Schedule of Fees Authorized by 49 U.S.C. 30141; Fee for Review and Processing of Conformity Certificates for Nonconforming Vehicles

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 594

[Docket No. 97-046; Notice 2]

RIN 2127-AG73

Schedule of Fees Authorized by 49 U.S.C. 30141; Fee for Review

and Processing of Conformity Certificates for Nonconforming Vehicles

AGENCY: National Highway Traffic Safety Administration (NHTSA),

Department of Transportation.

ACTION: Final rule.

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SUMMARY: This rule amends NHTSA's regulations that prescribe a schedule

of fees authorized by 49 U.S.C. 30141 for various functions performed

by the agency with respect to the importation of motor vehicles. The

amendment establishes a fee for the agency's review and processing of

statements that registered importers submit to certify that vehicles

that were not originally manufactured to conform to all applicable

Federal motor vehicle safety standards have been brought into

conformity with those standards. The fee, which is set at $14.00 for

fiscal year 1998, applies to all vehicles for which conformity

certificates are submitted to NHTSA, including vehicles imported from

Canada, which currently account for over 98 percent of the

nonconforming vehicles that are processed by NHTSA.

DATES: The amendment established by this final rule will become

effective on October 29, 1997.

Any petitions for reconsideration must be received by NHTSA not

later than November 13, 1997.

ADDRESSES: Any petitions for reconsideration should refer to the docket

and notice numbers above and be submitted to: Docket Section, National

Highway Traffic Safety Administration, 400 Seventh Street, S.W.,

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

through Friday.

FOR FURTHER INFORMATION CONTACT: For non-legal issues: Clive Van Orden,

Office of Vehicle Safety Compliance, National Highway Traffic Safety

Administration, 400 Seventh Street, S.W., Washington, D.C. 20590 (202-

366-2830). For legal issues: Coleman Sachs, Office of Chief Counsel,

National Highway Traffic Safety Administration, 400 Seventh Street,

S.W., Washington, D.C. 20590 (202-366-5238).

SUPPLEMENTARY INFORMATION:

A. Background

This rule was preceded by a notice of proposed rulemaking (NPRM)

that NHTSA published on July 15, 1997 (62 FR 37847), proposing to

establish a fee for the agency's review and processing of conformity

certificates submitted by registered importers and to set the fee for

fiscal year (FY) 1998 at $17.00 per vehicle. The NPRM stated that 49

U.S.C. 30141 permits an importer who is registered with NHTSA (a

``registered importer'') to import a motor vehicle that was not

originally manufactured to conform to all applicable Federal motor

vehicle safety standards (FMVSS), provided that NHTSA has decided that

the vehicle is eligible for importation. Once a motor vehicle has been

declared eligible for importation, it is imported under bond by a

registered importer or by an individual who has executed a contract or

other agreement with a registered importer to bring the vehicle into

compliance with applicable FMVSS. When the registered importer

completes all necessary alterations, it must certify to NHTSA that the

vehicle meets the FMVSS. See 49 U.S.C. 30146(b) and 49 CFR 592.6(e).

This is accomplished by submitting, in accordance with regulations and

guidance issued by NHTSA, a package containing photographic and

documentary evidence of the vehicle's conformance with each applicable

FMVSS. Each of these packages is reviewed by NHTSA's Office of Vehicle

Safety Compliance (OVSC) to verify the accuracy of the information it

contains. If NHTSA questions the registered importer's certification of

compliance, the registered importer is notified pursuant to 49 CFR

592.8(c) to hold the vehicle for inspection. Acceptance of the

certification ends the agency's involvement with the vehicle.

The NPRM noted that NHTSA staff expends much time reviewing and

evaluating routine compliance packages, and even more time if a package

does not indicate conformance with the FMVSS, necessitating follow-up

action.

[[Page 50877]]

Based on figures accumulated to date, NHTSA expects to review over

21,000 compliance packages in FY 1997, which will end on September 30,

1997.

B. Authority for Fee

NHTSA is authorized under 49 U.S.C. 30141(a)(3) to establish an

annual fee requiring registered importers to pay for the costs of

carrying out the registered importer program. The agency is also

authorized under this section to establish fees to pay for the costs of

processing the conformance bonds that registered importers provide, and

fees to pay for the costs of making agency decisions relating to the

importation of noncomplying motor vehicles and equipment. As stated in

the NPRM, NHTSA believes it is entitled to reimbursement under 49

U.S.C. 30141 for the costs of reviewing conformity packages submitted

by registered importers to secure the release of the conformance bonds

that cover noncomplying vehicles.

Because NHTSA's approval of the conformity package is a necessary

predicate to the release of these bonds, NHTSA has concluded that the

expense incurred by the agency in reviewing and processing each package

may be treated as part of the bond processing cost, for which NHTSA is

authorized to set a fee under 49 U.S.C. 30141(a)(3)(A).

Additionally, NHTSA's decision to approve the release of a bond

based on its review of a conformity package qualifies as a ``decision''

under Subchapter III of Title 49, U.S. Code, for which the agency is

authorized to set a fee under 49 U.S.C. 30141(a)(3)(B). Section

30141(e) provides that the amounts collected as fees from registered

importers under section 30141(a)(3) ``are only for use by the Secretary

of Transportation--(1) in carrying out this section and sections 30146

(a)-(c)(1), (d), and (e) and 30147(b) of this title * * *.'' NHTSA's

authority to review conformity packages is principally derived from

section 30146(c). That provision authorizes the Secretary of

Transportation to require the compliance certification submitted by a

registered importer to ``be accompanied by evidence of compliance the

Secretary considers appropriate * * *.'' In light of the fact that

section 30141(e) clearly authorizes the use of fees collected from

registered importers under section 30141(a)(3) to support NHTSA's

actions in reviewing conformity packages, NHTSA has concluded that it

is authorized under 49 U.S.C. 30141(a)(3)(B) to charge fees for that

purpose.

Even if such authority did not exist in Chapter 301 of Title 49,

U.S. Code, the Independent Offices Appropriation Act of 1952, 31 U.S.C.

9701, provides ample authority for NHTSA to impose fees that are

sufficient to recover the agency's full costs for the review and

processing of conformity packages. By reviewing the conformity package

and authorizing the release of the conformance bond that is posted upon

entry of a nonconforming vehicle, NHTSA is performing a specific

service for an identifiable beneficiary that can form the basis for the

imposition of a fee under 31 U.S.C. 9701.

Courts have long recognized that federal agencies may impose fees

under section 9701 for providing comparable services to regulated

entities. See, e.g., Seafarers International Union of North America v.

U.S. Coast Guard, 81 F.3d 179, 183 (D.C. Cir. 1996)(finding the Coast

Guard authorized to charge reasonable fees for processing applications

for merchant mariner licenses, certificates, and work documents);

Engine Manufacturers Association v. E.P.A., 20 F.3d 1177, 1180 (D.C.

Cir. 1994)(finding the E.P.A. authorized to impose a fee to recover its

costs for testing vehicles and engines for compliance with the emission

standards of the Clean Air Act); and National Cable Television

Association, Inc. v. F.C.C., 554 F.2d 1094, 1101 (D.C. Cir. 1976)

(finding the F.C.C. authorized to impose fees for issuing certificates

of compliance to cable television operators).

In view of the language and judicial construction of 31 U.S.C.

9701, NHTSA is relying on this provision as an independent source of

authority for the conformity package review fee. The agency believes

that this provision and 49 U.S.C. 30141 each provide sufficient

separate authority for this fee and the other fees that the agency has

established under 49 CFR Part 594. Section 9701 was not cited as

authority for the Part 594 fees previously established by the agency

because each of those fees was expressly authorized under the language

of 49 U.S.C. 30141 or its predecessor provision. When the prior fees

were established, NHTSA did not recognize a need to impose a fee for

the review and processing of conformity certificates because those

actions accounted for a relatively small share of the work performed by

OVSC. In the ensuing years, OVSC has devoted a substantially greater

share of its work to those efforts, so that a fee is now necessary to

offset the agency's costs for performing this work.

C. Comments

Three comments were submitted in response to the notice of proposed

rulemaking. The first of these was from Philip Trupiano of Auto

Enterprises, Inc. of Clawson, Michigan, a registered importer. In his

comment, Mr. Trupiano contends that NHTSA lacks statutory authority to

establish the proposed fee for the review and processing of conformity

packages. Specifically, Mr. Trupiano states that the action taken by

the agency on these packages cannot be characterized as a ``decision''

under Subchapter III of Title 49, U.S. Code, for which the agency is

authorized to set a fee under 49 U.S.C. 30141(a)(3)(B). Mr. Trupiano

asserts that NHTSA's claim to that effect is refuted by the letters

that the agency issues to registered importers following its review of

conformity packages, which Mr. Trupiano describes as merely

acknowledging receipt of the importer's certification and stating that

a determination of a vehicle's compliance with the FMVSS may only be

made upon actual compliance testing by NHTSA.

Mr. Trupiano appears to have misconstrued the nature of the

decision the agency makes upon its review of a conformity package. That

decision is not whether the vehicle in fact conforms to all applicable

FMVSS, but instead whether the bond that is issued to ensure such

conformity may be released. The agency reaches its decision on whether

the bond may be released based on its review of the conformity package

submitted by the importer. If the conformity package provides

sufficient evidence that the vehicle complies with all applicable

FMVSS, NHTSA issues the release letter. As Mr. Trupiano has noted, the

letter contains the caveat that it does not constitute an agreement on

NHTSA's part that the vehicle in fact complies with all applicable

FMVSS since testing must be performed to determine compliance with many

of the standards. NHTSA's decision to release the conformance bond

based on its review of the conformity package is nonetheless a decision

under Subchapter III of Title 49, U.S. Code, for which the agency is

authorized to set a fee under 49 U.S.C. 30141(a)(3)(B).

Mr. Trupiano also asserts that 31 U.S.C. 9701 does not provide

alternate authority for establishment of the proposed fee because

paragraph (c)(2) of section 9701 states that ``[t]his section does not

affect a law of the United States--* * * prescribing bases for

determining charges * * *.'' Applying this language, Mr. Trupiano

contends that section 9701 provides no authority for the proposed fee

because Congress has elsewhere ``prescribed the bases for which fees

would be assessed for the registered importer program * * *.''

[[Page 50878]]

Mr. Trupiano's contention that 31 U.S.C. 9701 does not provide

alternate authority for the proposed fee also appears to be based on a

misreading of that statute. The only provision that Mr. Trupiano cites

in support of this contention is 49 U.S.C. 9701(c)(2), which states:

``(c) this section does not affect a law of the United States--* * *

(2) prescribing bases for determining charges, but a charge may be

redetermined under this section consistent with the prescribed bases.''

The legislative history of section 9701 reveals that it was derived

from a provision previously codified at 31 U.S.C. 483a (1976), which

stated, as one of its provisos, ``[t]hat nothing contained in this

section shall repeal or modify existing statutes prescribing bases for

calculation of any fee, charge or price * * *.'' This provision has no

bearing on 49 U.S.C. 30141(a)(3)(B), because that section merely

authorizes the establishment of fees to pay for the costs of making

decisions under Chapter 301, without prescribing any bases for the

calculation of such fees. Contrary to Mr. Trupiano's apparent

interpretation of subsection (b)(2) of 31 U.S.C. 9701, that subsection

does not preclude an agency from establishing a fee under section 9701

where other statutory authority for the establishment of the fee may

exist. The subsection instead merely states that if the other statute

prescribes a basis for determining the amount of the fee, that basis

shall be given effect.

Mr. Trupiano next challenges the finding by NHTSA in the regulatory

analysis portion of the NPRM that the proposed fee would not have a

significant economic impact on a substantial number of small

businesses, precluding the need for the agency to prepare a regulatory

flexibility analysis under the Regulatory Flexibility Act. As Mr.

Trupiano notes, this finding was predicated on the agency's belief that

importers could pass along the proposed fee, which is quite small in

comparison to the value of the vehicles to which it would apply, to the

ultimate purchasers of those vehicles. Mr. Trupiano instead contends

that vehicles imported from Canada must compete with domestically

produced versions of those vehicles and that the value of Canadian

imports, which is set by the value of their domestic counterparts,

would not be enhanced in any manner by payment of the proposed fee. As

such, Mr. Trupiano asserts that the fee would have to be absorbed by

the importer and that it could have significant cost consequences if

the volume of imports by any one importer is sufficiently high.

Additionally, Mr. Trupiano asserts that NHTSA did not provide advance

notice to registered importers or their trade association prior to

issuance of the NPRM, or seek alternatives that would reduce the cost

of processing compliance packages. The alternatives that Mr. Trupiano

identifies are: ``(1) Electronic data transfer of the conformance

package and bond release; (2) elimination of unnecessary film

photographs of the vehicles; (3) reduction in the amount of the

conformity bond required; and (4) shorter turnaround time in reviewing

the conformity packages.''

With regard to the cost impact of the proposed fee on registered

importers, NHTSA notes that Mr. Trupiano did not identify the profit

margin on which these businesses typically operate. From NHTSA's

understanding of this industry, the agency believes that the fee, which

was proposed at $17.00 but is being established in this final rule at

$14.00 on the basis of more current data, is quite low in relation to

the profit earned by the typical registered importer on each

noncomplying vehicle that it imports. Even if this fee amount could not

be passed on to the vehicle's ultimate purchaser, as Mr. Trupiano

contends, the agency believes that the registered importer could absorb

it without suffering undue financial strain. Based on informal contacts

with registered importers prior to the issuance of the NPRM, NHTSA

understood that they could reasonably accommodate a fee in the

neighborhood of twenty to twenty-five dollars. The $14.00 fee that

NHTSA is establishing in this final rule, which is based on the

agency's analysis of the costs it actually incurs in the review and

processing of conformity packages, is considerably short of this range.

With respect to the alternatives to the imposition of the proposed

fee that were identified by Mr. Trupiano, NHTSA notes that the only one

that would actually reduce the costs that NHTSA incurs in the review

and processing of conformity packages is the electronic transfer of the

bond release letter. The agency is currently studying the feasibility

of implementing such a change. The agency is also examining the issue

of allowing registered importers to transmit the contents of the

conformity package electronically. It is the agency's understanding

that any requirement for the electronic transfer of this data would

actually increase costs to many registered importers since they lack

the specialized equipment and expertise necessary to make such

transmissions. Agency costs are also likely to increase with the

electronic transfer of conformity data, as it would take longer for a

reviewer to call up photographs on a computer than to examine hard copy

photographs in a conformity package.

The principal impediment to the agency's approval of electronic

transmissions is the existing requirement for actual photographs to be

used to verify the certifications in the conformity package that the

vehicle complies with all applicable standards. NHTSA requires actual

photographs because they are less subject to manipulation than

electronically transmitted images and therefore provide a more reliable

means for identifying the vehicle that is the subject of the conformity

package and ascertaining its conformity status. Nevertheless, NHTSA is

still exploring ways to accommodate the interest in electronic

transmission that has been expressed by some registered importers.

NHTSA requires the conformance bond that accompanies the entry of a

noncomplying vehicle to be in an amount equal to 150% of the dutiable

value of the vehicle. See 49 CFR 591.8. The agency is authorized under

49 U.S.C. 30141(d)(2) to require importers to provide bonds up to that

amount. Since the full amount of the bond is released upon NHTSA's

approval of a conformity package, any reduction in the amount of the

bond should have negligible cost consequences for registered importers.

The agency believes that it is necessary for the bond to be in the full

amount authorized under section 30141(d)(2) to provide maximum

assurance that nonconforming vehicles imported under bond are brought

into compliance with all applicable standards.

Under 49 U.S.C. 30146(a), a registered importer may release custody

of a vehicle that did not conform to all applicable FMVSS at the time

of importation 30 days after it submits to NHTSA a conformity package

covering the vehicle, unless the agency notifies the importer to hold

the vehicle for inspection or notifies the importer that it has reason

to question the validity of the certification. Currently, NHTSA is

processing these packages well within the 30-day limit. Processing time

is now averaging approximately one and one-half weeks, with an

additional week taken, on average, if there is a need to communicate

with the registered importer to address any problem that the agency may

have with the package. Although the agency continually strives to

streamline its administrative processes, given current staff and

budgetary constraints, it would be difficult to achieve any significant

reduction in the present turnaround

[[Page 50879]]

time for the review and processing of conformity packages.

Mr. Trupiano next observes that NHTSA permits individuals to import

vehicles from Canada that are not certified as complying with all

applicable FMVSS provided that they furnish a letter from the vehicle's

manufacturer stating that the vehicle meets those requirements. Mr.

Trupiano contends that the agency expends many of the same resources in

processing these imports as it does for vehicles imported by registered

importers, leading him to question why it is not proposing a fee to

cover those processing costs. Through an agreement that it entered with

the U.S. Customs Service in April of this year, NHTSA's approval is no

longer necessary for the importation of Canadian vehicles for personal

use. The importer now furnishes the manufacturer's letter directly to

the Customs Service. As a consequence, there is no longer a basis for

the agency to impose a fee for processing these imports.

Mr. Trupiano's final contention is that the proposed fee ``would

serve to place an additional financial restriction on the entry of

motor vehicles from Canada, where no such equivalent fee is paid to the

Canadian government for importing a vehicle from the United States.''

As such, he asserts that the fee would constitute a non-tariff barrier

to trade prohibited under Article 309 of the North American Free Trade

Agreement (NAFTA).

Article 309 of NAFTA provides, with certain exceptions that are

beyond the scope of this discussion, that ``no Party may adopt or

maintain any prohibition or restriction on the importation of any good

of another Party * * *.'' NHTSA initially notes that the proposed fee

would be assessed for the sole purpose of allowing the agency to

recover its actual costs for the review and processing of conformity

packages. Assessment of the proposed fee would not prohibit or restrict

the entry of Canadian-certified vehicles into the United States, and,

as such, it would not violate any provision of Article 309.

NHTSA further notes that Article 904 of NAFTA preserves the right

of each Party to the agreement to ``adopt, maintain or apply any

standards-related measure, including any such measure relating to

safety, the protection of human * * * life or health * * * and any

measure to ensure its enforcement or implementation.'' Article 904

further provides that ``[s]uch measures include those to prohibit the

importation of a good of another Party * * * that fails to comply with

the applicable requirements of those measures or to complete the

Party's approval procedures.'' The term ``standard-related measure'' is

defined in Article 915 of NAFTA as including a ``conformity assessment

procedure.'' NHTSA's review of conformity packages is therefore

governmental action that is specifically sanctioned by NAFTA and there

is nothing in that agreement that restricts the right of any Party to

impose a fee for taking such action.

The second comment was submitted by Lawrence A. Beyer, an attorney

who has represented registered importers in matters before the agency.

Mr. Beyer initially contends that the agency based its calculation of

the proposed fee on a low estimate of nonconforming vehicle imports.

Mr. Beyer characterizes the proposed fee as being based on projected

imports of 16,000 in fiscal year 1998. In contrast to this figure, Mr.

Beyer states that noncomplying imports thus far in fiscal year 1997

have averaged 1,727 per month, which translates to a total of 20,729

vehicles for the entire fiscal year, and that the existing trend is for

the volume of noncomplying vehicle imports to increase each year. Based

on these larger projected import figures, Mr. Beyer contends that NHTSA

should reduce the amount of the proposed fee.

The agency has decided to accept this recommendation. As noted in

the NPRM, the proposed fee was calculated on the basis of resources

expended by NHTSA in processing the 16,000 noncomplying vehicles for

which conformity packages were submitted in calendar year 1996. Since

issuing the NPRM, NHTSA has received more complete data on the volume

of noncomplying vehicles imported during the current fiscal year for

which conformity packages must be processed by the agency. This

indicates that 20,786 such vehicle were imported from October 1, 1996,

the first day of fiscal year 1997, through September 16, 1997. Based on

this volume, NHTSA anticipates that over 21,000 noncomplying vehicles

will be imported by the end of this fiscal year on September 30, 1997.

NHTSA has decided to use this figure in calculating the conformity

package review fee for fiscal year 1998, as opposed to the 16,000

vehicle figure identified in the NPRM. Although NHTSA has also

identified the need to increase one cost element used in calculating

the fee in light of more accurate information received since issuing

the NPRM, an overall reduction in the fee from the $17.00 originally

proposed will be realized by allocating the agency's costs over a

larger vehicle base. As noted in the NPRM, NHTSA will review the fee at

least every two years to see if further adjustments are needed. The

agency is bound to provide this review in order to insure that it

recovers no more than its actual costs for the review and processing of

conformity packages.

Mr. Beyer further contends that NHTSA failed to properly assess the

impact of the proposed fee on small entities under the Regulatory

Flexibility Act, and did not solicit the input of affected small

entities before issuing the NPRM. He additionally contends that the

proposed fee would constitute a non-tariff barrier to trade under

NAFTA. Mr. Beyer also observes that the bond release letter issued by

NHTSA states that it does not constitute agreement by the agency that

the vehicle in question in fact conforms to all applicable standards.

The agency has addressed each of these issues in its response to the

previous comment. Mr. Beyer finally contends that ``NHTSA has attempted

to bypass its decision regarding VSA-1 eligible imports'' by assigning

new eligibility numbers. Mr. Beyer asserts that ``[t]here is no

substantive difference between the compliance issues for the VSA-1

determination which was paid for in 1989, and the new codes.'' What Mr.

Beyer overlooks is that the payment that was made in 1989 covered the

import eligibility decision that NHTSA had made regarding Canadian-

certified vehicles. As noted in the NPRM, that fee is entirely distinct

from the fee the agency has proposed to recover its costs for the

review and processing of conformity packages. Given the high volume of

conformity packages that NHTSA has had to process in recent years, and

the fact that this responsibility now accounts for a large share of the

work performed by the Equipment and Imports Division of the agency's

Office of Vehicle Safety Compliance, there is clearly a need for NHTSA

to now proceed with the implementation of a fee to recover its costs

for performing this function.

The third comment was submitted by Brian Osler, Executive Director

and Counsel for the North American Automobile Trade Association. Mr.

Osler states that his association is in favor of NHTSA recovering

reasonable costs for ensuring compliance with FMVSS. However, he asks

the agency to consider waiving the requirement for the submission of

photographs to substantiate compliance certifications. The agency has

addressed this issue in its response to Mr. Trupiano's comment.

D. Fee Computation

NHTSA has computed all other fees that it collects under the

authority of 49 U.S.C. 30141 on the basis of all direct

[[Page 50880]]

and indirect costs incurred by the agency in performing the function

for which the fee is charged. See 54 FR 17792, 17793 (April 25, 1989).

The Office of Management and Budget (OMB), in Circular A-25

establishing Federal policy for the assessment of user fees under 31

U.S.C. 9701, stated that such fees must be ``sufficient to recover the

full cost to the Federal Government * * * of providing the service,

resource, or good when the Government is acting in its capacity as a

sovereign.'' See 58 FR 38142, 38144 (July 15, 1993).

Applying an approach consistent with its past practices and the OMB

Circular, the agency has calculated its direct and indirect costs in

setting the fee for the review and processing of conformity

certificates as follows:

The direct costs used to calculate the fee include the estimated

cost of contract and professional staff time, computer costs, and costs

for record assembly, marking, shipment and storage.

The estimated cost of contract and professional staff time is

calculated on the basis of the full cost for time spent at the

following currently prevailing rates: Data entry--$44,410 per year;

computer programmer--$86,650 per year; compliance analyst--$60,092 per

year. Three quarters of the total hours worked by a single data entry

specialist on contract to OVSC are devoted to the processing of

compliance packages. A second data entry specialist on contract to OVSC

is engaged full time in the processing of compliance packages.

Multiplying the annual contract cost for the hours worked by these

contract support staff members ($44,410 each) by 1.75 (representing the

one data entry position devoted fully to compliance package processing

and the other in which three quarters of the total hours worked are

devoted to that function) yields $77,715.50 in data entry labor costs

that are incurred by NHTSA on an annual basis in the processing of

compliance packages. Thirty-seven percent of the total hours worked by

a single computer programmer on contract to OVSC is devoted to the

processing of compliance packages. Multiplying the annual contract cost

for the hours worked by this contract support staff member ($86,650) by

37 percent yields $32,060.50 in computer programming labor costs that

are incurred by NHTSA on an annual basis in the processing of

compliance packages. In the NPRM, NHTSA identified 18.75 percent of

this computer programmer's time as being devoted to the processing of

compliance packages, resulting in an annual cost of $16,246.88. At the

time that NHTSA was preparing the NPRM, this computer programmer had

recently begun her contract with the agency, resulting in a rough

estimate of the time which she anticipated would be needed to process

compliance packages. In the ensuing weeks, it has become apparent that

the time this contractor spends in the processing of compliance

packages was considerably underestimated, requiring adjustment to

better reflect the hours that she actually devotes to this task. Ninety

percent of the total hours worked by a single compliance analyst

employed by OVSC is devoted to the review of compliance packages.

Multiplying the annual rate of pay for this staff member ($60,092) by

90 percent yields $54,082.80 in compliance analyst labor costs that are

incurred by NHTSA on an annual basis in the review of compliance

packages.

Adding these amounts yields a total of $163,858.80 in contract and

professional staff costs that NHTSA incurs each year for the processing

and review of compliance packages. Dividing that amount by 21,000, the

number of compliance packages reviewed by OVSC in fiscal year 1997,

yields a direct cost of $7.80 for each compliance package reviewed.

Computer costs are calculated on the following basis: NHTSA pays

$13,800 per year to maintain a link with the Customs Service computer.

Ninety-five percent of the agency's usage of this computer is

associated with the review of compliance packages, resulting in a cost

of $13,110 that can be allocated to that use. Additionally, the agency

pays $30,000 per year for the purpose of running OVSC's computers and

performing necessary backups of data entries. Ninety percent of this

usage is associated with the review of compliance packages, yielding a

cost of $27,000 that can be allocated to that use. The agency also pays

$4,000 per year for a maintenance contract on OVSC's computers, ninety

percent of which can also be allocated to that office's review of

compliance packages, yielding an annual cost of $3,600. Additionally,

NHTSA pays a $9,360 annual licensing fee for the data base management

system that is used in the processing of compliance packages. Because

that system is not used for any other purpose, the full annual fee can

be allocated to that use. Adding these costs produces the sum of

$53,070 that is spent annually on computer usage associated with the

review of compliance packages. Dividing this sum by 21,000, which, as

previously indicated, is the number of compliance packages reviewed by

OVSC in fiscal year 1997, yields a direct cost of $2.53 for each

compliance package reviewed.

The average cost for record assembly, marking, and shipment is

calculated at the rate of $16.56 per box. The average cost for record

storage is calculated to be $7.92 per box for a storage period of three

years. Based on an average of 110 records per box, these costs amount

to 22 cents for each compliance package received by the agency. Adding

the direct costs for contract and professional staff hours ($7.80),

computer usage ($2.53), and record assembly, marking, shipment, and

storage ($0.22) produces a total of $10.55 for each compliance package

reviewed and processed by NHTSA.

The indirect costs include a pro rata allocation of the average

benefits of persons employed in processing and reviewing conformity

packages. Benefits provided by NHTSA amount to eighteen percent of the

salary earned by its employees. Multiplying the $54,082.80 in

professional staff costs that NHTSA incurs each year for the processing

and review of compliance packages by eighteen percent yields a figure

of $9,734.90.

The indirect costs also include a pro rata allocation of the costs

attributable to the rental and maintenance of office space and

equipment, the use of office supplies, and other overhead items. For

fiscal year 1998, these costs are projected to average $21,131 for each

employee and contract support staff member working at NHTSA

headquarters. This figure was derived by dividing $13,566,000 in

projected headquarters costs (reached by subtracting $482,000 in field

operating costs from total agency costs of $14,048,000) by 642

(representing 510 full time equivalent positions that are authorized

for NHTSA headquarters plus 132 on-site contract personnel).

Multiplying that figure by 3.02, which represents the number of

combined contract and professional staff-years devoted annually to the

review and processing of compliance packages, yields a figure of

$63,815.62. Adding this figure to $9,734.90 produces the sum of

$73,550.52, representing the total indirect costs incurred by NHTSA in

the review and processing of compliance packages. Dividing this amount

by 21,000, which, as previously indicated, is the number of compliance

packages reviewed by NHTSA in fiscal year 1997, yields $3.50 in

indirect costs for each compliance package reviewed. Adding these

indirect costs to the $10.55 in direct costs that NHTSA incurs in the

review and processing of each compliance package yields a total of

$14.05 in direct and indirect costs for

[[Page 50881]]

each compliance package reviewed by the agency.

Based on the above factors, NHTSA is establishing $14.00 as the fee

to recover its costs for the review and processing of a compliance

package. This fee will have to be tendered with each compliance package

submitted to the agency for processing.

E. Applicability of Fee to Canadian Vehicles

As noted in the NPRM, in recent years, Canadian imports have

accounted for a growing share of NHTSA's oversight program that is

directed at the importation of nonconforming vehicles. In NHTSA's

Calendar Year 1995 Report to Congress concerning this program, the

agency stated that 15,096 of the 15,332 nonconforming vehicles that

were permanently imported into the country during that year (or over

98%) were from Canada. The report noted a continuing upward trend in

the importation of noncomplying vehicles from Canada since 1993, and

attributed that development to the exchange rate favoring the U.S. over

the Canadian dollar.

In past years, NHTSA has not collected the per vehicle import

eligibility determination fee established under 49 CFR 594.8 from the

importers of vehicles that were certified by their original

manufacturer as complying with all applicable Canadian motor vehicle

safety standards and that were eligible for importation under vehicle

eligibility number VSA-1. As NHTSA explained in a final import

eligibility decision covering Canadian-certified motor vehicles,

published on May 13, 1997 at 62 FR 26348, the per vehicle import

eligibility fee was never imposed on the importers of these vehicles

because the first importer of a Canadian-certified motor vehicle paid

the full $1560 fee that was established in 1989 to cover the agency's

costs for an eligibility decision made on the Administrator's

initiative. In the May 13, 1997 final decision, NHTSA rescinded VSA-1

as the eligibility number assigned to all eligible Canadian-certified

vehicles, and replaced it with four separate eligibility numbers (VSA-

80 through 83), based on vehicle classification and weight.

NHTSA will collect the fee established under this rule from all

importers submitting conformity packages to the agency, including the

importers of Canadian-certified vehicles eligible for importation under

VSA-80 through 83. The agency deems this action to be necessary because

the review and processing of conformity packages submitted for Canadian

imports have assumed an increasing share of the staff time within

OVSC's Equipment and Imports Division and now comprise a major portion

of the work performed by that division. The imposition of such a fee is

also consistent with OMB's policy for Federal agencies to obtain full

cost reimbursement from the recipients of agency services.

Effective Date

Section 30141(e) of Title 49, U.S. Code requires the amount of fees

imposed under section 30141(a) to be reviewed, and, if appropriate,

adjusted by NHTSA at least every two years. It also requires that the

fee for each fiscal year be established before the beginning of that

year. The fee established under this final rule will first become

effective in fiscal year 1998, which begins on October 1, 1997. NHTSA

is meeting the requirements of section 30141(e) by publishing this

final rule establishing the fee before that date. However, in keeping

with the rulemaking requirements of the Administrative Procedure Act, 5

U.S.C. 553, the final rule will not become effective until thirty days

after its publication in the Federal Register. NHTSA will not collect

the fee for any conformity certificates submitted before the final

rule's effective date.

Rulemaking Analyses and Notices

1. Executive Order 12866 (Federal Regulatory Planning and Review) and

DOT Regulatory Policies and Procedures

This rule was not reviewed under E.O. 12866. NHTSA has analyzed

this rule and determined that it is not ``significant'' within the

meaning of the Department of Transportation's regulatory policies and

procedures.

2. Regulatory Flexibility Act

In accordance with the Regulatory Flexibility Act, NHTSA has

evaluated the effects of this action on small entities. Based upon this

evaluation, I certify that the amendment resulting from this rulemaking

will not have a significant economic impact on a substantial number of

small entities. Although most registered importers would qualify as

small businesses within the meaning of the Regulatory Flexibility Act,

the agency has no reason to believe that these companies could not pay

the fee established under this rule. This fee will in all likelihood be

passed along to the purchaser of the vehicle for which a conformity

package is submitted to NHTSA for review. Most nonconforming vehicles

that are imported into the United States are of very recent vintage,

and many would be considered luxury models. Given the nominal amount of

the fee established under this rule, especially when viewed in relation

to the purchase price of the vehicles to which it pertains, it will not

appreciably increase the purchase price of those vehicles and is

unlikely to have any significant impact on their importation and sale.

For that reason, registered importers and small businesses, small

organizations, and small governmental units that purchase motor

vehicles will not be significantly affected by the proposed fee.

Accordingly, no regulatory flexibility analysis has been prepared.

3. Executive Order 12612 (Federalism)

This action has been analyzed in accordance with the principles and

criteria contained in Executive Order 12612, and it has been determined

that the rule does not have sufficient Federalism implications to

warrant preparation of a Federalism Assessment. No State laws will be

affected.

4. National Environmental Policy Act

The agency has considered the environmental implications of this

rule in accordance with the National Environmental Policy Act of 1969

and determined that the rule would not significantly affect the human

environment.

5. Civil Justice Reform

This rule does not have any retroactive effect. It does not repeal

or modify any existing Federal regulations. A petition for

reconsideration or other administrative proceeding will not be a

prerequisite to an action seeking judicial review of this rule. This

rule does not preempt the states from adopting laws or regulations on

the same subject, except that it will preempt a state regulation that

is in actual conflict with the Federal regulation or makes compliance

with the Federal regulation impossible or interferes with the

implementation of the Federal statute.

List of Subjects in 49 CFR Part 594

Administrative practice and procedure, Imports, Motor vehicle

safety.

In consideration of the foregoing, Part 594, Schedule of Fees

Authorized by 49 U.S.C. 30141, in Title 49 of the Code of Federal

Regulations is amended as follows:

PART 594--[AMENDED]

1. The authority citation for Part 594 is amended to read as

follows:

[[Page 50882]]

Authority: 49 U.S.C. 30141, 31 U.S.C. 9701; delegation of

authority at 49 CFR 1.50.

2. Section 594.5 is amended by redesignating paragraphs (g) and (h)

as paragraphs (h) and (i), respectively, and by adding a new paragraph

(g), to read as follows:

Sec. 594.5 Establishment and payment of fees.

* * * * *

(g) A fee for the review and processing of a conformity certificate

shall be submitted with each certificate of conformity furnished to the

Administrator.

3. A new section 594.10 is added to part 594, to read as follows:

Sec. 594.10 Fee for review and processing of conformity certificate.

(a) Each registered importer shall pay a fee based on the agency's

direct and indirect costs for the review and processing of each

certificate of conformity furnished to the Administrator pursuant to

Sec. 591.7(e) of this chapter.

(b) The direct costs attributable to the review and processing of a

certificate of conformity include the estimated cost of contract and

professional staff time, computer usage, and record assembly, marking,

shipment and storage costs.

(c) The indirect costs attributable to the review and processing of

a certificate of conformity include a pro rata allocation of the

average benefits of persons employed in reviewing and processing the

certificates, and a pro rata allocation of the costs attributable to

the rental and maintenance of office space and equipment, the use of

office supplies, and other overhead items.

(d) For certificates of conformity submitted on and after October

29, 1997, the fee is $14.00.

* * * * *

Issued on: September 23, 1997.

Kenneth N. Weinstein,

Associate Administrator for Safety Assurance.

[FR Doc. 97-25665 Filed 9-26-97; 8:45 am]

BILLING CODE 4910-59-P