[Federal Register Volume 63, Number 190 (Thursday, October 1, 1998)]
[Rules and Regulations]
[Pages 52630-52632]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-26263]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Part 580
[NHTSA-98-4438]
RIN 2127-AG83
Odometer Disclosure Requirements; Exemptions
AGENCY: National Highway Traffic Safety Administration, DOT.
ACTION: Final rule.
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SUMMARY: This document amends an exemption from the odometer disclosure
requirements for vehicles ``ten years old or older'' to clarify that
the term ``years'' refers to ``model years.'' 49 CFR 580.17(a)(3). The
rule also amends the exemption by including a formula for calculating
the most recent model year to which the exemption applies.
The agency is taking this action following its consideration of
comments received from the public on the interim final rule that was
published in the Federal Register on September 11, 1997. 62 FR 47763,
Sept. 11, 1997.
This document is published as a final rule to be effective on its
publication in the Federal Register.
DATES: This rule is effective October 1, 1998.
FOR FURTHER INFORMATION CONTACT: Eileen Leahy, Office of the Chief
Counsel, National Highway Traffic Safety Administration, 400 Seventh
Street, SW, Room 5219, Washington, DC 20590 (Telephone: 202-366-5263).
SUPPLEMENTARY INFORMATION:
Background
On September 11, 1997, the National Highway Traffic Safety
Administration (NHTSA) published in the Federal Register an interim
final rule, 62 FR 47763, that repromulgated the exemptions to the
odometer disclosure requirements of 49 CFR Part 580 under the new
authority provided by Section 332 of the Transportation and Related
Agencies Appropriations Act for Fiscal Year 1997. That notice also
solicited public comment on the exemptions themselves. In response to
that notice, the agency received comments from the following entities:
the State of South Dakota Department of Revenue; the National Auto
Auction Association (``NAAA''); ADT Automotive, Inc. (``ADT'') (an auto
auction owner/operator); the Colorado Independent Automobile Dealers
Association (``CIADA''); the State of Tennessee Department of Safety,
Titling & Registration Division; the State of Idaho Transportation
Department; the State of Texas Department of Public Safety; the State
of Washington Department of Licensing: the Secretary of State of the
State of Illinois; the Colorado Department of Public Safety; the
Oklahoma Tax Commission of the State of Oklahoma; the Oregon
Independent Auto Dealers Association (``OIADA''), the State of Georgia
Department of Revenue, Motor Vehicle Division; and the State of
California Department of Motor Vehicles. For convenience, the
commenters that are state motor vehicle administrators or titling
agencies will be referred to simply by the name of the state; and state
agency commenters collectively will be referred to as ``the States'' or
``the State commenters.''
Discussion
The comments focused on a single area of concern: the confusion
that exists about how to apply the exemption for vehicles ``ten years
old or older.'' 49 CFR 580.17(a)(3). Of the fourteen commenters, seven
(NAAA, ADT, ID, CIADA, OIADA, Oklahoma and Georgia) expressed the view
that there was a need to make a change to clear up existing confusion;
while one (California) stated that changing the wording to ``ten model
years or older'' instead of ten years old or older would have only a
minimal impact, and two (Colorado and Washington State) stated that
changing the language of the regulation would have no impact on their
operations. Texas opposed changing the number of years from ten.
Illinois, South Dakota and Tennessee opposed making any change to the
status quo.
None of those advocating an amendment suggested a change in the age
that would qualify a vehicle for the exemption. However, all of them
expressed a need to clear up confusion about when a vehicle becomes
``10 years old'' and thus eligible for the exemption from the odometer
disclosure requirements, either by adding language to the rule, or by
changing the agency's interpretation setting forth the formula to be
applied to decide which vehicles are exempt. Three commenters, NAAA,
ADT and Idaho, supported a change of the wording of the exemption, to
``10 model years old or older.'' CIADA and OIADA advocated that NHTSA
revise its interpretation of the exemption, from ``current calendar
year minus 10 equals the first model year for [which] a vehicle is
exempt'' to ``current calendar year minus 11 equals the first model
year for [which] a vehicle is exempt.''
Two states, Oklahoma and Georgia, suggested that the best means of
eliminating the confusion that currently exists concerning the coverage
of the exemption would be to include the method of calculating the
newest model year to which the exemption would apply in the language of
the exemption itself, without changing the words now used to describe
qualifying vehicles: ten years old or older.
Upon evaluating the comments, NHTSA concludes that the best way to
ensure that the exemption is understood correctly and applied uniformly
is to include the method of calculation as part of the exemption, as
Oklahoma and Georgia suggested. In this way, the means of calculating
the model year to which the exemption applies will be
[[Page 52631]]
readily available to anyone by reading the regulation, without having
to go to any outside source, such as the agency's interpretation
letters, for further information. Accordingly, the agency has decided
to include in section 580.17(a)(3) a statement that the current
calendar year minus 10 equals the most recent model year that is exempt
from disclosure requirements.
After considering all of the comments, the agency has also decided
to amend section 580.17(a)(3) by changing the words ``vehicles 10 years
old or older'' to ``vehicles 10 model years old or older.'' Changing
``year'' to ``model year'' does not effect a change from the applicable
NHTSA interpretations, which conclude that eligibility for the
exemption is to be based on a vehicle's model year rather than on its
actual chronological age based on the time that has elapsed since its
date of production.
In the rule as amended today, the formula announced in that
interpretation remains the same. The formula arrives at the most recent
model year (i.e, the newest vehicles) to which the exemption applies by
subtracting ten model years from the current calendar year. For
example, during calendar year 1998 (i.e., from January 1 through
December 31, 1998), vehicles with a model year designation of 1988 or
earlier are exempt from the odometer disclosure requirements:
1998(current calendar year)--10 = 1988 (most recent model year exempt).
Some commenters expressed concern that a formula that mixes model
year and calendar year might be confusing. However, the agency has
decided, after considering the alternatives, that this method is
actually easier to apply, because it avoids the need to determine the
date on which the model year begins (which, as some commenters pointed
out, can change from year to year, or from manufacturer to
manufacturer) or to ascertain the date on which an individual vehicle
was produced. Assigning the current calendar year as the base year
means that the states do not have to ascertain the beginning dates of
every manufacturer's model year before calculating whether a particular
vehicle is ten years old within the meaning of the exemption; using the
calendar year as the base also makes it easier to administer the
exemption because it eliminates potential confusion arising from
variations among the states in which month they use as the beginning
date of the vehicle registration year. Likewise, making the exemption
available by whole model year rather than according to the vehicle's
actual chronological age based on date of production means that states
and others involved in processing vehicle transfers will not need to
take the time to ascertain the date a vehicle was produced in order to
decide whether the exemption applies.
By making no change in the substance of the exemption, this rule
also addresses the concerns of several state commenters who opposed
making any change in the language of the regulation because they
believe that this would result in a change in the scope of the
exemption, which would impose burdens in terms of costly changes in
computer systems, retraining of employees, and re-educating the public.
To the contrary, by including the formula in the rule, the amendment
should clear up the apparent confusion about which vehicles are in fact
entitled to the exemption. Under both the old wording (as elaborated in
NHTSA's interpretations) and the wording adopted in this rule, model
year 1988 is the most recent model year that is exempt from odometer
disclosure during calendar year 1998.
The only circumstance in which a state would have to make changes
such as altering the computer system or retraining employees would be
if the state had not previously been performing the calculation
correctly. NHTSA believes that there are only three or four states in
which improper calculation of the exemption is a problem; and that even
in those states, the erroneous application of the exemption is often
localized in some Department of Motor Vehicles branch offices rather
than being statewide. In the latter case, the only action that the
state would need to take is retraining its employees; no changes to its
titling system would be necessary. The agency believes that the
positive impact that the new rule will have--improving the efficiency
of the process of titling vehicles by eliminating state-to-state
variation in the applicability of the ten-year-old vehicle exemption--
more than outweighs the small burden that may be incurred by a handful
of states.
The agency decided not to adopt the suggestion of CIADA to change
the calculation from ``current calendar year minus 10'' to ``current
calendar year minus 11.'' CIADA correctly points out that this change
would ensure that only vehicles whose chronological age (based on date
of manufacture) is at least 10 years old are exempt from the disclosure
requirements. However, the drawback of the CIADA proposal is that it is
a change from the previous NHTSA interpretation and, as such, would
require all the states to change their current systems for determining
which vehicles are exempt. Such a change would, as pointed out above,
require expenditure of resources for retraining employees, changing
computer systems and educating the public. It would also be likely to
continue the confusion that apparently exists about the proper method
of calculating the exemption. NHTSA concludes that the benefit to be
realized from requiring disclosure for a relatively small population of
additional vehicles is small and is far outweighed by the costs that
would be incurred by the states in implementing this proposal.
Finally, the agency acknowledges the concerns of a number of the
state commenters who opposed adding the words ``model year'' to the
exemption. The major concerns expressed about this change were that it
would create, rather than reduce, confusion about how to apply the
exemption; and that it would require states, even those who are
properly applying the current exemption according to NHTSA's
interpretation, to make costly expenditures to re-educate their staff
and the public and to change their computer systems. As one commenter
said, this appears to penalize those states that were applying the
exemption properly.
In response to these expressions of concern, NHTSA wishes to
reiterate that the changes it is making today will not require those
states that are already applying the exemption properly to alter their
current approach. The purpose of this rule is to make clear the law
that was already in effect for those who have not understood it
correctly. The addition of the words ``model year'' to the exemption
simply makes explicit in the wording of the exemption itself that which
was already implied (as evidenced by NHTSA's interpretation): that the
determination of whether a vehicle is exempt is to be based on the
model year of the vehicle rather than its chronological age. Contrary
to the fears expressed by some commenters, this approach does not
require a state titling office, or anyone else involved in the transfer
of a motor vehicle, to ascertain the vehicle's actual date of
manufacture to determine whether it is exempt.
Statutory Authority
The agency published the interim final rule under the authority of
Section 332 of the Department of Transportation and Related Agencies
Appropriations Act for Fiscal Year 1997, P.L. 104-205. Section 332
provided that funds provided by the Act could be used for the purpose
of permitting exemptions from the odometer disclosure requirements of
Part 580.
[[Page 52632]]
Subsequently, Congress addressed the issue of exemptions more
completely in the Transportation Equity Act for the 21st Century, P.L.
105-178 (TEA 21). To resolve any lingering uncertainties about the
validity of exemptions issued under Part 580, Section 7105(b) of TEA 21
amended Section 32705(a) of title 49, United States Code, by adding the
following new paragraph:
(5) The Secretary may exempt such classes or categories of
vehicles as the Secretary deems appropriate from these requirements.
Until such time as the Secretary amends or modifies the regulations
set forth in 49 CFR 580.6, such regulations shall have full force
and effect.
In making final the transition from section 580.6 to section
580.17, which was initiated by the interim final rule, the agency's
repromulgation of the exemptions implements the provisions of paragraph
32705(a)(5). The amendments relating to ``model years,'' and to the
method for calculating the most recent model year to which an exemption
applies, are made under the authority provided by the paragraph to
amend or modify exemptions.
Federalism Assessment
The agency has analyzed this rule in accordance with the principles
and criteria contained in Executive Order 12612 and has determined that
the rule does not have sufficient federalism implications to warrant
the preparation of a Federalism Assessment. The final rule merely
clarifies the scope of the existing exemption from the odometer
disclosure requirements, and does not alter the effect on the states of
existing statutory or regulatory requirements.
Rulemaking Analyses
A. Executive Order 12886 and DOT Regulatory Policies and Procedures
NHTSA has analyzed this rule and determined that it is neither
``major'' nor ``significant'' within the meaning of Executive Order
12866 or of Department of Transportation regulatory policies and
procedures. Because the agency estimates that this rule would not have
a significant impact, it has not prepared a regulatory evaluation.
B. Regulatory Flexibility Act
The agency has also considered the effects of this action under the
Regulatory Flexibility Act. I certify that this action will not have
substantial economic impact on a substantial number of small entities.
Because it merely clarifies an existing exemption from agency
regulations, it does not affect the impact of those regulations on
small businesses.
C. National Environmental Policy Act
The agency has analyzed this rule under the National Environmental
Policy Act and determined that it will not have a significant impact on
the human environment. Accordingly, it has not prepared an
environmental impact statement.
D. Paperwork Reduction Act
The final rule is not a collection of information as that term is
defined by OMB in 5 CFR part 1320. It clarifies one of the existing
exemptions to the odometer disclosure requirements in 49 CFR part 580.
That exemption does not require the collection of any information. The
information collection requirements established by part 580 have been
approved by OMB (OMB 2127-0047).
E. Civil Justice Reform Act
This rule will not have any retroactive effect. States may not
adopt laws on disconnecting, altering or tampering with an odometer
with intent to defraud that are inconsistent with 49 U.S.C. Chapter
327. 49 U.S.C. Chapter 327 does not exempt persons from complying with
disconnecting, altering or tampering with an odometer with an intent to
defraud. Agency regulations issued under 49 U.S.C. Chapter 327 are
subject to judicial review pursuant to 5 U.S.C. 704. There is no
requirement for a petition for reconsideration or other administrative
proceeding before a party may file a suit in court challenging
regulations promulgated under Chapter 327.
List of Subjects in 49 CFR Part 580
Consumer protection, Motor vehicles, Odometers.
In consideration of the foregoing, the interim rule amending 49 CFR
part 580 that was published at 62 FR 47763 on September 11, 1998, is
adopted as a final rule with the following change:
PART 580--ODOMETER DISCLOSURE REQUIREMENTS
1. Revise the authority citation for Part 580 to read as follows:
Authority: 49 U.S.C. 32705; delegation of authority at 49 CFR
1.50(f) and 501.8(e)(1).
2. Amend Sec. 580.17 to revise paragraph (a)(3) to read as follows:
Sec. 580.17 Exemptions.
* * * * *
(a) * * *
(3) A vehicle that was manufactured in a model year beginning at
least ten years before January 1 of the calendar year in which the
transfer occurs; or
Example to paragraph (a)(3): For vehicle transfers occurring
during calendar year 1998, model year 1988 or older vehicles are
exempt.
* * * * *
Issued on: September 24, 1998.
Ricardo Martinez,
Administrator.
[FR Doc. 98-26263 Filed 9-30-98; 8:45 am]
BILLING CODE 4910-59-P
