
title has been made, ``instant'' is considered to mean at any point
before a permanent title is issued. The primary purpose of the
verification is to determine the validity and status of a document
purporting to be a certification of title, to determine whether the
automobile has been a junk or salvage vehicle or has been reported as
such, to compare and verify the odometer information presented with
that reported in the system, and to determine the validity of other
information presented (e.g., lien-holder status, etc.). While the laws
and regulations of the receiving state will prevail in determining the
status of the vehicle (e.g., branding, title type, or status), the
information in NMVTIS should be used by the state to identify
inconsistencies, errors, or other issues, and to follow state
procedures and policies for their resolution. Because NMVTIS can
prevent many types of fraud in addition to simple brand washing, states
are encouraged to use NMVTIS for verifications on all transactions
whenever possible. This verification includes in-state title
transactions, dealer reassignments, lender and dealer verifications,
updates, corrections, and other types of title transactions. This
business process is made possible through the integrated, online method
of state participation and is strongly encouraged by law enforcement,
consumer protection groups, and private sector entities.
States are also required under 49 U.S.C. 30503(a) to make selected
titling information they maintain available for use in NMVTIS.
Specifically, states are required to report: (1) An automobile's VIN;
(2) any description of the automobile included on the certificate of
title, including all brand information; (3) the name of the individual
or entity to whom the title certificate was issued; and (4) information
from junk or salvage yard operators or insurance carriers regarding
their acquisition of junk automobiles or salvage automobiles, if this
information is being collected by the state. 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 was issued and any later mileage information, if
in the state's title record for that vehicle. Accordingly, the rule
requires states to provide such mileage information to NMVTIS. States
shall provide new title information and any updated title information
to NMVTIS at least once every 24 hours.
In addition, with the approval of DOJ, the operator, and the state,
the rule will allow 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.
The Anti-Car Theft Act specifically covers ``automobiles'' as
defined in 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, Public Law No. 110-140, and generally covers
four-wheel vehicles 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 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, and law enforcement organizations including DOJ
have strongly encouraged states to continue to provide information on
such vehicles in order to reduce the theft of such vehicles. Therefore,
while states only are required to report on automobiles, they are
strongly encouraged to continue reporting to NMVTIS information on all
motor vehicles possessing VINs in their state titling systems.
---------------------------------------------------------------------------
\3\ Pursuant to 49 U.S.C. 30102(a)(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.
---------------------------------------------------------------------------
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 rule clarifies the
reporting requirements imposed on insurance carriers regarding junk and
salvage automobiles. The Anti-Car Theft Act defines a salvage
automobile 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 state, or designated as a total loss by the insurance
carrier under the terms of its policies, regardless of whether an
insurance carrier retitles the vehicle into its name or allows the
owner to retain the vehicle.
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 shall trigger reporting to NMVTIS by an insurance
carrier. Insurance carriers are required under this rule to provide
NMVTIS with: (1) The VIN of such automobiles; (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 (owner name or lien-holder name) and who possessed the
automobile when it was designated a junk or salvage automobile; and (4)
the name of the owner of the automobile at the time of the filing of
the report with NMVTIS (either the insurance company or the owner, if
owner-retained). DOJ strongly encourages insurers to include the
primary reason for the insurance carrier's designation of salvage or
total loss in this reporting as well. 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 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 disposition of such automobiles,
and the name of the individual or entity that takes possession of the
vehicle. The reporting of this information by insurance carriers will
help reduce instances in which thieves use the VINs of junk or salvage
motor vehicles on stolen motor vehicles and will assist in preventing
and
[[Page 5771]]
eliminating fraud. Accordingly, the Department of Justice strongly
encourages insurance carriers to report such additional information to
the operator.
3. Junk and Salvage Yards and Auto Recyclers
Under this rule, junk yards and salvage yards are 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. Such entities must also report whether the
vehicle is intended for export out of the United States, which will
assist law enforcement in investigations related to the export and
cloning of exported vehicles. 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), (8). ``Rebuilding, restoration, and crushing'' is
reflective of the varied nature of entities that meet this definition.
Included in this definition are scrap-vehicle shredders and scrap-metal
processors, as well as ``pull- or pick-apart yards,'' salvage pools,
salvage auctions, and other types of auctions, businesses, and
individuals that handle salvage vehicles (including vehicles declared a
``total loss''). 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 belief of the
Department of Justice and the state and local law enforcement community
that a significant number of these buyers purchase junk and salvage
automobiles at salvage pools in order to acquire VINs or titles that
can be used on stolen motor vehicles or to create cloned motor vehicles
for other illicit purposes.
Such entities must report all salvage or junk vehicles they obtain,
including vehicles from or on behalf of insurance carriers, that can
reasonably be assumed to be total-loss vehicles. Such entities are not
required to report any vehicle that is determined not to meet the
definition of salvage or junk after a good-faith physical and value
appraisal conducted by qualified appraisal personnel entirely
independent of any other persons or entities. Second, DOJ has added a
clarification that individuals and entities of this type that handle
fewer than five vehicles per year that are determined to be salvage or
total loss are not required to report under the salvage yard
requirements, consistent with requirements for automobile dealers, see
49 U.S.C. 32702(2).
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 available to the operator the information required by
this rule of junk and salvage entities. Because some junk or salvage
yards may hold vehicles for several months or years before a final
disposition (e.g., crushed, sold, rebuilt, etc.) is known, some junk
and salvage yards may need to provide a supplemental or additional
report at the time of disposition or within 30 days of the date of
disposition. Nothing in this rule shall preclude a junk or salvage yard
from reporting the disposition of a vehicle at the time of first
reporting, if such a disposition is known with certainty. Junk and
salvage yards are responsible for ensuring the accuracy and
completeness of their reporting and for providing corrected information
to the system should the disposition be changed from what was initially
reported.
4. Lenders and Automobile Dealers
The Anti-Car Theft Act requires that the operator make NMVTIS
information available to prospective purchasers, including auction
companies and entities engaged in the business of purchasing new or
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 who also
can be the victims of fraud. This rule allows 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 and to prevent fraud. For purposes of
clarification, this rule permits commercial consumers to access and
verify NMVTIS information at the time of purchases, as well as at any
time during the ownership of or involvement with such vehicles (i.e.,
lender verifications). States are strongly encouraged to work with
lenders and others in using NMVTIS as an electronic means of performing
title transactions and verifications. Conducting such efforts in an
electronic fashion will eliminate a major source of fraud--paper-based
title exchanges, updates, lien releases, etc.
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 is currently
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. Further, the operator of NMVTIS must make relevant
information available to states, law enforcement officials, prospective
and current purchasers (individual and commercial), 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 to all permitted users.
The Department will instruct the operator that if it is not
receiving reporting entity data directly, then it must identify at
least three third-party organizations willing to receive reports from
reporting entities (junk, salvage, insurance) and to share such data
with NMVTIS. The operator also will take steps to ensure data quality
to the extent possible and take steps as described in this rule to
correct reported data, if not reported by a state, which has the
authority to make changes via updates.
The operator will be using the National Information Exchange Model
or any successor information-sharing model for all new information
exchanges established, and DOJ may require the operator to use Web
services for all new connections to NMVTIS.
Services to State Motor Vehicle Title Administrations
The operator will:
Make available to state motor vehicle title
administrations at least two methods of interacting with NMVTIS. States
will have the option of participating via ``stand alone'' access, which
is a basic Internet site that allows a state to enter a VIN and receive
the results of the search. States currently have the option of fully
integrating the NMVTIS search function into their title-information
systems. This method of access allows state systems to perform the
search seamlessly and without specific effort of the titling staff.
This method allows updates made after the
[[Page 5772]]
title transaction to be shared with the prior state of title and allows
real-time updates to NMVTIS as well. The operator also will make
available a modified stand-alone access process (that allows for batch
inquiries) to central-issue states to support their efficient title
administration needs.
Share with states any and all information in NMVTIS,
including any intended export criteria, junk and salvage history, and
any other information obtained by the operator (e.g., title history
information from other North American title administrations, etc.).
Provide the states with the greatest amount of flexibility
in such things as data standards, mapping, and connection methodology.
Services to Law Enforcement
In particular, the operator of NMVTIS will be responsible for
ensuring that state and local law enforcement agencies have access to
all title information in or available through NMVTIS, including
personal information collected by NMVTIS for law enforcement purposes.
A thief can take a stolen, cloned vehicle to a non-participating state
and get a valid title by presenting the clone and matching fraudulent
ownership documentation to the new state. Thieves often switch the VIN
plate (and sometime other VIN stickers) 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 instantly
updated, reliable way of validating the information on the ownership
documentation prior to issuing the new title. Investigations have shown
that sophisticated criminal organizations typically employ fraud
schemes involving multiple state-title processes and either target non-
participating states as the new title-issuing agent or use fraudulent
or counterfeit title documents from a non-participating state in order
to effect brand washing or cloning. Exported vehicles also have become
a key source for cloning activities. NMVTIS will provide law
enforcement agencies with access to make inquiries to further their
investigations of motor vehicle theft and fraud--including fraud
committed against consumers, businesses, and states. This access will
allow law enforcement agencies to better identify stolen motor
vehicles, enhance their ability to identify vehicle theft rings,
identify cases of public corruption, and identify other criminal
enterprises involving vehicles. NMVTIS will reduce the ability of
organized criminal organizations to obtain fraudulent vehicle
registrations by linking state and local 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. In addition to providing
access to NMVTIS based on a VIN inquiry, the operator also will allow
law enforcement agencies to make inquiries based on other search
criteria in the system, including the organizations reporting data to
the system, individuals owning, supplying, purchasing, or receiving
such vehicles (if available), and export criteria.
Services in Support of Consumer Access
The operator of NMVTIS is responsible for ensuring that a means
exists for allowing insurers and purchasers to access information,
including information regarding brands, junk and salvage history, and
odometer readings. Such access shall be provided to individual
consumers in a single-VIN search arrangement and to commercial
consumers in a single-, multiple-, or batch-VIN search arrangement. 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 or history. Not only are unsuspecting
purchasers paying more than the motor vehicle is worth, but 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. In several reported cases, consumers purchased vehicles that
had previously been involved in a collision, and airbags were not
reinstalled. These consumers were later killed in a collision where the
airbags could not deploy because they were no longer present. This
fraud has serious consequences, not only for commerce and law
enforcement, but also for highway and citizen safety.
The cost for Web-based prospective-purchaser inquiries for
individuals shall be nominal and take into consideration the potential
that consumers may lack credit cards or Internet access. Consumer-
access fees charged by the operator may be in addition to fees that may
be charged by other public or private entities participating in
providing the service. While this rule does not establish minimum or
maximum fees for such consumer access in order to allow it to remain
``market-driven'' and flexible, the Department requires that all
consumer-access fees and methods be approved by the Department prior to
enactment.
The Department anticipates that the operator will implement a Web-
based method of permitting prospective purchasers to access NMVTIS
information as required by the Act. Consumer access shall be available
to individual and commercial consumers who are considering purchasing a
vehicle or who have recently purchased a vehicle. Consumers accessing
NMVTIS shall receive an indication of and link to the current state of
title, the brand history (name of brand/brand category), the most
recent odometer information in the system, and any reports on the
subject vehicle from junk or salvage yards.
Privacy and Security Protections for NMVTIS
The operator may not release any personal information to individual
prospective purchasers. The operator also will develop a privacy policy
that will address the release of this information as well. The operator
also will ensure that NMVTIS and associated access services (i.e.,
secure networks used to facilitate access to personal information
included in NMVTIS) meet or exceed technology industry security
standards, most notably any relevant Global Justice Information Sharing
Initiative standards and recommendations.
Accountability and Transparency
The operator shall publish an annual report describing the
performance of the system during the preceding year and shall include a
detailed report of NMVTIS expenses and all revenues received as a
result of NMVTIS operation. Additionally, the operator (if not the
Department of Justice) shall be required to procure an independent
financial audit of NMVTIS expenses and revenues during the preceding
year. Both the annual performance and budget report and the independent
audit report shall be publicly available via www.NMVTIS.gov.
Although DOJ has primary enforcement responsibility for the
provisions of this rule, the operator
[[Page 5773]]
shall conduct regular reviews of reporting compliance by all reporters
to assess the extent to which reporting entities are reporting
appropriately, documentation is in place, and other requirements of
reporting are being met. The operator shall provide the results of such
information to DOJ. The operator shall also maintain a publicly
available, regularly updated listing of all entities reporting to
NMVTIS. Such listing shall include the name of the reporting entity,
city/state, contact information, and last-data-reported date.
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, AAMVA (the operator of NMVTIS) currently
employs a ten-tiered fee structure. The fee a particular state is
charged depends on the tier in which that state is placed based on the
number of currently 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 its Board of
Directors, comprising state motor vehicle administrators. 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 requires the operator (if not the Department of Justice)
to continue to charge user fees to all states based on the total number
of motor vehicles titled in the state and to continue the tiered
structure. Such a pro rata fee structure simplifies 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. Last, a pro rata fee structure eliminates any
disincentive for states to make title verifications and encourages all
states to participate in order to receive the benefits of the system
they are funding.
In addition, the Department of Justice requires that the operator
charge user fees 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 participate in the system, which includes
making titling information available to NMVTIS, conducting title-
verification checks before issuing a title, and paying any user fees.
Because all states are required to participate in NMVTIS, this rule
requires that the operator charge user fees to all states, regardless
of their current level of participation. Further, this rule requires
that the operator notify states at least one year in advance of user
fees and invoice every state at least once per year. This schedule
shall remain in place until modified by agreement with DOJ.
Under this rule, and consistent with the Anti-Car Theft Act, users,
such as purchasers, insurers, consumers, and other non-governmental
entities, may be charged a fee for inquiries they make to NMVTIS.
Because of the varying levels of participation by the states, the
Department has decided to eliminate the proposed provision prohibiting
the operator from charging transaction fees for consumer transactions
performed by fully participating states. However, the Department
retains the authority to allow the operator to discount such fees for
fully participating states. The operator shall not charge any user fees
or transaction fees for inquiries made by law enforcement agencies. The
operator shall ensure that all third-party providers of NMVTIS
information are eligible for the same prices and discounts, based on
the product implemented or provided (e.g., single VIN lookup, batch
lookup, etc.). The operator shall require that all providers and
methods of consumer access include a visible notice and disclaimer, or
a link to such a notice or disclaimer, that provides consumers with
accurate information on what NMVTIS includes and any limitations in the
database. The names of all noncompliant states shall be disclosed to
each consumer for purposes of awareness. Providers and methods of
consumer access also will include a link to operator-provided
information that explains to consumers how NMVTIS works, such as how
different reporting streams may explain variances or seemingly
conflicting information. Those providers and methods of consumer access
also will provide a link to a state's brand definitions if those brands
are displayed and the information is available.
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), the cost of technical
upgrades, costs to comply with the provisions of this rule, and other
costs as approved by the Department of Justice in advance of the
expense. The operator is authorized to develop a system-enhancement
reserve that does not exceed 50% of the annual cost of operating the
system for use in ensuring that critical upgrades can be implemented on
an emergency basis as necessary. 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
average less than 3 cents per motor vehicle title, although states in
different tiers may pay slightly different rates. The operator of
NMVTIS will inform the states of the applicable fees either through
publication in the Federal Register or by direct notice or invoicing to
the states.
The operator will be required to recalculate its fees on at least a
biennial (every two years) basis at least one year in advance of their
effective date. Any fees charged to the states would be offset by
transaction fees received by the operator. 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 fees imposed by the operator in connection to NMVTIS must be
approved by the Department of Justice.
Notwithstanding individual and batch lookups or inquiries, the
operator shall not, under any circumstances, sell a state's entire data
set in bulk or sell the entire NMVTIS data set in bulk.
Since Fiscal Year 1997, the Department of Justice, through BJA, has
provided over $15 million to AAMVA for NMVTIS implementation. In Fiscal
Years 2007-2009, BJA invited states to apply for direct funding from
DOJ to support initial NMVTIS implementation. In fiscal years 2007 and
2008, less than six states applied for funds each year. BJA awarded
funds to five states in fiscal year 2007 and one state in 2008 to
support system implementation. BJA also invited AAMVA, the system
operator, to apply for direct funding from BJA in fiscal years 2007 and
2008, to supplement state participation fees received by AAMVA, as
authorized under the Anti-
[[Page 5774]]
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 in fiscal years 2007 and 2008. As noted above, funds
awarded to the operator of NMVTIS will reduce the amount of user fees
that must be imposed to implement NMVTIS once all states are
participating.
7. Governance
The Department of Justice may establish a NMVTIS Advisory Board to
provide input and recommendations from stakeholders on NMVTIS
operations and administration. If created, the Advisory Board's costs
would be supported by the operator after approval of the Department of
Justice.
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 economic 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 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 required information to the state and the state makes that
information available to the operator. 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 or in cases where an update or correction to previously reported
data is needed.
Paperwork Reduction Act
This information collection has been submitted to the Office of
Management and Budget (OMB) for review in accordance with the
procedures of the Paperwork Reduction Act of 1995, Public Law No. 104-
13, 109 Stat. 163. 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 have 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 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 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 $5,650,000--
depending on necessary system upgrades that may be required and user
volume. Therefore, the current AAMVA fee structure under-funds NMVTIS
by $4,150,000 according to its 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
[[Page 5775]]
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). In addition, the cost is minimized because a state is only
required to check out-of-state titles. Moreover, 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.
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 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 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, the carrier would be required to report
the data to NMVTIS. With the assumption that the data is already
collected in an exportable format, 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 annual
Initial average labor Total first year costs
Yard size Reporting method investment Annual ongoing labor Annual vehicle costs per (includes initial
costs costs volume * vehicle investment costs and
(cents) annual labor costs)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small (non-automated)............. Fax.................. $90 12 hours per year/ 1-200 96 $1.86.
$96.00.
Small (automated)................. FTP.................. 0 24 minutes per year/ 1-200 3 3 cents.
$3.12.
Medium............................ FTP.................. 0 24 minutes per year/ 201-500 <1 <1 cent.
$3.12.
Large............................. FTP.................. 250 24 minutes per year/ 501-7,800 <1 6 cents.
$3.12.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(* Note: Per-vehicle costs based on an average annual vehicle volumes.)
While it is difficult to estimate how many junk and salvage yards
are not automated, the National Salvage Vehicle Reporting Program and
other industry representatives estimate that nearly all have some form
of data collection even if they do not have automation in place. The
National Salvage Vehicle Reporting Program 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 and salvage
yards will have some form of automation and be capable of exporting
[[Page 5776]]
and sending monthly reports electronically.
In cases in which small junk and salvage yards have no form of
automation or computerized files, the Department assumes that a fax or
other data-transmittal 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 and salvage
yards of this size is relatively small (estimated at 20% of licensed
junk and salvage yards) and the number of 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 because law
enforcement will not be 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 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. Based on the comments to the proposed rule, the Department
believes that a 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.
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
28 CFR Part 25
Crime, Law enforcement, Motor vehicles safety, Motor vehicles,
Reporting and recordkeeping requirements, Transportation.
0
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 amended as follows:
PART 25--DEPARTMENT OF JUSTICE INFORMATION SYSTEMS
0
1. The Authority citation for part 25 is revised to read as follows:
Authority: Public Law 103-159, 107 Stat. 1536, 49 U.S.C. 30501-
30505; Public Law 101-410, 104 Stat. 890, as amended by Public Law
104-134, 110 Stat. 1321.
0
2. Add a new 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 and auto
recyclers.
25.57 Erroneous junk or salvage reporting.
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. The purpose of
NMVTIS is to assist in efforts to prevent the introduction or
reintroduction of stolen motor vehicles into interstate commerce,
protect states and individual and commercial consumers from fraud,
reduce the use of stolen vehicles for illicit purposes including
fundraising for criminal enterprises, and provide consumer protection
from unsafe vehicles.
Sec. 25.52 Definitions.
For purposes of this subpart B:
Acquiring means owning, possessing, handling, directing, or
controlling.
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.
[[Page 5777]]
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 dealers, 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, regardless of whether or not the
ownership of the vehicle is transferred to the insurance carrier.
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.
Note to definition of ``Salvage yard'': For purposes of this
subpart, vehicle remarketers and vehicle recyclers, including scrap
vehicle shredders and scrap metal processors as well as ``pull- or
pick-apart yards,'' salvage pools, salvage auctions, and other types of
auctions handling salvage or junk vehicles (including vehicles declared
a ``total loss''), are included in the definition of ``junk or salvage
yards.''
State means a state of the United States or the District of
Columbia.
Total loss means that the cost of repairing such vehicles plus
projected supplements plus projected diminished resale value plus
rental reimbursement expense exceeds the cost of buying the damaged
motor vehicle at its pre-accident value, minus the proceeds of selling
the damaged motor vehicle for salvage.
VIN means the vehicle identification number;
Sec. 25.53 Responsibilities of the operator of NMVTIS.
(a) By no later than March 31, 2009, 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, 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, with the
concurrence of the Department of Justice, additional information from
states and public and private entities that 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 may not make personally
identifying information contained within NMVTIS, such as the name or
address of the owner of an automobile, available to an individual
prospective purchaser. With the approval of the Department of Justice,
the operator 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 operator shall develop and maintain a privacy policy that
addresses the information in the system and how personal information
shall be protected. DOJ shall review and approve this privacy policy.
(e) The means by which access is provided by the operator to users
of NMVTIS must be approved by the Department of Justice.
(f) The operator shall biennially establish and at least annually
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 operating the system. The operator is required to recalculate the
user fees on a biennial basis. After the operator establishes its
initial user fees for the states under this section, subsequent state
user fees must be established at least one year in advance of their
effective date. Any user fees 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
or invoice to the states.
(1) 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), costs necessary for implementing
the provisions of this rule, the cost of technical upgrades, and other
costs approved in advance by the Department of Justice.
(2) User fees collected from states should be based on the states'
pro rata share of the total number of titled motor vehicles based on
the Highway Statistics Program of the Federal Highway Administration,
U.S. Department of Transportation, except in cases where states did not
report to that program, in which case the states shall make available
the most recent statistics for motor vehicle title registrations.
(3) All states, regardless of their level of participation, shall
be charged user fees by the operator.
(4) No fees shall be charged for inquiries from law enforcement
agencies.
(g) 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
[[Page 5778]]
funds to operate NMVTIS. This report must also include a status report
on the implementation of the system, compliance with reporting and
other requirements, and sufficient detail and scope regarding financial
information so that reasonable determinations can be made regarding
budgeting and performance. The operator shall procure an independent
financial audit of NMVTIS revenues and expenses on an annual basis. The
Department of Justice will make these reports available for public
inspection.
Sec. 25.54 Responsibilities of the States.
(a) Each state must maintain at least the level of participation in
NMVTIS that it had achieved as of January 1, 2009. By no later than
January 1, 2010, each state must have completed implementation of all
requirements of participation and provide, or cause to be provided by
an agent or third party, to the designated operator and in an
electronic format acceptable to the operator, at a frequency of once
every 24 hours, 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 (including any and all brands associated with such vehicle);
(3) The name of the individual or entity to whom the certificate
was issued;
(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; and
(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) By no later than January 1, 2010, each state shall establish a
practice of performing a 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 or in cases of title transfers. The check will consist of--
(1) Communicating to the operator the VIN of the automobile for
which the certificate of title is sought;
(2) Giving the operator an opportunity to communicate to the
participating state the results of a search of the information and
using the results to determine the validity and status of a document
purporting to be a certification of title, to determine whether the
automobile has been a junk or salvage vehicle or has been reported as
such, to compare and verify the odometer information presented with
that reported in the system, and to determine the validity of other
information presented (e.g., lien-holder status, etc.).
(d) By January 1, 2010, those states not currently paying user fees
will be responsible for paying user fees as established by the operator
to support NMVTIS.
Sec. 25.55 Responsibilities of insurance carriers.
(a) By no later than March 31, 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 (i.e. , state) 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) The name, address, and contact information for the reporting
entity (insurance carrier);
(2) VIN;
(3) The date on which the automobile was obtained or designated as
a junk or salvage automobile;
(4) The name of the individual or entity from whom the automobile
was obtained and who possessed it when the automobile was designated as
a junk or salvage automobile; and
(5) 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 must
be pursuant to a means approved by the operator.
(d) Insurance carriers whose required data is provided to the
operator through an operator-authorized third party in a manner
acceptable to the operator are not required to duplicate such
reporting. For example, if the operator and a private third-party
organization reach agreement on the provision of insurance data already
reported by insurance to the third party, insurance companies are not
required to subsequently report the information directly into NMVTIS.
Sec. 25.56 Responsibilities of junk yards and salvage yards and auto
recyclers.
(a) By no later than March 31, 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 in whole or in
part by that entity in the prior month.
(b) The inventory shall include the following information:
(1) The name, address, and contact information for the reporting
entity (junk, salvage yard, recycler);
(2) VIN;
(3) The date the automobile was obtained;
(4) The name of the individual or entity from whom the automobile
was obtained;
(5) A statement of whether the automobile was crushed or disposed
of, for sale or other purposes, to whom it was provided or transferred,
and if the vehicle is intended for export out of the United States.
(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 the information required in this rule available to
the operator.
(d) Junk and salvage yards may be required to file an update or
supplemental report of final disposition of any automobile where final
disposition information was not available at the time of the initial
report
[[Page 5779]]
filing, or if their actual disposition of the automobile differs from
what was initially reported.
(e) 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.
(f) Junk- and salvage-yard operators whose required data is
provided to the operator through an operator-authorized third party
(e.g., state or other public or private organization) in a manner
acceptable to the operator are not required to duplicate such
reporting. In addition, junk and salvage yards are not required to
report on an automobile 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.
(g) Such entities must report all salvage or junk vehicles they
obtain, including vehicles from or on behalf of insurance carriers,
which can be reasonably assumed are total loss vehicles. Such entities,
however, are not required to report any vehicle that is determined not
to meet the definition of salvage or junk after a good-faith physical
and value appraisal conducted by qualified appraisal personnel, so long
as such appraisals are conducted entirely independent of any other
interests, persons or entities. Individuals and entities that handle
less than five vehicles per year that are determined to be salvage,
junk, or total loss are not required to report under the salvage-yard
requirements.
(h) Scrap metal processors and shredders that receive automobiles
for recycling where the condition of such vehicles generally prevent
VINs from being identified are not required to report to the operator
if the source of each vehicle has already reported the vehicle to
NMVTIS. In cases where a supplier's compliance with NMVTIS cannot be
ascertained, however, scrap metal processors and shredders must report
these vehicles to the operator based on a visual inspection if
possible. If the VIN cannot be determined based on this inspection,
scrap metal processors and shredders may rely on primary documentation
(i.e., title documents) provided by the vehicle supplier.
Sec. 25.57 Erroneous junk or salvage reporting.
(a) In cases where a vehicle is erroneously reported to have been
salvage or junk and subsequently destroyed (i.e., crushed), owners of
the legitimate vehicles are encouraged to seek a vehicle inspection in
the current state of title whereby inspection officials can verify via
hidden VINs the vehicle's true identity. Owners are encouraged to file
such inspection reports with the current state of title and to retain
such reports so that the vehicle's true history can be documented.
(b) To avoid the possibility of fraud, the operator may not allow
any entity to delete a prior report of junk or salvage status.
Dated: January 23, 2009.
Mark Filip,
Acting Attorney General.
[FR Doc. E9-1835 Filed 1-26-09; 11:15 am]
BILLING CODE 4410-02-P