81 FR 43524 - Civil Penalties

DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration

Federal Register Volume 81, Issue 128 (July 5, 2016)

Page Range		43524-43529
FR Document		2016-15800

This interim final rule updates the maximum civil penalty amounts for violations of statutes and regulations administered by NHTSA pursuant the Federal Civil Penalties Inflation Adjustment Act Improvement Act of 2015. This final rule also amends our regulations to reflect the new civil penalty amounts for violations of the National Traffic and Motor Vehicle Safety (the Safety Act) Act authorized by the Fixing America's Surface Transportation Act (FAST Act).

Federal Register, Volume 81 Issue 128 (Tuesday, July 5, 2016)

[Federal Register Volume 81, Number 128 (Tuesday, July 5, 2016)]
[Rules and Regulations]
[Pages 43524-43529]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2016-15800]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 578

[Docket No. NHTSA-2016-0075]
RIN 2127-AL73

Civil Penalties

AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation (DOT).

ACTION: Interim final rule.

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SUMMARY: This interim final rule updates the maximum civil penalty
amounts for violations of statutes and regulations administered by
NHTSA pursuant the Federal Civil Penalties Inflation Adjustment Act
Improvement Act of 2015. This final rule also amends our regulations to
reflect the new civil penalty amounts for violations of the National
Traffic and Motor Vehicle Safety (the Safety Act) Act authorized by the
Fixing America's Surface Transportation Act (FAST Act).

DATES: Effective date: This rule is effective August 4, 2016.
Petitions for reconsideration: Petitions for reconsideration of
this final rule must be received not later than August 19, 2016.

ADDRESSES: Any petitions for reconsideration should refer to the docket
number of this document and be submitted to: Administrator, National
Highway Traffic Safety Administration, 1200 New Jersey Avenue SE., West
Building, Fourth Floor, Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Thomas Healy, Office of Chief
Counsel, NHTSA, telephone (202) 366-2992, facsimile (202) 366-3820,
1200 New Jersey Ave SE., Washington, DC 20590.

SUPPLEMENTARY INFORMATION:

I. Background

On November 2, 2015, the Federal Civil Penalties Inflation
Adjustment Act Improvement Act (the 2015 Act), Pub. L. 114-74, Section
701, was signed into law. The purpose of the 2015 Act is to improve the
effectiveness of civil monetary penalties and to maintain their
deterrent effect. The 2015 Act requires agencies to make an initial
catch up adjustment to the civil monetary penalties they administer
through an interim final rule and then to make subsequent annual
adjustments for inflation. The amount of increase of any adjustment to
a civil penalty pursuant to the 2015 Act is limited to

[[Page 43525]]

150 percent of the current penalty. Agencies are required to issue the
interim final rule with the initial catch up adjustment by July 1,
2016.
The method of calculating inflationary adjustments in the 2015 Act
differs substantially from the methods used in past inflationary
adjustment rulemakings conducted pursuant to the Federal Civil
Penalties Inflation Adjustment Act of 1990 (the Inflation Adjustment
Act), Pub. L. 101-410. Previously, adjustments to civil penalties were
conducted under rules that required significant rounding of figures.
For example, a penalty increase that was greater than $1,000, but less
than or equal to $10,000, would be rounded to the nearest multiple of
$1,000. While this allowed penalties to be kept at round numbers, it
meant that penalties would often not be increased at all if the
inflation factor was not large enough. Furthermore, increases to
penalties were capped at 10 percent. Over time, this formula caused
penalties to lose value relative to total inflation.
The 2015 Act has removed these rounding rules; now, penalties are
simply rounded to the nearest $1. While this creates penalty values
that are no longer round numbers, it does ensure that penalties will be
increased each year to a figure commensurate with the actual calculated
inflation. Furthermore, the 2015 Act ``resets'' the inflation
calculations by excluding prior inflationary adjustments under the
Inflation Adjustment Act, which contributed to a decline in the real
value of penalty levels. To do this, the 2015 Act requires agencies to
identify, for each penalty, the year and corresponding amount(s) for
which the maximum penalty level or range of minimum and maximum
penalties was established (i.e., originally enacted by Congress) or
last adjusted other than pursuant to the Inflation Adjustment Act.
The Director of the Office of Management and Budget (OMB) provided
guidance to agencies in a February 24, 2016 memorandum on how to
calculate the initial adjustment required by the 2015 Act.\1\ The
initial catch up adjustment is based on the change between the Consumer
Price Index for all Urban Consumers (CPI-U) for the month of October in
the year the penalty amount was established or last adjusted by
Congress and the October 2015 CPI-U. The February 24, 2016 memorandum
contains a table with a multiplier for the change in CPI-U from the
year the penalty was established or last adjusted to 2015. To arrive at
the adjusted penalty the agency must multiply the penalty amount when
it was established or last adjusted by Congress, excluding adjustments
under the Inflation Adjustment Act, by the multiplier for the increase
in CPI-U from the year the penalty was established or adjusted provided
in the February 24, 2016 memorandum. The 2015 Act limits the initial
inflationary adjustment to 150 percent of the current penalty. To
determine whether the increase in the adjusted penalty is less than 150
percent, the agency must multiply the current penalty by 250 percent.
The adjusted penalty is the lesser of either the adjusted penalty based
on the multiplier for CPI-U in Table A of the February 24, 2016
memorandum or an amount equal to 250% of the current penalty. This
interim final rule adjusts the civil penalties for violations of
statutes and regulations that NHTSA administers consistent with the
February 24, 2016 memorandum.
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\1\ Memorandum from the Director of OMB to Heads of Executive
Departments and Agencies, Implementation of the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015 (Feb.
24, 2016), available at www.whitehouse.gov/sites/default/files/omb/memoranda/2016/m-16-06.pdf.
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II. Inflationary Adjustments to Penalty Amounts in 49 CFR Part 578

Changes to Civil Penalties for School Bus Related Violations of the
Safety Act (49 CFR 578.6(a)(2))

The maximum civil penalty for a single violation of 30112(a)(1) of
Title 49 of the United States Code involving school buses or school bus
equipment, or of the prohibition on school system purchases and leases
of 15 passenger vans as specified in 30112(a)(2) of Title 49 of the
United States Code was set at $10,000 when the penalty was established
by the Safe, Accountable, Flexible, Efficient Transportation Equity
Act: A Legacy for Users (SAFETEA-LU), Pub. L. 109-59, 119 Stat. 1942,
enacted in 2005. Applying the multiplier for the increase in CPI-U for
2005 in Table A of the February 24, 2016 memorandum (1.19397) results
in an adjusted civil penalty of $11,940. The maximum civil penalty for
a related series of violations of 30112(a)(1) and 30112(a)(2) was
$15,000,000 when the penalty was established by SAFETEA-LU in 2005.
Applying the multiplier for the increase in CPI-U for 2005 results in
an adjusted maximum civil penalty of $17,909,550.

Changes to Civil Penalties for Filing False or Misleading Reports Under
49 U.S.C. 30165(a)(4)

The Moving Ahead for Progress in the 21st Century Act (MAP-21) of
2012, Pub. L. 112-141, established a maximum civil penalty for persons
knowingly or willfully submitting materially false or misleading
information to NHTSA after certifying that the information was accurate
pursuant to 49 U.S.C. 30166(o) of $5,000 per day. Applying the
multiplier for the increase in CPI-U for 2012 in Table A of the
February 24, 2016 memorandum (1.02819) results in an adjusted civil
penalty of $5,141. MAP-21 established a maximum civil penalty for a
related series of daily violations of 49 U.S.C. 30166(o) of $1,000,000.
Applying the multiplier for the increase in CPI-U for 2012 results in
an adjusted civil penalty of $1,028,190 for a related series of daily
violations of 49 U.S.C. 30166(o).

Change to Penalty for Violation of 49 U.S.C. Chapter 305 (49 CFR
578.6(b))

The Anti Car Theft Act of 1992, Pub. L. 102-519, 204, 106 Stat.
3393 (1992) established a civil penalty of $1,000 for each violation of
the reporting requirements related to maintaining the Nation Motor
Vehicle Title Information System. Applying the multiplier for the
increase in CPI-U for 1992 in Table A of the February 24, 2016
memorandum (1.67728) results in an adjusted civil penalty of $1,677.

Change to Maximum Penalty Under 49 U.S.C. 32506(a) (49 CFR 578.6(c))

The Motor Vehicle Information and Cost Savings Act (Cost Savings
Act), Pub. L. 92-513, 86 Stat. 953, (1972), established a civil penalty
of $1,000 for each violation of a bumper standard established pursuant
to the Cost Savings Act. Applying the multiplier for the increase in
CPI-U for 1972 in Table A of the February 24, 2016 memorandum (5.62265)
results in an adjusted civil penalty of $5,623. Since this would result
in an increase to the current civil penalty of greater than 150
percent, the adjusted civil penalty is $2,750 (Current penalty $1,100 x
2.5).
The Cost Savings Act also established a maximum civil penalty of
$800,000 for a related series of violations of the bumper standards
established pursuant to the Act. Applying the multiplier for the
increase in CPI-U for 1972 in Table A of the February 24, 2016
memorandum (5.62265) results in an adjusted civil penalty of
$4,498,120. Since this would result in an increase to the current civil
penalty of greater than 150 percent, the adjusted civil penalty is
$3,062,500 (Current penalty $1,225,000 x 2.5).

[[Page 43526]]

Change to Penalties Under the Consumer Information Provisions (49 CFR
578.6(d)(1))

The Cost Savings Act established a civil penalty of $1,000 for each
violation of 49 U.S.C. 32308(a) related to providing information on
crashworthiness and damage susceptibility. Applying the multiplier for
the increase in CPI-U for 1972 in Table A of the February 24, 2016
memorandum (5.62265) results in an adjusted civil penalty of $5,623.
Since this would result in an increase to the current civil penalty of
greater than 150 percent, the adjusted civil penalty is $2,750 (Current
penalty $1,100 x 2.5). The Cost Savings established a maximum civil
penalty of $400,000 for a series of related violations of 49 U.S.C.
32308(a). Applying the multiplier for the increase in CPI-U for 1972 in
Table A of the February 24, 2016 memorandum (5.62265) results in an
adjusted civil penalty of $2,249,060. Since this would result in an
increase to the current civil penalty of greater than 150 percent, the
adjusted civil penalty is $1,500,000 (Current penalty $600,000 x 2.5).

Change to Penalties Under the Tire Consumer Information Provisions (49
CFR 578.6(d)(2))

The Energy Independence and Security Act of 2007, Pub. L. 110-140,
121 Stat. 1507 (2007) established a civil penalty of $50,000 for each
violation related to the tire information fuel efficiency information
program under 49 U.S.C. 32304A. Applying the multiplier for the
increase in CPI-U for 2007 in Table A of the February 24, 2016
memorandum (1.13833) results in an adjusted civil penalty of $56,917.

Change to Penalties Under the Country of Origin Content Labeling
Provisions (49 CFR 578.6(d)(2))

The American Automobile Labeling Act, Pub L. 102-388, Sec. 210,
106 Stat. 1556 (1992), established a civil penalty of $1,000 for
willfully failing to affix, or failing to maintain, the label required
by the Act. Applying the multiplier for the increase in CPI-U for 1992
in Table A of the February 24, 2016 memorandum (1.67728) results in an
adjusted civil penalty of $1,677.

Change to Penalties Under the Odometer Tampering and Disclosure
Provisions (49 CFR 578.6(f))

MAP-21 adjusted the civil penalty for each violation of 49 U.S.C.
Chapter 327 or a regulation issued thereunder related to odometer
tampering and disclosure to $10,000 per violation. Applying the
multiplier for the increase in CPI-U for 2012 in Table A of the
February 24, 2016 memorandum (1.02819) results in an adjusted civil
penalty of $10,282. MAP-21 established a maximum civil penalty of
$1,000,000 for a related series of violations of 49 U.S.C. Chapter 327
or a regulation issued thereunder. Applying the multiplier for the
increase in CPI-U for 2012 results in an adjusted civil penalty of
$1,028,190 for a related series of violations.
MAP-21 also adjusted the civil penalty for violations of 49 U.S.C.
Chapter 327 or a regulation issued thereunder with intent to defraud to
$10,000 per violation. Applying the multiplier for the increase in CPI-
U for 2012 results in an adjusted civil penalty of $10,282.

Change to Penalties Under the Vehicle Theft Protection Provisions (49
CFR 578.6(g))

The Motor Vehicle Theft Law Enforcement Act of 1984 (Vehicle Theft
Act), Public Law 98-547, Sec. 608, 98 Stat. 2762 (1984), established a
civil penalty of $1,000 for each violation of 49 U.S.C. 33114(a)(1)-
(4). Applying the multiplier for the increase in CPI-U for 1984 in
Table A of the February 24, 2016 memorandum (2.25867) results in an
adjusted civil penalty of $2,259. The Vehicle Theft Act also
established a maximum penalty of $250,000 for a related series of
violations of 49 U.S.C. 33114(a)(1)-(4). Applying the multiplier for
the increase in CPI-U for 1984 results in an adjusted civil penalty of
$564,668.
The Anti Car Theft Act of 1992 established a civil penalty of
$100,000 per day for violations of the Anti Car Theft Act related to
operation of a chop shop. Applying the multiplier for the increase in
CPI-U for 1992 in Table A of the February 24, 2016 memorandum (1.67728)
results in an adjusted civil penalty of $167,728.

Change to Penalties Under the Automobile Fuel Economy Provisions (49
CFR 578.6(g))

The Energy Policy and Conservation Act (EPCA) of 1975, Public Law
94-163, Sec. 508, 89 Stat. 912 (1975), established a civil penalty of
$10,000 for each violation of 49 U.S.C. 32911(a). Applying the
multiplier for the increase in CPI-U for 1975 in Table A of the
February 24, 2016 memorandum (4.3322) results in an adjusted civil
penalty of $43,322. Since this would result in an increase to the
current civil penalty of greater than 150 percent, the adjusted civil
penalty is $40,000 (Current penalty $16,000 x 2.5).
EPCA also established a civil penalty of $5 multiplied by each .1
of a mile a gallon by which the applicable average fuel economy
standard under that section exceeds the average fuel economy for
automobiles to which the standard applies manufactured by the
manufacturer during the model year, multiplied by the number of those
automobile and reduced by the credits available to the manufacturer.
Applying the multiplier for the increase in CPI-U for 1975 results in
an adjusted civil penalty of $22. Since this would result in an
increase to the current civil penalty of greater than 150 percent, the
adjusted civil penalty is $14 (Current penalty $5.50 x 2.5).
In 1978 Congress amended EPCA, Public Law 95-619, 402, 92 Stat.
3255 (Nov. 9, 1978) to allow the Secretary of Transportation to
establish a new civil penalty for each .1 of a mile a gallon by which
the applicable average fuel economy standard under EPCA exceeds the
average fuel economy for automobiles to which the standard applies
manufactured by the manufacturer during the model year. These
amendments, which are codified in 49 U.S.C. 32912(c), state that the
new civil penalty cannot be more than $10. Applying the multiplier for
the increase in CPI-U for 1978 in Table A of the February 24, 2016
memorandum (3.54453) to the $10 maximum penalty the Secretary is
permitted to establish under 49 U.S.C. 32912(c) results in an adjusted
civil penalty of $35. Since this would result in an increase of greater
than 150 percent, the adjusted maximum civil penalty that the Secretary
is permitted to establish under 49 U.S.C. 32912(c) is $25 (Current
maximum penalty $10 x 2.5). Because the new maximum penalty that the
Secretary is permitted to establish under 49 U.S.C. 32912(c) is $25,
the new adjusted civil penalty in 49 CFR 578.6(h)(2) of $14 does not
exceed the maximum penalty that the Secretary is permitted to impose.

Change to Penalties Under the Medium and Heavy Duty Vehicle Fuel
Efficiency Program (49 CFR 578.6(i))

In 2011, the agency established a maximum penalty of $37,500 per
vehicle or engine for violations of 49 CFR 535. Applying the multiplier
for the increase in CPI-U for 2011 in Table A of the February 24, 2016
memorandum (1.05042) results in an adjusted civil penalty of $39,391.

III. Codification of Increases to NHTSA's Civil Penalty Authority in
the FAST Act

On December 4, 2015, the FAST Act, Public Law 114-94, was signed
into law. Section 24110 of the FAST Act

[[Page 43527]]

increased the maximum civil penalty that NHTSA may collect for each
violation of the Safety Act under 49 U.S.C. 30165(a)(1) and 49 U.S.C.
30165(a)(3) to $21,000 per violation (previously $7,000) and the
maximum amount of civil penalties that NHTSA can collect for a related
series of violations to $105 million (previously $35 million). In order
for these increases to become effective, the Secretary of
Transportation was required to certify to Congress that NHTSA has
issued the final rule required by Section 31203 of MAP-21. Section
31203 required NHTSA to provide an interpretation of civil penalty
factors in 49 U.S.C. 30165 for NHTSA to consider in determining the
amount of penalty or compromise for violations of the Safety Act. Pub.
L. 112-141, Sec. 31203, 126 Stat. 758 (2012). The increases in maximum
civil penalties in Section 24110 of the FAST Act became effective the
date of the Secretary's certification.
NHTSA issued the final rule required by Section 31203 of MAP-21 on
February 24, 2016. On March 17, 2016, the Secretary certified to
Congress by letter to the Chairman and Ranking Member of the Senate
Committee on Commerce, Science, and Transportation, and to the Chairman
and Ranking Member of the House Committee on Energy and Commerce that
NHTSA had issued the Final Rule. On March 22, 2016, the Office of the
Secretary of Transportation published a notice in the Federal Register
notifying the public that the increase was in effect.\2\ NHTSA is
codifying these increases in this interm final rule.
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\2\ 81 FR 15413.
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IV. Public Comment

NHTSA is promulgating this interim final rule to ensure that the
amount of civil penalties contained in 49 CFR 578.6 reflect the
statutorily mandated ranges as adjusted for inflation. Pursuant to the
2015 Act, NHTSA is required to promulgate a ``catch-up adjustment''
through an interim final rule. Pursuant to the 2015 Act and 5 U.S.C.
553(b)(3)(B), NHTSA finds that good cause exists for immediate
implementation of this interim final rule without prior notice and
comment because it would be impracticable to delay publication of this
rule for notice and comment and because public comment is unnecessary.
By operation of the Act, NHTSA must publish the catch-up adjustment by
July 1, 2016. Additionally, the 2015 Act provides a clear formula for
adjustment of the civil penalties, leaving the agency little room for
discretion. Furthermore, the increases in NHTSA's civil penalty
authority authorized by the FAST Act are already in effect and the
amendments merely update 49 CFR 578.6 to reflect the new statutory
civil penalty. For these reasons, NHTSA finds that notice and comment
would be impracticable and is unnecessary in this situation.

V. Rulemaking Analyses and Notices

Executive Order 12866, Executive Order 13563, and DOT Regulatory
Policies and Procedures

NHTSA has considered the impact of this rulemaking action under
Executive Order 12866, Executive Order 13563, and the Department of
Transportation's regulatory policies and procedures. This rulemaking
document was not reviewed under Executive Order 12866 or Executive
Order 13563. This action is limited to the adoption of adjustments of
civil penalties under statutes that the agency enforces, and has been
determined to be not ``significant'' under the Department of
Transportation's regulatory policies and procedures and the policies of
the Office of Management and Budget. Because this rulemaking does not
change the number of entities that are subject to civil penalties, the
impacts are limited. Furthermore, excluding the penalties in 49 CFR
578.6(h)(2) for violations of Corporate Average Fuel Economy standards,
this final rule does not establish civil penalty amounts that NHTSA is
required to seek.
We also do not expect the increase in the civil penalty amount in
49 CFR 578.6(h)(2) to be economically significant. Over the last five
model years, NHTSA has collected an average of $20 million per model
year in civil penalties under 49 CFR 578.6(h)(2). Therefore, increasing
the current civil penalty amount by 150 percent would not result in an
annual effect on the economy of $100 million or more.
Furthermore, NHTSA contends that the economic effects of increasing
the civil penalty in 49 CFR 578.6(h)(2) are not directly proportional
to the increase in the amount of civil penalty. Manufacturers could
pursue several strategies to avoid liability for civil penalties under
49 CFR 578.6(h)(2), including purchasing offset credits from other
manufacturers, production and marketing changes to influence the
average fuel economy of vehicles produced by the manufacturer, and
vehicle design changes intended to increase the vehicle's fuel economy.
NHTSA contends that manufacturers will pursue the strategy, or mix on
strategies, that results in the lowest overall cost to the
manufacturer. For this reason the expected economic impacts of this
rule can be expected to be lower than the amount of the increase to the
civil penalty amount in 49 CFR 578.6(h)(2).

Regulatory Flexibility Act

We have also considered the impacts of this rule under the
Regulatory Flexibility Act. I certify that this 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.
For example, according to the 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.
Many small businesses are subject to the penalty provisions of 49
U.S.C. Chapter 301 (Safety Act) and therefore may be affected by the
adjustments made in this rulemaking. For example, based on
comprehensive reporting

[[Page 43528]]

pursuant to the early warning reporting (EWR) rule under the 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 vehicle manufacturers that are not subject to
comprehensive EWR reporting. Furthermore, there are about 70 registered
importers. Equipment manufacturers (including importers), entities
selling motor vehicles and motor vehicle equipment, and motor vehicle
repair businesses are also subject to penalties under 49 U.S.C. 30165.
As noted throughout this preamble, this rule will only increase the
penalty amounts that the agency could obtain for violations covered by
49 CFR 578.6. Under the 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 would not affect our civil penalty policy under
SBREFA.
Since, this regulation does not establish a penalty amount that
NHTSA is required to seek, except for civil penalties under 49 CFR
578.6(h)(2), this rule will not have a significant economic impact on
small businesses. Furthermore, low volume manufacturers can petition
for an exemption from the Corporate Average Fuel Economy standards
under 49 CFR part 525. This will lessen the impacts of this rulemaking
on small business by allowing them to avoid liability for penalties
under 49 CFR 578.6(h)(2). Small organizations and governmental
jurisdictions will not be significantly affected as the price of motor
vehicles and equipment ought not change as the result of this rule.

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
proposed regulation.
This rule will not 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, as specified in Executive Order 13132. The reason
is that this rule will generally apply to motor vehicle and motor
vehicle equipment manufacturers (including importers), entities that
sell motor vehicles and equipment and motor vehicle repair businesses.
Thus, the requirements of Section 6 of the Executive Order do not
apply.

Unfunded Mandates Reform Act of 1995

The Unfunded Mandates Reform Act of 1995, Public Law 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.

Executive Order 12778 (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.
That section does not require that a petition for reconsideration be
filed prior to seeking judicial review.

Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1980, we state
that there are no requirements for information collection associated
with this rulemaking action.

Privacy Act

Please note that anyone is able to search the electronic form of
all comments received into any of our dockets by the name of the
individual submitting the comment (or signing the comment, 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

Imports, Motor vehicle safety, Motor vehicles, Rubber and rubber
products, Tires, Penalties.

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

PART 578--CIVIL AND CRIMINAL PENALTIES

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

Authority: Pub. L. 101-410, Pub. L. 104-134, Pub. L. 109-59,
Pub. L. 114-74, Pub. L. 114-94, 49 U.S.C. 30165, 30170, 30505,
32308, 32309, 32507, 32709, 32710, 32902, 32912, and 33115;
delegation of authority at 49 CFR 1.81, 1.95.

0
2. Section 578.6 is revised to read as follows:

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

(a) Motor vehicle safety--(1) In general. A person who violates any
of sections 30112, 30115, 30117 through 30122, 30123(a), 30125(c),
30127, or 30141 through 30147 of Title 49 of the United States Code or
a regulation prescribed under any of those sections is liable to the
United States Government for a civil penalty of not more than $21,000
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 $105,000,000.
(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 $11,940 for each
violation. A separate violation occurs for each motor vehicle or item
of motor vehicle

[[Page 43529]]

equipment and for each failure or refusal to allow or perform an act
required by this section. The maximum penalty under this paragraph for
a related series of violations is $17,909,550.
(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
$21,000 per violation per day. The maximum penalty under this paragraph
for a related series of daily violations is $105,000,000.
(4) False and misleading reports. A person who knowingly and
willfully submits materially false or misleading information to the
Secretary, after certifying the same information as accurate under the
certification process established pursuant to section 30166(o), shall
be subject to a civil penalty of not more than $5,141 per day. The
maximum penalty under this paragraph for a related series of daily
violations is $1,028,190.
(b) National Automobile Title Information System. An individual or
entity violating 49 U.S.C. Chapter 305 is liable to the United States
Government for a civil penalty of not more than $1,677 for each
violation.
(c) Bumper standards. (1) A person that violates 49 U.S.C. 32506(a)
is liable to the United States Government for a civil penalty of not
more than $2,750 for each violation. A separate violation occurs for
each passenger motor vehicle or item of passenger motor vehicle
equipment involved in a violation of 49 U.S.C. 32506(a)(1) or (4)--
(i) That does not comply with a standard prescribed under 49 U.S.C.
32502, or
(ii) For which a certificate is not provided, or for which a false
or misleading certificate is provided, under 49 U.S.C. 32504.
(2) The maximum civil penalty under this paragraph (c) for a
related series of violations is $3,062,500.
(d) Consumer information--(1) Crash-worthiness and damage
susceptibility. A person who violates 49 U.S.C. 32308(a), regarding
crashworthiness and damage susceptibility, is liable to the United
States Government for a civil penalty of not more than $2,750 for each
violation. Each failure to provide information or comply with a
regulation in violation of 49 U.S.C. 32308(a) is a separate violation.
The maximum penalty under this paragraph for a related series of
violations is $1,500,000.
(2) Consumer tire information. Any person who fails to comply with
the national tire fuel efficiency program under 49 U.S.C. 32304A is
liable to the United States Government for a civil penalty of not more
than $56,917 for each violation.
(e) Country of origin content labeling. A manufacturer of a
passenger motor vehicle distributed in commerce for sale in the United
States that willfully fails to attach the label required under 49
U.S.C. 32304 to a new passenger motor vehicle that the manufacturer
manufactures or imports, or a dealer that fails to maintain that label
as required under 49 U.S.C. 32304, is liable to the United States
Government for a civil penalty of not more than $1,677 for each
violation. Each failure to attach or maintain that label for each
vehicle is a separate violation.
(f) Odometer tampering and disclosure. (1) A person that violates
49 U.S.C. Chapter 327 or a regulation prescribed or order issued
thereunder is liable to the United States Government for a civil
penalty of not more than $10,281 for each violation. A separate
violation occurs for each motor vehicle or device involved in the
violation. The maximum civil penalty under this paragraph for a related
series of violations is $1,028,190.
(2) A person that violates 49 U.S.C. Chapter 327 or a regulation
prescribed or order issued thereunder, with intent to defraud, is
liable for three times the actual damages or $10,281, whichever is
greater.
(g) Vehicle theft protection. (1) A person that violates 49 U.S.C.
33114(a)(1)-(4) is liable to the United States Government for a civil
penalty of not more than $2,259 for each violation. The failure of more
than one part of a single motor vehicle to conform to an applicable
standard under 49 U.S.C. 33102 or 33103 is only a single violation. The
maximum penalty under this paragraph for a related series of violations
is $564,668.
(2) A person that violates 49 U.S.C. 33114(a)(5) is liable to the
United States Government for a civil penalty of not more than $167,728
a day for each violation.
(h) Automobile fuel economy. (1) A person that violates 49 U.S.C.
32911(a) is liable to the United States Government for a civil penalty
of not more than $40,000 for each violation. A separate violation
occurs for each day the violation continues.
(2) Except as provided in 49 U.S.C. 32912(c), a manufacturer that
violates a standard prescribed for a model year under 49 U.S.C. 32902
is liable to the United States Government for a civil penalty of $14
multiplied by each .1 of a mile a gallon by which the applicable
average fuel economy standard under that section exceeds the average
fuel economy--
(i) Calculated under 49 U.S.C. 32904(a)(1)(A) or (B) for
automobiles to which the standard applies manufactured by the
manufacturer during the model year;
(ii) Multiplied by the number of those automobiles; and
(iii) Reduced by the credits available to the manufacturer under 49
U.S.C. 32903 for the model year.
(i) Medium- and heavy-duty vehicle fuel efficiency. The maximum
civil penalty for a violation of the fuel consumption standards of 49
CFR part 535 is not more than $39,391 per vehicle or engine. The
maximum civil penalty for a related series of violations shall be
determined by multiplying $39,391 times the vehicle or engine
production volume for the model year in question within the regulatory
averaging set.

Issued on: June 22, 2016.
Mark R. Rosekind,
Administrator.
[FR Doc. 2016-15800 Filed 7-1-16; 8:45 am]
BILLING CODE 4910-59-P

43524 Federal Register / Vol. 81, No. 128 / Tuesday, July 5, 2016 / Rules and Regulations

authority for this collection of below-1–GHz spectrum (In the Matter of DEPARTMENT OF TRANSPORTATION
information is contained in 47 U.S.C. Policies Regarding Mobile Spectrum
151, 152, 154, 154(i), 155(c), 157, 201, Holdings, Expanding the Economic and National Highway Traffic Safety
202, 208, 214, 301, 302a, 303, 307, 308, Innovation Opportunities of Spectrum Administration
309, 310, 311, 314, 316, 319, 324, 331, Through Incentive Auctions, FCC 14–63,
332, 333, 336, 534, 535 and 554. Report and Order, 29 FCC Rcd 6133, 49 CFR Part 578
Nature and Extent of Confidentiality: 6190, para. 135 (2014) (Mobile Spectrum [Docket No. NHTSA–2016–0075]
There is no need for confidentiality Holdings R&O). See also Application
required with this collection of RIN 2127–AL73
Procedures for Broadcast Incentive
information.
Privacy Impact Assessment: Yes. Auction Scheduled to Begin on March Civil Penalties
Needs and Uses: On July 20, 2015, the 29, 2016; Technical Formulas for
Competitive Bidding, Public Notice, 30 AGENCY: National Highway Traffic
Commission released the Part 1 R&O in Safety Administration (NHTSA),
which it updated many of its Part 1 FCC Rcd 11034, Appendix 3 (WTB
2015); Wireless Telecommunications Department of Transportation (DOT).
competitive bidding rules (See Updating
Bureau Releases Updated List of ACTION: Interim final rule.
Part 1 Competitive Bidding Rules;
Expanding the Economic and Reserve-Eligible Nationwide Service SUMMARY: This interim final rule
Innovation Opportunities of Spectrum Providers in each PEA for the Broadcast updates the maximum civil penalty
Through Incentive Auctions; Petition of Incentive Auction, Public Notice, AU amounts for violations of statutes and
DIRECTV Group, Inc. and EchoStar LLC No. 14–252 (WTB 2016). regulations administered by NHTSA
for Expedited Rulemaking to Amend pursuant the Federal Civil Penalties
The Commission also revised the
Section 1.2105(a)(2)(xi) and 1.2106(a) of Inflation Adjustment Act Improvement
currently approved collection of
the Commission’s Rules and/or for Act of 2015. This final rule also amends
Interim Conditional Waiver; information under OMB Control
Number 3060–0798 to permit the our regulations to reflect the new civil
Implementation of the Commercial penalty amounts for violations of the
Spectrum Enhancement Act and collection of the additional information
for Commission licenses and permits, National Traffic and Motor Vehicle
Modernization of the Commission’s Safety (the Safety Act) Act authorized
Competitive Bidding Rules and pursuant to the rules and information
collection requirements adopted by the by the Fixing America’s Surface
Procedures, Report and Order, Order on Transportation Act (FAST Act).
Reconsideration of the First Report and Commission in the Part 1 R&O and the
Mobile Spectrum Holdings R&O. As part DATES: Effective date: This rule is
Order, Third Order on Reconsideration
of the Second Report and Order, and of the collection, the Commission is effective August 4, 2016.
Petitions for reconsideration: Petitions
Third Report and Order, FCC 15–80, 30 now approved for the information
for reconsideration of this final rule
FCC Rcd 7493 (2015), modified by collection and recordkeeping
must be received not later than August
Erratum, 30 FCC Rcd 8518 (2015) (Part requirements associated with 47 CFR
1 R&O)). Of relevance to the information 19, 2016.
1.2110(j), 1.2112(b)(2)(iii),
collection at issue here, the ADDRESSES: Any petitions for
1.2112(b)(2)(v), 1.2112(b)(2)(vii), and
Commission: (1) Implemented a new reconsideration should refer to the
1.2112(b)(2)(viii). Also, in certain
general prohibition on the filing of docket number of this document and be
circumstances, the Commission requires submitted to: Administrator, National
auction applications by entities the applicant to provide copies of their
controlled by the same individual or set Highway Traffic Safety Administration,
agreements and/or submit exhibits. 1200 New Jersey Avenue SE., West
of individuals (but with a limited
exception for qualifying rural wireless In addition, the Commission is now Building, Fourth Floor, Washington, DC
partnerships); (2) modified the approved for various other, non- 20590.
eligibility requirements for small substantive editorial/consistency edits FOR FURTHER INFORMATION CONTACT:
business benefits, and updated the and updates to FCC Form 601 that Thomas Healy, Office of Chief
standardized schedule of small business correct inconsistent capitalization of Counsel, NHTSA, telephone (202)
sizes, including the gross revenues words and other typographical errors, 366–2992, facsimile (202) 366–3820,
thresholds used to determine eligibility; and better align the text on the form 1200 New Jersey Ave SE., Washington,
(3) established a new bidding credit for with the text in the Commission rules DC 20590.
eligible rural service providers; (4) both generally and in connection with SUPPLEMENTARY INFORMATION:
adopted targeted attribution rules to recent non-substantive, organizational
prevent the unjust enrichment of I. Background
amendments to the Commission’s rules.
ineligible entities; and (5) adopted rules On November 2, 2015, the Federal
prohibiting joint bidding arrangements Federal Communications Commission. Civil Penalties Inflation Adjustment Act
with limited exceptions. The updated Gloria J. Miles, Improvement Act (the 2015 Act), Pub. L.
Part 1 rules apply to applicants seeking Federal Register Liaison Officer, Office of the 114–74, Section 701, was signed into
licenses and permits. Secretary. law. The purpose of the 2015 Act is to
Additionally, on June 2, 2014, the [FR Doc. 2016–15819 Filed 7–1–16; 8:45 am] improve the effectiveness of civil
Commission released the Mobile BILLING CODE 6712–01–P monetary penalties and to maintain
Spectrum Holdings R&O, in which the their deterrent effect. The 2015 Act
Commission updated its spectrum requires agencies to make an initial
sradovich on DSK3GDR082PROD with RULES

screen and established rules for its catch up adjustment to the civil
upcoming auctions of low-band monetary penalties they administer
spectrum. Of relevance to the through an interim final rule and then
information collection at issue here, the to make subsequent annual adjustments
Commission stated that it could reserve for inflation. The amount of increase of
spectrum in order to ensure against any adjustment to a civil penalty
excessive concentration in holdings of pursuant to the 2015 Act is limited to

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Federal Register / Vol. 81, No. 128 / Tuesday, July 5, 2016 / Rules and Regulations 43525

150 percent of the current penalty. 2015 CPI–U. The February 24, 2016 Pub. L. 112–141, established a
Agencies are required to issue the memorandum contains a table with a maximum civil penalty for persons
interim final rule with the initial catch multiplier for the change in CPI–U from knowingly or willfully submitting
up adjustment by July 1, 2016. the year the penalty was established or materially false or misleading
The method of calculating last adjusted to 2015. To arrive at the information to NHTSA after certifying
inflationary adjustments in the 2015 Act adjusted penalty the agency must that the information was accurate
differs substantially from the methods multiply the penalty amount when it pursuant to 49 U.S.C. 30166(o) of $5,000
used in past inflationary adjustment was established or last adjusted by per day. Applying the multiplier for the
rulemakings conducted pursuant to the Congress, excluding adjustments under increase in CPI–U for 2012 in Table A
Federal Civil Penalties Inflation the Inflation Adjustment Act, by the of the February 24, 2016 memorandum
Adjustment Act of 1990 (the Inflation multiplier for the increase in CPI–U
Adjustment Act), Pub. L. 101–410. (1.02819) results in an adjusted civil
from the year the penalty was penalty of $5,141. MAP–21 established
Previously, adjustments to civil established or adjusted provided in the
penalties were conducted under rules a maximum civil penalty for a related
February 24, 2016 memorandum. The
that required significant rounding of series of daily violations of 49 U.S.C.
2015 Act limits the initial inflationary
figures. For example, a penalty increase adjustment to 150 percent of the current 30166(o) of $1,000,000. Applying the
that was greater than $1,000, but less penalty. To determine whether the multiplier for the increase in CPI–U for
than or equal to $10,000, would be increase in the adjusted penalty is less 2012 results in an adjusted civil penalty
rounded to the nearest multiple of than 150 percent, the agency must of $1,028,190 for a related series of daily
$1,000. While this allowed penalties to multiply the current penalty by 250 violations of 49 U.S.C. 30166(o).
be kept at round numbers, it meant that percent. The adjusted penalty is the
penalties would often not be increased Change to Penalty for Violation of 49
lesser of either the adjusted penalty U.S.C. Chapter 305 (49 CFR 578.6(b))
at all if the inflation factor was not large based on the multiplier for CPI–U in
enough. Furthermore, increases to Table A of the February 24, 2016 The Anti Car Theft Act of 1992, Pub.
penalties were capped at 10 percent. memorandum or an amount equal to L. 102–519, 204, 106 Stat. 3393 (1992)
Over time, this formula caused penalties 250% of the current penalty. This established a civil penalty of $1,000 for
to lose value relative to total inflation. interim final rule adjusts the civil
The 2015 Act has removed these each violation of the reporting
penalties for violations of statutes and requirements related to maintaining the
rounding rules; now, penalties are regulations that NHTSA administers
simply rounded to the nearest $1. While Nation Motor Vehicle Title Information
consistent with the February 24, 2016 System. Applying the multiplier for the
this creates penalty values that are no memorandum.
longer round numbers, it does ensure increase in CPI–U for 1992 in Table A
that penalties will be increased each II. Inflationary Adjustments to Penalty of the February 24, 2016 memorandum
year to a figure commensurate with the Amounts in 49 CFR Part 578 (1.67728) results in an adjusted civil
actual calculated inflation. Furthermore, penalty of $1,677.
Changes to Civil Penalties for School
the 2015 Act ‘‘resets’’ the inflation
Bus Related Violations of the Safety Act Change to Maximum Penalty Under 49
calculations by excluding prior
(49 CFR 578.6(a)(2)) U.S.C. 32506(a) (49 CFR 578.6(c))
inflationary adjustments under the
Inflation Adjustment Act, which The maximum civil penalty for a
The Motor Vehicle Information and
contributed to a decline in the real value single violation of 30112(a)(1) of Title
Cost Savings Act (Cost Savings Act),
of penalty levels. To do this, the 2015 49 of the United States Code involving
Pub. L. 92–513, 86 Stat. 953, (1972),
Act requires agencies to identify, for school buses or school bus equipment,
or of the prohibition on school system established a civil penalty of $1,000 for
each penalty, the year and each violation of a bumper standard
corresponding amount(s) for which the purchases and leases of 15 passenger
vans as specified in 30112(a)(2) of Title established pursuant to the Cost Savings
maximum penalty level or range of
49 of the United States Code was set at Act. Applying the multiplier for the
minimum and maximum penalties was
established (i.e., originally enacted by $10,000 when the penalty was increase in CPI–U for 1972 in Table A
Congress) or last adjusted other than established by the Safe, Accountable, of the February 24, 2016 memorandum
pursuant to the Inflation Adjustment Flexible, Efficient Transportation Equity (5.62265) results in an adjusted civil
Act. Act: A Legacy for Users (SAFETEA–LU), penalty of $5,623. Since this would
The Director of the Office of Pub. L. 109–59, 119 Stat. 1942, enacted result in an increase to the current civil
Management and Budget (OMB) in 2005. Applying the multiplier for the penalty of greater than 150 percent, the
provided guidance to agencies in a increase in CPI–U for 2005 in Table A adjusted civil penalty is $2,750 (Current
February 24, 2016 memorandum on of the February 24, 2016 memorandum penalty $1,100 × 2.5).
how to calculate the initial adjustment (1.19397) results in an adjusted civil The Cost Savings Act also established
required by the 2015 Act.1 The initial penalty of $11,940. The maximum civil a maximum civil penalty of $800,000 for
catch up adjustment is based on the penalty for a related series of violations a related series of violations of the
change between the Consumer Price of 30112(a)(1) and 30112(a)(2) was
bumper standards established pursuant
Index for all Urban Consumers (CPI–U) $15,000,000 when the penalty was
to the Act. Applying the multiplier for
for the month of October in the year the established by SAFETEA–LU in 2005.
the increase in CPI–U for 1972 in Table
penalty amount was established or last Applying the multiplier for the increase
in CPI–U for 2005 results in an adjusted A of the February 24, 2016
adjusted by Congress and the October
sradovich on DSK3GDR082PROD with RULES

maximum civil penalty of $17,909,550. memorandum (5.62265) results in an
1 Memorandum from the Director of OMB to adjusted civil penalty of $4,498,120.
Heads of Executive Departments and Agencies, Changes to Civil Penalties for Filing Since this would result in an increase to
Implementation of the Federal Civil Penalties False or Misleading Reports Under 49 the current civil penalty of greater than
Inflation Adjustment Act Improvements Act of 2015 U.S.C. 30165(a)(4) 150 percent, the adjusted civil penalty
(Feb. 24, 2016), available at www.whitehouse.gov/
sites/default/files/omb/memoranda/2016/m-16– The Moving Ahead for Progress in the is $3,062,500 (Current penalty
06.pdf. 21st Century Act (MAP–21) of 2012, $1,225,000 × 2.5).

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43526 Federal Register / Vol. 81, No. 128 / Tuesday, July 5, 2016 / Rules and Regulations

Change to Penalties Under the 2012 in Table A of the February 24, gallon by which the applicable average
Consumer Information Provisions (49 2016 memorandum (1.02819) results in fuel economy standard under that
CFR 578.6(d)(1)) an adjusted civil penalty of $10,282. section exceeds the average fuel
The Cost Savings Act established a MAP–21 established a maximum civil economy for automobiles to which the
civil penalty of $1,000 for each violation penalty of $1,000,000 for a related series standard applies manufactured by the
of 49 U.S.C. 32308(a) related to of violations of 49 U.S.C. Chapter 327 or manufacturer during the model year,
providing information on a regulation issued thereunder. multiplied by the number of those
crashworthiness and damage Applying the multiplier for the increase automobile and reduced by the credits
susceptibility. Applying the multiplier in CPI–U for 2012 results in an adjusted available to the manufacturer. Applying
for the increase in CPI–U for 1972 in civil penalty of $1,028,190 for a related the multiplier for the increase in CPI–
Table A of the February 24, 2016 series of violations. U for 1975 results in an adjusted civil
memorandum (5.62265) results in an MAP–21 also adjusted the civil penalty of $22. Since this would result
adjusted civil penalty of $5,623. Since penalty for violations of 49 U.S.C. in an increase to the current civil
this would result in an increase to the Chapter 327 or a regulation issued penalty of greater than 150 percent, the
current civil penalty of greater than 150 thereunder with intent to defraud to adjusted civil penalty is $14 (Current
percent, the adjusted civil penalty is $10,000 per violation. Applying the penalty $5.50 × 2.5).
$2,750 (Current penalty $1,100 × 2.5). multiplier for the increase in CPI–U for In 1978 Congress amended EPCA,
The Cost Savings established a 2012 results in an adjusted civil penalty Public Law 95–619, 402, 92 Stat. 3255
maximum civil penalty of $400,000 for of $10,282. (Nov. 9, 1978) to allow the Secretary of
a series of related violations of 49 U.S.C. Transportation to establish a new civil
Change to Penalties Under the Vehicle
32308(a). Applying the multiplier for penalty for each .1 of a mile a gallon by
Theft Protection Provisions (49 CFR
the increase in CPI–U for 1972 in Table which the applicable average fuel
578.6(g))
A of the February 24, 2016 economy standard under EPCA exceeds
The Motor Vehicle Theft Law the average fuel economy for
memorandum (5.62265) results in an
Enforcement Act of 1984 (Vehicle Theft automobiles to which the standard
adjusted civil penalty of $2,249,060.
Act), Public Law 98–547, § 608, 98 Stat. applies manufactured by the
Since this would result in an increase to
2762 (1984), established a civil penalty manufacturer during the model year.
the current civil penalty of greater than
of $1,000 for each violation of 49 U.S.C. These amendments, which are codified
150 percent, the adjusted civil penalty
33114(a)(1)–(4). Applying the multiplier in 49 U.S.C. 32912(c), state that the new
is $1,500,000 (Current penalty $600,000
for the increase in CPI–U for 1984 in civil penalty cannot be more than $10.
× 2.5).
Table A of the February 24, 2016 Applying the multiplier for the increase
Change to Penalties Under the Tire memorandum (2.25867) results in an in CPI–U for 1978 in Table A of the
Consumer Information Provisions (49 adjusted civil penalty of $2,259. The February 24, 2016 memorandum
CFR 578.6(d)(2)) Vehicle Theft Act also established a (3.54453) to the $10 maximum penalty
The Energy Independence and maximum penalty of $250,000 for a the Secretary is permitted to establish
Security Act of 2007, Pub. L. 110–140, related series of violations of 49 U.S.C. under 49 U.S.C. 32912(c) results in an
121 Stat. 1507 (2007) established a civil 33114(a)(1)–(4). Applying the multiplier adjusted civil penalty of $35. Since this
penalty of $50,000 for each violation for the increase in CPI–U for 1984 would result in an increase of greater
related to the tire information fuel results in an adjusted civil penalty of than 150 percent, the adjusted
efficiency information program under $564,668. maximum civil penalty that the
49 U.S.C. 32304A. Applying the The Anti Car Theft Act of 1992 Secretary is permitted to establish under
multiplier for the increase in CPI–U for established a civil penalty of $100,000 49 U.S.C. 32912(c) is $25 (Current
2007 in Table A of the February 24, per day for violations of the Anti Car maximum penalty $10 × 2.5). Because
2016 memorandum (1.13833) results in Theft Act related to operation of a chop the new maximum penalty that the
an adjusted civil penalty of $56,917. shop. Applying the multiplier for the Secretary is permitted to establish under
increase in CPI–U for 1992 in Table A 49 U.S.C. 32912(c) is $25, the new
Change to Penalties Under the Country of the February 24, 2016 memorandum adjusted civil penalty in 49 CFR
of Origin Content Labeling Provisions (1.67728) results in an adjusted civil 578.6(h)(2) of $14 does not exceed the
(49 CFR 578.6(d)(2)) penalty of $167,728. maximum penalty that the Secretary is
The American Automobile Labeling permitted to impose.
Change to Penalties Under the
Act, Pub L. 102–388, § 210, 106 Stat.
Automobile Fuel Economy Provisions Change to Penalties Under the Medium
1556 (1992), established a civil penalty
(49 CFR 578.6(g)) and Heavy Duty Vehicle Fuel Efficiency
of $1,000 for willfully failing to affix, or
failing to maintain, the label required by The Energy Policy and Conservation Program (49 CFR 578.6(i))
the Act. Applying the multiplier for the Act (EPCA) of 1975, Public Law 94–163, In 2011, the agency established a
increase in CPI–U for 1992 in Table A § 508, 89 Stat. 912 (1975), established a maximum penalty of $37,500 per
of the February 24, 2016 memorandum civil penalty of $10,000 for each vehicle or engine for violations of 49
(1.67728) results in an adjusted civil violation of 49 U.S.C. 32911(a). CFR 535. Applying the multiplier for
penalty of $1,677. Applying the multiplier for the increase the increase in CPI–U for 2011 in Table
in CPI–U for 1975 in Table A of the A of the February 24, 2016
Change to Penalties Under the February 24, 2016 memorandum memorandum (1.05042) results in an
Odometer Tampering and Disclosure (4.3322) results in an adjusted civil adjusted civil penalty of $39,391.
sradovich on DSK3GDR082PROD with RULES

Provisions (49 CFR 578.6(f)) penalty of $43,322. Since this would
MAP–21 adjusted the civil penalty for result in an increase to the current civil III. Codification of Increases to
each violation of 49 U.S.C. Chapter 327 penalty of greater than 150 percent, the NHTSA’s Civil Penalty Authority in the
or a regulation issued thereunder related adjusted civil penalty is $40,000 FAST Act
to odometer tampering and disclosure to (Current penalty $16,000 × 2.5). On December 4, 2015, the FAST Act,
$10,000 per violation. Applying the EPCA also established a civil penalty Public Law 114–94, was signed into
multiplier for the increase in CPI–U for of $5 multiplied by each .1 of a mile a law. Section 24110 of the FAST Act

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Federal Register / Vol. 81, No. 128 / Tuesday, July 5, 2016 / Rules and Regulations 43527

increased the maximum civil penalty increases in NHTSA’s civil penalty overall cost to the manufacturer. For
that NHTSA may collect for each authority authorized by the FAST Act this reason the expected economic
violation of the Safety Act under 49 are already in effect and the impacts of this rule can be expected to
U.S.C. 30165(a)(1) and 49 U.S.C. amendments merely update 49 CFR be lower than the amount of the
30165(a)(3) to $21,000 per violation 578.6 to reflect the new statutory civil increase to the civil penalty amount in
(previously $7,000) and the maximum penalty. For these reasons, NHTSA 49 CFR 578.6(h)(2).
amount of civil penalties that NHTSA finds that notice and comment would be Regulatory Flexibility Act
can collect for a related series of impracticable and is unnecessary in this
violations to $105 million (previously situation. We have also considered the impacts
$35 million). In order for these increases of this rule under the Regulatory
to become effective, the Secretary of V. Rulemaking Analyses and Notices Flexibility Act. I certify that this rule
Transportation was required to certify to Executive Order 12866, Executive Order will not have a significant economic
Congress that NHTSA has issued the 13563, and DOT Regulatory Policies and impact on a substantial number of small
final rule required by Section 31203 of Procedures entities. The following provides the
MAP–21. Section 31203 required factual basis for this certification under
NHTSA has considered the impact of 5 U.S.C. 605(b). The amendments
NHTSA to provide an interpretation of
this rulemaking action under Executive almost entirely potentially affect
civil penalty factors in 49 U.S.C. 30165
Order 12866, Executive Order 13563, manufacturers of motor vehicles and
for NHTSA to consider in determining
and the Department of Transportation’s motor vehicle equipment.
the amount of penalty or compromise
regulatory policies and procedures. This The Small Business Administration’s
for violations of the Safety Act. Pub. L.
rulemaking document was not reviewed regulations define a small business in
112–141, § 31203, 126 Stat. 758 (2012).
under Executive Order 12866 or part as a business entity ‘‘which
The increases in maximum civil
Executive Order 13563. This action is operates primarily within the United
penalties in Section 24110 of the FAST
Act became effective the date of the limited to the adoption of adjustments States.’’ 13 CFR 121.105(a). SBA’s size
Secretary’s certification. of civil penalties under statutes that the standards were previously organized
NHTSA issued the final rule required agency enforces, and has been according to Standard Industrial
by Section 31203 of MAP–21 on determined to be not ‘‘significant’’ Classification (‘‘SIC’’) Codes. SIC Code
February 24, 2016. On March 17, 2016, under the Department of 336211 ‘‘Motor Vehicle Body
the Secretary certified to Congress by Transportation’s regulatory policies and Manufacturing’’ applied a small
letter to the Chairman and Ranking procedures and the policies of the Office business size standard of 1,000
Member of the Senate Committee on of Management and Budget. Because employees or fewer. SBA now uses size
Commerce, Science, and Transportation, this rulemaking does not change the standards based on the North American
and to the Chairman and Ranking number of entities that are subject to Industry Classification System
Member of the House Committee on civil penalties, the impacts are limited. (‘‘NAICS’’), Subsector 336—
Energy and Commerce that NHTSA had Furthermore, excluding the penalties in Transportation Equipment
issued the Final Rule. On March 22, 49 CFR 578.6(h)(2) for violations of Manufacturing, which provides a small
2016, the Office of the Secretary of Corporate Average Fuel Economy business size standard of 1,000
Transportation published a notice in the standards, this final rule does not employees or fewer for automobile
Federal Register notifying the public establish civil penalty amounts that manufacturing businesses. Other motor
that the increase was in effect.2 NHTSA NHTSA is required to seek. vehicle-related industries have lower
is codifying these increases in this We also do not expect the increase in size requirements that range between
interm final rule. the civil penalty amount in 49 CFR 500 and 750 employees.
578.6(h)(2) to be economically For example, according to the SBA
IV. Public Comment significant. Over the last five model coding system, businesses that
NHTSA is promulgating this interim years, NHTSA has collected an average manufacture truck trailers, travel
final rule to ensure that the amount of of $20 million per model year in civil trailers/campers, carburetors, pistons,
civil penalties contained in 49 CFR penalties under 49 CFR 578.6(h)(2). piston rings, valves, vehicular lighting
578.6 reflect the statutorily mandated Therefore, increasing the current civil equipment, motor vehicle seating/
ranges as adjusted for inflation. penalty amount by 150 percent would interior trim, and motor vehicle
Pursuant to the 2015 Act, NHTSA is not result in an annual effect on the stamping qualify as small businesses if
required to promulgate a ‘‘catch-up economy of $100 million or more. they employ 500 or fewer employees.
adjustment’’ through an interim final Furthermore, NHTSA contends that Similarly, businesses that manufacture
rule. Pursuant to the 2015 Act and 5 the economic effects of increasing the gasoline engines, engine parts, electrical
U.S.C. 553(b)(3)(B), NHTSA finds that civil penalty in 49 CFR 578.6(h)(2) are and electronic equipment (non-vehicle
good cause exists for immediate not directly proportional to the increase lighting), motor vehicle steering/
implementation of this interim final rule in the amount of civil penalty. suspension components (excluding
without prior notice and comment Manufacturers could pursue several springs), motor vehicle brake systems,
because it would be impracticable to strategies to avoid liability for civil transmissions/power train parts, motor
delay publication of this rule for notice penalties under 49 CFR 578.6(h)(2), vehicle air-conditioning, and all other
and comment and because public including purchasing offset credits from motor vehicle parts qualify as small
comment is unnecessary. By operation other manufacturers, production and businesses if they employ 750 or fewer
of the Act, NHTSA must publish the marketing changes to influence the employees. See http://www.sba.gov/
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catch-up adjustment by July 1, 2016. average fuel economy of vehicles size/sizetable.pdf for further details.
Additionally, the 2015 Act provides a produced by the manufacturer, and Many small businesses are subject to
clear formula for adjustment of the civil vehicle design changes intended to the penalty provisions of 49 U.S.C.
penalties, leaving the agency little room increase the vehicle’s fuel economy. Chapter 301 (Safety Act) and therefore
for discretion. Furthermore, the NHTSA contends that manufacturers may be affected by the adjustments
will pursue the strategy, or mix on made in this rulemaking. For example,
2 81 FR 15413. strategies, that results in the lowest based on comprehensive reporting

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Federal Register / Vol. 81, No. 128 / Tuesday, July 5, 2016 / Rules and Regulations 43529

equipment and for each failure or person who violates 49 U.S.C. 32308(a), single motor vehicle to conform to an
refusal to allow or perform an act regarding crashworthiness and damage applicable standard under 49 U.S.C.
required by this section. The maximum susceptibility, is liable to the United 33102 or 33103 is only a single
penalty under this paragraph for a States Government for a civil penalty of violation. The maximum penalty under
related series of violations is not more than $2,750 for each violation. this paragraph for a related series of
$17,909,550. Each failure to provide information or violations is $564,668.
(3) Section 30166. A person who comply with a regulation in violation of (2) A person that violates 49 U.S.C.
violates section 30166 of Title 49 of the 49 U.S.C. 32308(a) is a separate 33114(a)(5) is liable to the United States
United States Code or a regulation violation. The maximum penalty under Government for a civil penalty of not
prescribed under that section is liable to this paragraph for a related series of more than $167,728 a day for each
the United States Government for a civil violations is $1,500,000. violation.
penalty for failing or refusing to allow (2) Consumer tire information. Any (h) Automobile fuel economy. (1) A
or perform an act required under that person who fails to comply with the person that violates 49 U.S.C. 32911(a)
section or regulation. The maximum national tire fuel efficiency program
penalty under this paragraph is $21,000 is liable to the United States
under 49 U.S.C. 32304A is liable to the Government for a civil penalty of not
per violation per day. The maximum United States Government for a civil
penalty under this paragraph for a more than $40,000 for each violation. A
penalty of not more than $56,917 for separate violation occurs for each day
related series of daily violations is each violation.
$105,000,000. the violation continues.
(e) Country of origin content labeling.
(4) False and misleading reports. A A manufacturer of a passenger motor (2) Except as provided in 49 U.S.C.
person who knowingly and willfully vehicle distributed in commerce for sale 32912(c), a manufacturer that violates a
submits materially false or misleading in the United States that willfully fails standard prescribed for a model year
information to the Secretary, after to attach the label required under 49 under 49 U.S.C. 32902 is liable to the
certifying the same information as U.S.C. 32304 to a new passenger motor United States Government for a civil
accurate under the certification process vehicle that the manufacturer penalty of $14 multiplied by each .1 of
established pursuant to section manufactures or imports, or a dealer a mile a gallon by which the applicable
30166(o), shall be subject to a civil that fails to maintain that label as average fuel economy standard under
penalty of not more than $5,141 per day. required under 49 U.S.C. 32304, is liable that section exceeds the average fuel
The maximum penalty under this to the United States Government for a economy—
paragraph for a related series of daily civil penalty of not more than $1,677 for (i) Calculated under 49 U.S.C.
violations is $1,028,190. each violation. Each failure to attach or 32904(a)(1)(A) or (B) for automobiles to
(b) National Automobile Title which the standard applies
maintain that label for each vehicle is a
Information System. An individual or manufactured by the manufacturer
separate violation.
entity violating 49 U.S.C. Chapter 305 is during the model year;
(f) Odometer tampering and
liable to the United States Government (ii) Multiplied by the number of those
disclosure. (1) A person that violates 49
for a civil penalty of not more than automobiles; and
U.S.C. Chapter 327 or a regulation
$1,677 for each violation.
(c) Bumper standards. (1) A person prescribed or order issued thereunder is (iii) Reduced by the credits available
that violates 49 U.S.C. 32506(a) is liable liable to the United States Government to the manufacturer under 49 U.S.C.
to the United States Government for a for a civil penalty of not more than 32903 for the model year.
civil penalty of not more than $2,750 for $10,281 for each violation. A separate (i) Medium- and heavy-duty vehicle
each violation. A separate violation violation occurs for each motor vehicle fuel efficiency. The maximum civil
occurs for each passenger motor vehicle or device involved in the violation. The penalty for a violation of the fuel
or item of passenger motor vehicle maximum civil penalty under this consumption standards of 49 CFR part
equipment involved in a violation of 49 paragraph for a related series of 535 is not more than $39,391 per
U.S.C. 32506(a)(1) or (4)— violations is $1,028,190. vehicle or engine. The maximum civil
(i) That does not comply with a (2) A person that violates 49 U.S.C. penalty for a related series of violations
standard prescribed under 49 U.S.C. Chapter 327 or a regulation prescribed shall be determined by multiplying
32502, or or order issued thereunder, with intent $39,391 times the vehicle or engine
(ii) For which a certificate is not to defraud, is liable for three times the production volume for the model year
provided, or for which a false or actual damages or $10,281, whichever is in question within the regulatory
misleading certificate is provided, under greater. averaging set.
49 U.S.C. 32504. (g) Vehicle theft protection. (1) A
person that violates 49 U.S.C. Issued on: June 22, 2016.
(2) The maximum civil penalty under
this paragraph (c) for a related series of 33114(a)(1)-(4) is liable to the United Mark R. Rosekind,
violations is $3,062,500. States Government for a civil penalty of Administrator.
(d) Consumer information—(1) Crash- not more than $2,259 for each violation. [FR Doc. 2016–15800 Filed 7–1–16; 8:45 am]
worthiness and damage susceptibility. A The failure of more than one part of a BILLING CODE 4910–59–P
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Document Created: 2016-07-01 23:50:18
Document Modified: 2016-07-01 23:50:18

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Rules and Regulations
Action		Interim final rule.
Contact		Thomas Healy, Office of Chief
FR Citation		81 FR 43524
RIN Number		2127-AL73
CFR Associated		Imports; Motor Vehicle Safety; Motor Vehicles; Rubber and Rubber Products; Tires and Penalties

81 FR 43524 - Civil Penalties

DEPARTMENT OF TRANSPORTATIONNational Highway Traffic Safety Administration

Federal Register Volume 81, Issue 128 (July 5, 2016)

DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration