81 FR 95489 - Civil Penalties
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration Federal Register Volume 81, Issue 249 (December 28, 2016)
National Highway Traffic Safety Administration
Federal Register Volume 81, Issue 249 (December 28, 2016)
| Page Range | 95489-95492 | |
| FR Document | 2016-31136 |
[Federal Register Volume 81, Number 249 (Wednesday, December 28, 2016)] [Rules and Regulations] [Pages 95489-95492] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-31136] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION National Highway Traffic Safety Administration 49 CFR Part 578 [Docket No. NHTSA-2016-0136] RIN 2127-AL82 Civil Penalties AGENCY: National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT). ACTION: Final rule; response to petition for reconsideration; response to petition for rulemaking. ----------------------------------------------------------------------- SUMMARY: On July 5, 2016, NHTSA published an interim final rule updating the maximum civil penalty amounts for violations of statutes and regulations administered by NHTSA, pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. This decision responds to a petition for partial reconsideration of that interim final rule. After carefully considering the issues raised, the Agency grants some aspects of the petition, and denies other aspects. This decision amends the relevant regulatory text accordingly. This decision also responds to a petition for rulemaking on a similar topic. DATES: Effective date: This rule is effective January 27, 2017. FOR FURTHER INFORMATION CONTACT: Ms. Rebecca Yoon, Office of the Chief Counsel, NHTSA, telephone (202) 366-2992, facsimile (202) 366-3820, 1200 New Jersey Avenue SE., Washington, DC 20590. SUPPLEMENTARY INFORMATION: I. Background on CAFE Penalties and Interim Final Rule The National Highway Traffic Safety Administration (NHTSA) administers Corporate Average Fuel Economy (CAFE) standards under 49 U.S.C. 32901 et seq. Vehicle manufacturers that produce passenger cars and light trucks for sale in the United States are subject to these standards,\1\ and are subject to civil penalties for failure to meet the standards.\2\ Manufacturers generally meet the standards by applying technology to their vehicles to improve their fleet-wide fuel economy, but may also apply credits earned from over-compliance with standards in another year or purchased from another manufacturer. If a manufacturer does not have credits to apply, and does not apply sufficient fuel economy-improving technologies to their vehicles to meet their fleet-wide standards, then that manufacturer is liable for civil penalties.\3\ --------------------------------------------------------------------------- \1\ 49 U.S.C. 32911(b). \2\ 49 U.S.C. 32912(b). \3\ Civil penalties are remitted to the U.S. Treasury. --------------------------------------------------------------------------- Congress has prescribed the formula for calculating a civil penalty for violation of a CAFE standard. That formula multiplies the penalty rate times the number of tenths-of-a-mile-per-gallon by which a non- compliant fleet falls short of an applicable CAFE standard, times the number of vehicles in that non-compliant fleet.\4\ For many years, the penalty rate has been $5.50 per tenth-of-a-mile-per-gallon. As an illustration, assume that Manufacturer A produced 1,000,000 light trucks in model year 2010. Assume further that A has a light truck standard of 20 mpg for MY 2010, and an achieved light truck average fuel economy level of 19.7 mpg in that model year. If A has no credits to apply, then A's assessed civil penalty under this historical penalty rate would be: --------------------------------------------------------------------------- \4\ 49 U.S.C. 32912(b). $5.50 (penalty rate) x 3 (tenths of an mpg) x 1,000,000 (vehicles in Manufacturer A's light truck fleet) = $16,500,000 due for A's light --------------------------------------------------------------------------- truck fleet for MY 2010. To date, few manufacturers have actually paid civil penalties, and the amounts of CAFE penalties paid generally have been relatively low. Additionally, since the introduction of credit trading and transfers for MY 2011 and after, many manufacturers have taken advantage of those flexibilities rather than paying civil penalties for non-compliance. The Federal Civil Penalties Inflation Adjustment Act Improvements Act (November 2, 2015) (the ``Act'') prescribed an inflation adjustment for many civil monetary penalties, including CAFE's civil penalty rate. In that Act, Congress generally required Federal agencies that administer civil monetary penalties to make an initial ``catch-up'' adjustment for inflation through an interim final rule by July 1, 2016, and then to make subsequent annual adjustments for inflation (see Pub. L. 114-74, Sec. 701). NHTSA developed an interim final rule (IFR) implementing the Agency's responsibilities under that Act, and that IFR published in the Federal Register on July 5, 2016. The NHTSA IFR included adjustments for all civil monetary penalties administered by the Agency, including those prescribed by the CAFE program. In accordance with the Act and OMB guidance, the updated penalty rate increased from $5.50 per tenth of a mile per gallon (mpg) to $14 per tenth of an mpg.\5\ NHTSA stated in implementation guidance that it issued following the IFR that the Agency intended to apply the $14 rate to any penalties assessed on and after August 4, 2016, beginning with penalties applicable to violations for MY 2015, and also applying to any violations from prior model years that resulted from recalculation of a manufacturer's previous CAFE levels.\6\ --------------------------------------------------------------------------- \5\ NHTSA's explanation of its process, including reliance on OMB guidance for calculating the initial adjustment required by the Act, is set forth in the interim final rule at 81 FR 43524-26 (Jul. 5, 2016). The interim final rule also discusses the ``rounding rule'' under the prior version of the Federal Civil Penalties Inflation Adjustment Act, which prevented NHTSA from raising the $5.50 rate after 1997. \6\ Memorandum, ``Implementation of the Federal Civil Penalties Inflation Adjustment Act Improvement Act of 2015 for the Corporate Average Fuel Economy (CAFE) Program,'' July 18, 2016. --------------------------------------------------------------------------- II. Industry Petition for Reconsideration The Auto Alliance and Global Automakers jointly petitioned NHTSA for reconsideration of the interim final rule with regard to the inflation adjustment for CAFE non-compliance penalties (hereafter, the Alliance and Global petition will be referred to as the ``Industry Petition'') on August 1, 2016. The Industry Petition asked that NHTSA not apply the penalty increase to non-compliances associated with ``model years that have already been completed or for which a company's compliance plan has already been set.'' Specifically, the Industry Petition stated that: Our most significant concern with the IFR is that it would apply retroactively to the 2014 and 2015 Model Years (which have been completed for all manufacturers but for which the compliance files are not all closed), to the 2016 Model Year (which is complete for many manufacturers) and to the 2017 and 2018 Model Years (for which manufacturers have already set compliance plans based on guidance from NHTSA, including the [historical penalty amounts of $5.50 per tenth of an mpg]). Applying the increased civil penalties in this manner is profoundly unfair to manufacturers, does not improve the effectiveness of this penalty, and does nothing to further the policies underlying the CAFE statute. Industry Petition at 3. In the alternative, the Industry Petition requested that if NHTSA decided to apply the penalty increase to MYs 2014-2018, the Agency should recalculate the adjusted penalty rate [[Page 95490]] using 2007 as the ``base year'' for calculating the inflation adjustment. As another alternative, the Industry Petition sought a finding that immediately increasing the penalty to $14 would cause a ``negative economic impact,'' thereby requiring a smaller initial penalty increase. See Public Law 114-74, Sec. 701(c) (providing for an exception to the otherwise-applicable penalty increase, if the Agency finds through a rulemaking proceeding that the increase would cause a ``negative economic impact,'' a term that the statute does not define).\7\ --------------------------------------------------------------------------- \7\ Because the Agency is granting the Industry Petition's request to apply inflation-adjusted penalties only to MY 2019 and after, the Agency need not address the Industry Petition's alternative requests. --------------------------------------------------------------------------- III. Petition for Rulemaking To Raise Civil Penalty Rate The Center for Biological Diversity (CBD) petitioned NHTSA on October 1, 2015, just over a month prior to passage of the Act, to conduct a rulemaking to raise the civil penalty rate for CAFE standard violations under NHTSA's then-existing statutory authority. The CBD petition stated correctly that NHTSA had not adjusted the $5.50 civil penalty rate for inflation since 1997, and requested that the Agency follow the procedure laid out at 49 U.S.C. 32912(c) to undertake a rulemaking to raise the amount to the maximum then allowed by Congress, $10 per tenth-of-an-mpg. A month later, Congress changed the statutory landscape by enacting the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. IV. NHTSA Response to Petitions Having carefully considered the issues raised by the petitioners, NHTSA will grant the Industry Petition in part and deny it in part. Beginning with model year 2019, NHTSA will apply the full penalty prescribed by the Federal Civil Penalties Inflation Adjustment Improvements Act of 2015. NHTSA is required by the Act to continue adjusting the civil penalty for inflation each year, so the penalty rate applicable to MY 2019 and after fleets will be $14 per tenth-of- an-mpg, plus any adjustment(s) for inflation that occur between now and a violation's assessment. The Agency concludes that this decision also effectively addresses the issue raised by the CBD Petition. The discussion below presents the Agency's analysis and conclusion. A. Model Years 2014-2016 NHTSA agrees with the Industry Petitioners that applying the $14 civil penalty rate to violations of CAFE standards in model years prior to the enactment of the Act would not result in additional fuel savings, and thus would seem to impose retroactive punishment without accomplishing Congress' specific intent in establishing the civil penalty provision of the Energy Policy and Conservation Act (``EPCA''). Model years typically begin prior to their respective calendar year. By November 2, 2015 (the date of enactment of the civil penalties adjustment Act), nearly all manufacturers subject to the CAFE standards had completed both model years 2014 and 2015, and no further vehicles in those model years were being produced in significant numbers. This argument is even stronger considering that all manufacturers would have completed these model years prior to July 5, 2016, the date of the IFR. If all the vehicles for a model year have already been produced, then there is no way for their manufacturers to raise the fuel economy level of those vehicles in order to avoid higher penalty rates for non- compliance. In the specific context of EPCA as amended, the purpose of civil penalties for non-compliance is to encourage manufacturers to comply with the CAFE standards. See 49 CFR 578.2 (section addressing penalties states that a ``purpose of this part is to effectuate the remedial impact of civil penalties and to foster compliance with the law''); see generally, 49 U.S.C. 32911-32912; United States v. General Motors, 385 F.Supp. 598, 604 (D.D.C. 1974), vacated on other grounds, 527 F.2d 853 (D.C. Cir. 1975) (``The policy of the Act with regard to civil penalties is clearly to discourage noncompliance''). Assuming that higher civil penalty rates are intended, in the particular context of CAFE, to provide greater incentives for manufacturers to comply with applicable standards, then raising penalty rates for model years already completed and thus unchangeable would be not only retroactive,\8\ but incapable of serving the purpose of causing greater compliance with CAFE standards. Based on the governing statutory framework and the specific CAFE regulatory scheme, NHTSA believes that Congress would not have intended retroactive application of an inflation adjustment to overcome this core substantive purpose and intent of EPCA. This analysis compels the conclusion that applying an increased penalty rate to MYs 2014 and 2015 would not be appropriate, nor would applying it to MY 2016, which was underway by November 2, 2015 and over halfway complete by July 5, 2016.\9\ --------------------------------------------------------------------------- \8\ Retroactivity is not favored in the law. The Supreme Court has stated that ``congressional enactments . . . will not be construed to have retroactive effect unless their language requires this result.'' Landgraf v. USI Film Products, 511 U.S. 244, 280 (1994), citing Bowen v. Georgetown University Hospital, 488 U.S. 204, 208 (1988). NHTSA believes that in the specific context of the CAFE program and the statutes that govern it, Congress could not have intended to impose higher civil penalty rates for time periods when they would not incentivize increased fuel economy. \9\ The decision not to apply the increased penalties retroactively is similar to the approach taken by various other federal agencies in implementing the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. See, e.g., Department of Justice, Interim final rule with request for comments: Civil Monetary Penalties Inflation Adjustment, 81 FR 42491 (June 30, 2016) (applying increased penalties only to violations after November 2, 2015, the date of the Act's enactment); Federal Aviation Administration, Interim Final Rule: Revisions to Civil Penalty Inflation Adjustment Tables, 81 FR 43463 (July 5, 2016) (applying increased penalties only to violations after August 1, 2016). --------------------------------------------------------------------------- B. Model Years 2017 and 2018 The Industry Petition asserts that manufacturers have set their product and compliance plans for MY 2017 and 2018 based on the CAFE penalty provisions in place prior to July 2016, and that it is too late at this juncture to make significant changes to those plans and avoid non-compliances (for the manufacturers already intending not to comply). The Agency determined above that it is not appropriate to apply an increased penalty rate to CAFE non-compliance in past model years, i.e., MY 2016 and before, which could not be changed in response to a higher penalty rate. The next question presented by the Industry Petition is how to address future model years' vehicles whose fuel economy levels cannot be changed at this juncture. For immediate future model years (i.e., 2017 and 2018), the theoretical possibility exists that manufacturers could respond to a higher penalty rate by increasing their fleet fuel economy and thus achieving CAFE compliance or mitigating their non-compliance. However, because of industry design, development, and production cycles, vehicle designs (including drivetrains, which are where many fuel economy improvements are made) are often fixed years in advance, making adjustments to fleet fuel economy difficult without a lead time of multiple years. Here, the Industry Petitioners assert that their plans for what technology to put on which MYs 2017 and 2018 vehicles are, at the point the IFR was issued, fixed and inalterable. NHTSA takes manufacturers' product cycles into account when NHTSA sets fuel economy standards. For example, [[Page 95491]] because NHTSA recognizes that manufacturers' product and compliance plans are difficult to alter significantly for years ahead of a given model year,\10\ the Agency includes product cadence in its assessment of CAFE standards, by limiting application of technology in its analytical model to years in which vehicles are refreshed or redesigned. NHTSA believes that this approach facilitates continued fuel economy improvements over the longer term by accounting for the fact that manufacturers will seek to make improvements when and where they are most cost-effective. --------------------------------------------------------------------------- \10\ One of the Industry Petitioners, the Alliance, submitted supplemental materials describing the activities and events that make up product cycles, which support this point. See Docket No. NHTSA-2016-0136. --------------------------------------------------------------------------- In an analogous context, EPCA provides that when DOT amends a fuel economy standard to make it more stringent, that new standard must be promulgated ``at least 18 months before the beginning of the model year to which the amendment applies.'' 49 U.S.C. 32902(a)(2). The 18 months' notice requirement for increases in fuel economy standards represents a congressional acknowledgement of the importance of advance notice to vehicle manufacturers to allow them the lead time necessary to adjust their product plans, designs, and compliance plans to address changes in fuel economy standards. Similarly here, affording manufacturers lead time to adjust their products and compliance plans helps them to account for such an increase in the civil penalty amount. In this unique case, the 18-month lead time for increases in the stringency of fuel economy standards provides a reasonable proxy for appropriate advance notice of the application of substantially increased--here nearly tripled--civil penalties. Given that NHTSA issued the IFR in July 2016, 18 months from that date would be January 2018, which would encompass MY 2017 for most manufacturers and models and part of MY 2018. Based on the Industry Petition, comments, and agency expertise, NHTSA believes that, in this instance, applying the adjusted penalties only for MY 2019 and after provides a reasonable amount of lead time for manufacturers to adjust their plans and products to take into account the substantial change in penalty level. For future model years for which the vehicles to be produced and their technologies are essentially fixed (i.e., MYs 2017-2018), it is conceivable that some manufacturers might be able to change production volumes of certain lower- or higher-fuel-economy models, which could help them to reduce or avoid CAFE non-compliance penalties. However, in this particular instance, compelling such a result through the immediate application of higher penalty rates to product design decisions that have already been made and cannot be changed would be contrary to a fundamental congressional purpose of the CAFE program. The Energy Independence and Security Act (EISA) amendments of 2007 required that fuel economy standards be attribute-based, demonstrating congressional intent that the CAFE program be responsive to consumer demand. See 49 U.S.C. 32902(b)(3). Applying higher civil penalty rates in a way that would force manufacturers to disregard consumer demand (e.g., by restricting the availability of vehicles that consumers want) would be inconsistent with that fundamental statutory command. Providing some lead time, as here, mitigates that concern. In order to reconcile competing statutory objectives in the unique context of multi-year vehicle product cycles, NHTSA will grant the Industry Petition insofar as it seeks to apply the penalty increase only for model years 2019 and after. For CAFE standard non-compliances that occur(ed) for model years 2014-2018, NHTSA intends to assess civil penalties at the rate of $5.50 per tenth of an mpg. Beginning with model year 2019, NHTSA will apply the full penalty prescribed by the Federal Civil Penalties Inflation Adjustment Improvements Act of 2015. NHTSA is required by the Act to continue adjusting the civil penalty for inflation each year, so the penalty rate applicable to MY-2019-and- after fleets will be $14 per tenth-of-an-mpg, plus any adjustment(s) for inflation that occur between now and then. See Public Law 114-74, Sec. 701(b)(2). NHTSA believes this approach appropriately harmonizes the two congressional directives of adjusting civil penalties to account for inflation and maintaining attribute-based, consumer-demand-focused standards, applied in the context of the presumption against retroactive application of statutes. See, e.g., Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208. This decision increases civil penalties starting with the model year that manufacturers, in this particular instance, are reasonably able to design and produce vehicles in response to the increased penalties. See Industry Petition at 4-6 (seeking application of the adjusted civil penalties only to MY 2019 and after). In summary, NHTSA partially grants the Industry Petition for Reconsideration insofar as it seeks implementation of the civil penalties adjustment only to MY 2019 and after, and denies the Industry Petition in all other respects. This action also effectively responds to the petition for rulemaking from CBD to increase the civil penalty rate as permitted by EPCA/EISA. The civil penalty rate beginning in MY 2019 will be substantially higher than the CBD petition requested, and NHTSA believes that the increased penalty will accomplish CBD's goal of encouraging manufacturers to apply more fuel-saving technologies to their vehicles in those future model years. To the extent that the CBD Petition requests an earlier penalty rate increase, it is denied for the reasons set forth in this decision. V. Regulatory Notices and Analyses A. 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, and has been determined not to be ``significant'' under the Department of Transportation's regulatory policies and procedures and the policies of the Office of Management and Budget. B. Regulatory Flexibility Act NHTSA has also considered the impacts of this rule under the Regulatory Flexibility Act. I certify that this rule will not have a significant 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 only affect manufacturers of motor vehicles. Low-volume manufacturers can petition NHTSA for an alternate CAFE standard under 49 CFR part 525, which lessens the impacts of this rulemaking on small businesses by allowing them to avoid liability for potential 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. C. 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 [[Page 95492]] 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, or the agency consults with State and local governments 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 applies to motor vehicle manufacturers. Thus, the requirements of Section 6 of the Executive Order do not apply. D. Unfunded Mandates Reform Act of 1995 (UMRA) 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 NHTSA does not believe that this rule will necessarily have a $100 million effect, no Unfunded Mandates assessment will be prepared. E. 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. F. 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. G. 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 (65 FR 19477-78) or you may visit https://www.transportation.gov/privacy. List of Subjects in 49 CFR Part 578 Fuel economy, Motor vehicles, 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. 32902 and 32912; delegation of authority at 49 CFR 1.81, 1.95. 0 2. Section 578.6 is amended by revising paragraph (h) to read as follows: Sec. 578.6 Civil penalties for violations of specified provisions of Title 49 of the United States Code. * * * * * (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), beginning with model year 2019, 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, plus any adjustments for inflation that occurred or may occur (for model years before model year 2019, the civil penalty is $5.50), 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 produced 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. * * * * * Issued on: December 21, 2016. Mark R. Rosekind, Administrator. [FR Doc. 2016-31136 Filed 12-27-16; 8:45 am] BILLING CODE 4910-59-P
![Federal Register / Vol. 81, No. 249 / Wednesday, December 28, 2016 / Rules and Regulations 95489
[FR Doc. 2016–31215 Filed 12–27–16; 8:45 am] compliance with standards in another monetary penalties administered by the
BILLING CODE 6560–50–P year or purchased from another Agency, including those prescribed by
manufacturer. If a manufacturer does the CAFE program. In accordance with
not have credits to apply, and does not the Act and OMB guidance, the updated
DEPARTMENT OF TRANSPORTATION apply sufficient fuel economy- penalty rate increased from $5.50 per
improving technologies to their vehicles tenth of a mile per gallon (mpg) to $14
National Highway Traffic Safety to meet their fleet-wide standards, then per tenth of an mpg.5 NHTSA stated in
Administration that manufacturer is liable for civil implementation guidance that it issued
penalties.3 following the IFR that the Agency
49 CFR Part 578 Congress has prescribed the formula intended to apply the $14 rate to any
for calculating a civil penalty for penalties assessed on and after August
[Docket No. NHTSA–2016–0136]
violation of a CAFE standard. That 4, 2016, beginning with penalties
RIN 2127–AL82 formula multiplies the penalty rate applicable to violations for MY 2015,
times the number of tenths-of-a-mile- and also applying to any violations from
Civil Penalties per-gallon by which a non-compliant prior model years that resulted from
AGENCY: National Highway Traffic fleet falls short of an applicable CAFE recalculation of a manufacturer’s
Safety Administration (NHTSA), standard, times the number of vehicles previous CAFE levels.6
Department of Transportation (DOT). in that non-compliant fleet.4 For many
II. Industry Petition for
ACTION: Final rule; response to petition
years, the penalty rate has been $5.50
Reconsideration
for reconsideration; response to petition per tenth-of-a-mile-per-gallon. As an
illustration, assume that Manufacturer A The Auto Alliance and Global
for rulemaking. Automakers jointly petitioned NHTSA
produced 1,000,000 light trucks in
SUMMARY: On July 5, 2016, NHTSA model year 2010. Assume further that A for reconsideration of the interim final
published an interim final rule updating has a light truck standard of 20 mpg for rule with regard to the inflation
the maximum civil penalty amounts for MY 2010, and an achieved light truck adjustment for CAFE non-compliance
violations of statutes and regulations average fuel economy level of 19.7 mpg penalties (hereafter, the Alliance and
administered by NHTSA, pursuant to in that model year. If A has no credits Global petition will be referred to as the
the Federal Civil Penalties Inflation to apply, then A’s assessed civil penalty ‘‘Industry Petition’’) on August 1, 2016.
Adjustment Act Improvements Act of under this historical penalty rate would The Industry Petition asked that NHTSA
2015. This decision responds to a be: not apply the penalty increase to non-
compliances associated with ‘‘model
petition for partial reconsideration of $5.50 (penalty rate) × 3 (tenths of an
years that have already been completed
that interim final rule. After carefully mpg) × 1,000,000 (vehicles in
considering the issues raised, the or for which a company’s compliance
Manufacturer A’s light truck fleet) =
Agency grants some aspects of the plan has already been set.’’ Specifically,
$16,500,000 due for A’s light truck
petition, and denies other aspects. This the Industry Petition stated that:
fleet for MY 2010.
decision amends the relevant regulatory To date, few manufacturers have Our most significant concern with the IFR
text accordingly. This decision also is that it would apply retroactively to the
actually paid civil penalties, and the 2014 and 2015 Model Years (which have
responds to a petition for rulemaking on amounts of CAFE penalties paid
a similar topic. been completed for all manufacturers but for
generally have been relatively low. which the compliance files are not all
DATES: Effective date: This rule is Additionally, since the introduction of closed), to the 2016 Model Year (which is
effective January 27, 2017. credit trading and transfers for MY 2011 complete for many manufacturers) and to the
FOR FURTHER INFORMATION CONTACT: Ms. and after, many manufacturers have 2017 and 2018 Model Years (for which
Rebecca Yoon, Office of the Chief taken advantage of those flexibilities manufacturers have already set compliance
Counsel, NHTSA, telephone (202) 366– rather than paying civil penalties for plans based on guidance from NHTSA,
2992, facsimile (202) 366–3820, 1200 including the [historical penalty amounts of
non-compliance. $5.50 per tenth of an mpg]). Applying the
New Jersey Avenue SE., Washington, The Federal Civil Penalties Inflation increased civil penalties in this manner is
DC 20590. Adjustment Act Improvements Act profoundly unfair to manufacturers, does not
SUPPLEMENTARY INFORMATION: (November 2, 2015) (the ‘‘Act’’) improve the effectiveness of this penalty, and
prescribed an inflation adjustment for does nothing to further the policies
I. Background on CAFE Penalties and many civil monetary penalties, underlying the CAFE statute.
Interim Final Rule including CAFE’s civil penalty rate. In Industry Petition at 3.
The National Highway Traffic Safety that Act, Congress generally required In the alternative, the Industry
Administration (NHTSA) administers Federal agencies that administer civil Petition requested that if NHTSA
Corporate Average Fuel Economy monetary penalties to make an initial decided to apply the penalty increase to
(CAFE) standards under 49 U.S.C. 32901 ‘‘catch-up’’ adjustment for inflation MYs 2014–2018, the Agency should
et seq. Vehicle manufacturers that through an interim final rule by July 1, recalculate the adjusted penalty rate
produce passenger cars and light trucks 2016, and then to make subsequent
for sale in the United States are subject annual adjustments for inflation (see 5 NHTSA’s explanation of its process, including
to these standards,1 and are subject to Pub. L. 114–74, Sec. 701). NHTSA reliance on OMB guidance for calculating the initial
civil penalties for failure to meet the developed an interim final rule (IFR) adjustment required by the Act, is set forth in the
interim final rule at 81 FR 43524–26 (Jul. 5, 2016).
standards.2 Manufacturers generally implementing the Agency’s
sradovich on DSK3GMQ082PROD with RULES
The interim final rule also discusses the ‘‘rounding
meet the standards by applying responsibilities under that Act, and that rule’’ under the prior version of the Federal Civil
technology to their vehicles to improve IFR published in the Federal Register Penalties Inflation Adjustment Act, which
their fleet-wide fuel economy, but may on July 5, 2016. The NHTSA IFR prevented NHTSA from raising the $5.50 rate after
1997.
also apply credits earned from over- included adjustments for all civil 6 Memorandum, ‘‘Implementation of the Federal
Civil Penalties Inflation Adjustment Act
1 49 U.S.C. 32911(b). 3 Civil penalties are remitted to the U.S. Treasury. Improvement Act of 2015 for the Corporate Average
2 49 U.S.C. 32912(b). 4 49 U.S.C. 32912(b). Fuel Economy (CAFE) Program,’’ July 18, 2016.
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![95492 Federal Register / Vol. 81, No. 249 / Wednesday, December 28, 2016 / Rules and Regulations
in the development of regulatory G. Privacy Act Issued on: December 21, 2016.
policies that have federalism Please note that anyone is able to Mark R. Rosekind,
implications.’’ ‘‘Policies that have search the electronic form of all Administrator.
federalism implications’’ is defined in comments received into any of our [FR Doc. 2016–31136 Filed 12–27–16; 8:45 am]
the Executive Order to include dockets by the name of the individual BILLING CODE 4910–59–P
regulations that have ‘‘substantial direct submitting the comment (or signing the
effects on the States, on the relationship comment, if submitted on behalf of an
between the national government and association, business, labor union, etc.). DEPARTMENT OF COMMERCE
the States, or on the distribution of You may review DOT’s complete
power and responsibilities among the Privacy Act statement in the Federal National Oceanic and Atmospheric
various levels of government.’’ Under Register published on April 11, 2000 Administration
Executive Order 13132, the agency may (65 FR 19477–78) or you may visit
not issue a regulation with Federalism https://www.transportation.gov/privacy. 50 CFR Part 648
implications, that imposes substantial
direct compliance costs, and that is not List of Subjects in 49 CFR Part 578 RIN 0648–XF074
required by statute, unless the Federal Fuel economy, Motor vehicles,
government provides the funds Fisheries of the Northeastern United
Penalties. States; Northeast Multispecies
necessary to pay the direct compliance In consideration of the foregoing, 49
costs incurred by State and local Fishery; Possession and Trip Limit
CFR part 578 is amended as set forth Modifications for the Common Pool
governments, or the agency consults below.
with State and local governments early Fishery
in the process of developing the PART 578—CIVIL AND CRIMINAL AGENCY: National Marine Fisheries
proposed regulation. PENALTIES Service (NMFS), National Oceanic and
This rule will not have substantial Atmospheric Administration (NOAA),
direct effects on the States, on the ■ 1. The authority citation for 49 CFR Commerce.
relationship between the national part 578 is revised to read as follows:
ACTION: Temporary rule; inseason
government and the States, or on the Authority: Pub. L. 101–410, Pub. L. 104– adjustment.
distribution of power and 134, Pub. L. 109–59, Pub. L. 114–74, Pub L.
responsibilities among the various 114–94, 49 U.S.C. 32902 and 32912; SUMMARY: This action increases the
levels of government, as specified in delegation of authority at 49 CFR 1.81, 1.95. possession and trip limits for Southern
Executive Order 13132. The reason is ■ 2. Section 578.6 is amended by New England/Mid-Atlantic yellowtail
that this rule applies to motor vehicle revising paragraph (h) to read as flounder and reduces the possession
manufacturers. Thus, the requirements follows: and trip limits for Georges Bank cod in
of Section 6 of the Executive Order do place for Northeast multispecies
not apply. § 578.6 Civil penalties for violations of common pool vessels for the remainder
specified provisions of Title 49 of the United
of the 2016 fishing year. The Regional
D. Unfunded Mandates Reform Act of States Code.
Administrator is authorized to adjust
1995 (UMRA) * * * * * possession and trip limits for common
The Unfunded Mandates Reform Act (h) Automobile fuel economy. (1) A pool vessels to facilitate harvesting, or
of 1995, Public Law 104–4, requires person that violates 49 U.S.C. 32911(a) prevent exceeding, the pertinent
agencies to prepare a written assessment is liable to the United States common pool quotas during the fishing
of the cost, benefits, and other effects of Government for a civil penalty of not year. Increasing the possession and trip
proposed or final rules that include a more than $40,000 for each violation. A limits on Southern New England/Mid-
Federal mandate likely to result in the separate violation occurs for each day Atlantic yellowtail flounder is intended
expenditure by State, local, or tribal the violation continues. to provide additional fishing
governments, in the aggregate, or by the (2) Except as provided in 49 U.S.C.
opportunities and help allow the
private sector, of more than $100 32912(c), beginning with model year
common pool fishery to catch its
million annually. Because NHTSA does 2019, a manufacturer that violates a
allowable quota for the stock, while
not believe that this rule will standard prescribed for a model year
reducing the possession and trip limits
necessarily have a $100 million effect, under 49 U.S.C. 32902 is liable to the
for Georges Bank cod is necessary to
no Unfunded Mandates assessment will United States Government for a civil
prevent overharvest of the common pool
be prepared. penalty of $14, plus any adjustments for
quota for that stock.
inflation that occurred or may occur (for
E. Executive Order 12778 (Civil Justice model years before model year 2019, the DATES: The action increasing the
Reform) civil penalty is $5.50), multiplied by possession and trip limits for Southern
each .1 of a mile a gallon by which the New England/Mid-Atlantic yellowtail
This rule does not have a retroactive
applicable average fuel economy flounder is effective December 22, 2016,
or preemptive effect. Judicial review of
standard under that section exceeds the through April 30, 2017. The action
this rule may be obtained pursuant to 5
average fuel economy— decreasing the possession and trip
U.S.C. 702. That section does not
(i) Calculated under 49 U.S.C. limits for Georges Bank cod is effective
require that a petition for
32904(a)(1)(A) or (B) for automobiles to January 1, 2017, through April 30, 2017.
reconsideration be filed prior to seeking
judicial review. which the standard applies produced by FOR FURTHER INFORMATION CONTACT: Kyle
sradovich on DSK3GMQ082PROD with RULES
the manufacturer during the model year; Molton, Fishery Management Specialist,
F. Paperwork Reduction Act (ii) Multiplied by the number of those 978–281–9236.
In accordance with the Paperwork automobiles; and SUPPLEMENTARY INFORMATION: The
Reduction Act of 1980, we state that (iii) Reduced by the credits available regulations at 50 CFR 648.86(o)
there are no requirements for to the manufacturer under 49 U.S.C. authorize the Regional Administrator to
information collection associated with 32903 for the model year. adjust the possession and trip limits for
this rulemaking action. * * * * * common pool vessels in order to
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Document Created: 2016-12-28 02:16:35
Document Modified: 2016-12-28 02:16:35
| 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 | Final rule; response to petition for reconsideration; response to petition for rulemaking. | |
| Dates | Effective date: This rule is effective January 27, 2017. | |
| Contact | Ms. Rebecca Yoon, Office of the Chief Counsel, NHTSA, telephone (202) 366-2992, facsimile (202) 366-3820, 1200 New Jersey Avenue SE., Washington, DC 20590. | |
| FR Citation | 81 FR 95489 | |
| RIN Number | 2127-AL82 | |
| CFR Associated | Fuel Economy; Motor Vehicles and Penalties |
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