TITLE I -- MOTOR VEHICLE SAFETY
Section 101. This section would amend section 30115 of title 49, United States Code, to require manufacturers of motor vehicles and motor vehicle equipment to test or perform other engineering analyses that demonstrate compliance of their products with all applicable federal motor vehicle safety standards (FMVSS) before they certify under section 30115 that their products comply with these standards. The Secretary would employ existing authority to require manufacturers to maintain records of this testing or other engineering analyses.
Though a manufacturer generally should test or perform other engineering analyses of its product and record the results as the adequate basis for certifying the products compliance with a FMVSS, chapter 301 currently does not require such actions. This section would strengthen the National Highway Traffic Safety Administrations (NHTSA) safety compliance assurance program by requiring manufacturers to test or perform other engineering analyses of their products to ensure that they meet the requirements of applicable motor vehicle safety standards. The new requirement would not apply to those requirements for which compliance test procedures are not specified by the applicable standards (e.g., labeling requirements).
This amendment would provide further assurance that adequate information regarding a manufacturers compliance with safety standards is available. It also would enhance the agencys ability to determine the likely compliance of a vehicle or item of vehicle equipment based on manufacturer data, allowing a reduction in the number of governmental compliance tests. It is unlikely to add any significant burden upon manufacturers, since they ought to have an empirical basis to demonstrate compliance of their products with all applicable safety standards before they certify that their products comply with these standards. Transport Canada has imposed a similar requirement for several years.
Section 102. This section would amend section 30120(g)(1) of title 49, United States Code, to: (1) extend to ten years the current eight-year limit on the obligation of manufacturers of motor vehicles or items of motor vehicle equipment to remedy, without charge, safety-related defects and noncompliances with federal motor vehicle safety standards; and (2) increase the current three-year limit on the obligation of tire manufacturers to provide such a remedy to five years. Congress established both limits in 1974.
In 1995, the last year in which statistics concerning the age of the vehicle fleet were published, about a third of the vehicles on the nations roads were over ten years old. By extending the eight-year limitation to ten years, this section recognizes the longer useful life of today's motor vehicles, and assures that the manufacturers duty to remedy safety-related problems in those vehicles without charge is extended consistent with that change. The three-year limit on the obligation of tire manufacturers to provide a remedy without charge for safety-related defects and noncompliances preceded the general adoption of radial tires. By increasing the tire manufacturers obligation to five years, this section reflects the longer life of current tires.
Section 103. This section would amend section 30120 of title 49, United States Code, by adding a new subsection (j) to prohibit dealers of used motor vehicles from selling or leasing used vehicles for purposes other than resale until the dealer informs the purchaser or lessee of any notifications by a manufacturer of any safety-related defects or noncompliances with federal motor vehicle safety standards with respect to the vehicle that have not been remedied. It also requires the dealer either to: (1) offer to have the defects or noncompliances remedied; or (2) give the purchaser or lessee a written description of the defects or noncompliances, the written acknowledgment of which must be received by the dealer from the purchaser or lessee. The amendment defines "dealer" as a person who has sold at least 10 motor vehicles during the prior 12 months to buyers that bought the vehicles other than for resale, and a "used motor vehicle" is defined as a vehicle that has previously been purchased other than for resale.
Currently, section 30120(i) prohibits dealers who have been notified that new motor vehicles or new items of replacement equipment in their possession contain a safety-related defect or do not comply with a safety standard from selling or leasing the vehicles or items of equipment until the defects or noncompliances are remedied. The statute does not address the sale or lease of used vehicles that have a safety defect or a noncompliance. Though all major passenger car and light truck vehicle manufacturers have indicated to NHTSA that they urge their franchised dealers to remedy any safety defects or noncompliances in the used vehicles they have manufactured before selling or leasing them to consumers, there is no requirement to do so. There also is no requirement to inform a prospective purchaser or lessee of any defects or noncompliances with respect to the used vehicle that have not been remedied. In addition, many used vehicles are sold through independent dealers.
This section would enhance motor vehicle safety by assuring that purchasers or lessees of used motor vehicles are informed by the dealer, before purchase or lease, of any notifications by a manufacturer of any safety-related defects or noncompliances with a federal safety standard with respect to the vehicle that have not been remedied. The section also would enhance motor vehicle safety by requiring the dealer either to offer to have the defects or noncompliances remedied or to give the purchaser or lessee a written description of the defects or noncompliances. If the dealer offers to have the defects or noncompliances remedied, the dealer would not experience significant costs. Section 30120 requires manufacturers of motor vehicles to remedy, without charge, any safety-related defects and noncompliances with federal motor vehicle safety standards. Thus, franchised dealers could perform the remedy and receive reimbursement from the manufacturer in the usual way. With respect to independent used motor vehicle dealers, or franchised dealers who are selling used vehicles made by a different manufacturer, information about recalls, including information about whether a vehicle is covered by one or more recalls, is readily accessible from a variety of sources, including NHTSA and vehicle manufacturers. Most defects and noncompliances are remedied at the behest of vehicle owners before the vehicle comes into the possession of a used motor vehicle dealer. If a used motor vehicle dealer has any doubt about whether a defect or noncompliance has been remedied, the dealer can contact a franchised dealer or the manufacturer who could provide the requested information. If the remedy had not been performed, the used motor vehicle dealer could present the vehicle to the manufacturers franchised dealer for repair of the defect or noncompliance without charge.
In recognition that information relating to recalls may not be readily available to used motor vehicle dealers for some time after the defect or noncompliance is determined to exist, this section directs the Secretary to establish a "grace period" during which this requirement would not apply.
Section 104. This section would amend section 30120 of title 49, United States Code, by adding a new subsection (k) to prohibit an owner or lessor of a school bus or of a motor vehicle used to transport passengers for compensation, who has been provided a notification by the manufacturer pursuant to section 30118(b) or section 30118(c), concerning a defect in or failure to comply with a federal motor vehicle safety standard (FMVSS) respecting the school bus or motor vehicle in the owners or lessors possession at the time of notification, from operating the school bus or other motor vehicle until the defect or noncompliance is remedied. This section would affect owners and lessors of school buses and motor vehicles used to transport passengers for compensation, such as rental cars, taxicabs, transit buses, tour buses, intercity buses, and ambulances.
Chapter 301 (sections 30118-30120) requires manufacturers of motor vehicles to notify owners, purchasers, and dealers if the manufacturer or NHTSA determines that the vehicle contains a safety-related defect or a noncompliance with a FMVSS, and to remedy the defect or noncompliance without charge. The statute does not require that owners of defective or noncompliant vehicles must have them remedied. While owners of individual private motor vehicles are in the best position to decide for themselves whether to take their vehicles to a dealer to have them repaired, since the chief impact of this decision is of primary concern to themselves and their families, this does not apply to owners of vehicles used to transport passengers for hire or to school buses. Those passengers will have no way of knowing if the vehicle has a safety problem. Passengers of these vehicles should not be put at risk by the owners failure to respond to a safety recall, especially since the repair will be performed without charge.
Tragic incidents have occurred in recent years in which school children were killed or seriously injured during non-emergency circumstances when their clothing or backpacks caught on the exit handrail of school buses that had been recalled to modify a defective handrail, but on which the repair had not been performed. NHTSAs audits of recalls show that rental fleets, such as taxicab fleets, often have poor recall completion rates, ranging 10 to 25 percent below that of individually owned vehicles. A number of recalls involving buses have shown completion rates of less than 50 percent. This section would help to minimize instances where failure to remedy known safety problems causes crashes, injuries, and fatalities.
Section 105. This section contains three changes to the motor vehicle safety chapters civil penalty provisions. The first change would amend section 30165(a) of title 49, United States Code, to increase the maximum civil penalty from $1,000 to $5,000 for each violation of sections 30112, 30115, 30117-30122, 30123(d), 30125(c), 30127, and 30141-30147, or a regulation prescribed under any of those sections. The second change would amend section 30165(a) to increase the maximum penalty from $800,000 to $4,000,000 for any related series of violations concerning the sections cited above.
Section 30165(a)s $1,000 limit was set in 1966. That sections $800,000 limit for a series of related violations was originally set at $400,000 in 1966 and subsequently raised to $800,000 in 1974. These statutory penalties were recently raised by minor amounts through agency regulation (see 49 C.F.R. Part 578.6(a)) to adjust for inflation, pursuant to the Federal Civil Monetary Penalty Act of 1990 (P.L. 101-410), as amended by the Debt Collection Improvement Act of 1996 (P.L. 104-134).
The first two changes to section 30165(a) would make the civil penalty limits for the sections cited above comparable to the civil penalty limits provided for other federal regulatory agencies. For example, the civil penalty specified for certain analogous violations of the Federal Trade Commission Act (15 U.S.C. 45(l) and (m)) is $10,000 for each such violation, with no maximum for a related series of violations. The civil penalty specified for violations of the Consumer Product Safety Act (15 U.S.C. 2069(a)(1)) is $5,000 for each such violation, with a maximum for a related series of violations of $1,250,000.
The proposed increase in the penalty amounts reflects present economic circumstances. As of October 1998, the Consumer Price Index (CPI) for all urban consumers (not seasonally adjusted) was almost five times higher than it was in 1967, a year after passage of the National Traffic and Motor Vehicle Safety Act of 1966.
The sections third change would amend section 30165(a) to set forth a separate paragraph (a)(2), which would apply to violations of reporting and other informational requirements, and would set a new penalty structure for these violations. Such violations would be treated as continuing violations, subject to daily penalties for each day that the violation continues. The maximum penalty under this paragraph would be $5,000 per violation per day. The maximum penalty for a "related series" of violations would be $500,000.
The provision of daily penalties for continuing violations is comparable to civil penalty authority provided to other federal regulatory agencies. For example, under the Toxic Substances Control Act, administered by the Environmental Protection Agency (EPA), any person who performs a prohibited act (including failing to establish or maintain records, submit reports, notices or other information, permit access to or copying of records, or refusing to permit entry or inspection) is liable for a civil penalty of up to $25,000 for each such violation, and each day of a continuing violation constitutes a separate violation (see sections 2614, 2615(a)(1), 2689 of title 15, United States Code).
TITLE II -- ODOMETERS
Section 201. This section would amend section 32709(a)(1) of title 49, United States Code, to increase the maximum civil penalty from $2,000 to $5,000 for each violation of the odometer chapter (chapter 327 of title 49), or a regulation prescribed or order issued under the chapter, and to increase the maximum penalty from $100,000 to $1,000,000 for any related series of violations.
The $2,000 limit was originally set at $1,000 (section 412(a) of the Motor Vehicle Information and Cost Savings Act Amendments of 1976, P.L. 94-364), and subsequently raised to $2,000 (section 3(a) of the Truth in Mileage Act of 1986, P.L. 99-579). The $100,000 limit was set in 1976 (section 412(a) of the Motor Vehicle Information and Cost Savings Act Amendments of 1976, P.L. 94-364).
This increase in civil penalty limits for violations of the odometer chapter would be comparable to the civil penalty limits provided for other federal regulatory agencies. For example, the civil penalty specified for violations of the Consumer Product Safety Act (see section 2069(a)(1) of title 15, United States Code) is $5,000 for each such violation, with a maximum for a related series of violations of $1,250,000.
Section 202. This section would amend section 32710(a) of title 49, United States Code, to increase the limit on damages that victims of odometer fraud can recover from violators of the odometer law (chapter 327 of title 49), from the current three times actual damages or $1,500, whichever is greater, and reasonable attorney fees, to three times actual damages or $10,000, whichever is greater, and reasonable attorney fees.
The current limit on damages to victims of odometer fraud was established in 1972 by the Motor Vehicle Information and Cost Savings Act (P.L. 92-513). In 1972, the average price of a used vehicle was far lower than it is today. Today, many vehicles with a rolled-back odometer can be sold for a price that exceeds the price of a similar vehicle with an accurate odometer reading by much more than the $1,500 statutory damage amount. Experience also has shown that the state attorneys general and private attorneys are more inclined to settle for the statutory damage amount rather than attempt to calculate the amount of actual damages sustained, particularly when numerous vehicles are involved. To provide a more equitable result for defrauded consumers, and to advance the national effort to eliminate odometer fraud, the dollar amount of damages should be raised to the greater of three times actual damages or $10,000, plus attorney fees.