[Federal Register Volume 84, Number 191 (Wednesday, October 2, 2019)]
[Rules and Regulations]
[Pages 52664-52704]
[FR Doc No: 2019-20360]

Vol. 84

Wednesday,

No. 191

October 2, 2019

Part III

Department of Transportation

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National Highway Traffic Safety Administration

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49 CFR Part 580

Odometer Disclosure Requirements; Final Rule

Federal Register / Vol. 84 , No. 191 / Wednesday, October 2, 2019 /
Rules and Regulations

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 580

[Docket No. NHTSA-2019-0089]
RIN 2127-AL39

Odometer Disclosure Requirements

AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation (DOT).

ACTION: Final rule.

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SUMMARY: This final rule is issued to fulfill a requirement in the
Moving Ahead for Progress in the 21st Century Act of 2012 (MAP-21) that
NHTSA establish regulations permitting states to adopt schemes that
allow electronic odometer disclosure statements in conjunction with
electronic titling systems associated with the transfer of interests in
motor vehicles. Amendments in this final rule allow odometer
disclosures in an electronic medium while maintaining and protecting
the existing system(s) ensuring accurate odometer disclosures and aid
law enforcement in prosecuting odometer fraud. To accomplish this goal,
the final rule amends prior regulations governing transactions made on
paper titles and similar documents allowing odometer disclosures to be
made in a purely electronic environment or through using paper
documents that are scanned and converted into electronic form and
stored in a state data system. This final rule also adds new sections
containing specific additional requirements only applying to electronic
disclosures to ensure the secure creation and maintenance of electronic
records. NHTSA is also amending the mileage disclosure exemption to
vehicles that are 20 years old or older.

DATES:
    Effective date: This rule is effective December 31, 2019.
    Petitions for reconsideration: Petitions for reconsideration of
this final rule must be received not later than November 18, 2019.
    Incorporation by Reference: The incorporation by reference of
certain publications listed in the standard is approved by the Director
of the Federal Register as of December 31, 2019.

ADDRESSES: Petitions for reconsideration of this final rule must refer
to the docket and notice number set forth above and be submitted to the
Administrator, National Highway Traffic Safety Administration, 1200 New
Jersey Avenue SE, Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT:
    For policy and technical issues: Mr. David Sparks, Director, Office
of Odometer Fraud, National Highway Traffic Safety Administration, 1200
New Jersey Avenue SE, Washington, DC 20590. Telephone:<PHONE_NUMBER>.
Email<EMAIL_ADDRESS>    For legal issues: Mr. Thomas Healy, Office of the Chief Counsel,
National Highway Traffic Safety Administration, 1200 New Jersey Avenue
SE, Washington, DC 20590. Telephone:<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary
    A. Summary of Requirements of the Final Rule
    B. Costs and Benefits
II. Background
    A. MAP-21
    B. FAST Act Amendments
    C. The Cost Savings Act, the Truth in Mileage Act and Subsequent
Amendments
    1. The Cost Savings Act
    2. The Truth in Mileage Act
    3. Amendments Following the Truth in Mileage Act and the 1994
Recodification of the Cost Savings Act
    D. Overview of NHTSA's Odometer Disclosure Regulations
    E. Previous State Petitions for Approval of Electronic Odometer
Disclosure Schemes
    F. Notice of Proposed Rulemaking
    G. Summary of Comments to the NPRM
    1. Scope of the Final Rule
    2. Definitions
    3. Identity of Parties to a Motor Vehicle Transfer and Security
of Signatures
    4. Document or Record Security and System Security
    5. Odometer Disclosures
    6. Requirements for Electronic Transactions
    7. Leased Vehicles
    8. Document Retention
    9. Power of Attorney
    10. Exemptions
    11. Miscellaneous Amendments
    12. Other Comments
III. Final Rule and Response to Comments
    A. Summary of the Final Rule
    B. Supplemental Notice of Proposed Rulemaking
    C. Scope of the Final Rule
    D. Definitions
    E. Identity of Parties to a Motor Vehicle Transfer and Security
of Signatures
    F. Document or Record Security and System Security
    G. Odometer Disclosures
    H. Requirements for Electronic Transactions
    I. Leased Vehicles
    J. Document Retention
    K. Power of Attorney
    L. Exemptions
    M. Miscellaneous Amendments
    N. Other Comments
    O. New Technologies
IV. Effective Date
V. Costs and Benefits
VI. Regulatory Notices and Analyses

I. Executive Summary

A. Summary of Requirements of the Final Rule

    On Friday, March 25, 2016, NHTSA published a notice of proposed
rulemaking (NPRM) specifying potential amendments to part 580 allowing
states and other jurisdictions to establish electronic odometer
disclosure schemes allowing odometer disclosures required by the Motor
Vehicle Information and Cost Savings Act (Cost Savings Act) to be made
electronically (81 FR 16107). The odometer disclosure laws and
regulations protect purchasers of motor vehicles from odometer fraud.
See Public Law 92-513, 86 Stat. 947, 961-63 (1972).
    The NPRM discussed the Moving Ahead for Progress in the 21st
Century Act of 2012's (MAP-21, or Pub. L. 112-141) direction that NHTSA
promulgate regulations permitting written odometer disclosures and
statements to be made electronically. To provide background and context
for the proposed rules, the NPRM examined the history and development
of existing odometer statutes and regulations from their inception in
the Cost Savings Act of 1972 (Pub. L. 92-513, 86 Stat. 947, 961-63
(1972)) through the Truth in Mileage Act (TIMA) and subsequent
amendments.\1\ The NPRM also noted that Sec.  24111 of the Fixing
America's Surface Transportation Act of 2015 (FAST Act, or Pub. L. 114-
94), allows states to adopt electronic odometer disclosure systems
without prior approval of the Secretary (``the Secretary'') of the
Department of Transportation until the effective date of the final rule
addressed by this notice. Id.
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    \1\ Public Law 100-561 sec. 40, 102 Stat. 2805, 2817 (1988)
added Section 408(d)(2)(C) allowing use of secure power of attorney.
In 1990, Congress amended section 408(d)(2)(C) of the Cost Savings
Act. The amendment addressed retention of powers of attorneys by
states and provided that the rule adopted by the Secretary not
require a vehicle be titled in the state in which the power of
attorney was issued. See Public Law 101-641 sec. 7(a), 104 Stat.
4654, 4657 (1990). The Cost Savings Act, as amended by TIMA, was
repealed in 1994 and reenacted and recodified without substantive
change. Public Law 103-272, 108 Stat. 745, 1048-1056, 1379, 1387
(1994).
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    The salient provisions of the odometer disclosure regulations, 49
CFR 580.5, 580.7 and 580.13, were described in the NPRM, including the
requirement that odometer disclosures must be made on the title
(Section 580.5(c)), the attestation made when executing the

disclosure (Sec.  580.5(e)), as well as security features incorporated
into titles and other documents to guard against tampering and
counterfeiting (Section 580.4). Recordkeeping requirements, which are
critical for effective detection and prosecution of odometer fraud,
were also addressed. As the NPRM proposed modifying exemptions from
disclosure in Sec.  580.17, the existing provisions of this section
were also described.
    Because of their instructive value, the NPRM examined the petition
process by which states may seek approval of alternative odometer
disclosure schemes (Sec.  580.11) and petitions from Virginia,
Wisconsin, Florida, New York, and Texas seeking approval of electronic
disclosure systems. The NPRM observed such systems must minimize or
eliminate disclosures made on paper, provide adequate means for
verifying identities, link or merge disclosures with the record title,
and preclude duplicate electronic and paper titles. Additionally, the
NPRM stated electronic odometer disclosure systems must meet special
conditions involved in vehicle leasing, provide for adequate
recordkeeping and record retrieval, and accommodate interstate
transactions between electronic and paper title jurisdictions.
    The NPRM observed the purpose of the odometer disclosure provisions
of the Cost Savings Act, as amended, is to protect consumers by
ensuring they receive valid representations of a vehicle's actual
mileage at the time of transfer. The Agency noted an additional purpose
of creating a system of records and a paper trail to facilitate
detection and prosecution of odometer fraud. Proposals set forth in the
NPRM sought to preserve these attributes while allowing jurisdictions
maximum flexibility in developing and deploying electronic titling and
odometer disclosure schemes. The NPRM proposed changing part 580 to
recognize physical and electronic documents by amending Sec.  580.1 to
add the option of electronic disclosures; Sec.  580.3 to add new
definitions and amend existing definitions to accommodate physical and
electronic filings; Sec.  580.4 to clarify separate requirements for
the security of physical disclosures and electronic disclosures; Sec.
580.5 to clarify methods of disclosure for physical and electronic
systems; Sec.  580.7 to add provisions allowing for the option of
electronic disclosures for leased motor vehicles; Sec.  580.8 to
include electronic copies among forms of disclosures that must be
retained and general requirements for that retention; Sec. Sec.  580.13
and 580.14 to allow use of a power of attorney to address interstate
transfers and added a new Sec.  580.6 (previously reserved), which
would contain unique requirements for electronic odometer disclosures.
Other amendments proposed in the NPRM sought to correct a typographical
error, update NHTSA's address, strike obsolete text in Sec.  580.12 and
extend the disclosure exemption in Sec.  580.17 from 10 years to 25
years.
    After careful consideration of all available information, including
public comments submitted in response to the NPRM, the agency decided
to adopt amendments proposed by the NPRM for Sec. Sec.  580.1, 580.10,
580.11 and 580.12 without substantive change. Remaining amendments in
this final rule differ from proposals in the NPRM. Some of these
changes are minor. For example, the final rule replaces the word
``his'' with ``their'' and makes other modifications for gender
neutrality. Similarly, to enhance clarity, the final rule establishes
as definition of ``jurisdiction'' that encompasses states and
territories and replaces ``state'' wherever formerly used in part 580
with ``jurisdiction.'' This final rule also adopts additional
amendments to enhance clarity and accuracy. Section 580.2 is amended to
better describe the status of a vehicle upon termination of a lease,
and the term ``purchasers'' has been replaced with the more accurate
and less restrictive term ``transferees.'' Consistent with the former
amendment, the term ``dealer'' in Sec.  508.13(g) has been changed to
``transferee'' to reflect that those receiving ownership may include
persons or entities who are not dealers.
    This final rule also implements significant changes to proposals
contained in the NPRM. Broad definitions of physical documents and
electronic documents NHTSA proposed have been discarded. Commenters
rightly observed these proposed definitions were not apt. The final
rule therefore contains new definitions for ``Access,'' ``Electronic
Power of Attorney,'' ``Electronic Title,'' ``Jurisdiction,'' and
``Printed Name,'' and revises ``Original Power of Attorney,'' ``Sign or
Signature,'' and ``Transferor.'' These more precise definitions are
applied throughout part 580 to facilitate transactions with physical
and electronic titles and powers of attorney. In contrast to the NPRM,
which did not provide for an electronic power of attorney but allowed
electronic reassignments, this final rule authorizes both under certain
circumstances. The definition of ``Sign or Signature'' has been
modified from our earlier proposal in that requirements for an
electronic signature require a National Institute of Standards (NIST)
level 2 authentication system rather than NIST Level 3. The final
rule's requirements for electronic titles and electronic powers of
attorney also diverge from the NPRM in allowing authorized
modifications to electronic records. In addition, the final rule more
clearly recognizes electronic titles and odometer disclosures may take
many forms, from scanned copies of paper documents to database entries.
Recognizing technologies such as ``pen pads'' may be used in electronic
titling and odometer disclosure systems and paper documents may, in
some jurisdictions, be employed in an electronic odometer disclosure
system, the final rule removes the NPRM's proposal to delete printed
names from electronic transactions. The final rule also modifies
requirements for scanning documents to allow document conversion in
black and white at a resolution of 200 dot per inch (dpi).
Recordkeeping requirements of Sec. Sec.  580.8 and 580.9 are changed
from our earlier proposal to allow more options for transferees and to
streamline the proposed rules for auctions. NHTSA has now adopted
provisions allowing electronic and paper powers of attorney when a
title is unavailable to a transferor because the title is lost,
physically held by a lienholder, electronically controlled by a
lienholder, or when an electronic title is inaccessible. Our NPRM also
proposed changing the exemption from mileage disclosure in Sec.  580.17
for cars 10 years old or older to 25 years old or older. The final rule
adopts an exemption for cars 20 years old or older and explicitly sets
out how this modified exemption will be applied.

B. Costs and Benefits

    As discussed in Section V of this notice, the agency only performed
a detailed cost benefit analysis for the exemption amendments of this
final rule. With the exception changing the exemption from mileage
disclosure from 10 to 20 years this final rule imposes no mandatory
requirements. Amendments to part 580 simply allow jurisdictions the
option of adopting electronic title and odometer disclosure systems
without seeking prior approval from NHTSA. To the extent provisions in
this final rule may affect existing electronic title and odometer
disclosure systems in the small number of jurisdictions with such
schemes, the agency believes provisions of this final rule are
sufficiently flexible requiring little or no change. Since the FAST
Act's temporary suspension of the requirement that states must petition
NHTSA for

approval of alternative electronic odometer disclosure schemes ends on
the effective date of this final rule, states seeking to adopt such
schemes after that date must either comply with the provisions of this
final rule or petition the agency for approval of alternative
procedures.
    To the limited extent this final rule impacts states and other
jurisdictions with electronic titles systems, the agency believes that
there is the potential for significant cost savings to be realized
through issuance of this final rule. These savings would first be
manifested through avoidance of legal and administrative costs to
prepare and submit petitions to NHTSA seeking approval of electronic
title systems. Moreover, by establishing uniform rules for electronic
title systems, this final rule facilitates adoption of electronic
disclosures and titles and the use of these mechanisms in vehicle
transactions. Currently, NHTSA estimates that there are at least 40
million odometer disclosures made every year in the United States.
Since the agency believes that electronic disclosure will be less
costly than paper disclosures, even a minor cost savings per disclosure
could lead to large societal savings. However, the agency does not have
any data on the extent to which this rule will incentivize their
existing practices. Certainly, this rule will make it far easier to
adopt electronic disclosures as states will no longer need to petition
NHTSA if the requirements of this final rule are met. It is reasonable,
then, to expect that more states will adopt this practice, but the
agency does not now have sufficient data to determine how this general
expectation will translate into quantifiable cost savings.
    The final rule's modification of the vehicle age-based exemption
from odometer disclosure will impose costs and produce benefits. The
total cost of the change to the exemption in this final rule is
estimated to be from the minimum of $0.7 million in 2020 to the maximum
of $5.4 million in 2029 and later. If the rule can deter 5 percent of
rollbacks from affected vehicles the rule would eliminate $1.5 million
in annual consumer losses in 2020 and $7.5 million in such losses from
2029 forward.

II. Background and Summary of Final Rule

A. MAP-21

    This document is being issued pursuant to the Moving Ahead for
Progress in the 21st Century Act of 2012 (MAP-21, or Pub. L. 112-141),
which amended Section 32705 of Title 49, United States Code. The
amendments required the Secretary to prescribe regulations permitting
any written disclosures or notices and related matters to be provided
electronically not later than 18 months after the date of enactment of
the Motor Vehicle and Highway Safety Improvement Act of 2012. Section
31205, 126 Stat. 761 (2012).

B. FAST Act Amendments

    Section 24111 of the Fixing America's Surface Transportation Act of
2015 (FAST Act, or Pub. L. 114-94), signed into law December 4, 2015,
allows states to adopt electronic odometer disclosure systems without
prior approval of the Secretary. Any such system must comply with
applicable state and federal laws regarding electronic signatures under
15 U.S.C. 7001 et seq., meet requirements of 49 U.S.C. 32705 and
provide for ``appropriate authentication and security measures,''
Public Law 114-94 section 24111. States may only adopt electronic
odometer systems without prior approval of the Secretary until the
effective date of rules proposed in this notice. Id.
    In providing states with the opportunity to implement electronic
odometer disclosure systems until the effective date of this final
rule, FAST Act amendments do not alter existing statutory odometer
disclosure requirements or their intent. Effective odometer disclosure
systems are essential to protecting consumers from odometer fraud and
must reduce or eliminate opportunities for such fraud to the greatest
practicable extent. Federal and state governments have an interest in
preventing such fraud.
    This final rule and NHTSA's prior responses to state petitions for
approval of alternative disclosure schemes (discussed below) contain
guidance on potential strengths and weaknesses of electronic odometer
disclosure schemes.

C. The Cost Savings Act, the Truth in Mileage Act and Subsequent
Amendments

1. The Cost Savings Act
    In 1972, Congress enacted the Motor Vehicle Information and Cost
Savings Act (Cost Savings Act) to, among other things, protect
purchasers of motor vehicles from odometer fraud. See Public Law 92-
513, 86 Stat. 947, 961-63 (1972).
    To assist purchasers in knowing the true mileage of a motor
vehicle, Section 408 of the Cost Savings Act required the transferor of
a motor vehicle to provide written disclosure to the transferee at the
time of the transfer of ownership of the vehicle. See Public Law 92-
513, 408, 86 Stat. 947 (1972). Section 408 required the Secretary to
issue rules requiring the transferor to provide a written disclosure to
the transferee in connection with the transfer of the vehicle. 86 Stat.
962-63. The written disclosure was to include the cumulative mileage
registered on the odometer, or disclose the actual mileage is unknown,
if the odometer reading is known to the transferor to be different from
the number of miles the vehicle has traveled. The rules were to
prescribe the way information is disclosed under this section and in
which such information is retained. Id. Section 408 further stated if
any transferor violated any rules under this section or knowingly gave
a false statement to a transferee in making any disclosure required by
such rules is a violation. Id. The Cost Savings Act also prohibited
disconnecting, resetting, or altering motor vehicle odometers. Id. The
statute subjected violators to civil and criminal penalties and
provided for federal injunctive relief, state enforcement, and a
private right of action.
    Despite these protections, there were shortcomings in odometer
provisions of the Cost Savings Act. In some states, the odometer
disclosure statement was not on the title; instead, it was a separate
document that could easily be altered or discarded and did not travel
with the title. Titles were not on tamper-proof paper, and mileage
disclosures could be easily altered. Problems were compounded by title
washing through jurisdictions with ineffective controls. In addition,
there were considerable misstatements of mileage on vehicles that had
formerly been leased vehicles, as well as on used vehicles sold at
wholesale auctions.
2. The Truth in Mileage Act
    In 1986, Congress enacted the Truth in Mileage Act (TIMA), which
added provisions to odometer provisions of the Cost Savings Act. See
Public Law 99-579, 100 Stat. 3309 (1986). TIMA amendments expanded and
strengthened Section 408 of the Cost Savings Act.
    Among other requirements, TIMA precluded the licensing of vehicles
unless several requirements were met by the transferee and transferor.
Titles must be printed by a secure printing process or other secure
process and must indicate the mileage and contain space for the
transferee to disclose the mileage in a subsequent transfer. The
transferee, when applying for a title, is required to provide the
transferor's (seller's) title, and if that title contains a space for
the

transferor to disclose the vehicle's mileage, that information must be
included, and the statement must be signed and dated by the transferor.
    As to lease vehicles, TIMA stated NHTSA must publish rules
requiring the lessor of vehicles to advise its lessee(s) that the
lessee is required by law to disclose the vehicle's mileage to the
lessor upon the lessor's transfer of ownership of the vehicle.
Additionally, TIMA required auction companies establish and maintain
records on vehicles sold at the auction, including the name of the most
recent owner of the vehicle, the name of the buyer, the vehicle
identification number, and the odometer reading on the date the auction
took possession of the vehicle.
    As amended by TIMA, section 408(f) (1) of the Cost Savings Act
provided its provisions on mileage statements for licensing of vehicles
(and rules involving leased vehicles) apply in a state, unless the
state has in effect alternate motor vehicle mileage disclosure
requirements approved by the Secretary. Section 408(f)(2) stated
``[t]he Secretary shall approve alternate motor vehicle mileage
disclosure requirements submitted by a State unless the Secretary
determines that such requirements are not consistent with the purpose
of the disclosure required by subsection (d) or (e), as the case may
be.''
3. Amendments Following the Truth in Mileage Act and the 1994
Recodification of the Cost Savings Act
    In 1988, Congress amended section 408(d) of the Cost Savings Act to
permit the use of a secure power of attorney in circumstances where the
title was held by a lienholder. The Secretary was required to publish a
rule to implement the provision. See Public Law 100-561 Sec.  40, 102
Stat. 2805, 2817 (1988), which added Sec.  408(d)(2)(C). In 1990,
Congress amended Sec.  408(d)(2)(C) of the Cost Savings Act. The
amendment addressed retention of powers of attorneys by states and
provided the rule adopted by the Secretary not require a vehicle be
titled in the state in which the power of attorney was issued. See
Public Law 101-641 Sec.  7(a), 104 Stat. 4654, 4657 (1990).
    Because of the 1994 recodification of various laws pertaining to
the DOT, the Cost Savings Act, as amended by TIMA, was repealed,
reenacted, and recodified without substantive change. See Public Law
103-272, 108 Stat. 745, 1048-1056, 1379, 1387 (1994). The statute is
now codified at 49 U.S.C. 32705 et seq. In particular, section 408(a)
of the Cost Savings Act was recodified at 49 U.S.C. 32705(a). Sections
408(d) and (e), which were added by TIMA (and later amended), were
recodified at 49 U.S.C. 32705(b) and (c). Provisions pertaining to
approval of state alternate motor vehicle mileage disclosure
requirements were recodified at 49 U.S.C. 32705(d).

D. Overview of NHTSA's Odometer Disclosure Regulations

    The implementing regulations for the odometer provisions of the
Cost Savings Act, as amended, are found in part 580 of title 49 of the
Code of Federal Regulations (CFR). These regulations establish minimum
requirements for odometer disclosure, the form of certain documents
employed in disclosures, and the security of title documents and power
of attorney forms. The regulations also set rules for transactions
involving leased vehicles, set recordkeeping requirements including
those for auctions, and authorize the use of powers of attorney in
limited circumstances. Additionally, part 580 contains provisions
exempting certain classes of vehicles from disclosure regulations and
provides a petition process by which a state may obtain approval of
alternate disclosure requirements. The following paragraphs summarize
important aspects of the regulations.
    Odometer disclosures must be made on a secure title, reassignment
document, or power of attorney when a vehicle is transferred to a new
owner. Section 580.5(c) requires a transferor to sign, and to print
his/her name on an odometer disclosure statement with the following
information: (1) The odometer reading at the time of transfer (not to
include tenths of miles); (2) the date of transfer; (3) the
transferor's name and current address; (4) the transferee's name and
current address; and (5) the identity of the vehicle, including its
make, model, year, body type, and VIN. The transferor must also, under
Sec.  580.5(e), certify whether the odometer reading reflects the
vehicle's actual mileage, disclose whether the odometer reading
reflects mileage in excess of the odometer's mechanical limit or, if
the odometer does not reflect the actual mileage, must state the
odometer reading should not be relied on. The transferee must
acknowledge the reading by signing the statement. Each title, at the
time it is issued to the transferee, must contain the mileage disclosed
by the transferor.
    To ensure vehicles subject to leases of four months or more have
accurate odometer readings executed on titles at the time of transfer,
Sec.  580.7(a) requires lessors to provide written notice to the lessee
of the lessee's obligation to disclose the mileage of the leased
vehicle and penalties for failure to disclose the information. Before a
change in ownership of a leased vehicle, lessees are required by Sec.
580.7(b) to provide disclosures comparable to those required by Sec.
580.5(c) and (e), noted above, to the lessor along with the date the
lessor notified the lessee of disclosure requirements. Additionally,
the lessor must state the date the lessor received the lessee's
completed disclosure statement and must sign it. Under Sec.  580.7(d) a
lessor transferring ownership of a vehicle (without obtaining
possession) may indicate the mileage disclosed by the lessee on the
vehicle's title unless the lessor has reason to believe the lessee's
disclosure is inaccurate.
    When a title is physically held by a lienholder or has been lost,
Sec.  580.13(a) allows a transferor to give the transferee a power of
attorney to execute the mileage disclosure on the title once it is
obtained by the transferee. Section 580.13(b) and (d) provide that the
transferor must disclose information identical to that required by
Sec.  580.5(c) and (e) on part A of the secure power of attorney form.
The transferee is required to sign the power of attorney form part A
and print his/her name. Id. In turn, Sec.  580.13(f) requires the
transferee, upon receipt of the transferor's title, to make on the
title exactly the mileage disclosure as disclosed by the transferor on
the power of attorney.
    After part A of the power of attorney form has been used, part B
may be executed when a vehicle addressed on part A is resold. Part B of
the secure power of attorney form allows a subsequent transferee to
give a power of attorney to his transferor to review the title and any
reassignment documents for mileage discrepancies, and if no
discrepancies are found, to acknowledge disclosure on the title, while
maintaining the integrity of the first seller's disclosure. The
disclosure required to be made by the transferor to the transferee for
this transaction on part B of the power of attorney form tracks
information required to be made by the transferor to the transferee on
the title when ownership of a vehicle is transferred on a title under
49 CFR 580.5. Among other things, the power of attorney must contain a
space for the transferor to disclose the mileage to the transferee and
sign and date the form, and a space for the transferee to sign and date
the form.
    To ensure disclosures made through a power of attorney are
accurate, Sec.  580.15 requires the person exercising the power of
attorney to certify, on part C of the form, that disclosures made on a
title or

reassignment document on behalf of the original seller are identical to
those found on part A of the power of attorney. This section also
requires a certification, when part B is used, that the mileage
disclosed and acknowledged under part B is greater than the mileage
disclosed in part A.
    Titles, reassignment documents, and the power of attorney form must
be protected against counterfeiting and tampering by a secure printing
process or other secure process (Sec.  580.4). These titles,
reassignment documents, and powers of attorney must contain a statement
referring to federal odometer law and a warning that failure to
complete the form or providing false information may result in fines or
imprisonment. See Sec.  580.5(d). For a leased vehicle, the lessor is
obligated to provide the lessee with written notice of the obligation
to make a mileage disclosure, and that notice must contain the same
warnings (Sec.  580.7(a)). Except in the limited context of the proper
use of the power of attorney forms, no person shall sign an odometer
disclosure statement as the transferor and transferee in the same
transaction (Sec.  580.5(h)).
    Part 580 establishes minimum requirements for record retention,
ensuring a paper trail sufficient to support detection and prosecution
of odometer fraud. Section 580.8(a) requires motor vehicle dealers and
distributors, who are required to issue an odometer disclosure, to
retain copies of each odometer statement they issue and receive for
five years. Lessors of leased vehicles must retain the odometer
statement they receive from their lessee for five years from the date
they transfer ownership of the leased vehicle (Sec.  580.8(b)). If a
power of attorney authorized by Sec. Sec.  580.13 and/or 580.14 has
been used, dealers must retain copies of the document for five years
(Sec.  580.8(c)). Section 580.9 requires auction companies to retain
the name of the most recent owner on the date the auction took
possession of the motor vehicle, the name of the buyer, the vehicle
identification number, and the odometer reading on the date the auction
company took possession of the motor vehicle for five years from the
date of sale. States are required, under Sec.  580.13(f) to retain the
original copy of the power of attorney authorized by Sec.  580.13(a) or
(b) and the title for a period of three years or a time period equal to
the state's titling record retention period, whichever is shorter.
    Other sections of part 580 establish a petition process by which
states may seek assistance in revising their odometer laws (Sec.
580.10), may seek approval of alternative odometer disclosure schemes
(Sec.  580.11), and establish exemptions from the disclosure
requirements of Sec. Sec.  580.5 and 580.7 (Sec.  580.17). Exemptions
in 580.17 apply to transfers or leases for: (1) Vehicles with a Gross
Vehicle Weight Rating (GVWR) over 16,000 pounds; (2) vehicles that are
not self-propelled; (3) vehicles manufactured in a model year beginning
10 years before January 1 of the calendar year in which the transfer
occurs; (4) certain vehicles sold by the manufacturer to any agency of
the United States; and (5) a new vehicle prior to its first transfer
for purposes other than resale.

E. Previous State Petitions for Approval of Electronic Odometer
Disclosure Schemes

    The Cost Savings Act, as amended by TIMA in 1986, contains a
specific provision on approval of state alternative odometer disclosure
programs. Subsection 408(f)(2) of the Cost Savings Act (now recodified
at 49 U.S.C. 32705(d)) provides NHTSA shall approve alternate motor
vehicle mileage disclosure requirements submitted by a state unless
NHTSA determines such requirements are not consistent with the purpose
of the disclosure required by subsection (d) or (e) as the case may be.
(Subsections 408(d), (e) of the Costs Savings Act were recodified to 49
U.S.C. 32705(b) and (c).)
    Virginia, Wisconsin, Florida, New York, Texas, and Arizona filed
petitions with NHTSA seeking approval of electronic alternative
odometer programs under 49 U.S.C. 32705(d)). NHTSA has approved, in
whole or in part, five of these six petitions and not taken final
action on the Arizona petition, which was made moot by the passage of
section 24111 of the FAST Act and Arizona's adoption of a disclosure
system under that provision. Review of the systems proposed in these
petitions and the terms of NHTSA's actions in response to them,
illustrates the variations in schemes between jurisdictions and the
concerns raised by electronic odometer disclosure.
    Petitions filed by three states, Virginia, Texas, and Wisconsin,
shared certain characteristics. In each case, the proposed alternative
odometer disclosure schemes applied only to intrastate transactions.
Each of the three proposals also relied on multi-factor authentication
to ensure the identity of persons executing the odometer disclosures.
All three proposals relied on substituting electronic versions of the
paper odometer disclosure form by maintaining the electronic form on
state-controlled systems. These systems also held data elements
comprising the electronic title.
    Virginia petitioned NHTSA in December 2006 seeking approval of
electronic odometer disclosure for intrastate transfers of vehicles not
subject to liens. Virginia proposed using a paperless system where
users would enter the information and attestations found on paper
odometer disclosures into a state electronic system. The petition
stated unique personal identification numbers (PIN) and unique customer
numbers sent by conventional U.S. mail would be used with the
customer's date of birth (DOB) to create a verified account and
signature. Dealer users would provide lists of employees authorized to
make disclosures, and these individuals would get PINs by conventional
mail to verify their identity. In dealer sales, the employee PIN and a
dealer number would be used. Disclosures would be made in the same way
a paper disclosure would be made. The seller or transferor would fill
out an electronic form identical to the paper form and sign it
electronically. The buyer or transferee would examine the disclosure
and either accept it or reject it. Once accepted, the disclosure would
be linked to the electronic title, and the transferor would be
instructed to mail any paper title to the state.
    A June 2008 petition by Texas sought approval of alternative
odometer disclosure requirements for intrastate transactions between
residents transferring vehicles not subject to liens. Texas proposed to
eliminate paper titles (except as requested), create electronic titles
and require in-state vehicle transfers to be made electronically.
Users, who would have to be Texas residents holding a valid state
identification credential, would be verified by matching four personal
data elements and two forms of identification against a state database.
Odometer mileage disclosures would be made by requiring both parties to
separately log into a secure website, make required disclosures and
verification of the mileage, and accept or reject the transaction. The
seller or transferor would then mail the paper title to the state for
destruction. The title and odometer disclosure would remain as an
electronic record, and the transferee could receive a secure paper
title on request.
    Wisconsin filed a petition in September 2009 proposing an
electronic odometer disclosure scheme limited to intrastate
transactions where at least one party would be a motor vehicle dealer.
Identity verification would be based on customers entering a minimum of
three personal identifiers--name, address,

date of birth, product number, Driver License/ID number, and a Federal
Employer Identification Number or partial Social Security Number--in
the state system. Once verified, the user could begin the title
transaction. As with the Virginia and Texas petitions, Wisconsin's
proposal linked electronic odometer disclosures to the title record in
the state's database. Similarly, a title could not be transferred
unless the electronic odometer disclosure had been properly completed.
Again, if a paper title was needed, the Wisconsin DMV would print it on
secure paper with the odometer disclosure statement in the proper
location and format under existing rules.
    Finding that the Virginia scheme would properly verify user
identities, provide security equivalent to the paper system, and create
an adequate system of records, NHTSA granted Virginia's request on
January 7, 2009 (74 FR 643). NHTSA granted the Texas petition on April
22, 2010 (75 FR 20925) after that state clarified the Texas system
allowed transferees to obtain a paper copy of the title meeting TIMA,
required dealers to retain copies of odometer disclosures, and required
disclosure of the brand (the brand states whether the odometer reflects
the actual mileage, reflects mileage in excess of the designated
odometer limit or differs from the actual mileage and is not reliable.)
Id. at 20928. NHTSA also noted since Texas would require persons with
an electronic title to submit any paper titles to Texas for
destruction, the proposal would prevent potential mischief caused by
duplicate titles. Id. at 20929. In a final determination published on
January 10, 2011, 76 FR 1367, the agency approved the Wisconsin
proposal based on its user verification scheme, the linkage of a
properly executed odometer disclosure to the electronic title, and the
existence of safeguards preventing the simultaneous existence of an
electronic and paper title.
    Petitions filed by two other states, Florida and New York, differed
from other petitions as systems proposed relied, to differing degrees,
on the use of paper forms for executing the odometer disclosures. These
paper forms, which were not titles, reassignment documents or a power
of attorney specified under part 580, were employed to transmit
information either before entry into an electronic system or to
facilitate interstate transactions. Because paper documents are
employed in conjunction with an electronic system, these odometer
disclosure schemes can be referred to as ``hybrid'' systems because of
their reliance on paper and electronic information storage.
    In December 2009, Florida proposed a hybrid electronic disclosure
system in December 2009 wherein the actual data entry into the state
system would be made by authorized tag agents using data terminals. For
private sales, authorized tag agents required transferors and
transferees to fill out odometer disclosures on paper forms. These
paper forms would be executed by both parties at the tag agent's
facility after each had verified their identity to the tag agent. The
tag agent would enter the data into Florida's system and create an
electronic title for the transferee, or upon request, provide the
transferee with a paper title. For dealer transactions, Florida
proposed transferors with e-title would complete a secure reassignment
form with odometer disclosure. When the dealer transferred that vehicle
to another transferee, both parties would complete another secure
reassignment form with an odometer disclosure. The dealer would take
both secure reassignment forms to a tag agency. The tag agent would
enter the disclosures, and the data needed to create an electronic
title or provide the transferor with the option of obtaining a paper
title. Similarly, a lessee of a leased vehicle with an e-title would
bring the vehicle to a dealership and make the odometer disclosure on a
secure physical document. The lessor would then sign a secure physical
power of attorney to the dealer authorizing the dealer to execute the
odometer disclosure on its behalf. The dealer would then sign a
physical secure reassignment form agreeing with the odometer
disclosure. When the dealer sold the vehicle to another buyer, the
dealer would take the various physical documents (bill of sale,
reassignment document, and power of attorney) to the tag agency, where
the tag agent would enter the required data and either create an
electronic title in Florida's system or have a paper title provided for
the buyer.
    New York filed a petition with NHTSA in November 2010, seeking
conversion of the existing paper process for dealer transactions to an
electronic one. A transferor's odometer disclosure would be made on the
title and then recorded in New York's system by a specific dealer
employee whose identity had been verified. If that dealer sold a
vehicle to another licensed New York dealer, the selling dealer would
enter the current odometer reading, vehicle and seller and purchaser
information. The purchasing dealer would subsequently sign on, review
the selling dealer's odometer disclosure, and other data and accept or
reject the transaction. Subsequent New York dealer transfers would be
recorded in the same manner.
    New York proposed that when a vehicle owned by a New York dealer is
sold to a retail purchaser, salvage dealer, out-of-state buyer, or
other non-New York dealer purchaser, the selling dealer would access
its system, enter odometer and other information, including the seller
and purchaser. A two-part sales receipt/odometer statement would be
created, and if correct, would be accepted by the buyer. The dealer
would then print a two-part sales receipt with a disclosure statement
on each part. The dealer would retain one part, and the purchaser would
be given the other, along with the original title acquired by the
dealer upon vehicle purchase.
    NHTSA granted the Florida petition in part and denied it in part,
approving provisions for private party transactions but denying
proposed terms for dealer and leased vehicle transactions. 77 FR 36935
(June 20, 2012). Among other things, NHTSA observed dealer transactions
relied on odometer disclosures being made on documents other than the
title itself. This, in the agency's view, is inconsistent with TIMA's
command that disclosures be made on the title and not on a separate
document. Further, the Florida dealer transaction scheme allowed
issuance of new registrations after submission of a disclosure
statement on a physical reassignment document rather than on the title
itself, thereby violating the statutory requirement that a title with
an odometer statement must be submitted prior to registering the
vehicle. Florida's proposed requirements for leased vehicles were
denied on similar grounds because of the numerous times disclosures had
to be made on documents other than the title that did not meet security
and content thresholds. Finally, the use of a power of attorney, where
the lessor had access to the title, was inconsistent with TIMA.
    NHTSA's initial determination denied New York's petition because it
used a non-secure receipt for odometer disclosure in transfers between
New York dealers and out-of-state buyers and was, therefore,
inconsistent with federal odometer law. 76 FR 65487, 65491 (Oct. 21,
2011). New York subsequently amended its proposal by replacing the non-
secure document with a secure state-issued paper, New York State MV-50
(Retail Certificate of Sale) form. The result of this change was a
consumer purchasing a vehicle from a dealer would then receive the
original title and odometer statement executed by the owner, who sold
the vehicle to the dealer, and the secure MV-50 form with

an odometer disclosure. Additionally, the mileage disclosed at the time
of the sale to the dealer and the mileage disclosed at the time the
dealer sold the vehicle to the subsequent retail purchaser would be
recorded in New York's system and available for viewing through a web
portal. The agency's final determination, 77 FR 50381 (Aug. 12, 2012),
granted the New York petition as amended. NHTSA found the employment of
the secure state-issued and numbered MV-50 form, in conjunction with
the odometer disclosure on the original seller's title and the
recording of these disclosures in New York's electronic system, met the
purposes of TIMA.
    Processing foregoing petitions illuminated concerns relevant to
this final rule. Any electronic odometer disclosure system must follow
TIMA's command that odometer disclosures must be made on the title
itself, the electronic equivalent of that title, or a selectively
narrow set of tightly controlled secure documents. While jurisdictions
should be accorded a degree of flexibility in designing and executing
electronic titling and odometer disclosure schemes, an electronic
odometer disclosure system should minimize or eliminate odometer
disclosures on documents other than the title. Other concerns include
methods of transmitting secure paper documents, the means for verifying
the identity of transferors and transferees, the potential for the
simultaneous existence of paper and electronic titles and the problems
posed by interstate transactions between states with traditional and
electric systems.
    NHTSA's experience with petitions filed by Virginia, Texas,
Florida, New York, and others demonstrates states choose to create a
paperless system where all parties to a transaction make direct entries
into the system or may employ a ``hybrid'' scheme where paper forms are
employed as part of the process. As discussed below, some commenters
responding to the NPRM believed amendments proposed by NHTSA did not
adequately address the characteristics of such hybrid systems. An
additional concern raised by commenters, particularly states that had
previously had alternative odometer disclosure systems approved through
the petition process, was the applicability of provisions in the final
rule to those systems. The agency believes provisions of this final
rule are sufficiently flexible to minimize potential conflicts with
terms of our prior approvals of alternative odometer disclosure
schemes.

F. Notice of Proposed Rulemaking

    The NPRM was published in the Federal Register on March 25, 2016
(81 FR 16107). This notice explained the Moving Ahead for Progress in
the 21st Century Act of 2012 (MAP-21, or Pub. L. 112-141) directed
NHTSA to prescribe regulations permitting any written odometer
disclosures or notices to be provided electronically. See section
31205, 126 Stat. 761 (2012). The proposed amendments sought to allow
odometer disclosures in an electronic medium while maintaining accurate
odometer disclosures and aiding law enforcement in prosecuting odometer
fraud. To accomplish this end, the proposal addressed electronic
signatures and identity verification, security concerns, record
retention, leased vehicle transfers, and interstate transactions
between jurisdictions with electronic and paper titles. The NPRM
proposed modifying odometer disclosure exemptions for transfers of ten
year old vehicles to transactions involving 25 year old vehicles. Other
proposed amendments addressed restructuring of part 580, corrections to
typographical errors and updating NHTSA's address.
    Although Congress had directed that NHTSA promulgate regulations
allowing electronic odometer disclosures and, through the FAST Act
amendment discussed above, facilitated state adoption of electronic
odometer disclosure systems until the effective date of this final
rule, few jurisdictions have implemented schemes for electronic titles
and electronic odometer disclosure, either in whole or in part. Given
the nascent state of electronic titling and odometer disclosures, as
well as variations in existing title systems in states and territories,
the NPRM asked for comments on how prescriptive NHTSA's approach should
be. While more prescriptive requirements might better protect vehicle
buyers and force a degree of uniformity in future electronic systems,
such an approach by NHTSA could limit or hinder adoption of electronic
titling and odometer disclosure system. Additionally, a highly
prescriptive approach could be interpreted to be inconsistent with the
direction in MAP-21 to promulgate regulations that simply permit
electronic disclosures. The foregoing concerns prompted NHTSA to
specifically request comments in the NPRM on whether it should adopt a
minimalist approach or a more prescriptive set of rules.
    NHTSA chose to propose modifications to the existing structure of
part 580 to accommodate electronic odometer disclosure schemes.
Accordingly, the NPRM sought to add new definitions in part 580.3 for
the terms ``Electronic Document,'' ``Physical Document,'' and ``Sign or
Signature.'' As proposed, ``Electronic Document'' would mean ``a title,
reassignment document or power of attorney that is maintained in
electronic form by a state, territory or possession that meets all the
requirements of this part.'' The NPRM proposed defining a ``Physical
Document'' as ``a title, reassignment document or power of attorney
printed on paper that meets all the requirements of this part.'' The
proposed definition of ``Sign or Signature'' encompassed both hand
written and electronic signatures and, for the electronic signature,
also specified that a valid electronic signature must incorporate an
identity authentication scheme equivalent to or greater than a NIST
Level 3 system. This definition also specified a valid electronic
signature must be made by the specific individual whose identity had
been verified, regardless of whether the person was signing as in
individual or as a representative of a business. The NPRM specifically
requested comments on the propriety and appropriateness of these
proposed definitions. In addition, the NPRM asked for comments on
implementation of identity verification for transferors and transferees
in electronic transactions, including what level of NIST verification
should be appropriate, whether car dealers should provide secure
computing services, and what security measures should be mandatory for
such services.
    In contrast to a written signature, which through handwriting
analysis can be used to identify an individual even in the event of
forgery, an electronic signature is, without sufficient verification
and other safeguards, anonymous. Because of this, NHTSA proposed that a
valid electronic signature must be made by an individual. The NPRM also
asked for comments on whether any other requirements are necessary to
ensure investigators can back trace an electronic ``signature'' to
identify the individual and/or computer used in the electronic
equivalent of a paper trail or whether the proposed requirements could
be used to identify individuals making unauthorized alterations to
disclosure statements.
    Consistent with its approach of modifying existing provisions of
part 580 to allow electronic odometer disclosures, NHTSA also proposed
amending Sec.  580.4, which governed security features of printed
forms, by creating a new paragraph (a) for paper documents and new
paragraph (b) for

electronic records. The requirements for paper documents remained
unchanged while the proposed paragraph (b) requirements set forth that
electronic titles, power of attorney forms, and reassignment documents
must be maintained in a secure environment and protected from
unauthorized modification, alteration, or disclosure. Paragraph (b)
also proposed that the system storing title and odometer disclosure
information must record dates and times when documents are created,
when odometer disclosures contained are signed, when documents are
accessed, and when any attempt is made to alter or modify documents.
The NPRM asked for comment on these proposals, including the degree to
which the security and authenticity requirements for electronic
documents appropriately matched those for paper documents.
    The NPRM also addressed a bedrock concern of any electronic system
creating and maintaining records having financial import--system
security. Rather than attempt to specify security requirements, the
NPRM explained the agency made a tentative determination that such an
effort would be inappropriate given the comparatively slow pace of
rulemaking in comparison to the rapidly evolving and changing landscape
of cyber security. Just as software and hardware are constantly
evolving and improving, cyber-attacks and efforts to undermine the
security of electronic data systems are also changing rapidly and
frequently. Moreover, the NPRM noted potential risks to property
interests and commerce presented by insecure vehicle titling and
odometer disclosure systems would be addressed by the jurisdictions
creating these systems. The jurisdictions doing so would be better
positioned to assess security risks and craft appropriate responses.
The NPRM nonetheless requested comments on whether NHTSA should
establish minimum security requirements, including hardware and natural
disaster specifications, and if such security requirements should be
modeled on the Federal Information Security Management Act (FISMA)
framework.
    Section 580.5 of part 580 dictates the content and manner of
odometer disclosure. The NPRM proposed adding the phrase ``whether a
physical or electronic document'' in Sec.  580.5(a) so the disclosure
requirements specified in Sec.  580.5 would apply to paper and
electronic transactions. Similarly, the NPRM also proposed amending
Sec.  580.5(c), governing the specific disclosures that must be made
when transferring title, by adding the phrase ``physical document'' in
instances of paper title transfers and ``electronic form incorporated
into the electronic title.'' to Sec.  580.5(c) for instances of
electronic title transfers. The agency also added a requirement that
disclosures in the case of electronic titles must be on an electronic
form incorporated into that title, that the electronic disclosure must
be incorporated into the electronic title, and, in jurisdictions with
electronic titles, reassignment documents could not be used in lieu of
making the odometer disclosure electronically. The agency also asked
for comments on the proposal that disclosures be made on an electronic
form incorporated into the electronic title.
    Under Sec.  580.5(d), paper forms used to make odometer disclosures
must contain certain legal notices and warnings intended to ensure
those executing the forms are aware of their responsibilities and
potential liability when doing so. The NPRM proposed extending these
requirements to electronic disclosures transfers by amending Sec.
580.5(d), specifying that in instances of electronic transfer, the
required information must be displayed on the screen, and acknowledged
as understood by that party, before any signature can be applied to the
transaction. NHTSA also proposed amending Sec.  580.5(f), requiring
transferees to print their name on the disclosure and return a copy to
the transferor, to restrict its application to paper transactions only.
Because Sec.  580.5(f) also requires transferees to provide transferors
with a copy of the executed disclosure statement, the agency also
proposed electronic disclosure systems provide a means for parties
involved with the transaction to access copies of the disclosure.
Although this proposal expanded the paper requirement from making a
copy available to one party to both parties, NHTSA believed the burden
of making an electronic copy of the disclosure statement to both
parties rather than one would be minimally burdensome. The NPRM sought
specific comments on these proposed amendments.
    Section 580.5(g) of part 580 addresses the situation in which a
vehicle has not been titled or where the existing paper title does not
have sufficient space for making an odometer disclosure. As explained
in the NPRM, NHTSA tentatively believed this provision should only
apply in jurisdictions where paper titles and odometer disclosures are
used. The agency thought any electronic titling system would have the
capability to accept disclosures for multiple transactions and could be
configured to accept an odometer disclosure immediately prior to
creation of the first electronic title. Accordingly, the NPRM proposed
limiting application of Sec.  580.5(g) to transactions employing paper
documents in jurisdictions without electronic title systems. The NPRM
asked for comments specifically addressing this proposal.
    The NPRM also proposed adding a new Sec.  580.6 to part 580 to
create requirements resolving unique concerns posed by electronic
odometer disclosures. To ensure systems creating and maintaining
records provided a minimum level of security and certainty, the NPRM
sought to add Sec.  580.6(a)(1) requiring electronic records to be
retained in a format that cannot be altered and, further, that
indicates any attempts to alter it. As it is critical that parties to a
transaction are who they claim to be for ownership and law enforcement
purposes, the NPRM proposed in Sec.  580.6(a)(2), a requirement that
any electronic signature identify an individual. The section also
proposed if an individual is acting in a business capacity or otherwise
on behalf of any other individual or entity, that the business or
entity also be identified as part of that unique electronic signature.
Because the requirement to maintain or provide copies of paper
documents exists in various places within part 580, the NPRM proposed
accommodating these requirements in electronic disclosure systems by
establishing, in Sec.  580.6(a)(3), that any requirement in part 580 to
disclose, issue, execute, return, notify, or otherwise provide
information to another person is satisfied when a copy of the
electronic disclosure or statement is electronically transmitted or
otherwise electronically accessible to the party required to receive
the disclosure. Although the NPRM noted NHTSA discouraged the continued
use of paper documents in electronic disclosure jurisdictions, the
agency proposed accommodating ``hybrid'' systems such as those seen in
the Florida and New York petitions by creating Sec.  580.6(a)(7)
requiring that any physical documents used to make electronic
disclosures comply with the security and other requirements applicable
to paper documents in part 580.
    The advent of electronic titles would not eliminate the demand for
paper titles, particularly because paper titles are likely to be
essential to completing interstate transactions between electronic and
paper jurisdictions. Moreover, paper titles will need to be accounted
for when electronic title systems are created. Since the

simultaneous existence of an electronic and a paper title would provide
fertile ground for odometer fraud, the NPRM proposed, in Sec.
580.6(a)(4) that any physical title replaced by an electronic title
must be destroyed after creation of the electronic title. The proposed
text of this section further provided that an electronic copy of the
physical title be recorded and maintained for five years and that the
electronic copy be retained in a format that cannot be altered and that
indicates any attempts to alter it. If a paper title needed to be
created from an electronic record, the NPRM proposed, in Sec.
580.6(a)(6), that only states or their authorized surrogates could
produce a secure paper title from an electronic record and that this
paper title must meet the security requirements applicable to paper
titles. Additionally, the proposed Sec.  580.6(a)(6) stated that
issuance of a paper title in an electronic title state must be
memorialized by a record stating the electronic title has been
superseded by a paper document that is the official title. As suggested
by the Texas petition seeking approval of alternative odometer
regulations, NHTSA also believed electronic title systems might have a
means of making a paper document available to vehicle owners who would
attest to the existence of an electronic title maintained by their
jurisdiction. The NPRM proposed adding a provision in Sec.  580.6(a)(5)
permitting jurisdictions to issue such a document if they chose to do
so. Because NHTSA anticipated electronic title and odometer disclosure
systems would rely on scanned documents at various times and under
various conditions, including interstate transactions from paper
jurisdictions to electronic jurisdictions, the NPRM proposed adding
Sec.  580.6(a)(7) specifying that any conversion of physical documents
to electronic documents must preserve the security features of the
physical document and be scanned at a resolution of not less than 600
dots per inch (dpi). Again, the NPRM sought specific comments on the
foregoing proposals.
    The agency also proposed several amendments to Sec.  580.7, which
governs odometer disclosures for leased vehicles. Leased vehicles
present challenges to the ordinary scheme for odometer disclosures
because lessors usually hold the title to the vehicle but seldom have
physical control over it. When a vehicle lease is terminated, the
lessee typically surrenders the vehicle to a dealer while the lessor is
responsible for making the required odometer disclosures on the title.
To facilitate transactions associated with terminating the lease, Sec.
580.7(a) required lessors to provide lessee with a written notice
explaining that the lessee must provide the lessor with an odometer
disclosure statement and that failure to do so, or to do so in
conformance with federal law, exposes them to criminal liability.
Section 580.7(b) and (c) state lessees must execute an odometer
disclosure statement with any transfer of ownership and provide this
disclosure statement to the lessor. In turn, the lessor is required by
Sec.  580.7(d) to execute the disclosure statement on the vehicle title
in conformance with the lessee's disclosure unless the lessor has
reason to believe the lessee's disclosure is inaccurate. The NPRM
proposed amending Sec.  580.7(a) to allow lessors to provide notices to
lessee electronically, proposed deletion of a printed name requirement
for electronic odometer disclosures by lessees in Sec.  580.7(b) and
proposed adding a new Sec.  580.7(e) stating an electronic system
maintained by a lessor must meet the proposed security requirements in
Sec.  580.4(b). The NPRM also requested comments on whether leased
vehicle electronic disclosures should be a required part of the
electronic system established by a jurisdiction or are best developed
by individual leasing companies.
    Sections 580.8 and 580.9 include requirements for odometer
disclosure record retention by motor vehicle dealers and distributors
and by auction companies, respectively. Section 580.8(a) specifies
dealers and distributors must retain a ``Photostat, carbon copy or
other facsimile copy of each odometer mileage statement which they
issue and receive.'' Under both sections, records must be stored for
five years in a manner and method so they are accessible to NHTSA
investigators and other law enforcement personnel. The records must
also be stored so they are difficult or impossible to modify. The NPRM
proposed adding requirements in a new Sec.  580.8(d) and Sec.  580.9
that electronic odometer disclosure records kept by motor vehicle
dealers, distributors, and auction companies must be stored in a format
that cannot be altered and that indicates any attempts to alter the
document, consistent with the standards set forth in proposed Sec.
580.4(b). NHTSA requested comment on whether this requirement would be
sufficient to allow law enforcement to detect altered documents.
    The agency also proposed modifications to the power of attorney
provisions in Sec.  580.13(a) and (b), to allow an individual with a
vehicle titled in an electronic title state to use a power of attorney
to sell a vehicle in a paper title state. This proposed expansion of
the use of a power of attorney, in conjunction with the agency's view
that the power of attorney provisions applicable to lost titles or
titles held by lienholders would no longer be needed in electronic
title jurisdictions, led the agency to propose adding the word
``physical'' in multiple places in Sec. Sec.  580.13(f), 580.14(a),
(e), and (f), and in 580.15(a) to restrict application of various
provisions to paper title jurisdictions. The NPRM asked commenters to
specifically address the need for the proposed power of attorney and if
an electronic power of attorney would also be needed or feasible.
    Because Sec.  580.17(a)(3) exempts any vehicle, which is more than
10 years old from the odometer disclosure requirements and the average
age of the United States vehicle fleet has been trending upward to 11.5
years, the NPRM proposed raising the exemption to 25 years. The NPRM
also requested comments on whether the exemption should be eliminated.
    Another group of amendments in the NPRM were proposed to correct
address changes and typographical errors as well as removing obsolete
provisions and providing redesignations needed to complete the final
rule.

G. Summary of Comments to the NPRM

    NHTSA received 28 comments in response to the NPRM. Six comments
were filed by state motor vehicle departments: The Motor Vehicle
Division of the Arizona Department of Transportation (Arizona), the
California Department of Motor Vehicles (California), the Florida
Department of Highway Safety and Motor Vehicles (Florida), the Oregon
Driver and Motor Vehicle Services (Oregon), the Texas Department of
Motor Vehicles (Texas), and the Virginia Department of Transportation
(Virginia). State concerns were also addressed in comments from the
American Association of Motor Vehicle Administrators (AAMVA). Dealer
and auctioneer concerns were voiced by comments from the National
Automobile Dealers Association (NADA), the National Independent
Automobile Dealers Association (NIADA), the National Auto Auction
Association (NAAA), the Ohio Automobile Dealers Association (OADA),
Copart Inc. (Copart), Dealertrack Inc. (Dealertrack), and Insurance
Auto Auctions Inc. (IAA). Several trade associations acting on behalf
of lenders also submitted comments, including the National

Association of Federal Credit Unions (NAFCU), National Title Solutions
Forum of the American Financial Services Association (NTSF), the Credit
Union National Association (CUNA), the Credit Union Coalition of Texas
(CUCTX), and the Heartland Credit Union Association (HCUA).
    Comments were also filed by insurance companies and insurance trade
associations: Allstate Corporation (Allstate), the Property Casualty
Insurers Association of America (PCIA), the American Insurance
Association (AIA), Liberty Mutual (Liberty), and the National
Association of Mutual Insurance Companies (NAMI). Other organizations,
such as the Electronic Signature and Records Association (ESRA), the
National Odometer and Title Fraud Enforcement Association (NOTFEA), and
the National Salvage Vehicle Reporting Program (NSVRP) also filed
comments. An individual, Thaddeus Lopatka, filed comments as well.
    The commenters all favored regulatory changes that would allow
states to implement electronic odometer disclosures as part of an
electronic title system. The comments, however, differed in how this
goal should be achieved. While some comments did not address the
specifics of NHTSA's proposed amendments, others provided detailed
analyses of the regulatory text contained in the NPRM. The comments
also diverged on the extent to which NHTSA should exercise its
regulatory authority. While some commenters urged NHTSA to leave as
much as possible to the discretion of individual states, others felt
the agency should compel creation of a national electronic title and
odometer disclosure system by a specified date and impose penalties for
non-compliance. The agency's proposed modification of the ten-year
exemption was supported by most commenters and vociferously opposed by
others. For commenters who specifically addressed the agency's proposed
requirement that individual identities be established by NIST level 3
authentication, opposition was universal. Some commenters also voiced
reservations about the structure of the proposed amendments, which, in
their view, appeared to adopt an unduly narrow vision of how electronic
odometer disclosure and electronic titling systems would function. For
these commenters, NHTSA's proposal did not adequately address the
potential adoption of hybrid systems employing a mixture of paper
documents and electronic processes.
    Two commenters, NADA and NAAA, suggested NHTSA issue an SNPRM prior
to issuing a final rule while two, NAMIC and Texas, suggested NHTSA
delay issuance of a final rule. NADA stated an SNPRM might be needed
because of the complex array of potential motor vehicle transfers and
potential variations between state systems that NHTSA needs to explore.
NAAA stated an SNPRM might be required to explore the effect of any
delays inherent in producing paper titles on exporting vehicles. Texas
stated the proposals put forward in the NPRM indicated an apparent
misunderstanding of current title processes and urged the agency to
work with stakeholders to draft clearer, more meaningful language.
NAMIC suggested delay so NHTSA could convene an assembly of state
officials with the goal of forging a national electronic titling and
odometer disclosure system.
1. Scope of the Final Rule
    NHTSA's March 25, 2016, NPRM stated the agency's view that the
directive in MAP-21 to promulgate rules allowing electronic odometer
disclosure was intended only to facilitate this change without imposing
additional requirements on stakeholders (81 FR 16114). Nonetheless, the
NPRM requested comments on whether the proposals therein should be
extended to prevent, or limit, variation among the various state
systems.
    Comments submitted in response to this solicitation were generally
split into two opposing positions. Several commenters urged creation of
a uniform national electronic title and disclosure system while others
urged the agency take a minimalist approach. Insurers favored the
former approach while most states embraced the latter. The AIA
contended allowing both paper and electronic disclosures complicated an
already cumbersome process. AIA urged NHTSA to require electronic
titling and odometer disclosure and warned the co-existence of
electronic and paper title and disclosure systems will inevitably lead
to fraud, title washing, errors, the inability to find the owner for
recalls, and a lack of consumer understanding of the process.
    The organization further urged NHTSA to establish a date certain by
which all states must move to an electronic title and disclosure system
and establish penalties for jurisdictions not meeting this deadline.
NAMIC offered similar concerns about the potential complexity of co-
existing paper and electronic systems as well as potential issues
caused by incompatible state databases. As noted, NAMIC urged NHTSA to
convene meetings with states and other stakeholders to formulate a plan
for a more uniform electronic system. Although Texas adopted a position
that NHTSA's rulemaking should not be prescriptive and should grant
states as much leeway as possible in developing electronic title and
odometer disclosure systems and encouraged NHTSA to explore the use of
the U.S. Department of Justice's National Motor Vehicle Title
Information System (NMVTIS) as a national system to facilitate the
transfer of electronic titles. According to Texas, leveraging this
existing system would assist with mitigating any costs associated with
implementing a national electronic title transfer system and aid the
rate of adoption while easing the implementation process.
    Among state commenters, Virginia stood alone in supporting an
expanded scope for the final rule. Virginia's concerns included the
possibility of broad variations among state systems that would hinder
interoperability and preclude the consistency required to allow
consumers to conduct interstate transactions. While Virginia advocated
rules to enforce consistency in security standards, its comments also
decried the proposed NIST authentication and minimum dot per inch
standards as well as the inability of traditional rulemaking to keep
pace with rapidly changing technologies. Texas, California, and Florida
offered comments stating the scope of the NPRM proposals should not be
expanded. Texas stated each jurisdiction should be able to facilitate
the electronic process for signatures as it determines appropriate.
California contended that initially, each state must be able to
implement an electronic odometer scheme within its own environment.
Florida echoed this sentiment while opining that flexibility is needed
as states first implement intrastate systems. AAMVA stated few states
had developed electronic title systems, and even fewer could support
fully electronic transactions or odometer disclosures. In AAMVA's view,
imposing restrictive requirements before all states have had the
opportunity to evaluate their existing systems and determine what such
a transition could look like would be premature. ESRA's comments also
endorsed a less restrictive regulatory approach stating the NPRM
proposals were sufficiently broad to enhance the adoption of e-odometer
and e-titling systems, and some level of variation would be acceptable
if state systems are technologically neutral and promote
interoperability.

2. Definitions
    NHTSA proposed several changes to definitions found within Sec.
580.3 to accommodate electronic odometer disclosures within the
existing framework of part 580. The NPRM proposed new definitions for
the terms ``Electronic Document,'' ``Physical Document,'' and ``Sign or
Signature,'' where an electronic document is a title, reassignment
document, or power of attorney maintained in an electronic form; a
physical document is a paper document as used prior to the advent of
electronic disclosures, and sign or signature may either be a hand
written signature or an electronic sound, symbol, or process using an
authentication system to verify the signer's identity. As noted, the
NPRM sought comments on the appropriateness of the proposed
definitions.
    One insurer, Liberty Mutual, four associations, AAMVA, NADA, CUCTX,
and HCUA, and three states, California, Virginia, and Texas, offered
comments in response to the definitions contained in the NPRM.
California voiced concerns the definition of electronic document
inappropriately inferred that electronic titles exist only as an
electronic image of a paper document when an electronic title may only
be a set of data elements maintained in a state database and not
necessarily a form. AAMVA also stated ``Electronic Record'' would be
more appropriate than ``Electronic Document'' and opined the proposed
definition of ``Electronic Document,'' and ``Physical Document,''
should both refer to lease disclosures required by Sec.  580.7. HCUA
stated the proposed definition should clarify that a database record
could serve as the title, disclosure, and audit trail. California
further noted the proposed definition included ``reassignment
document'' and ``power of attorney,'' which appears to conflict with
proposed language for Sec.  580.15, limiting powers of attorney to
paper transactions, which California also opposed. California suggested
Electronic Document should include or be restated as ``titling record''
and ``paperless or electronic title.''
    Virginia believed the definition of ``sign or signature'' is
insufficient to address handwritten signatures on paper, handwritten
signatures captioned electronically on a pen pad, electronic signatures
for individuals, and electronic signatures for organizations verified
through authentication measures. NADA offered similar comment, stating
many of its dealer members used ``pen pads'' to capture signatures
electronically. CUCTX noted the proposed definition of ``Sign or
Signature'' applied only to electronic disclosure statements and should
be expanded to include other electronic documents to capture powers of
attorney as well.
    Texas, which provided a ``redline'' version of part 580 along with
its written comments, suggested the definitions proposed in the NPRM be
expanded by adding a definition of ``Access'' encompassing the means of
entering, displaying and modifying previously stored data, ``Agent'' as
person appointed by a power of attorney or authorized to act for an
entity, ``Electronic title'' for electronic titles incorporating an
electronic reassignment format or process, ``Jurisdiction'' meaning a
state, territory, or possession of the United States of America,
``Mileage'' meaning the actual distance a vehicle has traveled,
``Printed Name'' meaning either the clear and legible name on a
physical document or an equivalent electronic record and ``Sign or
Signature'' meaning either a traditional hand-written signature on a
paper disclosure or an electronic sound symbol or process either
incorporating an authentication process or performed before an
authorized employee or agent of the jurisdiction. Liberty Mutual
suggested adding a definition for an electronically signed document
used specifically for title transfers for total loss vehicles.
    NADA offered a similar comment to that provided by Texas and urged
NHTSA to add a clarifying definition of the term ``State'' to read
``any jurisdiction of the United States that issues motor vehicle
titles, and the authorized agent(s) for any such jurisdiction.''
3. Identity of Parties to a Motor Vehicle Transfer and Security of
Signatures
    The definition of ``Sign or Signature'' proposed in the NPRM
specified a valid electronic signature must identify a specific
individual. This requirement stems from NHTSA's concern the comparative
anonymity of an electronic signature to a written signature could
frustrate identification of perpetrators of odometer fraud. This
proposed requirement also appeared in Sec.  580.6(a)(2) of the proposed
amendments. The agency received many comments in response to this
proposed requirement, and these comments are discussed below.
    As proposed in the NPRM, the definition of ``sign or signature''
for an electronic document included an electronic sound, symbol, or
process using an authentication system equivalent to or greater than
Level 3 as described in NIST Special Publication 800-63-2, Electronic
Authentication Guideline, which identifies a specific individual. NHTSA
proposed incorporating the NIST Level 3 requirement into the definition
of an electronic signature because of agency concerns that electronic
odometer disclosures could easily be made by someone other than the
actual transferor or transferee involved in the transaction. The NPRM
requested comments on the appropriate NIST level as well as other forms
of verification and security, including whether dealers should be
required to provide secure computing services to transferors and
transferees.
    Commenters addressing the issue uniformly opposed the proposed
requirement that identity verification for electronic odometer
disclosures must meet NIST Level 3. California noted NIST Level 3
authentication went beyond what is required for current paper
transactions. In California's view, prescribing a NIST Level 3 identity
authentication, which, among other things, could entail verification of
a government ID, such as a driver license, and a financial or utility
account, is unnecessary. California argued a Level 3 process would be
burdensome and impractical, if not impossible, to implement. California
contended the manner of identity verification be left to states at a
level strong enough to reasonably identify the signing party and should
not be set above NIST Level 2. Florida contended the cost and
complexity of implementing a Level 3 system may prohibit many states
from being able to provide electronic titles and odometer disclosures.
Further, Florida argued a Level 2 solution would still provide greater
security than the existing paper process. Virginia asked if use of pen
pad for electronic transactions done in person before a state employee
or agent--essentially replicating the present paper process--met NIST
Level 2 requirements.
    Texas, like California, argued against any NIST level requirement
because jurisdictions should be responsible for the secure electronic
process just as they are for the existing security provisions for paper
documents. According to Texas, states have an interest in the security
of vehicle and odometer transactions equal to that of the federal
government and are more familiar with their jurisdiction's business
needs and those of its customers. Should NHTSA specify a NIST level,
Texas urged that it not be set above NIST Level 2. AAMVA noted the NPRM
proposal did not distinguish between electronic signatures being made
in the presence of a state employee or agent and remote

transactions. The association also urged the agency to not require NIST
Level 3 authentication and observed attaining this level of security
would be very difficult because of the requirement that all elements of
the system meet NIST Level 3. Further, AAMVA argued an attempt to force
all potential participating parties to comply with a standard set at
NIST Level 3 would ultimately lead to a common inability to do so.
Compared to the existing paper signature process, AAMVA stated NIST
Level 2 would be achievable and provide suitable assurance of identity.
    Other stakeholders also argued against NIST Level 3 authentication.
Dealer groups OADA, NAAA, NIADA, and NADA stated obtaining and
maintaining a NIST Level 3 system would require significant investment
by states and dealers. This burden is not, in the view of these
commenters, necessary when compared to the benefits achievable with a
Level 2 system. These organizations also believe costs of Level 3
authentication would prevent states from attempting to employ
electronic title and odometer disclosure systems. Lender associations
and other entities also opposed the proposal to require Level 3
authentication. HCUA stated Level 2 authentication should be sufficient
while the NTSF argued Level 3 authentication was not required. In
NTSF's view, as supported by the ANSI X9. l 17-2012 ``Secure Remote
Access Mutual Authentication'' authentication framework, vehicle
transfers are relatively low risk transactions that do not require the
security provided by NIST Level 3. Further, NTSF observed the NIST
Standards are applicable to federal government computer systems and
should not be applied in this context. Finally, given the costs of
Level 3 for states and others, NTSF recommended the final rule replace
Level 3 with Level 2. ESRA observed the threat of financial loss
presented by fraudulent odometer disclosures is commensurate with Level
2 authentication and this level is adequate for odometer disclosures.
    The NPRM also requested specific comments on whether dealers should
be required to provide secure computing services to transferors and
transferees. NIADA and IAA responded, noting NHTSA should be mindful
vehicle transfers are processed by many entities with different
resources and are not limited to dealers. In the view of these
commenters, imposing the foregoing requirement on a wide range of
potential parties to a transfer would be unduly burdensome.
    NHTSA also asked for comments on whether any requirements beyond
those proposed in the NPRM would be needed or desired given the need
for an odometer disclosure system to provide an adequate paper trail to
identify the signer of an electronic odometer disclosure. Florida
stated electronic odometer disclosure systems provide more security
than the paper process. According to Florida, paper transactions do not
involve verifying signatures and titles or other reassignment documents
are often given to the transferee without being filled out so the
incomplete forms are filled out by the transferee. Because electronic
systems would require completeness and allow more frequent and accurate
mileage reporting, Florida argued NHTSA should not adopt more stringent
requirements in the Final Rule.
4. Document or Record Security and System Security
    Prior to the issuance of this final rule, Sec.  580.4 set forth the
requirements for security features incorporated into paper documents
employed to perform odometer disclosures. These security features are
intended to prevent modification of existing disclosures and deter the
use of counterfeit documents. The NPRM proposed amending this section
through addition of new requirements for electronic documents or titles
intended to provide the same level of security for electronic records
as exists in secure paper documents. The proposed language would
require electronic titles, powers of attorney, and reassignment
documents to be maintained in a secure environment protecting the
record for unauthorized modification. This environment would be part of
a system that records when the document or record is created, when the
odometer disclosures within are signed, when documents are accessed,
and the date and time any attempt is made to alter the documents as
well as any alterations made in the document.
    The NPRM first sought comment on whether the proposal appropriately
matched the security and authenticity requirement for electronic
documents to the existing requirements, which apply to paper documents.
While the NPRM contained a discussion outlining why the agency was not
proposing specific security standards for these storage systems, NHTSA
also asked for comment on whether the final rule should incorporate
more specific security requirements for systems used to create and
maintain electronic titles and odometer disclosures.
    With the caveat that many commenters noted that the proposed
language referred to an electronic ``document'' when reference to an
electronic ``record'' would be more appropriate, this portion of the
proposed rule enjoyed general support with many commenters strongly
endorsing the agency's decision not to impose specific security
standards for electronic title and odometer disclosure systems. NAAA
and IAA noted the proposal required protection against unauthorized
changes but did not address how entry errors are to be corrected. NTSF
stated the requirement to track when records are accessed seemed to be
unduly burdensome given the nature of the records involved. ESRA
recommended NHTSA take an ``agnostic'' approach to electronic records
storage by allowing states to store electronic data and documents in
their secure data systems and to employ reasonable efforts to prevent
such records from being altered.
    Some commenters believed the proposal was too prescriptive.
California noted paper documents should not be compared to an
electronic process and that it would be unnecessary to prescribe
anything more than maintaining electronic titling and odometer
disclosure information in a secure system or environment. Texas stated
the proposed requirements are more cumbersome than those for physical
documents, and jurisdictions should be given the same latitude for
electronic and physical documents. Virginia objected to the requirement
that attempts to alter or modify records be tracked. Virginia noted the
proposal did not distinguish between authorized and unauthorized
modification and that any unauthorized attempt at access should result
in denial of access and not creation of a record. AAMVA stated most
systems track dates and times on who accessed certain records and asked
NHTSA to exercise caution so requirements do not interrupt titling
agency business.
    Comments supporting NHTSA's decision to not adopt specific system
security requirements were submitted by insurers, dealer associations,
lender groups, states, and others. Allstate stated that states should
have the flexibility to assess systems requirements that ensure
information security. Dealer groups NADA, OADA, and NIADA agreed with
NHTSA's approach, as did Dealertrack, stating that technology moved too
rapidly for effective regulation by rules. NADA and NTSF opined that
specific system security requirements would be counterproductive for
the same reason. ESRA recommended only general security standards and
safeguards be adopted to prevent obsolescence and to empower states
adopt systems they determine are most appropriate. CUCTX

also noted states have been, and should be, responsible for maintaining
secure electronic title records. Arizona stated specific security
standards would be too inflexible. Virginia urged any security
requirements be technology neutral to keep pace with changing threats.
Texas questioned the need for any security requirements given the
strong interest any jurisdiction would have in maintaining the security
and integrity of public records. AAMVA also questioned the need for
systems security requirements based on the history of states securely
maintaining data for many years. In AAMVA's view, specific system
security requirements would hinder states in their ability to protect
this data rather than enhance it.
5. Odometer Disclosures
    NHTSA proposed several changes to Sec.  580.5, Disclosure of
odometer information, to accommodate electronic odometer disclosures.
The proposed amendments sought to ensure the content required in the
paper-based disclosure system would be carried forward into an
electronic environment. Therefore, where information was required to be
entered on the title under the paper system, the NPRM proposed, in
580.5(c), that the same information be entered in ``an electronic form
incorporated into the electronic title.'' Similarly, where notices of
potential liability for failing to meet certain requirements are
required on paper documents, 580.5(d) of the NPRM proposed the same
warnings be provided electronically for electronic transactions. At the
same time, differences between an electronic and a paper-based
transaction led the agency to propose differing requirements for the
two regimes. A requirement that a printed name be affixed to the
disclosure on a paper title in Sec.  580.5(f) was not carried forward
into the agency proposal for electronic transactions as sufficient
means independent of a hand-written signature should be available to
identify individuals executing electronic disclosures. Where the paper
based system requires the transferee to sign the executed disclosure
statement and return a copy to the transferor, Sec.  580.5(f) of the
NPRM proposed an electronic system make copies of the executed
documents available to the parties.
    Comments addressing this portion of the agency's proposal supported
the proposed changes. These commenters nonetheless offered observations
and corrections, which they believed would better reflect the
characteristics of electronic odometer disclosure and electronic title
systems and clarify the proposals made in the NPRM. The proposal's
directive in 580.5(c) that an odometer disclosure be made on an
``electronic form incorporated into the electronic title'' led some
commenters to observe this nomenclature was inconsistent with any form
of electronic disclosure and electronic title system save those that
relied on scanning images of documents and storing these documents
electronically.
    AAMVA observed NHTSA's approach seemed to transform a paper-based
disclosure process into an electronic disclosure by simply scanning
current documentation--the title, the reassignment, or the power of
attorney. The organization stated any reliance on a physical document,
whether scanned or not, does not constitute an electronic disclosure
system and should not provide the basis for an electronic disclosure
system. Instead, AAMVA noted, an electronic disclosure and title record
would be data fields making up an electronic record. HCUA offered
similar views, urging NHTSA to clarify that database records can be
substituted for scanned images of paper titles by state DMVs. NTSF also
stated it is important to note states maintain electronic title records
as database records and not scanned images of paper titles. The
organization contended the proposed rules wrongly indicated title and
disclosure documents must exist as embedded replicas of the
corresponding paper documents when the actual electronic record would
be an actual secure electronic database record of the transaction,
including the metadata supporting the authentication of the individual
executing the signature, as well as a full audit trail of transactional
data. ESRA offered similar comments about the nature of electronic
titles and recommended replacing the term ``form'' with the term
``statement'' when referring to electronic disclosure documents, and
using the term ``record'' instead of ``form'' when referring to
electronic titles. Texas argued it is paramount that NHTSA recognizes
what an electronic process is and allow latitude in their development.
    Other comments focused more narrowly. California stated electronic
and paper titles will only resemble each other to the extent they
contain the same information. Florida and Virginia simply stated they
supported the agency proposal to incorporate the odometer disclosure
into the electronic title. Texas strongly supported requiring odometer
disclosures to be made ``on'' the electronic title while noting it did
not support allowing a separate ``electronic'' or physical reassignment
apart from the electronic title. Because there would be unlimited
``space'' for mileage disclosure entries in an electronic title system,
Texas contended a reassignment process that is not specifically
attached to an electronic title should be prohibited. Arizona stated
requirements in Sec. Sec.  580.5(c) and 580.6(a)(7) regarding the use
of physical documents for a transfer being conducted electronically
appear to conflict and suggested the provisions in Sec.  580.6(a)(7)
take precedence with Sec.  580.5(c) being reworded to eliminate the
conflict.
    The NPRM proposed amending Sec.  580.5(d) to provide the same
warnings and notices present on paper odometer disclosure forms also be
presented to parties executing an electronic disclosure. As presented
in the NPRM, the amendment stated, ``the information specified in this
paragraph shall be displayed, and acknowledged as understood by the
party, prior to the execution of any electronic signatures.'' Texas
supported including the proposed statements and warnings but contended
the electronic signature should be sufficient acknowledgement that
statements were read and understood. Therefore, Texas argued against
any additional acknowledgement such as a checkbox. IAA observed this
language did not provide adequate guidance on the sequence in which the
odometer disclosures would be executed and that if neither transferor
nor transferee may sign until the acknowledgement by both, it would be
difficult to envision the proper sequence of execution.
    NHTSA also proposed amending Sec.  580.5(f), which specified
transferees receiving a paper odometer disclosure from a transferor
must sign the disclosure statement, print their name, and return the
signed copy to the transferor. The proposed amendment eliminated the
requirement for a printed name in electronic transactions and stated
electronic disclosure systems must provide a copy to the parties. With
one exception, all commenters responding to this proposal supported
elimination of the printed name requirement. California, Florida,
Virginia, NADA, NTSF, and AAMVA all supported eliminating the printed
name requirement in electronic disclosures, with most also stating
identity authentication employed in these systems would make the
printed name requirement superfluous. Texas, however, strongly opposed
elimination of the printed name requirement, explaining a printed name
would still be needed in electronic disclosures when an individual
employee of a business executed the disclosure on behalf of their
employer. California

opposed the proposal that electronic disclosure systems provide a copy
of the executed disclosure statement to the parties. In California's
view, states should have the option of choosing whether to make copies
available. NADA supported the proposal that systems make copies
available as did Texas. Texas also recommended more generic language to
require the jurisdiction to make it available.
    An additional modification proposed in the NPRM sought to expand
the provisions of Sec.  580.5(g) to electronic systems. Section
580.5(g) addresses issues that may arise in sales when a brand-new
vehicle has not yet been titled or when an existing title for a used
vehicle does not have sufficient space to accommodate multiple
disclosures. In such an instance, the section provided that a separate
document could be used for the disclosure. To extend this section to
electronic disclosures, the NPRM proposed that in jurisdictions with
electronic title and odometer disclosure, the system shall provide a
means for making the disclosure electronically and incorporating it
into the electronic title when the title is created.
    Commenters supported this proposal but noted potential difficulties
in implementing it. Some commenters suggested states have the option of
employing either a paper or an electronic system for these
transactions, even where the jurisdiction provided an electronic title
and odometer disclosure system. California and Virginia stated they
agreed with the proposal. Florida generally supported the concept but
observed the ability to use only an electronic means depended on
whether the Manufacturer's Certificate of Origin (MCO) is available
electronically or only on paper. According to Florida, if a
jurisdiction maintains electronic title and odometer disclosure systems
but the manufacturer has a paper MCO, the jurisdiction must have a way
to capture signatures from this paper document into the electronic
system. NADA voiced similar concerns and noted the uncertainty of
electronic versions of required documents being available until
electronic systems became universal. Texas did not support the
requirement for a secure electronic process for these transactions
since the paper system does not require use of a secure document,
manufacturers control the form of the MCO, and NHTSA did not propose
imposing requirements on manufacturers for the MCO.
    Texas also suggested clarification to paragraph (g). Texas noted
the words ``or if the physical title does not contain a space for the
information required'' are no longer relevant because part 580 requires
all issued titles to contain space for the required information.
Additionally, Texas recommended the text specify when use of a separate
reassignment document is permitted. However, Texas would support
allowing (but not requiring) jurisdictions to employ an electronic
process.
6. Requirements for Electronic Transactions
    Section 580.6, previously reserved for future use, was employed by
the NPRM as the vehicle for proposed new regulations establishing
requirements for electronic odometer disclosures. These proposals
sought to establish fundamental requirements for electronic odometer
disclosure systems that would protect against odometer fraud while
facilitating smooth and efficient transactions. The proposed
regulations address recordkeeping requirements, access to electronic
documents, identification of participants, conversion of paper records
to electronic records, the potential for simultaneous electronic and
paper titles, and the character of any paper documents employed as part
of an electronic title system.
    The NPRM proposed adding Sec.  580.6(a)(1) requiring any electronic
record be retained in a format that cannot be altered and, further,
that indicates any attempts to alter it. Commenters addressing this
proposal supported it, providing the ban on alterations was limited to
unauthorized alterations. AAMVA supported NHTSA's intent to provide a
mechanism to track unauthorized access and alteration but warned
against language that would limit titling agency authority or impede
titling agency business. NAAA similarly urged the agency to ensure any
final rule include language allowing jurisdictions to employ an error
correction mechanism. ESRA again urged the agency to take an
``agnostic'' approach and allow states to employ reasonable efforts to
protect records. NADA similarly cautioned requirements protecting
record integrity be practical and appropriate for states, their agents,
and all other parties involved. California agreed protections were
needed to prevent unauthorized attempts to access and alter information
but urged caution against imposing disruptive requirements. Florida
requested NHTSA distinguish between authorized and unauthorized
alterations while Texas stated jurisdictions be allowed the latitude to
maintain electronic records in the fashion they feel is the most
secure. Virginia noted the proposal did not separate legitimate
corrections from unauthorized alterations but supported security
measures, record retention requirements, and audit and review.
    Subsection 580.6(a)(2) of the agency's proposal creates a
requirement that any electronic signature identify an individual and,
further, that if the individual is acting in a business capacity or
otherwise on behalf of any other individual or entity, that the
business or entity also be identified as part of that unique electronic
signature. As explained in the NPRM, the agency believed this
requirement is needed both to facilitate identity authentication and to
create a record of the individual executing an electronic signature.
Commenters voiced opposing views on this proposal. While states and
some associations supported it, dealers and vehicle auction
organizations were strongly against it. Lender groups, NTSF and HCUA,
supported the proposal. AAMVA also supported the proposal, and ESRA
stated the requirement represented a best practice. California and
Florida offered support without elaboration while Virginia stated it
supports signatures applying to an individual and not to an
organization. Texas supported the requirement with the proviso that
there be no specific requirements on how this is to be accomplished.
    NADA stated it had concerns about the proposal for several reasons.
The association noted transfers for odometer disclosure purposes do not
involve transferees taking title to the vehicle when that transferee is
a dealership, wholesaler, insurance company, auction, or a lessee.
Therefore, NADA argues the rules must accommodate a process by which
odometer disclosures are made on electronic documents without title
transferring (reassignments). NADA also questioned why agents acting on
behalf of licensed entities should have to sign as individuals if they
use the unique identifiers issued to their licensed employer. NADA
urged NHTSA to consider adopting two sets of electronic transaction
requirements, one for licensed entities such as dealers, distributors,
auctions, lessors, lenders, and their agents, and one for private
individuals. IAA, a vehicle auction company, stated the proposed rule
would, in its case, result in a single employee signing on behalf of a
host of vehicle owners bringing their vehicles for sale.
    According to IAA, adoption of this requirement would necessitate
many thousands of unique electronic signatures, posing a huge burden on
the auction company and states processing the signatures. As NADA did,
IAA

observed auction houses were state-licensed and subject to state
regulation. As such, IAA argued states and licensees should be given
the latitude to fashion workable methods for identification. Copart,
another auction provider, offered the same observations about the
effect of this proposal on businesses that provide a venue for selling
large volumes of vehicles for many different owners. The company urged
NHTSA to seek a solution allowing various industry stakeholders to
develop reasonable methods for signing odometer disclosures. NAAA, a
group representing auctioneers, stated the proposal was not workable
for bulk processors like their members. In NAAA's view, creating
thousands of unique signature credentials for each auction would be
both a logistical nightmare and an opportunity for increased fraud. To
address these problems, NAAA suggested NHTSA issue a second notice of
proposed rulemaking incorporating comments from both industry
stakeholders and states before proceeding to a final rule.
    The process of executing an odometer disclosure requires notices,
warnings, and instructions to be read, information to be supplied by
the transferor, acknowledgement and acceptance of the disclosure by the
transferee, and, in paper transactions, a copy of the signed disclosure
statement must be given to the transferor by the transferee. To enable
the needed access to text and other information in electronic
disclosure schemes, NHTSA proposed adding Sec.  580.6(a)(3), stating
any requirement in the regulations to disclose, issue, execute, return,
notify, or otherwise provide information to another person is satisfied
when a copy of the electronic disclosure or statement is electronically
transmitted or otherwise electronically accessible to the party
required to receive the disclosure. Two associations, AAMVA and ESRA,
and two states, California and Virginia, commented on this specific
proposal. AAMVA opposed the proposal, arguing the responsibility to
provide odometer disclosure information resides with the transferee and
transferor and should remain there. AAMVA also contended any
notification requirements should be transaction-based rather than the
process-based individual account method proposed by NHTSA. In AAMVA's
view, the NHTSA proposal would impose additional technology
requirements on states.
    ESRA noted the federal Electronic Signatures in Global National
Commerce Act (``ESIGN'') establishes how a consumer may request a paper
copy of an electronic record. Arguably, therefore, precedence has been
set for permitting vehicle owners to obtain paper copies of e-titling
documents, including odometer disclosures, in any state e-titling
system. California argued states should not be required to provide the
access described, and Virginia stated it had no objections.
    NHTSA explained in the NPRM that it expected implementation of
electronic titling and odometer disclosure systems would occur slowly,
and, for the foreseeable future, both paper and electronic title and
disclosure systems would coexist. As evidenced by the petitions for
approval filed with the agency, individual states are not likely to
shift their entire titling and odometer disclosure systems from paper
to electronic systems at one time, and it is inevitable that interstate
vehicle sales will involve vehicles moving from one type of
jurisdiction to another. The NRPM proposed adding two sections to 580.6
to address the issues posed by the co-existence of paper and electronic
systems. Section 580.6(a)(4) proposed requiring that a prior paper
title and odometer disclosure be copied electronically for retention by
the electronic system state and that the paper document(s) be destroyed
at the time they are converted to electronic documents. Further, the
electronic copy of the paper title would be retained in a system
allowing its retrieval for five years. Section 580.6(a)(6) proposed
that states maintaining an electronic title and odometer disclosure
system shall retain the capacity to issue physical titles meeting all
the requirements of this part. Once a physical title is created by a
state with an electronic title and odometer disclosure statement
system, the electronic record must indicate a physical title has been
issued and the electronic title and disclosure statement have been
superseded by the physical title as the official title.
    The proposal further provided that electronic title and odometer
disclosure systems shall record the date on which the physical title
was issued and record the identity of the recipient of the physical
title as well as the owner(s) named on the physical title. Two
commenters, PCI and ESRA, supported these proposals without substantive
comment. AAMVA noted that use of physical documents should be strongly
discouraged in an electronic disclosure jurisdiction, but exchanging
electronic and paper title records will be necessary. According to
AAMVA, an active electronic title record and an active paper title
cannot coexist. However, AAMVA noted jurisdictions cannot reliably
ensure the destruction of existing physical documents. These paper
titles can be invalidated and the record superseded (as is current
practice), but the new jurisdiction of record has no control over
whether a transferor or transferee destroys the document. AAMVA also
stated that because states are currently required to perform a title
check prior to title transactions to determine if they have the most
current title issued, states already have a process in place to
validate that they are not dealing with an out-of-date or superseding
title.
    NADA concurred in the need for a process to convert ``official'' e-
odometer records to ``official'' paper records and that only state or
their authorized agents should be allowed to do so. In NADA's view,
records of such conversions should be retained. Florida stated the
proposed rules mirror its current practices as it scans and stores
paper titles electronically and converts e-titles to paper for various
reasons. According to Florida, it presently stores the history of title
conversions from one form to another and invalidates the inactive title
while paper titles are printed by Florida or an authorized entity.
Florida, nonetheless, requested NHTSA not dictate that only states can
print titles in the event future developments allow for other means of
producing these secure documents. Florida also noted it would be
difficult for states to ensure paper titles are destroyed after
conversion to electronic titles and suggested that the rule provide
that a prior physical title be destroyed or otherwise rendered void.
California noted its procedure for converting paper titles to
electronic calls for the paper title to be scanned and stored, and the
original is destroyed. However, California felt the five-year storage
requirement proposed in Sec.  580.6(a)(4) is burdensome and suggested a
four-year requirement. Virginia supported the proposals without
substantive comment while Texas also stated the proposals mirrored its
current practice. However, Texas also noted jurisdictions cannot
control the submission of physical documents and would have to prevent
issuance of title until such time the documents were surrendered to
comply with the proposals.
    An individual providing comments, Lopatka, stated NHTSA should
alternatively consider adopting a system by which individual
titleholders may create official physical copies of their own records
from the electronic system. Mr. Lopatka conceded that allowing
individuals to print their own records from the electronic system might
reduce the level of security associated with the transaction to some
degree but that

allowing them to do so would lessen burdens on states implementing
electronic title and disclosure systems.
    Based in part on its experience in processing petitions for
approval of alternative disclosure schemes, NHTSA also proposed a new
Sec.  580.6(a)(5) giving jurisdictions with electronic title and
odometer disclosure systems the option of providing vehicle owners with
a paper record of ownership, including odometer disclosure information,
so long as the document clearly indicates it is not an official title
or odometer disclosure for that vehicle. Almost all commenters
supported this proposal provided the document issued could not be
employed as a counterfeit title. ESRA noted providing a non-negotiable
copy of a paper title is a standard practice in some states supporting
electronic titling programs today. NADA concurred with the proposal,
recognizing that some dealership customers may wish to be provided with
paper printouts. NTSF supported the proposal as this practice is
currently used in some states with electronic lien and title programs
but stated it should not be required. California and Florida also
agreed with the proposal if it remains permissive. Virginia opposed
using the language ``paper record of ownership'' because of potential
fraud and suggested the term ``title receipt.'' Texas also supported
states having this option provided issuing such a document was
discretionary. Lopatka argued against allowing states to provide an
unofficial ownership document, stating that merely requiring clear
disclosure that the physical copy is an unofficial record may be
insufficient to prevent this fraud and abuse.
    The agency's NPRM observed electronic title and odometer disclosure
systems have the potential to reduce opportunities for odometer fraud
by eliminating or reducing the use of paper documents in vehicle
transfers. Nonetheless, the agency's experience in processing petitions
seeking approval of alternative odometer disclosure schemes
demonstrated states may choose to implement electronic title and
odometer disclosure systems in ways that will still require the limited
use of paper documents. To ensure the security of transactions
employing such documents, the NPRM proposed a new section, Sec.
580.6(a)(7), requiring any physical documents used to make odometer
disclosures for entry into and electronic title and odometer disclosure
system to comply with the existing requirements of part 580. AAMVA
agreed to the extent that continued use of physical documents is
necessary in an electronic system, any physical documents used must
comply with regulatory requirements. NADA did not object to the
proposal while California supported it without substantive comment.
Arizona observed the requirements in the proposed Sec. Sec.  580.5(c)
and 580.6(a)(7) appeared to conflict and suggested that Sec.
580.6(a)(7) take precedence and Sec.  580.5(c) be reworded to eliminate
the conflict. Texas stated that it fully supported this proposal,
particularly as it would apply to powers of attorney but encouraged
NHTSA to review other sections of its proposed rules because the agency
believes other sections may imply such a scenario is not permissible.
    Another issue addressed in the NPRM is the need to ensure odometer
disclosure records converted from paper to an electronic form do not
lose their value in that process. The NPRM therefore proposed such a
conversion must maintain and preserve the security features in the
document so alterations or modifications can be detected in the
electronic version. The proposal, found in Sec.  580.6(a)(8), also
required that scanning be made in color at a resolution of 600 dpi.
    Comments received in response to this proposal were unanimously
opposed to the requirement that scanning be conducted at 600 dpi, and
some commenters noted that scanning or imaging need not be in color.
Dealertrack stated that a 600 dpi and color scanning requirement are
well beyond current industry standards and should be reconsidered. NADA
opposed the proposal as unduly burdensome on states and their agents.
In NADA's view, NHTSA should adopt a standard that requires no more
than a black and white scan of 300 dpi PDF, TIFF, or equivalent. OADA
recommended NHSTA not impose any minimum technological standards and
instead leave that to the discretion of the individual state motor
vehicle administrators. AAMVA contended a 600-dpi scan is excessive,
and the NPRM provides no clear evidence or case study to support a
high-resolution standard. According to AAMVA, a 600-dpi resolution
unnecessarily increases the file size to the point that storage and
transmission of title histories sent via email become overly expensive
and burdensome. This burden, AAMVA's view, provides no meaningful
benefit as documents are but one part of establishing an odometer fraud
case.
    ESRA stated NHTSA should take a technology and standard-neutral
position and allow states to choose reasonable standards. NTSF
recommended NHTSA abandon scanning and resolution requirements because
of variations in document and font sizes among states. In NTSF's view,
states already have appropriate scanning resolution requirements, and
NHTSA should leave this issue to state regulation. Arizona stated
scanning documents at the NHTSA proposed resolution would adversely
affect system performance and impose data storage costs and recommended
states retain the ability to balance between system performance and
scanned image quality. In Arizona's view, any requirement should be
limited to requiring detail sufficient to preserve the features of the
original document. California also strongly disagreed with the
proposal, contending the standard be left to states and not set above
200 dpi in black and white. Florida echoed the comments of Arizona and
California, citing greatly increased storage, transmission, and
scanning costs.
    According to Florida, color scans are not optimal, and NHTSA should
allow states to set their own scanning standards. Texas observed
jurisdictions have a strong interest in the accuracy of title records
and bear the responsibility for assuring their validity. According to
Texas, scanning at the proposed resolution in color produced a loss of
visibility to security features, such as the ``VOID'' watermarks, which
are apparent at lower dpi black and white scans. Texas also noted NHTSA
did not impose a dpi requirement when approving its petition for
alternative disclosure, and Texas had been employing a minimum 200 dpi
standard with good results. Texas urged striking any dpi requirement
and allowing jurisdictions to ensure the security of their process,
particularly as the cost of scanning at the NHTSA-proposed resolution
would be prohibitive. Virginia also opposed requiring 600 dpi color
scans for cost and feasibility reasons. In Virginia's view, the
regulation should not set a dpi standard but noted 300 dpi is
reasonable. Lopatka urged the agency to more fully consider if states
must scan physical titles with sufficient resolution to preserve
security features or if preserving details such as the clarity of the
titleholder's signature is sufficient.
    The comments submitted by Texas also suggested adding two more
subsections to 580.8. One of the subsections would provide an
electronic means for completing a transaction where the transferor
holds a physical title that has been lost. According to Texas, adding
this paragraph, which would authorize the transferor to execute an
electronic or physical power of attorney, would save costs and reduce
fraud because it would eliminate the

need for the transferee to obtain a physical title, only to transfer it
electronically and make disclosure electronically. The second addition
put forward by Texas would explicitly state that separate reassignment
documents may not be used with an electronic title. Texas explained
that because electronic titles have no physical limitation on the
number of reassignments that can be incorporated into an electronic
title, a separate reassignment document is not needed and should not be
allowed. Texas also argued allowing physical reassignment documents
with electronic titles could result in increased odometer fraud.
7. Leased Vehicles
    Section 580.7 of part 580, Disclosure of odometer information for
leased motor vehicles, establishes requirements for odometer disclosure
for vehicles which, because of their leased status, are physically
controlled by a lessee while the lessor holds the title. Because these
vehicles are frequently transferred by the lessee to a transferor, this
section establishes special procedures to ensure mileage information is
provided by the lessee to the lessor. The lessor then executes the
odometer disclosure on the title using the information provided by the
lessee unless the lessor believes the lessee's mileage information is
inaccurate. As NHTSA explained in the NPRM, NHTSA is not aware of any
reason why electronic disclosures could not be made for leased
vehicles, and the NPRM proposed revisions which would allow lease
disclosures to be made on paper documents or electronically. Although
the proposal did not require any action on the part of states or other
jurisdictions to accommodate electronic disclosures for leased
vehicles, the NPRM asked for comments on whether such a requirement
should be implemented.
    Commenters submitting responses to this portion of the NPRM
rejected any suggestion that states or other jurisdictions be required
to make any accommodation for leased vehicle disclosures. NTSF
recommended this requirement be left up to states implementing
electronic odometer system. According to NTSF, specific regulations to
be implemented by states may be needed for electronic processing of the
practice by which a lessor can obtain an odometer disclosure from the
lessee. NIADA also stated electronic disclosures for leased vehicles
should be left to states to develop in conjunction with the leasing
companies operating in their jurisdiction. NADA did not address the
role of states but supported the NHTSA proposal to enable electronic
lessor-lessee notices and electronic lessee-lessor disclosures. NADA
also stated minimum requirements for these end-of-lease situations
should be established because leasing companies have been a significant
source of odometer fraud. AAMVA opposed involving states in
transactions made between the lessee and the lessor and that a state's
only involvement should be to accept completed documents. AAMVA also
noted the term ``physical document'' used in the proposed amendments
could create confusion as the proposed definition of this term included
a title, reassignment document, or power of attorney. California also
indicated leased vehicle transactions should only involve lessors and
lessees. Florida noted states were not involved in the leased vehicle
disclosure process and should not be compelled to participate now.
    As observed by AAMVA, Florida also questioned the use of term
``physical document'' in the proposed amendments. Texas found the
proposal to be particularly concerning. Texas rejected any role for
states in this process but observed the use of term ``physical
document'' and language stating leased vehicle disclosure be made
within an ``electronic document'' implicated states (and other title
issuing jurisdictions) because of the specific definitions NHTSA
proposed for these terms in the proposal. In addition, Texas
recommended allowing the lessors to comply with this section without
imposing the security requirements proposed by NHTSA as doing so would
provide a disincentive to adopting an electronic process. Virginia,
unlike any other commenter, supported including electronic disclosures
of leased vehicles as part of the electronic system established by a
jurisdiction but did not elaborate further.
8. Document Retention
    Sections 580.8 and 580.9 include requirements for odometer
disclosure record retention by motor vehicle dealers and distributors
and by auction companies, respectively. The NPRM proposed to amend
these requirements to include electronic copies or electronic documents
as an acceptable form of record. The proposal also added a requirement
in 580.8 that dealer electronic records must be retained in a format
which cannot be altered and which indicates any attempts to alter it.
    The comments addressing this proposal questioned whether extending
the paper record requirements for dealers and auction houses would be
necessary in jurisdictions with electronic title and odometer
disclosure systems because these jurisdictions would be required to
securely store electronic title and odometer disclosure data. Some
commenters also questioned the accuracy of some of the terms proposed
in the amendments. California stated the proposals are not needed
because it maintains the titling record of a vehicle, to which only
authorized access is permitted. Florida supported the proposed