Petition for Approval of Alternate Odometer Disclosure Requirements

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 580

[Docket No. 92-20; Notice 4]

Petition for Approval of Alternate Odometer Disclosure

Requirements

AGENCY: National Highway Traffic Safety Administration (NHTSA),

Department of Transportation.

ACTION: Notice of preliminary determination.

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SUMMARY: NHTSA's regulation concerning odometer disclosure sets forth

procedures by which a State may petition for approval of alternate

disclosure requirements to those otherwise required by the regulation.

In accordance with these procedures, the State of Florida has submitted

a petition for approval of alternate disclosure requirements allowing

the State not to require the disclosure of the addresses of motor

vehicle dealer transferors and transferees. NHTSA believes that an

odometer disclosure statement that does not include these addresses

threatens the integrity of the current system, and that Florida's

proposed alternative does not properly accommodate the purposes which

these addresses serve. Accordingly, NHTSA preliminarily denies

Florida's petition for approval of the proposed alternate disclosure

requirements.

DATES: Comments concerning this preliminary denial are due no later

than September 28, 1994.

ADDRESSES: Written comments should refer to the docket number of this

notice and should be submitted to: Docket Section, Room 5109, National

Highway Traffic Safety Administration, 400 Seventh Street, SW.,

Washington, D.C. 20590. (Docket hours are 9:30 a.m. to 4:00 p.m.)

FOR FURTHER INFORMATION CONTACT: John Donaldson, Office of the Chief

Counsel, Room 5219, National Highway Traffic Safety Administration, 400

Seventh Street, SW., Washington, D.C. 20590, (202) 366-1834.

SUPPLEMENTARY INFORMATION:

Background

To address the problem of odometer fraud, 49 U.S.C. chapter 327

(previously 15 U.S.C. 1981 et seq.) (the Act) provides that each person

transferring ownership of a motor vehicle must disclose the mileage on

the vehicle's title. The Act requires the States to conform their

procedures to enable the titles they issue to be used for odometer

disclosure. Section 32705(d) of the Act directs NHTSA to approve

alternate methods of odometer disclosure submitted by a State, provided

that those methods are consistent with the purposes of the disclosure

required by the Act.

NHTSA's implementing regulation, 49 CFR part 580, identifies

specific elements to be included in the odometer disclosure statement

(49 CFR 580.5 and 580.7). The elements of central importance to the

instant petition are the name and current address of both the

transferor and the transferee. The regulation also sets forth

procedures a petitioning State must follow to seek approval of

alternate requirements to those otherwise required of the State (49 CFR

580.11). In accordance with this latter provision, the State of Florida

has submitted a petition for approval of alternate disclosure

requirements.

Basis for the Petition

Florida seeks approval for alternative procedures to those

contained in 49 U.S.C. 32705(b) (previously 15 U.S.C. 1988(d)) and 49

CFR 580.5 (c)(3) and (c)(4). (The petition identifies paragraphs (c)(2)

and (c)(3) of the regulation, but it is clear from its context that

paragraphs (c)(3) and (c)(4) were intended.) These provisions require

odometer disclosure statements to be made on a title produced by means

of a secure printing process and to include the name and current

address of the transferor and transferee.

Florida currently uses two motor vehicle title forms, copies of

which were submitted with the petition. In all aspects of relevance

here, the forms are identical. Both forms contain one block for

transfer of title by seller on the front and three blocks for dealer

reassignment and one block for application for title on the back.

Florida states that the transfer of title and the dealer reassignment

blocks appear as prescribed by 49 CFR 580.5, except that they do not

contain a space for the address of the transferor and transferee.

Notwithstanding the absence of address spaces in these locations,

Florida asserts that its titles comply with the Federal requirements in

all cases except those involving reassignment by a licensed motor

vehicle dealer.

Florida explains that State law (Florida Statutes, Chapter 319)

precludes the assignment of a motor vehicle title by anyone other than

the person in whose name the title was issued, unless the person is a

dealer. Consequently, in a sale between non-dealers, Florida points out

that the required addresses will be available because the transferor's

address appears on the front of the title and the transferee's address

will eventually appear in the block for ``Application for Title by

Purchaser.'' Citing NHTSA's determination (53 FR No. 151 at 29470, Aug.

5, 1988) that information located elsewhere on the title need not be

repeated in the disclosure statement, Florida argues that its titles

comply with Federal requirements related to transfers between non-

dealers.

The alternate procedures for which Florida seeks approval apply to

transfers by or between licensed dealers. Florida acknowledges that its

titles do not make accommodation for the address of a dealer. Instead,

the dealer is required to include its license number in the

reassignment block appearing on the back of the title, when effecting a

subsequent transfer. According to Florida, the Department of Highway

Safety and Motor Vehicles (DHS) maintains records of all licensed

dealers in the State, indexed by both license number and name, from

which current address information is freely available upon request.

Florida asserts that this system is superior to the requirement of

NHTSA's regulation, because the State records contain the latest

available address information, and because consumers can be informed by

the DHS of avenues of relief through the State's consumer complaint

process and its $25,000 dealer license bond. Accordingly, Florida

concludes that the odometer disclosure procedures it imposes on dealers

are fully consistent with the purposes behind the Federal odometer

disclosure requirements, and that its petition should therefore be

granted.

Preliminary Determination

With respect to motor vehicle transfers in which no party is a

dealer, NHTSA agrees that the odometer disclosure procedures imposed by

Florida comply with Federal odometer disclosure requirements. While it

is preferable, from the standpoint of clarity, for the purchaser's

address to appear in the transfer block on the front of the title, we

nevertheless conclude that Florida's procedure adequately accommodates

all statutory and regulatory requirements covering these non-dealer

transactions.

NHTSA does not agree, however, that the procedures Florida imposes

on transactions in which at least one party is a dealer are consistent

with the purposes of the Federal requirements. Even assuming that

consumers are afforded unhindered access to in-state dealer address

information maintained by the DHS pursuant to its licensing authority,

this system fails to recognize the interstate nature of motor vehicle

transfers. Should a dealer from another State be involved in the chain

of transfer on a Florida title, the DHS would be unable to provide the

required address information. Moreover, without any identifying

information beyond a license number from an unknown State, it would be

extremely difficult to determine the location of an out-of-state

dealer.

NHTSA believes that Florida's proposed procedures would hinder

enforcement efforts, which rely on readily available address

information for all transferors and transferees in order to trace the

sales histories of motor vehicles. It is also worth noting that title

blocks lacking a common information element accepted by most States as

the norm for compliance with odometer disclosure requirements are more

likely to be questioned or rejected in interstate transactions. NHTSA

is aware of several such occurrences, and is mindful of their negative

impacts on interstate title transfers. Accordingly, the agency

concludes that Florida's approach is inconsistent with the purposes of

the odometer disclosure laws, and it preliminarily denies Florida's

petition.

Written Comments

Interested persons are invited to comment on this notice. It is

requested that ten copies be submitted.

All comments must be limited to 15 pages in length. This limitation

is intended to encourage commenters to detail their primary arguments

in a concise fashion. Necessary attachments may be appended without

regard to the 15-page limit. (49 CFR 553.21.)

Written comments to the public docket must be received by September

28, 1994. All comments received before the close of business on the

comment closing date will be considered and will be available for

examination in the docket at the above address before and after that

date. To the extent possible, comments received after the comment

closing date will also be considered. However, action on the petition

may proceed at any time after that date. Following the close of the

comment period, NHTSA will publish a final determination on the

petition responding to the comments. NHTSA will continue to file

relevant material in the docket as it becomes available after the

closing date, and it is recommended that interested persons continue to

examine the docket for new material. Those persons desiring to be

notified upon receipt of their comments should enclose, in the envelope

with their comments, a self-addressed, stamped postcard. Upon receiving

the comments, the docket supervisor will return the postcard by mail.

Copies of all comments will be placed in Docket 92-20, Notice 4 of

the NHTSA Docket Section in Room 5109, Nassif Building, 400 7th Street,

SW., Washington, D.C. 20590.

Issued on: August 24, 1994.

John Womack,

Acting Chief Counsel.

[FR Doc. 94-21250 Filed 8-26-94; 8:45 am]

BILLING CODE 4910-59-P