[Federal Register: April 22, 2010 (Volume 75, Number 77)]
[Proposed Rules]
[Page 20965-20974]
[DOCID:fr22ap10-20]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 580

[Docket No. NHTSA-2010-0046; Notice 1]

Petition for Approval of Alternate Odometer Disclosure
Requirements

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

ACTION: Initial determination.

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SUMMARY: The State of Wisconsin has petitioned for approval of
alternate odometer requirements to certain requirements under Federal
odometer law. NHTSA has initially determined that Wisconsin's alternate
requirements satisfy Federal odometer law, with limited exceptions.
Accordingly, NHTSA has preliminarily decided to grant Wisconsin's
petition on condition that before NHTSA makes a final determination,
Wisconsin amends its program to meet all the requirements of Federal
odometer law or demonstrates that it meets the requirements of Federal
law. This document is not a final agency action.

DATES: Comments are due no later than May 24, 2010.

ADDRESSES: You may submit comments [identified by DOT Docket ID Number
NHTSA-2010-0046] by any of the following methods:
     Federal eRulemaking Portal: Go to http://
www.regulations.gov. Follow the online instructions for submitting
comments.
     Mail: Docket Management Facility: U.S. Department of
Transportation, 1200 New Jersey Avenue SE., West Building Ground Floor,
Room W12-140, Washington, DC 20590-0001.
     Hand Delivery or Courier: West Building Ground Floor, Room
W12-140, 1200 New Jersey Avenue, SE., between 9 a.m. and 5 p.m. ET,
Monday through Friday, except Federal holidays.
     Fax:<PHONE_NUMBER>.
    Instructions: For detailed instructions on submitting comments and
additional information on the rulemaking process, see the Public
Participation heading of the Supplementary Information section of this
document. Note that all comments received will be posted without change
to http://www.regulations.gov, including any personal information
provided. Please see the Privacy Act heading below.
    Privacy Act: Anyone is able to search the electronic form of all
comments received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review DOT's
complete Privacy Act Statement in the Federal Register published on
April 11, 2000 (65 FR 19477-78) or you may visit http://
DocketInfo.dot.gov .
    Docket: For access to the docket to read background documents or
comments received, go to http://www.regulations.gov or the street
address listed above. Follow the online instructions for accessing the
dockets.

FOR FURTHER INFORMATION CONTACT: Andrew DiMarsico, Office of the Chief
Counsel, National Highway Traffic Safety Administration, 1200 New
Jersey Avenue, SE., West Building W41-227, Washington, DC 20590
(Telephone:<PHONE_NUMBER>) (Fax:<PHONE_NUMBER>).

SUPPLEMENTARY INFORMATION:

I. Introduction

    Federal odometer law, which is largely based on the Motor Vehicle
Information and Cost Savings Act (Cost Savings Act) \1\ and Truth in
Mileage Act of 1986 \2\, as amended (TIMA), contains a number of
provisions to limit odometer fraud and assure that the purchaser of a
motor vehicle knows the true mileage of the vehicle. The Cost Savings
Act requires the Secretary of Transportation to promulgate regulations
requiring the transferor (seller) of a motor vehicle to provide a
written statement of the vehicle's mileage registered on the odometer
to the transferee (buyer) in connection with the transfer of ownership.
This written statement is generally referred to as the odometer
disclosure statement. Further, under TIMA, vehicle titles themselves
must have a space for the odometer disclosure statement and States are
prohibited from licensing vehicles unless a valid odometer disclosure
statement on the title is signed and dated by the transferor. Titles
must also be printed by a secure printing process or other secure
process. With respect to leased vehicles, TIMA provides that the
regulations promulgated by the Secretary require written mileage
disclosures be made by lessees to lessors upon the lessor's transfer of
the ownership of the leased vehicle. Lessors must also provide written
notice to lessees about odometer disclosure requirements and the
penalties for not complying with them. Federal law also contains
document retention requirements for odometer disclosure statements.
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    \1\ Public Law 92-513, 86 Stat 947, 961 (1972).
    \2\ Public Law 99-579, 100 Stat. 3309 (1986).
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    TIMA's motor vehicle mileage disclosure requirements apply in a
State unless the State has alternate requirements approved by the
Secretary. The Secretary has delegated administration of the odometer
program to NHTSA. Therefore, a State may petition NHTSA for approval of
such alternate odometer disclosure requirements.
    Seeking to implement an electronic vehicle title transfer system,
the State of Wisconsin has petitioned for approval of alternate
odometer disclosure requirements. The Wisconsin Department of
Transportation proposes a paperless odometer disclosure program. Last
year, NHTSA reviewed certain requirements for alternative State
programs and approved the Commonwealth of Virginia's alternate odometer
disclosure program. 74 FR 643, 650 (January 7, 2009). Wisconsin's
program is similar to Virginia's program in some respects and is
broader in scope than Virginia's in others. Like Virginia's program,
transactions involving an out-of-State party are not, in general,
within the scope of Wisconsin's program. Wisconsin Pet. p. 2. Unlike
Virginia's program, which did not apply to transactions for leased
vehicles, Wisconsin's proposal implicates provisions of Federal
odometer law related to these vehicles. Wisconsin Pet. p. 4.
    As discussed below, NHTSA's initial assessment is that the
Wisconsin program satisfies the requirements for approval under Federal
odometer law, subject to resolution of certain concerns.

II. Statutory Background

    NHTSA recently reviewed the statutory background of Federal
odometer law in its consideration and approval of Virginia's petition
for alternate odometer disclosure requirements. See 73 FR 35617 (June
24, 2008) and 74 FR 643 (January 7, 2009). The statutory background of
the Cost Savings Act and TIMA and the purposes behind TIMA, as they
relate to odometer disclosure, other than in the transfer of leased
vehicles and vehicles subject to liens where a power of attorney is
used in the disclosure, are discussed at length in NHTSA's Final
Determination granting Virginia's petition. 74 FR 643, 647-48. A brief
summary of the statutory background of Federal odometer law and the
purposes of TIMA, including odometer disclosure requirements for leased
vehicles, follows.
    In 1972, Congress enacted the Cost Savings Act to, among other
things, prohibit tampering with odometers on motor vehicles and to
establish certain safeguards for the protection of purchasers with
respect to the sale of motor vehicles having altered or reset
odometers. See Public Law 92-513, Sec.  401, 86 Stat. 947, 961-63
(1972). The Cost Savings Act required that, under regulations to be
published by the Secretary, the transferor of a motor vehicle provide a
written vehicle mileage disclosure to the transferee, prohibited
odometer tampering and provided for enforcement. See Public Law 92-513,
Sec.  408, 86 Stat. 947 (1972).\3\ In general, the purpose for the
disclosure was to assist purchasers to know the true mileage of a motor
vehicle.
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    \3\ In general, section 408 states that the Secretary shall
prescribe rules requiring any transferor of a motor vehicle to
provide a written disclosure to the transferee that includes the
cumulative mileage on the odometer and if the odometer reading is
known to be different than the miles the vehicle has actually
traveled, a statement that the actual mileage is unknown.
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    A major shortcoming of the odometer provisions of the Cost Savings
Act was their failure to require that the odometer disclosure statement
be on the vehicle's title. In a number of States, the disclosures were
on separate documents that could be easily altered or discarded and did
not travel with the title. See 74 FR 644. Consequently, the disclosure
statements did not necessarily deter odometer fraud employing altered
documents, discarded titles, and title washing. Id.
    Another significant shortcoming involved leased vehicles. The
lessor is considered the transferor of the vehicle in leased vehicle
sales. Titles to leased vehicles are often transferred without the
lessor obtaining possession of the vehicle. Lessors without direct
access to their vehicles had to rely solely on their lessees to provide
accurate mileage information. However, lessees had no obligation to
provide accurate mileage information to lessors upon vehicle transfer.
This environment facilitated roll backs of odometers.
    Congress enacted TIMA in 1986 to address the Cost Savings Act's
shortcomings. It amended the Cost Savings Act to prohibit States from
licensing vehicles unless the new owner (transferee) submitted a title
from the seller (transferor) containing the seller's signed and dated
vehicle mileage statement. See Public Law 99-579, 100 Stat. 3309
(1986); 74 FR 644 (Jan. 7, 2009). TIMA also prohibits the licensing of
vehicles, for use in any State, unless the title issued to the
transferee is printed using a secure printing process or other secure
process, indicates the vehicle mileage at the time of transfer and
contains additional space for a subsequent mileage disclosure by the
transferee when it is sold again. Id.
    TIMA also required the Secretary to issue regulations regarding
odometer disclosures for leased vehicles.\4\ The regulations
promulgated by the Secretary were to require written mileage
disclosures by lessees to lessors upon the lessor's transfer of the
ownership of the leased vehicle. Lessors must also provide written
notice to lessees about the odometer disclosure requirements and the
penalties for not complying with them. Federal law also contains
document retention requirements for odometer disclosure statements.
TIMA required lessors to retain disclosures made by lessees for at
least four years following the date that the lessor transfers that
vehicle.\5\ Id.
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    \4\ TIMA amended the Cost Savings Act by adding section 408(e)
requiring the Secretary to prescribe rules related to leased
vehicles to ensure written disclosure of the mileage by the lessee
to the lessor upon the lessor's transfer of ownership of the
vehicle. Under these rules, the lessor must provide written notice
of the mileage disclosure requirements and the penalties for failure
to comply with the rules to the lessee.
    \5\ Federal regulations require lessors to retain odometer
disclosure statements received from lessees for a period of five
years. 49 CFR 580.8(b).
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    TIMA added a provision to the Cost Savings Act allowing States to
have alternate odometer disclosure requirements with the approval of
the Secretary of Transportation. Section 408(f) of the Cost Savings Act
states that the odometer disclosure requirements of subsections (d) and
(e)(1) shall apply in a State unless the State has alternate motor
vehicle mileage disclosure requirements approved by the Secretary in
effect. Section 408(f) further states that the 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.
    In 1988, Congress amended section 408(d)(1) 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. Public Law 100-561 Sec.  40, 102
Stat. 2805, 2817 (1988). Congress required that the odometer
disclosures be made on the power of attorney document at the time of
transfer and that the mileage be restated by the person exercising
power of attorney on the title. Id. In addition, the power of attorney
document was to be issued by means of a secure printing process or
other secure process. Id.
    In 1990, Congress amended section 408(d)(1)(C) of the Cost Savings
Act.\6\ The amendment addressed retention of powers of attorneys by
States and provided that the rule adopted by the Secretary not require
that 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).
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    \6\ Section 7(a) of Public Law 101-641 directed that the third
sentence of subsection (d)(2)(C) be amended. However, there was no
subsection (d)(2)(C) in section 408. The amendment was executed to
the third sentence of subsection (d)(1)(C) as the probable intent of
Congress.
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    In 1994, in the course of the recodification of various laws
pertaining to the Department of Transportation, the Cost Savings Act,
as amended, was repealed, reenacted and recodified without substantive
change. See Public Law 103-272, 108 Stat. 745, 1048-1056, 1379, 1387
(1994). The odometer statute is now codified at 49 U.S.C. 32701 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). The
provisions pertaining to approval of State alternate motor vehicle
mileage disclosure requirements were recodified at 49 U.S.C. 32705(d).

III. Statutory Purposes

    As discussed above, the Cost Savings Act, as amended by TIMA in
1986, states that NHTSA ``shall approve alternate motor vehicle mileage
disclosure requirements submitted by a State unless the [NHTSA]
determines that 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 Cost Savings Act were recodified to 49
U.S.C. 32705(b) and (c)). In light of this provision, we now turn to
our interpretation of the purposes of these subsections, as germane to
Wisconsin's petition.
    Our Final Determination granting Virginia's petition for alternate
odometer disclosure requirements identified the purposes of TIMA
germane to petitions for approval of odometer disclosure requirements
that did not include disclosures involving leased vehicles or
disclosures by power of attorney.\7\ 74 FR 643, 647-48 (January 7,
2009). A brief summary of the purposes identified in the Virginia Final
Determination follows. In addition, because the Wisconsin proposal
encompasses transfers of leased vehicles, we identify the purposes of
TIMA relevant to odometer disclosures for those vehicles.
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    \7\ Since Virginia's program did not cover disclosures involving
leased vehicles or disclosures by power of attorney, the purposes of
Sections 408(d)(2)(C) and 408(e) of the Cost Savings Act, as
amended, were not germane and were not addressed in the notice
approving the Virginia program. See 74 FR 647 n. 12.
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A. TIMA's Purposes Relevant to Vehicle Transfers in the Absence of a
Lease Agreement

    One purpose of TIMA is to assure that the form of the odometer
disclosure precludes odometer fraud. 74 FR 647. To prevent odometer
fraud facilitated by disclosure statements that were separate from
titles, TIMA required mileage disclosures to be on a secure vehicle
title instead of a separate document. These titles also had to contain
space for the seller's attested mileage disclosure and a new disclosure
by the purchaser when the vehicle was sold again. This discouraged
mileage alterations on titles and limited opportunities for obtaining
new titles with lower mileage than the actual mileage. Id.
    A second purpose of TIMA is to prevent odometer fraud by processes
and mechanisms making odometer mileage disclosures on the title a
condition of any application for a title, and a requirement for any
title issued by a State. 74 FR 647. This provision was intended to
eliminate or significantly reduce abuses associated with lack of
control of the titling process. Id.
    Third, TIMA sought to prevent alterations of disclosures on titles
and to preclude counterfeit titles through secure processes. 74 FR 648.
In furtherance of these purposes, paper titles (incorporating the
disclosure statement) must be produced using a secure printing process
or protected by ``other secure process.'' \8\ Id.
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    \8\ Congress intended to encourage new technologies by including
the language ``other secure process.'' The House Report accompanying
TIMA noted that ```other secure process' is intended to describe
means other than printing which could securely provide for the
storage and transmittal of title and mileage information.'' H.R.
Rep. No. 99-833, at 33 (1986). ``In adopting this language, the
Committee intends to encourage new technologies which will provide
increased levels of security for titles.'' Id. See also Cost Savings
Act, as amended by TIMA, Sec.  408(d), recodified at 49 U.S.C.
32705(b).
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    A fourth purpose is to create a record of vehicle mileage and a
paper trail. 74 FR 648. The underlying purposes of this record and
paper trail were to better inform consumers and provide mechanisms for
tracing odometer tampering and prosecuting violators. TIMA's
requirement that new applications for titles include signed mileage
disclosure statements on the titles from the prior owners creates a
permanent record that is easily checked by subsequent owners or law
enforcement officials. This record provides critical snapshots of
vehicle mileage at every transfer, which are the fundamental links of
this paper trail.
    Finally, the general purpose of TIMA is to protect consumers by
assuring that they receive valid representations of the vehicle's
actual mileage at the time of transfer based on odometer disclosures.
74 FR 648.

B. TIMA's Purposes Relevant To Leased Vehicles

    TIMA recognized that additional mechanisms were needed to assure
accurate odometer disclosures for leased vehicles. In vehicle leases,
the lessor typically retains ownership of the vehicle, but does not
possess it. The lessor, as a transferor, must comply with Federal
odometer disclosure requirements when it subsequently transfers title
to a leased vehicle. However, prior to TIMA, lessees were not obligated
by Federal odometer law to provide lessors with accurate odometer
disclosure statements. TIMA addressed this issue, as discussed above. A
number of purposes can be derived from TIMA's provisions, discussed
above, relating to the transfer of ownership of leased vehicles.
    One purpose of TIMA's leased vehicle provisions is to assure that
lessors have the vehicle's proper odometer mileage at the time of
transfer.
    A second purpose of TIMA's leased vehicle provisions is to assure
that lessees provide lessors with an odometer disclosure statement.
    A related purpose is to assure that lessees are formally notified
of their odometer disclosure obligations and the penalties for failing
to comply by not providing complete and truthful information.
    A fourth purpose is to set the ground rules for the lessors,
allowing them to indicate on the title the mileage provided by the
lessee, unless the lessor has reason to believe that the disclosure by
the lessee does not reflect the actual mileage of the vehicle.
    A fifth purpose of TIMA's leased vehicle provisions is to create
records and a paper trail. This is an expansion of the fourth general
purpose of TIMA stated above. The paper trail includes the written,
dated and signed odometer disclosure statement by the lessee. Unlike
odometer disclosure statements on vehicle titles that are filed with
the State, a lessee's odometer disclosure statement is separate from
the title and not filed with the State. Instead, the disclosure
statement is sent to the lessor, who must retain a copy for at least
four years. The retention of lessee odometer disclosure statements by
lessors permits law enforcement officials to trace fraudulent
disclosure statements back to lessees, if necessary.
    Last, the overall purpose of TIMA's leased vehicle provisions,
consistent with the general purposes of TIMA, is to ensure that there
are valid representations of the vehicle's actual mileage at the time
of transfer. See H.R. Rep. No. 99-833, at 33 (1986).

IV. The Wisconsin Petition

    Wisconsin, which is in the process of implementing an electronic
title transfer system, petitions for approval of alternate odometer
disclosure requirements. Wisconsin requests alternate disclosure
requirements for transfers of motor vehicles in transactions between
private parties (including motor vehicle dealers), transactions
involving leased vehicles, transactions between parties involving a
lienholder,\9\ and transactions involving private parties without any
lienholder.
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    \9\ Under Wisconsin law, a lienholder does not physically
possess the title to the vehicle; the title remains with the vehicle
owner. Thus, Wisconsin does not permit odometer disclosure by power
of attorney when title is held by a lienholder and does not petition
for alternate requirements regarding odometer disclosure by power of
attorney. Wisconsin does accept a written odometer disclosure by
power of attorney from an out-of-State party that registers the
vehicle in Wisconsin.
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    Recent Wisconsin legislation established that the title, title
application, and other specified information maintained by the DMV in
its database are the original and controlling title record for a
vehicle. See Wis. Stat. Ann. Sec.  342.01(2)(ac) and Sec.  342.09(4)
(2009). Wisconsin proposes to create an electronic odometer

statement (e-Odometer) as the official odometer statement to reside in
the Wisconsin Department of Transportation (WisDOT), Department of
Motor Vehicles (DMV) database. Under the proposal, a distinct e-
Odometer system would be created for accepting and maintaining e-
Odometer statements as stand-alone electronic records, separate from an
electronic title. E-Odometer statements would be linked to, and become
part of the title record in the DMV database. The DMV's titling system
would automatically link the e-Odometer records to a vehicle's title
whenever an electronic title transaction occurs and a title transfer
could not be completed unless a proper odometer disclosure is made in
the e-Odometer entry. According to Wisconsin's petition, if a paper
title is needed, DMV would print it on secure paper with the odometer
disclosure statement in the proper location and format.

A. Overview of Wisconsin's Electronic Titling System

    Wisconsin has implemented a titling system that permits
individuals, organizations and businesses (collectively, DMV Customers)
to process vehicle title transactions electronically through its
automated processing partnership system (APPS) program. See Wis. Admin.
Code Sec.  Trans 1565.01. Under APPS, a vendor \10\ approved by the DMV
\11\ creates a computer system to link or interface DMV customers with
the DMV database. The link permits the DMV customer to access to the
DMV database and conduct authorized title transactions.
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    \10\ According to Wisconsin's petition, a ``vendor'' is a
person, business or organization that contracts with the DMV to
provide a host computer system by which agents may obtain access to
specified information services. Wis. Admin. Code Sec.  Trans
156.02(8). An approved vendor must work with Wisconsin's DMV to
develop an automated interface software application that meets the
automated interface specifications prescribed by DMV. Wis. Admin.
Code Sec.  Trans 156.03(4).
    \11\ In order to become an approved vendor, an entity must
submit an application with certain information to DMV, submit an
approved implementation plan, work with DMV to meet the automated
interface specifications prescribed by DMV and execute a contract
with DMV.
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    In order to become eligible for direct access to the DMV's database
under the vendor system, a DMV customer must enter into an agreement
with an approved vendor, obtain DMV approval to process title
transactions, and enter into a contract with the DMV. To maintain
system security and integrity, employees of DMV customers using the
interface would have to submit a signed affidavit to the DMV before
accessing the system. Once the DMV customer complies with these
requirements, the DMV customer would be able to perform authorized
title transactions directly within DMV's system.
    Currently, Wisconsin requires motor vehicle dealers to
electronically process title transactions for vehicles that they sell.
See Wis. Stat. Ann. Sec.  342.16(1)a and (am) (2009); Wis. Admin. Code
Sec.  Trans 141.01. Motor vehicle dealers can perform electronic
titling transactions through APPS or through an Internet-based
interface with DMV, known as e-MV11. In order to process title
transactions using the e-MV11, a DMV customer must apply to the DMV by
submitting an application setting forth the name, address and contact
of the entity and providing the names and access authority of employees
performing title transactions. After setting up the required security
protocols, the DMV customer can enter the appropriate title
transaction.\12\ Also, under Wisconsin's electronic titling program,
motor vehicle dealers are required to maintain and keep their title
transactions records, including odometer disclosure statements, for
five years. See Wis. Admin. Code Sec.  Trans 141.08(2).
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    \12\ According to Wisconsin's petition, authorized transactions
for amending an electronic odometer record are or will be:
    1. Dealer sales to private buyers, including purchases and
trade-ins from private buyers;
    2. Dealer reassignments to other dealers;
    3. Consignor statement when consigning a vehicle for sale;
    4. Dealer or auction purchase of out-of-State vehicle and
subsequent sale of vehicle with Wisconsin title (Wisconsin could
produce a secure paper title for use by the other State.);
    5. DMV odometer corrections on title;
    6. Involuntary liens from towing/storage, landlord, or mechanic;
    7. Repossessions;
    8. Private sales where title is processed by DMV agent or
financial institution;
    9. Lessee to lessor statement upon relinquishing a leased
vehicle; and
    10. Private sales using e-MVpublic.
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    According to Wisconsin's petition, the electronic titling program
will be expanded to include other persons, businesses and
organizations. These businesses and organizations, such as lienholders
or auction companies, would conduct electronic title transactions
through APPS. Individuals conducting private sales of unencumbered
vehicles would eventually have the ability to perform title transfer
and odometer disclosure through an Internet-based application called e-
MVPublic.

B. Wisconsin's E-Odometer Program

    Wisconsin asserts that e-Odometer entries would provide a virtual
replacement of existing secure paper odometer disclosure statements for
vehicle transactions. Under Wisconsin's proposal, the e-Odometer system
would be a unique electronic application within Wisconsin's electronic
title transfer system. Although the e-Odometer entry would be a stand-
alone secure electronic record, it would be safely and securely
electronically linked to the electronic title record of the vehicle by
the vehicle identification number (VIN) and become part of the vehicle
title. Title transfer could not occur unless the transferor and
transferee, or other authorized persons, such as dealer employees,
perform the required disclosure and acceptance through the e-Odometer
system. Once the odometer disclosure and acceptance is completed, the
statement is stored in the e-Odometer system and linked to the
electronic title record by the VIN.
    The petition states that the following information that will be
stored in the secure e-Odometer record:
    1. VIN;
    2. Description of the vehicle by make, model, model year and body
type;
    3. Odometer reading and date of the reading;
    4. The Brand (actual, not actual or exceeds limits of odometer);
    5. Name, address of person disclosing odometer reading (must match
the transferor);
    6. Name, address of person accepting odometer reading (must match
the transferee); and
    7. Statement reference to Federal law requirement and potential
penalties.
    Some of the e-Odometer information, and other vehicle information,
will be available to DMV personnel through a DMV vehicle inquiry
function, while limited information will be available to the public
through a public inquiry function. The information available to DMV
personnel includes:
    1. Vehicle description;
    2. Title owner information;
    3. Brands, if any;
    4. Most current odometer reading, status and date recorded;
    5. Odometer reading, status and record date history;
    6. Lien information; and
    7. Owner in possession of the vehicle.
    The publicly available information includes:
    1. Vehicle description;
    2. Most current odometer reading, status and date recorded;
    3. Brands, if any; and
    4. Lien information.
    Wisconsin's petition states that amendments or creation of e-
Odometer records would only be possible when titles are transferred in
the course of authorized transactions by authorized persons.

C. Wisconsin E-Odometer Implementation Schedule

    Wisconsin proposes to implement its e-Odometer program in three
phases. Because motor vehicle dealers are already required to complete
title transactions electronically, Wisconsin intends to begin the e-
Odometer program with these dealers. See Wis. Stat. Ann. Sec.
342.16(1)a and (am) (2009); Wis. Admin. Code Sec.  Trans 141.01. The
second phase would implement e-Odometer in title transfers involving
lienholders, motor vehicle auctions, vehicle repossessions, and leases.
The proposal's final phase would implement e-Odometer in transfers of
unencumbered motor vehicles between private individuals. Phase two and
three are still under development and Wisconsin has not provided an
estimated implementation schedule. According to the petition, as e-
Odometer is phased in, Wisconsin will still issue odometer disclosures
on secure printed titles.
1. Phase One: E-Odometer in Dealer Transactions
    Wisconsin's petition states e-Odometer will apply first to motor
vehicle transfers through motor vehicle dealers. During this phase,
eligible title transactions include reassignments among dealers,
consignments and retail sales. In order to complete a transaction,
there must be an odometer disclosure and acceptance of the odometer
statement. The odometer disclosure and acceptance will be permitted
between the following persons: (1) Authorized dealer personnel and an
individual buyer; (2) an individual seller trading in a vehicle and
authorized dealer personnel; (3) authorized dealer personnel in the
case of dealer reassignments; and (4) an individual vehicle owner and
an authorized person on behalf of a consignee in the case of vehicle
consignment. According to Wisconsin, the identities of all persons
involved will be verified and authenticated through DMV's processes.
    Under Wisconsin's proposal, dealer title transfer transactions
would be completed through an APPS's vendor interface application or
the e-MV11 Internet-based application. During these title transfer
transactions, e-Odometer forms will be imported into the transaction
and completed by the authorized persons.
2. Phase 2: E-Odometer in Title Transactions Between Private Parties
Involving Lienholders and Other Commercial Entities
    Wisconsin's petition states that the second phase would incorporate
e-Odometer procedures into title transfers in a number of circumstances
including between private parties when there is a lien on the vehicle.
These title transactions would be processed by the financial
institution holding the lien. During this phase, e-Odometer would be
available to the financial institution through the APPS application or
an application WisDot develops for these lenders. Because lienholders
do not possess titles under Wisconsin law, a satisfied lienholder would
access e-Odometer to electronically release the lien to allow
production of a clear title. To facilitate this process, e-Odometer
forms would be available to buyers and sellers through an Internet
application allowing completion of the required odometer disclosures
and acceptances.
    During this second phase, Wisconsin also proposes to incorporate
use of the e-Odometer system into title transfers involving motor
vehicle auctions, involuntary vehicle transfers (i.e. involuntary liens
and repossessions), corrections to odometer information on titles,
leased vehicles and other transactions involving secure odometer
statements.
3. Phase 3: E-Odometer in Private Sales
    The last phase of Wisconsin's program would incorporate e-Odometer
entries into private sales of unencumbered vehicles. The title transfer
would be conducted through an on-line application called e-
MVPublic.\13\ For private transfers of motor vehicles, odometer
disclosure and acceptance would be accomplished by the seller and buyer
through e-MVPublic once their identities are verified by DMV processes.
---------------------------------------------------------------------------

    \13\ For individuals without Internet access, Wisconsin is
considering providing access to e-MVPublic at its DMV service
centers. At a minimum, Wisconsin states that public libraries offer
public access to computers and the Internet, which would enable
individuals without Internet to use e-Odometer.
---------------------------------------------------------------------------

D. Identity Verification Under Wisconsin E-Odometer

    Wisconsin's petition describes two verification processes whose
operation differs depending on whether the user is a DMV partner or
regular customer (such as a dealer or financial institution) or an
intermittent user. For a DMV partner or regular customer, the first
step is being approved by DMV to access its database. As part of the
approval process, the entity must provide the legal business name and
address of the location of the business. After approval, identity
verification procedures would require these users to enter into an
agreement with the DMV that includes security procedures--including
establishing an account and secure logon ID. The users are identified
and authenticated through a unique ``user ID'' and password that are
traced to a particular person on the account.
    The verification process would be managed by vendors. The Wisconsin
APPS program requires approved vendors to design precise electronic
security and audit trail procedures into its interface, which DMV would
then verify. This interface requires three administrative steps to
identify, authenticate and authorize users of the DMV's database.
First, vendors must create an audit journal to identify the individual
responsible for each transaction. Vendors assign each user a ``user
ID'' that can be traced to the individual user. Next, to authenticate
the user, a password known only to the user that is associated with the
``user ID'' is entered before a transaction is allowed. If an
individual user is not authorized by the vendor for the type of
transaction requested, the system will immediately terminate the
transaction. Last, vendors must authorize the user to access the
appropriate information. In addition to the identification protocols,
vendors must create and maintain access logs that can be used for
auditing and recording keeping, which include, among other things, a
history of each customer transaction.
    Under Wisconsin's proposal, DMV partners and regular customers must
submit the identity of each employee who will conduct title
transactions and specify each employee's authority to perform
transactions in DMV's database. Each employee must submit a signed
affidavit acknowledging security procedures and safeguards prior to
obtaining authorization from the DMV to conduct title transfer
transactions. DMV must confirm each user's authorization before the
user can process title transactions.
    For individuals who are not DMV partners or regular customers,
Wisconsin would require individuals to establish an electronic
signature that can uniquely identify the person. Identity verification
begins with the customer entering a minimum of three personal
identifiers for the correct customer record in the DMV database.
Personal identifiers include name, address, date of birth, product
number, Driver License/ID number, a Federal Employer Identification
Number, or

partial Social Security Number (possibly the last four or five
digits).\14\ After the user inputs the personal identifiers into the
system, the system will check DMV customer records and verify that the
user is the correct individual or business and will authorize the
customer to update the odometer statement. Once the user is verified,
the user can begin the title transaction.
---------------------------------------------------------------------------

    \14\ Wisconsin prohibits nonresidents from applying for a
Wisconsin title, except in certain limited exceptions. See Wis.
Admin. Code Sec.  Trans 154.13(2). A nonresident who is eligible to
apply for a Wisconsin title will not be considered a DMV partner or
regular customer. These nonresidents will be subject to the e-
Odometer requirements as long as the vehicle is titled and
transferred within Wisconsin.
---------------------------------------------------------------------------

E. Odometer Disclosure Under Wisconsin E-Odometer

    Wisconsin's petition states that two parties must engage in an
authorized e-Odometer transaction to effectuate the odometer
disclosure. In order to conduct the e-Odometer disclosure, each party
will access the DMV database by providing information to satisfy the
identity verification requirements of the system and the VIN of the
vehicle. Under Wisconsin's proposal, a transferor must disclose the
odometer reading and brand (actual/not actual/exceeding odometer
limits) and the transferee must accept the odometer reading to allow
the transaction to go forward.\15\ The e-Odometer transaction will
remain in a pending status between the transferor and transferee until
each party completes the required actions, e.g., disclosure by the
seller and acceptance by the buyer. Once both actions have been
accomplished, the e-Odometer record will be secured within DMV's
database and become part of the electronic title through the VIN.
---------------------------------------------------------------------------

    \15\ Wisconsin states that there are a limited number of
exceptions under Wisconsin law and e-Odometer to the requirement for
two parties to engage in a transaction to update a title. One
exception is involuntary transfer of the vehicle through
repossession by a financial institution in which the title is issued
to the financial institution. This exception is permissible under
Federal odometer law because repossession is not a transfer of
ownership and does not require an odometer disclosure statement. See
49 CFR 580.3. Another exception is when the seller is not available.
If the seller is not available, the DMV database permits the
transferee to state the odometer reading with a brand of ``not
actual.'' If the transferor becomes available to make the
disclosure, DMV would change the recorded status to ``actual.'' This
exception does not conform to Federal odometer law, which requires
an odometer disclosure statement, including the brand, at the time
of transfer of ownership. 49 U.S.C. 32705(a)(1); 49 CFR 580.5(a).
Federal odometer law does not permit subsequent alterations to the
brand as contemplated by Wisconsin. NHTSA believes that permitting
such an exception could create a loophole that would be abused.
---------------------------------------------------------------------------

    To clarify the e-Odometer procedure, Wisconsin provides an exemplar
title transaction involving a dealer trade-in. In a vehicle trade-in
transaction, the customer (transferor) must bring the paper title to
the dealer (transferee) at the time of the transferor. After entering
all the required data in the Wisconsin electronic title system and
initiating the e-Odometer process, the dealer would then destroy the
paper title.\16\ Under the e-Odometer process, the customer discloses
the odometer reading (and brand) and the dealer accepts the odometer
reading. The vehicle's odometer reading is then stored in the DMV
database and linked virtually to the vehicle's title through the VIN.
Upon later sale of the trade-in vehicle, the dealer (as the transferor)
must disclose the odometer reading (and brand) and the vehicle buyer
(as the transferee) must accept the odometer reading. The dealer and
buyer will access e-Odometer at the time of the sale to complete the
disclosure and acceptance of the odometer statement, which upon
acceptance by the buyer secures the odometer statement in the DMV's
database. After the sale of the vehicle is completed, the dealer
completes title processing in APPS or e-MV11 by titling the vehicle in
the consumer's name, verifying that secure odometer disclosure has been
completed. After titling is complete, the updated e-Odometer entry
becomes part of the title record. For in-State transactions, a paper
title is issued only upon request.
---------------------------------------------------------------------------

    \16\ According to Wisconsin, the dealer's failure to destroy the
title subjects the dealer to civil penalties and other sanctions,
such as license suspension or removal.
---------------------------------------------------------------------------

F. Wisconsin's Position on Meeting the Purposes of TIMA

    Wisconsin contends that its e-Odometer program meets the purposes
of TIMA, as described by NHTSA in its Final Determination on the
Commonwealth of Virginia's petition for alternate odometer disclosure
requirements. See 74 FR 643, 647-48 (January 7, 2009).
    Wisconsin's petition states that e-Odometer is part of the
vehicle's title. Under e-Odometer, the VIN links the odometer statement
to the title record. The system automatically imports e-Odometer into
the title transfer transaction process conducted by the transferor and
transferee. A title transaction cannot occur, unless the odometer
disclosure statement is made and accepted. The e-Odometer information
is then secured, stored, and becomes visible through the vehicle's
electronic title record.
    According to the petition, other system requirements provide a
significant level of security for the e-Odometer system. First, title
transfer cannot occur unless the authorized persons update e-Odometer
entries. Second, only those persons authorized to make title transfer
transactions (e.g. authorized dealer personnel or authenticated private
owners) are able to make e-Odometer statements. Third, odometer
disclosure under the e-Odometer system is only permitted when a title
is transferred.\17\ If a title is required to be printed on a secure
title paper, the DMV system will automatically include the odometer
disclosure information on the printed title. If a title on secure title
paper is used in a vehicle transfer, the odometer information shown on
the secure paper title will be entered into the e-Odometer electronic
record during the title transfer transaction process and the paper
title will be destroyed.
---------------------------------------------------------------------------

    \17\ As noted above, there are some exceptions under Wisconsin
law.
---------------------------------------------------------------------------

    Wisconsin's petition also states that odometer disclosure is a
required data input for application for a title and a required output
on the title. According to the petition, the odometer disclosure and
acceptance is a required input to an electronic title transaction,
whether performed through APPS or e-MV11. Although APPS permits
odometer disclosure and acceptance at different times, e-Odometer
secures the disclosure and acceptance and stores it electronically
until the odometer disclosure is imported during title processing.
    Wisconsin's petition asserts that e-Odometer provides an equivalent
level of security against altering, tampering, and counterfeiting as
the odometer statement on a secure paper title. According to Wisconsin,
the e-Odometer statement is secured in the DMV database, as soon as the
transferor electronically discloses and the transferee accepts the
odometer reading. After the transferee accepts the odometer disclosure,
e-Odometer stores that mileage disclosure, the date, the names and
addresses of the transferor and transferee, and will not allow any
changes to that entry.
    Finally, Wisconsin's petition contends that the authentication and
verification of the transferor's and transferee's electronic signatures
are readily detectable and reliably traced to the particular
individual. Wisconsin states that the DMV has established extensive
security procedures for vendors who process vehicle transactions on
behalf of DMV and

regularly interact with DMV, and for individuals and intermittent
business customers who wish to make entries in DMV records. Wisconsin's
security procedures are governed under Wisconsin statutes,
administrative rules, contracts, DMV policy and procedure, and
electronic security protocols. DMV Partners and regular business
customers will access the e-Odometer system through secure applications
that are already in use for vehicle title transactions. Individuals and
intermittent business customers will access the e-Odometer system
through a secure Internet application. Both applications require
information, such as electronic signatures, that can authenticate and
verify the users' identity.

IV. Analysis

    Under TIMA, NHTSA ``shall approve alternate motor vehicle mileage
disclosure requirements submitted by a State unless the [NHTSA]
determines that such requirements are not consistent with the purpose
of the disclosure required by subsection (d) or (e) as the case may
be.'' The purposes are discussed above, as is the Wisconsin
alternative. We now provide our initial assessment whether Wisconsin's
proposal satisfies TIMA's purposes as relevant to its petition.\18\
---------------------------------------------------------------------------

    \18\ Wisconsin would continue to be subject to all Federal
requirements that are not based on Section 408(d) and (e) of the
Cost Savings Act as amended, recodified at 49 U.S.C. 32705(b) and
(c).
---------------------------------------------------------------------------

A. Wisconsin's Proposal in Light of TIMA's Purposes Regarding Vehicle
Transfers Other Than Those Involving a Lease Agreement

    One purpose is to assure that the form of the odometer disclosure
precludes odometer fraud. In this regard, NHTSA has initially
determined that Wisconsin's proposed alternate disclosure requirements
satisfy this purpose. Under Wisconsin's proposal, a required part of
the data to be entered in the transfer of title is the vehicle's
odometer reading. The reading is disclosed by the transferor and
accepted by the transferee. Thereafter the odometer disclosure
statement will reside as an electronic record within the DMV database
that will be linked to the vehicle's title, also an electronic record,
by the VIN. Thus, the odometer disclosure is a required element
pertaining to and part of the title record in the DMV database. If a
hard copy of the title is needed, Wisconsin can generate a title with
the odometer disclosure statement on the title using a secure printing
process. Wisconsin's proposed system would, therefore, have the
odometer disclosure as part of the vehicle title as required by TIMA.
As to TIMA's requirement that the title contain a space for the
transferor to disclose the vehicle's mileage, NHTSA believes the
proposed Wisconsin electronic title and odometer system would provide
an electronic equivalent to these requirements for use in a subsequent
sale of the vehicle. The agency expects that hard copies of electronic
titles will continue to provide a separate space for owners to execute
a proper odometer disclosure in keeping with TIMA and current
practice.\19\
---------------------------------------------------------------------------

    \19\ Wisconsin notes that paper titles will be produced for
title transfer transactions that involve out-of-State parties, such
as a vehicle sale to an out-of State dealer or retail purchaser, an
auction sale to an out-of-State dealer or a retail consumer in
Wisconsin that requests a paper title.
---------------------------------------------------------------------------

    Another purpose of TIMA is to prevent odometer fraud by processes
and mechanisms making the disclosure of an odometer mileage on the
title a condition for the application for a title and a requirement for
the title issued by the State. With one exception, NHTSA has initially
determined that Wisconsin's proposed process satisfies this purpose.
Wisconsin's proposed on-line title transfer process requires disclosure
and acceptance of odometer information before the transaction can be
completed. If the transaction is successful, DMV's system will create
or amend an electronic title and store the linked electronic odometer
statement. A new title will not be issued without entry of the odometer
disclosure and acceptance of it.
    The exception concerns Wisconsin's proposal to permit the
alteration of the brand on an electronic odometer statement when the
seller of the vehicle is unavailable at the time of the transfer of
ownership. According to Wisconsin's petition, if the seller is not
available, the DMV database permits the transferee to state the
odometer reading with a brand of ``not actual.'' If the transferor
becomes available to make the disclosure and does so, DMV would change
the recorded status to ``actual.'' As noted above, such a subsequent
change to the title does not conform to Federal odometer law, which
requires an odometer disclosure statement, including the brand, to be
made at the time of transfer. 49 U.S.C. 32705(a)(1); 49 CFR 580.5(a).
The requirement to state the actual mileage and brand at the time of
transfer is not based on section 408(d) and (e) of the Cost Savings Act
as amended, recodified at 49 U.S.C. 32705(b) and (c).\20\ Accordingly,
we have decided to grant Wisconsin's petition on the condition that
Wisconsin conforms its program to the requirements of Federal odometer
law or fully explains how exceptions, such as the one for the
unavailable seller, complies with the law and its purposes.
---------------------------------------------------------------------------

    \20\ The requirement to provide a brand at the time of vehicle
transfer is based upon section 408(a) of the Cost Savings Act as
amended, recodified at 49 U.S.C. 32705(a).
---------------------------------------------------------------------------

    Another purpose of TIMA is to prevent alterations of disclosures on
titles and to preclude counterfeit titles through secure processes. The
agency has initially determined that Wisconsin's alternate disclosure
requirements appear to be as secure as current paper titles. As we
understand Wisconsin's proposal, the odometer statement is disclosed by
the transferor and accepted by the transferee, and thereafter the DMV
database system stores an electronic version of the odometer statement.
Assuming that the e-Odometer database is maintained with appropriate
levels of security, electronic recording of odometer readings and
disclosures would be maintained in a way in which alteration is
unlikely. The odometer reading, which would be linked to the electronic
title record by the VIN, cannot be altered except when it is updated
during the title transfer process by authorized users. On subsequent
title transfers, the transferor and transferee would have to complete
the odometer disclosure and acceptance for the transaction to be
completed.
    When fully implemented, all subsequent title transfers will be
performed through the APPS or e-MV11, or other secure on-line process.
Each time an on-line title transfer occurs, the DMV database system
stores the electronic version of the odometer statement. The DMV will
issue a paper title only when necessary, e.g., title transfer
transactions that involve out-of-State parties. Since the title and
odometer statement remain in electronic form under State care and
custody, the likelihood of an individual altering, tampering or
counterfeiting the title or odometer statement is significantly
decreased. These electronic records would be maintained in a secure
environment and any unauthorized access would be detected by the
system. Moreover, under Wisconsin law, the electronic title record is
the official and controlling title. If a conflict exists between the
electronic title and a paper title, the paper title is void.
    Another purpose of TIMA is to create a record of the mileage on
vehicles and a paper trail. The underlying purposes of this record
trail are to enable consumers to be better informed and provide a
mechanism through which

odometer tampering can be traced and violators prosecuted. In NHTSA's
preliminary view, the proposed Wisconsin's electronic title transfer
system will create a scheme of records, equivalent to the current
``paper trail,'' that assists law enforcement in identifying and
prosecuting odometer fraud. Under the Wisconsin proposal, creation of a
paper trail starts with the requirement for certain DMV customers to
process title transactions through the APPS program. Under APPS, a DMV
customer must sign a written agreement with DMV that includes security
procedures, an account and a secure logon ID. DMV customers also must
provide DMV with the names of the individuals authorized to conduct
transactions in APPS. These individuals are issued a secure logon ID
and password that can be traced by DMV to their transactions. In
addition, APPS vendors must create security protocols that include an
audit journal that can identify each person responsible for each title
transaction. Vendors must also provide DMV with a daily report
detailing all security violations. Furthermore, Wisconsin requires
motor vehicle dealers to retain copies of electronic titles for motor
vehicles owned and offered for sale and odometer statements received
and given for a period of 5 years.\21\
---------------------------------------------------------------------------

    \21\ Wisconsin indicates that its e-Odometer system will permit
motor vehicle dealers the ability to retain copies of all odometer
disclosure statements received or given by the dealers.
---------------------------------------------------------------------------

    For individuals not using APPS, the identity verification
procedures require the establishment of electronic signatures of the
parties. Due to the system's procedures for validating and
authenticating the electronic signature of each individual through
DMV's database, the electronic signatures of the transferor and
transferee are reliable, readily detectable and can easily be linked to
particular individuals.\22\ Because the electronic signature consists
of data elements such as the name, address, date of birth, product
number, driver license or identification card number, Federal Employer
Identification Number, or the last four or five digits of the
individual's Social Security number, Wisconsin's e-Odometer system can
validate and authenticate individual electronic signatures. This
authentication process also allows Wisconsin to trace the individuals
involved in the transaction. This capacity maintains the purposes of
creating a paper trail since the Wisconsin system will have a history
of each vehicle's title transfer and odometer disclosure. These
electronic records will create the electronic equivalent to a paper
based system that will be readily available to law enforcement.
---------------------------------------------------------------------------

    \22\ Electronic signatures are generally valid under applicable
law. Congress recognized the growing importance of electronic
signatures in interstate commerce when it enacted the Electronic
Signatures in Global and National Commerce Act (E-Sign). See Public
Law 106-229, 114 Stat. 464 (2000). E-Sign established a general rule
of validity for electronic records and electronic signatures. 15
U.S.C. 7001. It also encourages the use of electronic signatures in
commerce, both in private transactions and transactions involving
the Federal government. 15 U.S.C. 7031(a).
---------------------------------------------------------------------------

    Whether Wisconsin's program conforms to TIMA's overall purpose is
discussed in subpart C below.

B. Wisconsin's Proposal in Light of TIMA's Purposes Relevant to Leased
Vehicles

    One purpose of TIMA's leased vehicle provisions is to assure that
the lessor has the vehicle's odometer mileage at the time the lessor
transfers ownership. The agency has initially determined that the
Wisconsin alternate disclosure requirements satisfy this purpose. As we
understand Wisconsin's proposal, the State proposes to require vehicle
lessees to submit the electronic odometer statement to their lessors
when relinquishing the leased vehicle. The lessee's odometer statement
will be stored in the DMV database and linked to the leased vehicle by
the VIN. Once stored in the DMV database, the odometer statement is
secured and recorded and made available to the lessor. On subsequent
transfer of the vehicle by the lessor, the odometer disclosure
statement from the lessee would be available in the e-Odometer system
for acceptance by the subsequent transferee. The subsequent transferee
would have to accept the odometer disclosure reading in the e-Odometer
entry before the transaction could be completed and for title to
transfer.
    A second purpose of TIMA's leased vehicle provisions is to assure
that the lessee provides the lessor with an odometer disclosure
statement regarding the mileage of the vehicle. As discussed above, the
lessee would provide it via the DMV data base.
    A related purpose is to assure that lessees are formally notified
of their odometer disclosure obligations to the lessor and the
penalties for failing to comply by not providing complete and truthful
information. As described in the Petition, Wisconsin's alternate
disclosure requirements do not address this purpose. However, we note
that Wisconsin's leased vehicle odometer disclosure regulations
parallel 49 U.S.C. 32705(c)(2) and 49 CFR 580.7 by requiring that
lessors notify lessees of their odometer disclosure obligations. See
Wis. Admin. Code Trans 154.7 (2009). Lessors may meet this notification
requirement without using the electronic system proposed by Wisconsin.
The lessors' obligations should be clearly stated.
    A fourth purpose is to set the ground rules for the lessors,
allowing them to indicate on the title the mileage provided by the
lessee, unless the lessor has reason to believe that the disclosure by
the lessee does not reflect the actual mileage of the vehicle. We have
initially determined that Wisconsin's proposal meets this purpose. As
noted previously, a lessee will make the required odometer disclosure
to the lessor in e-Odometer upon relinquishing the leased vehicle. The
lessor may use this statement in a subsequent title transfer, unless
the lessor has reason to believe that the lessee's statement does not
reflect the vehicle's actual mileage, in which case, the lessor must
brand the title accordingly. We believe that Wisconsin must provide for
this branding information--that the lessor has reason to believe that
the disclosure by the lessee does not reflect the actual mileage of the
vehicle--in its proposed system.
    A fifth purpose of TIMA's leased vehicle provisions is to create
records and a paper trail. The paper trail includes the written, dated
and signed odometer disclosure statement by the lessee. The agency has
initially determined that the Wisconsin alternate disclosure
requirements satisfy this purpose. Under Wisconsin's proposal, as we
understand it, both the lessee and the lessor are required to make the
odometer disclosure electronically in e-Odometer.\23\ The lessee will
make the odometer disclosure in e-Odometer, which will be stored in the
DMV database and linked to the leased vehicle by the VIN. The lessor
will have to accept it to complete the transaction. On subsequent
transfer of the vehicle by the lessor, the lessor can use the lessee's
odometer disclosure statement, which is available in the e-Odometer
system, to certify the actual mileage of the leased vehicle. The
subsequent transferee would have to accept the odometer disclosure
reading in the e-Odometer entry before the transaction could be
completed and for title to transfer. It would then be stored.
Wisconsin's electronic odometer disclosure system would create a scheme
of records

equivalent to the current ``paper trail'' now assisting consumers in
reviewing mileages on used vehicles and law enforcement in identifying
and prosecuting odometer fraud. A copy of the odometer disclosure
statement could be retained by the lessor.\24\ With the use of the APPS
system to identify parties to the odometer disclosure and the use of
electronic signatures to identify individuals not in the APPS system,
the Wisconsin DMV will have the capacity to trace a particular lessee
who makes a fraudulent odometer disclosure during the lessor/lessee
transaction.
---------------------------------------------------------------------------

    \23\ As we understand Wisconsin's program, a nonresident lessee
who titles a vehicle in a different State, but leases the vehicle
from a Wisconsin lessor, is outside the scope of the e-Odometer
system. In such a scenario, the nonresident lessee is required to
provide a written odometer disclosure statement to the lessor.
    \24\ We note that, unlike retention requirements for motor
vehicle dealers, Wisconsin's petition does not address whether
lessors are required to retain copies of odometer disclosure made
through e-Odometer that they issue and receive. We have concluded
that lessors will continue to be subject to the retention
requirements as set forth in 49 CFR 580.8(b), which requires lessors
to retain a copy of odometer disclosure statements that they issue
and receive for five years. We note that Wisconsin's odometer
disclosure regulations require lessors to retain a copy of odometer
disclosure statements for five years. See Wis. Admin. Code Sec.
Trans 15412(2). We have tentatively concluded that Wisconsin must
create a mechanism for lessors to retain odometer disclosure
statements from lessees in order for lessors to comply with TIMA.
---------------------------------------------------------------------------

    The overall purpose of TIMA's leased vehicle provisions is to
ensure that vehicles subject to long-term leases have adequate odometer
disclosure statements executed on titles at the time of transfer. The
agency has initially determined that Wisconsin's proposal meets TIMA's
overall requirement. Upon the termination of the lease, a lessee will
be required to make an odometer disclosure statement in e-Odometer.
This electronic disclosure is equivalent to a paper odometer disclosure
statement and provides the same assurances. The lessee's odometer
statement will be secured and stored in Wisconsin's DMV database.
Because the odometer statement is electronically stored in a secure
environment, the statement, unlike a paper version, cannot be altered,
changed or lost, further enhancing the validity of the statement. In
addition, with the identity verification of the e-Odometer system, the
lessee can be traced to the odometer statement for a particular
vehicle. Last, upon transfer of the vehicle by the lessor, the
transferee has the opportunity to review the odometer statement in the
DMV's database and accept it (or reject it) prior to the transfer of
the vehicle's title.

C. Wisconsin's Proposal in Light of TIMA's Overall Purpose

    TIMA's overall purpose is to protect consumers by assuring that
they receive valid odometer disclosures representing a vehicle's actual
mileage at the time of transfer. Here, Wisconsin's proposed alternate
disclosure requirements include characteristics that would assure that
representations of a vehicle's actual mileage would be as valid as
those found in current paper title transfers. Identity authentication,
maintenance in a secure electronic environment and transferee
verification of the mileage data reported by the transferor all help to
ensure valid disclosures. In addition, by providing rapid access to
records of past transfers and by maintaining audit logs of each and
every title transfer transaction, the scheme proposed by Wisconsin
could potentially provide a superior deterrent to odometer fraud.
Furthermore, Wisconsin's proposal offers the public the opportunity to
view the most recent odometer reading and date of that reading through
an Internet application. A prospective purchaser can access the public
e-Odometer information to assess a vehicle's true value by comparing
the vehicle's current odometer reading to the electronic record stored
with the DMV.

V. NHTSA's Initial Determination

    For the foregoing reasons, NHTSA preliminarily grants Wisconsin's
petition regarding proposed alternate disclosure requirements with
respect to vehicle transfers, subject to resolution of certain issues.
As noted above, an issue is how the proposed Wisconsin system would
manage disclosure when the seller is unavailable. Second, as explained
above, we have tentatively concluded that Wisconsin will need to amend
its program to permit lessors to retain each odometer disclosure
statement they give and receive. The Agency also asks that Wisconsin
clarify the system's ability to allow lessors to place a different
brand on the disclosure statement in those instances where the lessor
believes, or has reason to believe, that the statement provided by the
lessee is inaccurate. During the comment period, we expect Wisconsin to
submit additional information demonstrating how its program satisfies
these concerns or that its program has been amended to satisfy these
concerns.
    This is not a final agency action. NHTSA invites public comments
within the scope of this notice. Should NHTSA decide to issue a final
grant of Wisconsin's petition, it would likely reserve the right to
rescind that grant in the event that future information indicates that,
in operation, Wisconsin's alternate disclosure requirements do not
satisfy applicable standards.

Request for Comments

How Do I Prepare and Submit Comments?

    Your comments must be written and in English. To ensure that your
comments are filed correctly in the Docket, please include the docket
number of this document in your comments.
    Your comments must not be more than 15 pages long (see 49 CFR
553.21). We established this limit to encourage you to write your
primary comments in a concise fashion. However, you may attach
necessary additional documents to your comments. There is no limit on
the length of the attachments.
    Please submit two copies of your comments, including the
attachments, to Docket Management at the address given under ADDRESSES.
    You may also submit your comments to the docket electronically by
logging onto the Dockets Management System Web site at http://
dms.dot.gov. Click on ``Help & Information,'' or ``Help/Info'' to
obtain instructions for filing the document electronically.

How Can I Be Sure That My Comments Were Received?

    If you wish Docket Management to notify you upon its receipt of
your comments, enclose a self-addressed, stamped postcard in the
envelope containing your comments. Upon receiving your comments, Docket
Management will return the postcard by mail.

How Do I Submit Confidential Business Information?

    If you wish to submit any information under a claim of
confidentiality, you should submit three copies of your complete
submission, including the information you claim to be confidential
business information, to the Chief Counsel, NHTSA, at the address given
above under FOR FURTHER INFORMATION CONTACT. In addition, you should
submit two copies, from which you have deleted the claimed confidential
business information, to Docket Management at the address given above
under ADDRESSES. When you send a comment containing information claimed
to be confidential business information, you should include a cover
letter setting forth the information specified in our confidential
business information regulation (49 CFR Part 512).

Will the Agency Consider Late Comments?

    We will consider all comments that Docket Management receives
before the

close of business on the comment closing date indicated above under
DATES. To the extent possible, we also will consider comments that
Docket Management receives after that date. If Docket Management
receives a comment too late for us to consider it in developing the
final rule, we will consider that comment as an informal suggestion for
future rulemaking action.

How Can I Read the Comments Submitted by Other People?

    You may read the comments received by Docket Management at the
address given under ADDRESSES. The hours of the Docket are indicated
above in the same location.
    You also may see the comments on the Internet. To read the comments
on the Internet, go to http://www.regulations.gov, and follow the
instructions for accessing the Docket.
    Please note that even after the comment closing date, we will
continue to file relevant information in the Docket as it becomes
available. Further, some people may submit late comments. Accordingly,
we recommend that you periodically check the Docket for new material.

    Issued on: April 7, 2010.
O. Kevin Vincent,
Chief Counsel.
[FR Doc. 2010-8321 Filed 4-21-10; 8:45 am]
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[Federal Register Volume 86, Number 132 (Wednesday, July 14, 2021)]
[Notices]
[Pages 37159-37160]
[FR Doc No: 2021-14938]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2019-D-3361]

Eligibility Criteria for Expanded Conditional Approval of New
Animal Drugs; Guidance for Industry; Availability

AGENCY: Food and Drug Administration, Health and Human Services (HHS).

ACTION: Notice of availability.

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SUMMARY: The Food and Drug Administration (FDA or Agency) is announcing
the availability of final guidance for industry (GFI) #261 entitled
``Eligibility Criteria for Expanded Conditional Approval of New Animal
Drugs.'' This guidance is intended for sponsors and potential sponsors
who may be interested in pursuing conditional approval of new animal
drugs for certain major uses in major species. Eligibility for
conditional approval has been expanded beyond minor uses in major
species and use in minor species (MUMS) to include certain major uses
in major species. The Center for Veterinary Medicine (CVM or we) refers
to the process for conditionally approving new animal drugs that are
not intended for MUMS indications as ``expanded conditional approval.''
The purpose of expanded conditional approval is to incentivize
development of new animal drugs for serious or life-threatening
conditions or unmet animal or human health needs under circumstances
where a demonstration of effectiveness would require a complex or
particularly difficult study or studies. This guidance defines certain
terms, clarifies the eligibility criteria for expanded conditional
approval, and describes the criteria CVM intends to consider when
determining expanded conditional approval eligibility.

DATES: The announcement of the guidance is published in the Federal
Register on July 14, 2021.

ADDRESSES: You may submit either electronic or written comments on
Agency guidances at any time as follows:

Electronic Submissions

    Submit electronic comments in the following way:
     Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments. Comments submitted
electronically, including attachments, to https://www.regulations.gov
will be posted to the docket unchanged. Because your comment will be
made public, you are solely responsible for ensuring that your comment
does not include any confidential information that you or a third party
may not wish to be posted, such as medical information, your or anyone
else's Social Security number, or confidential business information,
such as a manufacturing process. Please note that if you include your
name, contact information, or other information that identifies you in
the body of your comments, that information will be posted on https://www.regulations.gov.
     If you want to submit a comment with confidential
information that you do not wish to be made available to the public,
submit the comment as a written/paper submission and in the manner
detailed (see ``Written/Paper Submissions'' and ``Instructions'').

Written/Paper Submissions

    Submit written/paper submissions as follows:
     Mail/Hand Delivery/Courier (for written/paper
submissions): Dockets Management Staff (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
     For written/paper comments submitted to the Dockets
Management Staff, FDA will post your comment, as well as any
attachments, except for information submitted, marked and identified,
as confidential, if submitted as detailed in ``Instructions.''
    Instructions: All submissions received must include the Docket No.
FDA-2019-D-3361 for ``Eligibility Criteria for Expanded Conditional
Approval of New Animal Drugs.'' Received comments will be placed in the
docket and, except for those submitted as ``Confidential Submissions,''
publicly viewable at https://www.regulations.gov or at the Dockets
Management Staff between 9 a.m. and 4 p.m., Monday through Friday, 240-
402-7500.
     Confidential Submissions--To submit a comment with
confidential information that you do not wish to be made publicly
available, submit your comments only as a written/paper submission. You
should submit two copies total. One copy will include the information
you claim to be confidential with a heading or cover note that states
``THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.'' The Agency will
review this copy, including the claimed confidential information, in
its consideration of comments. The second copy, which will have the
claimed confidential information redacted/blacked out, will be
available for public viewing and posted on https://www.regulations.gov.
Submit both copies to the Dockets Management

Staff. If you do not wish your name and contact information to be made
publicly available, you can provide this information on the cover sheet
and not in the body of your comments and you must identify this
information as ``confidential.'' Any information marked as
``confidential'' will not be disclosed except in accordance with 21 CFR
10.20 and other applicable disclosure law. For more information about
FDA's posting of comments to public dockets, see 80 FR 56469, September
18, 2015, or access the information at: https://www.govinfo.gov/content/pkg/FR-2015-09-18/pdf/2015-23389.pdf.
    Docket: For access to the docket to read background documents or
the electronic and written/paper comments received, go to https://www.regulations.gov and insert the docket number, found in brackets in
the heading of this document, into the ``Search'' box and follow the
prompts and/or go to the Dockets Management Staff, 5630 Fishers Lane,
Rm. 1061, Rockville, MD 20852,<PHONE_NUMBER>.
    You may submit comments on any guidance at any time (see 21 CFR
10.115(g)(5)).
    Submit written requests for single copies of the guidance to the
Policy and Regulations Staff (HFV-6), Center for Veterinary Medicine,
Food and Drug Administration, 7500 Standish Pl., Rockville, MD 20855.
Send one self-addressed adhesive label to assist that office in
processing your requests. See the SUPPLEMENTARY INFORMATION section for
electronic access to the guidance document.

FOR FURTHER INFORMATION CONTACT: Christopher Loss, Center for
Veterinary Medicine (HFV-116), Food and Drug Administration, 7500
Standish Pl., Rockville, MD 20855,<PHONE_NUMBER>,
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Background

    In the Federal Register of September 30, 2019 (84 FR 51594), FDA
published the notice of availability for a draft guidance entitled
``Eligibility Criteria for Expanded Conditional Approval of New Animal
Drugs'' giving interested persons until January 28, 2020, to comment on
the draft guidance. FDA received a few comments on the draft guidance
and those comments were considered as the guidance was finalized.
Editorial changes were made to improve clarity. The guidance announced
in this notice finalizes the draft guidance dated September 2019.
    This level 1 guidance is being issued consistent with FDA's good
guidance practices regulation (21 CFR 10.115). The guidance represents
the current thinking of FDA on eligibility criteria for expanded
conditional approval of new animal drugs. It does not establish any
rights for any person and is not binding on FDA or the public. You can
use an alternative approach if it satisfies the requirements of the
applicable statutes and regulations.

II. Paperwork Reduction Act of 1995

    While this guidance contains no collection of information, it does
refer to previously approved FDA collections of information. Therefore,
clearance by the Office of Management and Budget (OMB) under the
Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3521) is not
required for this guidance. The previously approved collections of
information are subject to review by OMB under the PRA. The collections
of information in 21 CFR part 514 have been approved under OMB control
number 0910-0032.

III. Electronic Access

    Persons with access to the internet may obtain the guidance at
either https://www.fda.gov/AnimalVeterinary/GuidanceComplianceEnforcement/GuidanceforIndustry/default.htm, https://www.fda.gov/regulatory-information/search-fda-guidance-documents, or
https://www.regulations.gov.

    Dated: July 8, 2021.
Lauren K. Roth,
Acting Principal Associate Commissioner for Policy.
[FR Doc. 2021-14938 Filed 7-13-21; 8:45 am]
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