Petition for Approval of Alternate Odometer Disclosure Requirements

Philip R. Recht
National Highway Traffic Safety Administration
Federal Register
November 7, 1994

[Federal Register: November 7, 1994]


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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 Final Denial.

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SUMMARY: The National Highway Traffic Safety Administration (NHTSA) 
denies the petition submitted by the State of Florida for approval of 
alternate odometer disclosure requirements. Only one comment was 
submitted in response to NHTSA's preliminary determination that 
Florida's proposed procedures threaten the integrity of the current 
disclosure system. The agency reaffirms that determination, and Florida 
must conform its procedures to the odometer disclosure requirements of 
49 CFR Part 580.

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 ensure that the titles they issue contain odometer 
disclosure statements. 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 
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 the 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.

Notice of Preliminary Determination

    On August 29, 1994, NHTSA published a notice in the Federal 
Register (59 FR 44397) preliminarily denying Florida's petition. NHTSA 
determined that an odometer disclosure statement that does not include 
the addresses of transferors and transferees threatens the integrity of 
the current system, and that Florida's proposed alternative does not 
properly accommodate the purposes which these addresses serve.
    NHTSA rejected the procedures Florida would impose on transactions 
in which at least one party is a dealer as inconsistent with the 
purposes of the Federal requirements. Noting that the DHS would be 
unable to provide the required address information from its records if 
an out-of-state dealer were involved in the chain of transfer on a 
Florida title, NHTSA determined that Florida's approach failed to 
accommodate interstate motor vehicle transfers. NHTSA further noted 
that it would be extremely difficult to ascertain the location of an 
out-of-state dealer without any identifying information beyond a 
license number from an unknown State.
    NHTSA concluded 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. The agency also noted 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, thereby 
hindering the flow of commerce in motor vehicles.
    With respect to motor vehicle transfers in which no party is a 
dealer, NHTSA agreed that Florida's odometer disclosure procedures 
satisfy Federal odometer disclosure requirements. However, NHTSA 
recommended that the purchaser's address appear in the transfer block 
on the front of the title for improved clarity.

Comments

    In response to the Notice of Preliminary Determination, The agency 
received only one comment, which was submitted by the California 
Department of Motor Vehicles after the close of the comment period. 
Despite its lateness, NHTSA has considered the comment.
    According to California, national title standards developed by the 
American Association of Motor Vehicle Administrators and accepted by 
the States set forth requirements for title document size and contents. 
California asserts that these standards and State statutes often 
preclude the inclusion of additional information on the title document. 
Due to these title size limitations, California is concerned that 
mandating the address information might reduce the space available for 
dealer reassignment blocks and therefore lead to increased paperwork in 
title transfers.
    As a preliminary matter, NHTSA would point out that neither State 
statutes nor association standards may act to preclude the disclosure 
of information required by Federal law. Moreover, California fails to 
acknowledge that all other States (except Florida) have properly 
accommodated the requirement for including address information in the 
odometer disclosure statement, and many of these States' titles include 
multiple dealer reassignment blocks. Hence, California's concern is not 
reflected in real world problems. California has only recently begun to 
conform its titling procedures with Federal odometer requirements, and 
should consult other States for guidance in this matter.

Final Determination

    The agency is in possession of no information that would suggest 
that a change in the preliminary determination is appropriate. 
Accordingly, NHTSA reaffirms its preliminary determination and denies 
Florida's petition for approval of alternate odometer disclosure 
requirements. Florida must conform its procedures to the odometer 
disclosure requirements of 49 CFR Part 580. Additionally, the agency 
urges Florida to include a block for the purchaser's address on the 
front of the title, for improved clarity.

    Issued on: November 2, 1994.
Philip R. Recht,
Chief Counsel.
[FR Doc. 94-27523 Filed 11-4-94; 8:45 am]
BILLING CODE 4910-59-P