Medium- and Heavy-Duty Vehicle Fuel Efficiency Program |
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National Highway Traffic Safety Administration
July 23, 2015
[Federal Register Volume 80, Number 141 (Thursday, July 23, 2015)]
[Rules and Regulations]
[Pages 43631-43634]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-18073]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Part 535
Medium- and Heavy-Duty Vehicle Fuel Efficiency Program
CFR Correction
In Title 49 of the Code of Federal Regulations, Parts 400 to 571,
revised as of October 1, 2014, on page 146, Sec. 535.9 is reinstated
to read as follows:
Sec. 535.9 Enforcement approach.
(a) Compliance. (1) NHTSA will assess compliance with fuel
consumption standards each year, based upon EPA final verified data
submitted to NHTSA for its heavy-duty vehicle fuel efficiency program
established pursuant to 49 U.S.C. 32902(k). NHTSA may conduct
verification testing throughout a given model year in order to validate
data received from manufacturers and will discuss any potential issues
with EPA and the manufacturer.
(2) Credit values in gallons are calculated based on the final
CO2 emissions and fuel consumption data submitted by
manufacturers and verified/validated by EPA.
(3) NHTSA will verify a manufacturer's credit balance in each
averaging set for each given model year. The average set balance is
based upon the engines or vehicles performance above or below the
applicable regulatory subcategory standards in each respective
averaging set and any credits that are traded into or out of an
averaging set during the model year.
(i) If the balance is positive, the manufacturer is designated as
having a credit surplus.
(ii) If the balance is negative, the manufacturer is designated as
having a credit deficit.
(4) NHTSA will provide written notification to the manufacturer
that has a negative balance for any averaging set for each model year.
The manufacturer will be required to confirm the negative balance and
submit a plan indicating how it will allocate existing credits or earn,
and/or acquire by trade credits, or else be liable for a civil penalty
as determined in paragraph (b) of this section. The manufacturer must
submit a plan within 60 days of receiving agency notification.
(5) Credit shortfall within an averaging set may be carried forward
only three years, and if not offset by earned or traded credits, the
manufacturer may be liable for a civil penalty as described in
paragraph (b) of this section.
(6) Credit allocation plans received from a manufacturer will be
reviewed and approved by NHTSA. NHTSA will approve a credit allocation
plan unless it determines that the proposed credits are unavailable or
that it is unlikely that the plan will result in the manufacturer
earning sufficient credits to offset the subject credit shortfall. If a
plan is approved, NHTSA will revise the respective manufacturer's
credit account accordingly by identifying which existing or traded
credits are being used to address the credit shortfall, or by
identifying the manufacturer's plan to earn future credits for
addressing the respective credit shortfall. If a plan is rejected,
NHTSA will notify the respective manufacturer and request a revised
plan. The manufacturer must submit a revised plan within 14 days of
receiving agency notification. The agency will provide a manufacturer
one opportunity to submit a revised credit allocation plan before it
initiates civil penalty proceedings.
(7) For purposes of this regulation, NHTSA will treat the use of
future credits for compliance, as through a credit allocation plan, as
a deferral of civil penalties for non-compliance with an applicable
fuel consumption standard.
(8) If NHTSA receives and approves a manufacturer's credit
allocation plan to earn future credits within the following three model
years in order to comply with regulatory obligations, NHTSA will defer
levying civil penalties for non-compliance until the date(s) when the
manufacturer's approved plan indicates that credits will be earned or
acquired to achieve compliance, and upon receiving confirmed
CO2 emissions and fuel consumption data from EPA. If the
manufacturer fails to acquire or earn sufficient credits by the plan
dates, NHTSA will initiate civil penalty proceedings.
(9) In the event that NHTSA fails to receive or is unable to
approve a plan for a non-compliant manufacturer due to insufficiency or
untimeliness,
[[Page 43632]]
NHTSA may initiate civil penalty proceedings.
(10) In the event that a manufacturer fails to report accurate fuel
consumption data for vehicles or engines covered under this rule,
noncompliance will be assumed until corrected by submission of the
required data, and NHTSA may initiate civil penalty proceedings.
(b) Civil penalties. (1) Generally. NHTSA may assess a civil
penalty for any violation of this part under 49 U.S.C. 32902(k). This
section states the procedures for assessing civil penalties for
violations of Sec. 535.5. The provisions of 5 U.S.C. 554, 556, and 557
do not apply to any proceedings conducted pursuant to this section.
(2) Initial determination of noncompliance. An action for civil
penalties is commenced by the execution of a Notice of Violation. A
determination by NHTSA's Office of Enforcement of noncompliance with
applicable fuel consumption standards utilizing the certified and
reported CO2 emissions and fuel consumption data provided by
the Environmental Protection Agency as described in this part, and
after considering all the flexibilities available under Sec. 535.7,
underlies a Notice of Violation. If NHTSA Enforcement determines that a
manufacturer's averaging set of vehicles or engines fails to comply
with the applicable fuel consumption standard(s) by generating a credit
shortfall, the chassis, vehicle or engine manufacturer, as relevant,
shall be subject to a civil penalty.
(3) Numbers of violations and maximum civil penalties. Any
violation shall constitute a separate violation with respect to each
vehicle or engine within the applicable regulatory averaging set. The
maximum civil penalty is not more than $37,500.00 per vehicle or
engine. The maximum civil penalty under this section for a related
series of violations shall be determined by multiplying $37,500.00
times the vehicle or engine production volume for the model year in
question within the regulatory averaging set. NHTSA may adjust this
civil penalty amount to account for inflation.
(4) Factors for determining penalty amount. In determining the
amount of any civil penalty proposed to be assessed or assessed under
this section, NHTSA shall take into account the gravity of the
violation, the size of the violator's business, the violator's history
of compliance with applicable fuel consumption standards, the actual
fuel consumption performance related to the applicable standards, the
estimated cost to comply with the regulation and applicable standards,
the quantity of vehicles or engines not complying, and the effect of
the penalty on the violator's ability to continue in business. The
``estimated cost to comply with the regulation and applicable
standards,'' will be used to ensure that penalties for non-compliance
will not be less than the cost of compliance.
(5) NHTSA enforcement report of determination of non-compliance.
(i) If NHTSA Enforcement determines that a violation has occurred,
NHTSA Enforcement may prepare a report and send the report to the NHTSA
Chief Counsel.
(ii) The NHTSA Chief Counsel will review the report prepared by
NHTSA Enforcement to determine if there is sufficient information to
establish a likely violation.
(iii) If the Chief Counsel determines that a violation has likely
occurred, the Chief Counsel may issue a Notice of Violation to the
party.
(iv) If the Chief Counsel issues a Notice of Violation, he or she
will prepare a case file with recommended actions. A record of any
prior violations by the same party shall be forwarded with the case
file.
(6) Notice of violation. (i) The Notice of Violation will contain
the following information:
(A) The name and address of the party;
(B) The alleged violation(s) and the applicable fuel consumption
standard(s) violated;
(C) The amount of the proposed penalty and basis for that amount;
(D) The place to which, and the manner in which, payment is to be
made;
(E) A statement that the party may decline the Notice of Violation
and that if the Notice of Violation is declined within 30 days of the
date shown on the Notice of Violation, the party has the right to a
hearing, if requested within 30 days of the date shown on the Notice of
Violation, prior to a final assessment of a penalty by a Hearing
Officer; and
(F) A statement that failure to either pay the proposed penalty or
to decline the Notice of Violation and request a hearing within 30 days
of the date shown on the Notice of Violation will result in a finding
of violation by default and that NHTSA will proceed with the civil
penalty in the amount proposed on the Notice of Violation without
processing the violation under the hearing procedures set forth in this
subpart.
(ii) The Notice of Violation may be delivered to the party by:
(A) Mailing to the party (certified mail is not required);
(B) Use of an overnight or express courier service; or
(C) Facsimile transmission or electronic mail (with or without
attachments) to the party or an employee of the party.
(iii) At any time after the Notice of Violation is issued, NHTSA
and the party may agree to reach a compromise on the payment amount.
(iv) Once a penalty amount is paid in full, a finding of ``resolved
with payment'' will be entered into the case file.
(v) If the party agrees to pay the proposed penalty, but has not
made payment within 30 days of the date shown on the Notice of
Violation, NHTSA will enter a finding of violation by default in the
matter and NHTSA will proceed with the civil penalty in the amount
proposed on the Notice of Violation without processing the violation
under the hearing procedures set forth in this subpart.
(vi) If within 30 days of the date shown on the Notice of Violation
a party fails to pay the proposed penalty on the Notice of Violation,
and fails to request a hearing, then NHTSA will enter a finding of
violation by default in the case file, and will assess the civil
penalty in the amount set forth on the Notice of Violation without
processing the violation under the hearing procedures set forth in this
subpart.
(vii) NHTSA's order assessing the civil penalty following a party's
default is a final agency action.
(7) Hearing Officer. (i) If a party timely requests a hearing after
receiving a Notice of Violation, a Hearing Officer shall hear the case.
(ii) The Hearing Officer will be appointed by the NHTSA
Administrator, and is solely responsible for the case referred to him
or her. The Hearing Officer shall have no other responsibility, direct
or supervisory, for the investigation of cases referred for the
assessment of civil penalties. The Hearing Officer shall have no duties
related to the light-duty fuel economy or medium- and heavy-duty fuel
efficiency programs.
(iii) The Hearing Officer decides each case on the basis of the
information before him or her.
(8) Initiation of action before the Hearing Officer. (i) After the
Hearing Officer receives the case file from the Chief Counsel, the
Hearing Officer notifies the party in writing of:
(A) The date, time, and location of the hearing and whether the
hearing will be conducted telephonically or at the DOT Headquarters
building in Washington, DC;
[[Page 43633]]
(B) The right to be represented at all stages of the proceeding by
counsel as set forth in paragraph (b)(9) of this section;
(C) The right to a free copy of all written evidence in the case
file.
(ii) On the request of a party, or at the Hearing Officer's
direction, multiple proceedings may be consolidated if at any time it
appears that such consolidation is necessary or desirable.
(9) Counsel. A party has the right to be represented at all stages
of the proceeding by counsel. A party electing to be represented by
counsel must notify the Hearing Officer of this election in writing,
after which point the Hearing Officer will direct all further
communications to that counsel. A party represented by counsel bears
all of its own attorneys' fees and costs.
(10) Hearing location and costs. (i) Unless the party requests a
hearing at which the party appears before the Hearing Officer in
Washington, DC, the hearing may be held telephonically. In Washington,
DC, the hearing is held at the headquarters of the U.S. Department of
Transportation.
(ii) The Hearing Officer may transfer a case to another Hearing
Officer at a party's request or at the Hearing Officer's direction.
(iii) A party is responsible for all fees and costs (including
attorneys' fees and costs, and costs that may be associated with travel
or accommodations) associated with attending a hearing.
(11) Hearing procedures. (i) There is no right to discovery in any
proceedings conducted pursuant to this subpart.
(ii) The material in the case file pertinent to the issues to be
determined by the Hearing Officer is presented by the Chief Counsel or
his or her designee.
(iii) The Chief Counsel may supplement the case file with
information prior to the hearing. A copy of such information will be
provided to the party no later than 3 business days before the hearing.
(iv) At the close of the Chief Counsel's presentation of evidence,
the party has the right to examine respond to and rebut material in the
case file and other information presented by the Chief Counsel. In the
case of witness testimony, both parties have the right of cross-
examination.
(v) In receiving evidence, the Hearing Officer is not bound by
strict rules of evidence. In evaluating the evidence presented, the
Hearing Officer must give due consideration to the reliability and
relevance of each item of evidence.
(vi) At the close of the party's presentation of evidence, the
Hearing Officer may allow the introduction of rebuttal evidence that
may be presented by the Chief Counsel.
(vii) The Hearing Officer may allow the party to respond to any
rebuttal evidence submitted.
(viii) After the evidence in the case has been presented, the Chief
Counsel and the party may present arguments on the issues in the case.
The party may also request an opportunity to submit a written statement
for consideration by the Hearing Officer and for further review. If
granted, the Hearing Officer shall allow a reasonable time for
submission of the statement and shall specify the date by which it must
be received. If the statement is not received within the time
prescribed, or within the limits of any extension of time granted by
the Hearing Officer, it need not be considered by the Hearing Officer.
(ix) A verbatim transcript of the hearing will not normally be
prepared. A party may, solely at its own expense, cause a verbatim
transcript to be made. If a verbatim transcript is made, the party
shall submit two copies to the Hearing Officer not later than 15 days
after the hearing. The Hearing Officer shall include such transcript in
the record.
(12) Determination of violations and assessment of civil penalties.
(i) Not later than 30 days following the close of the hearing, the
Hearing Officer shall issue a written decision on the Notice of
Violation, based on the hearing record. This may be extended by the
Hearing officer if the submissions by the Chief Counsel or the party
are voluminous. The decision shall address each alleged violation, and
may do so collectively. For each alleged violation, the decision shall
find a violation or no violation and provide a basis for the finding.
The decision shall set forth the basis for the Hearing Officer's
assessment of a civil penalty, or decision not to assess a civil
penalty. In determining the amount of the civil penalty, the gravity of
the violation, the size of the violator's business, the violator's
history of compliance with applicable fuel consumption standards, the
actual fuel consumption performance related to the applicable standard,
the estimated cost to comply with the regulation and applicable
standard, the quantity of vehicles or engines not complying, and the
effect of the penalty on the violator's ability to continue in
business. The assessment of a civil penalty by the Hearing Officer
shall be set forth in an accompanying final order. The Hearing
Officer's written final order is a final agency action.
(ii) If the Hearing Officer assesses civil penalties in excess of
$1,000,000, the Hearing Officer's decision shall contain a statement
advising the party of the right to an administrative appeal to the
Administrator within a specified period of time. The party is advised
that failure to submit an appeal within the prescribed time will bar
its consideration and that failure to appeal on the basis of a
particular issue will constitute a waiver of that issue in its appeal
before the Administrator.
(iii) The filing of a timely and complete appeal to the
Administrator of a Hearing Officer's order assessing a civil penalty
shall suspend the operation of the Hearing Officer's penalty, which
shall no longer be a final agency action.
(iv) There shall be no administrative appeals of civil penalties
assessed by a Hearing Officer of less than $1,000,000.
(13) Appeals of civil penalties in excess of $1,000,000. (i) A
party may appeal the Hearing Officer's order assessing civil penalties
over $1,000,000 to the Administrator within 21 days of the date of the
issuance of the Hearing Officer's order.
(ii) The Administrator will review the decision of the Hearing
Officer de novo, and may affirm the decision of the hearing officer and
assess a civil penalty, or
(iii) The Administrator may:
(A) Modify a civil penalty;
(B) Rescind the Notice of Violation; or
(C) Remand the case back to the Hearing Officer for new or
additional proceedings.
(iv) In the absence of a remand, the decision of the Administrator
in an appeal is a final agency action.
(14) Collection of assessed or compromised civil penalties. (i)
Payment of a civil penalty, whether assessed or compromised, shall be
made by check, postal money order, or electronic transfer of funds, as
provided in instructions by the agency. A payment of civil penalties
shall not be considered a request for a hearing.
(ii) The party must remit payment of any assessed civil penalty to
NHTSA within 30 days after receipt of the Hearing Officer's order
assessing civil penalties, or, in the case of an appeal to the
Administrator, within 30 days after receipt of the Administrator's
decision on the appeal.
(iii) The party must remit payment of any compromised civil penalty
to NHTSA on the date and under such terms and conditions as agreed to
by the party and NHTSA. Failure to pay may result in NHTSA entering a
finding of violation by default and assessing a civil penalty in the
amount proposed in the Notice of Violation without processing
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the violation under the hearing procedures set forth in this part.
(c) Changes in corporate ownership and control. Manufacturers must
inform NHTSA of corporate relationship changes to ensure that credit
accounts are identified correctly and credits are assigned and
allocated properly.
(1) In general, if two manufacturers merge in any way, they must
inform NHTSA how they plan to merge their credit accounts. NHTSA will
subsequently assess corporate fuel consumption and compliance status of
the merged fleet instead of the original separate fleets.
(2) If a manufacturer divides or divests itself of a portion of its
automobile manufacturing business, it must inform NHTSA how it plans to
divide the manufacturer's credit holdings into two or more accounts.
NHTSA will subsequently distribute holdings as directed by the
manufacturer, subject to provision for reasonably anticipated
compliance obligations.
(3) If a manufacturer is a successor to another manufacturer's
business, it must inform NHTSA how it plans to allocate credits and
resolve liabilities per 49 CFR part 534.
[FR Doc. 2015-18073 Filed 7-22-15; 8:45 am]
BILLING CODE 1505-01-D