06-4580. Civil Penalties

AGENCY:

National Highway Traffic Safety Administration (NHTSA), DOT.

ACTION:

Final rule.

SUMMARY:

This document amends NHTSA's regulation on civil penalties by increasing the maximum civil penalties for violations of the National Traffic and Motor Vehicle Safety Act, as amended (Vehicle Safety Act). This action is taken pursuant to the Federal Civil Monetary Penalty Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996, which requires NHTSA to review and, as warranted, adjust penalties based on inflation at least every four years. In addition, this document codifies amendments to the penalty provisions of the Vehicle Safety Act by the Safe, Accountable, Flexible, Efficient Transportation Equity Act—A Legacy for Users (SAFETEA-LU) and makes a technical correction to the text of the agency's penalty regulation.

DATES:

This rule is effective on June 15, 2006.

FOR FURTHER INFORMATION CONTACT:

Michael Kido, Office of Chief Counsel, NHTSA, telephone [phone], facsimile [phone], 400 Seventh Street, SW., Washington, DC 20590.

SUPPLEMENTARY INFORMATION:

This rule amends NHTSA's regulations on civil penalties under the Vehicle Safety Act, 49 U.S.C. Chapter 301. As explained below, it makes four changes to 49 CFR Part 578 Civil and Criminal Penalties. These changes were proposed and explained in our March 9, 2006 Notice of Proposed Rulemaking (“NPRM”) at 71 FR 12156. There were no comments on that notice.

First, this rule adjusts for inflation the maximum available penalties codified at 49 CFR 578.6(a). In order to preserve the remedial impact of civil penalties and to foster compliance with the law, the Federal Civil Monetary Penalty Inflation Adjustment Act of 1990 (28 U.S.C. 2461 Notes, Pub. L. 101-410), as amended by the Debt Collection Improvement Act of 1996, (Pub. L. 104-134) (referred to collectively as the “Adjustment Act” or, in context, the “Act”), requires us and other Federal agencies to regularly adjust civil penalties for inflation. Under the Adjustment Act, following an initial adjustment that was capped by the Act, these agencies must make further adjustments, as warranted, to the amounts of penalties in statutes they administer at least once every four years.

NHTSA is adjusting the maximum penalty for a single violation of the Vehicle Safety Act. The agency last published a rule stating the maximum civil penalty for a single violation or a single violation per day under 49 U.S.C. Chapter 301 on November 14, 2000, 65 FR 68108. This rule incorporated amendments to 49 U.S.C. 30165(a) in the Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act. Pub. L. 106-414, 114 Stat. 1800. In the TREAD Act, Congress set the maximum penalty for a single violation of the Vehicle Safety Act or a regulation thereunder at $5,000. The TREAD Act also set the maximum penalty for a violation of 49 U.S.C. 30166 or a regulation thereunder at $5,000 per violation per day. The agency codified these amounts at 49 CFR 578.6(a)(1) and (a)(2), respectively. In today's rule, NHTSA is adjusting these amounts from $5,000 to $6,000 based on the Adjustment Act, for the reasons set forth in the NPRM.

Additionally, the agency is adjusting the maximum penalty amounts for a related series of violations of the Vehicle Safety Act or a regulation thereunder and for a related series of daily violations of 49 U.S.C. 30166 or a regulation thereunder. Both penalty amounts were last adjusted in amendments to 49 CFR 578.6(a) on September 28, 2004. 69 FR 57864. After applying the formulation set out in the NPRM, the adjusted civil penalty amounts for these violations are being adjusted from $16,050,000 to $16,375,000. The basis for these adjustments is set forth in the NPRM.

Second, this rule codifies the penalties added to the Vehicle Safety Act by the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). Pub. L. 109-59, 119 Stat. 1144, 1942-43 (2005). As explained in the NPRM, SAFETEA-LU added prohibitions related to the acquisition of noncomplying 15-passenger vans for school use and provided for associated penalties. See 71 FR at 12157. See also Pub. L. 109-59, 119 Stat. at 1942-43. Consistent with the agency's practice of codifying civil penalties available under statutes that it administers in Part 578, NHTSA is adding a new provision that includes the SAFETEA-LU penalties. As added in a new Section 578.6(a)(2), a single violation may result in a maximum penalty amount of $10,000, while a related series of violations may result in a maximum penalty amount of $15,000,000. We have written the new penalty provision to parallel the language in 49 CFR 578.6(a). The new regulation has the meaning of the penalty provision in SAFETEA-LU.

Third, this rule reorganizes 49 CFR 578.6(a). As adopted in 2000, the structure of 49 CFR 578.6(a) paralleled the structure of 49 U.S.C. 30165(a), as amended by the TREAD Act. SAFETEA-LU amended 49 U.S.C. 30165(a) by inserting the new penalties related to school bus violations as 49 U.S.C. 30165(a)(2) and by redesignating 49 U.S.C. 30165(a)(2), which relates to violations of 49 U.S.C. 30166 or a regulation thereunder, as 49 U.S.C. 30165(a)(3). 119 Stat. at 1942. To make the regulations parallel with 49 U.S.C. 30165(a), as amended by SAFETEA-LU, the current Section 578.6(a)(2), which was based on 49 U.S.C. 30165(a)(2), is being redesignated as 49 CFR 578.6(a)(3).

Fourth, this rule amends the language in 49 CFR 578.6(a) to conform it to the current statutory text. Specifically, §§ 578.6(a)(1) and (3), as redesignated, referred to violations of 49 U.S.C. 30123(d), which addresses the treatment of regrooved tires. On June 9, 1998, this statutory provision was redesignated as paragraph (a). See Pub. L. 105-178, 112 Stat. 107, 467. Accordingly, we are changing the regulation to reflect this redesignation.

Rulemaking Analyses and Notices

Executive Order 12866 and DOT Regulatory Policies and Procedures

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

(1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or Tribal governments or communities;

(2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;

(3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or

(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

NHTSA has considered the impact of this final rule under E.O. 12866 and the Department of Transportation's regulatory policies and procedures and has determined that it is not significant. This action is limited to the adoption of statutory adjustments of civil penalties under statutes that the agency enforces and codification in 49 CFR 578.6(a) of other statutory amendments, raises no novel issues, and does not otherwise interfere with other actions. This final rule does not impose any costs that would exceed the $100 million threshold or otherwise materially impact entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof. The agency has therefore determined this final rule to be not “significant” under the Department of Transportation's regulatory policies and procedures.

Regulatory Flexibility Act

We have also considered the impacts of this notice under the Regulatory Flexibility Act. I certify that this final rule will not have a significant economic impact on a substantial number of small entities. The following provides the factual basis for this certification under 5 U.S.C. 605(b). The amendments almost entirely potentially affect manufacturers of motor vehicles and motor vehicle equipment.

The Small Business Administration's regulations define a small business in part as a business entity “which operates primarily within the United States.” 13 CFR 121.105(a). SBA's size standards were previously organized according to Standard Industrial Classification (“SIC”) Codes. SIC Code 336211 “Motor Vehicle Body Manufacturing” applied a small business size standard of 1,000 employees or fewer. SBA now uses size standards based on the North American Industry Classification System (“NAICS”), Subsector 336—Transportation Equipment Manufacturing, which provides a small business size standard of 1,000 employees or fewer for automobile manufacturing businesses. Other motor vehicle-related industries have lower size requirements that range between 500 and 750 employees.^[1]

Many small businesses are subject to the penalty provisions of 49 U.S.C. Chapter 301 (Vehicle Safety Act) and therefore may be affected by the adjustments in this final rule. For example, based on comprehensive reporting pursuant to the early warning reporting (EWR) rule under the Motor Vehicle Safety Act, 49 CFR Part 579, of the more than 60 light vehicle manufacturers reporting, over half are small businesses. Also, there are other, relatively low production light vehicle manufacturers that are not subject to comprehensive EWR reporting. Furthermore, there are about 98 registered importers. Equipment manufacturers are also subject to penalties under 49 U.S.C. 30165.

As noted throughout this preamble, this rule only increases the maximum penalty amounts that the agency could obtain for a single violation and a related series of violations of the Vehicle Safety Act and codifies changes that are otherwise effective based on statutory amendments. The rule does not set the amount of penalties for any particular violation or series of violations. Under the Vehicle Safety Act, the penalty provision requires the agency to take into account the size of a business when determining the appropriate penalty in an individual case. See 49 U.S.C. 30165(b). The agency would also consider the size of a business under its civil penalty policy when determining the appropriate civil penalty amount. See 62 FR 37115 (July 10, 1997) (NHTSA's civil penalty policy under the Small Business Regulatory Enforcement Fairness Act (“SBREFA”)). The penalty adjustments that are being made do not affect our civil penalty policy under SBREFA.

Since this regulation does not establish penalty amounts, this rule will not have a significant economic impact on small businesses.

Small organizations and governmental jurisdictions are not significantly affected as the price of motor vehicles and equipment ought not change as the result of this final rule. As explained above, this action is limited to the adoption of a statutory directive, and has been determined to be not “significant” under the Department of Transportation's regulatory policies and procedures.

Executive Order 13132 (Federalism)

Executive Order 13132 requires NHTSA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Under Executive Order 13132, the agency may not issue a regulation with Federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, the agency consults with State and local governments, or the agency consults with State and local officials early in the process of developing the regulation. NHTSA also may not issue a regulation with Federalism implications and that preempts State law unless the agency consults with State and local officials early in the process of developing the regulation.

We have analyzed this rule in accordance with the principles and criteria set forth in Executive Order 13132 and have determined that this rule does not have sufficient Federal implications to warrant consultation with State and local officials or the preparation of a Federalism summary impact statement. The rule will not have any substantial impact on the States, or on the current Federal-State relationship, or on the current distribution of power and responsibilities among the various local officials.

Unfunded Mandates Reform Act of 1995

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

National Environmental Policy Act

We have also analyzed this rulemaking action under the National Environmental Policy Act and determined that it has no significant impact on the human environment.

Executive Order 12988 (Civil Justice Reform)

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

Paperwork Reduction Act

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

Privacy Act

Please note that anyone is able to search the electronic form of all submissions received into any of our dockets by the name of the individual submitting the submission (or signing the submission, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (Volume 65, Number 70; Pages 19477-78), or you may visit http://dms.dot.gov.

List of Subjects in 49 CFR Part 578

• Motor vehicle safety
• Penalties

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

PART 578—CIVIL AND CRIMINAL PENALTIES

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

Authority: Pub. L. 101-410, Pub. L. 104-134, Pub. L. 109-59, 49 U.S.C. §§ 30165, 30170, 30505, 32308, 32309, 32507, 32709, 32710, 32912, and 33115; delegation of authority at 49 CFR 1.50.

2. Section 578.6 is amended by redesignating paragraph (a)(2) as (a)(3), adding a new paragraph (a)(2), and revising paragraph (a)(1) and newly designated paragraph (a)(3), to read as follows:

§ 578.6

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

(a) Motor vehicle safety—(1) In general. A person who violates any of sections 30112, 30115, 30117 through 30122, 30123(a), 30125(c), 30127, or 30141 through 30147 of Title 49 of the United States Code or a regulation prescribed under any of those sections is liable to the United States Government for a civil penalty of not more than $6,000 for each violation. A separate violation occurs for each motor vehicle or item of motor vehicle equipment and for each failure or refusal to allow or perform an act required by any of those sections. The maximum civil penalty under this paragraph for a related series of violations is $16,375,000.

(2) School buses. Notwithstanding paragraph (a)(1) of this section, a person who:

(i) Violates section 30112(a)(1) of Title 49 United States Code by the manufacture, sale, offer for sale, introduction or delivery for introduction into interstate commerce, or importation of a school bus or school bus equipment (as those terms are defined in 49 U.S.C. § 30125(a)); or

(ii) Violates section 30112(a)(2) of Title 49 United States Code, shall be subject to a civil penalty of not more than $10,000 for each violation. A separate violation occurs for each motor vehicle or item of motor vehicle equipment and for each failure or refusal to allow or perform an act required by that section. The maximum penalty under this paragraph for a related series of violations is $15,000,000.

(3) Section 30166. A person who violates section 30166 of Title 49 of the United States Code or a regulation prescribed under that section is liable to the United States Government for a civil penalty for failing or refusing to allow or perform an act required under that section or regulation. The maximum penalty under this paragraph is $6,000 per violation per day. The maximum penalty under this paragraph for a related series of daily violations is $16,375,000.

* * * * *

Issued on: May 11, 2006.

Jacqueline Glassman,

Deputy Administrator.

Footnotes

1.  For example, according to the new SBA coding system, businesses that manufacture truck trailers, travel trailers/campers, carburetors, pistons, piston rings, valves, vehicular lighting equipment, motor vehicle seating/interior trim, and motor vehicle stamping qualify as small businesses if they employ 500 or fewer employees. Similarly, businesses that manufacture gasoline engines, engine parts, electrical and electronic equipment (non-vehicle lighting), motor vehicle steering/suspension components (excluding springs), motor vehicle brake systems, transmissions/power train parts, motor vehicle air-conditioning, and all other motor vehicle parts qualify as small businesses if they employ 750 or fewer employees. See http://www.sba.gov/​size/​sizetable.pdf for further details.