Interpretation ID: MULTISTG.UPS
Mr. Thomas S. Klingman
Motor Carrier Tax Manager
United Parcel Service
55 Glenlake Parkway NE
Atlanta, GA 30328
Dear Mr. Klingman:
This is in response to your letter dated January 26, 1996, in which you requested that this office clarify which party is responsible for odometer disclosure under Federal law when the disclosure involves a vehicle manufactured in two or more stages. Your letter states that United Parcel Service (UPS) has encountered differing interpretations from several jurisdictions when it registers these vehicles.
Under the Federal odometer law, it is the person transferring ownership of a motor vehicle who is obliged to disclose the odometer reading under Federal law. 49 U.S.C. 32705; 49 CFR 580.5(c). Accordingly, the answer to your question of whether it is the incomplete vehicle manufacturer or the final-stage manufacturer that must disclose the mileage on the odometer hinges on the meaning of the terms "transferor" and "motor vehicle" as applied to the Federal odometer disclosure requirements.
Section 32702(8) of Title 49 of the United States Code states that "transfer" of a motor vehicle means "to change ownership by sale, gift, or other means." In its implementing regulations, NHTSA has defined "transferor" as "any person who transfers ownership of a motor vehicle by sale, gift, or any means other than the creation of a security interest." Under Part C of Subtitle VI of Title 49 of the United States Code, the definition of "motor vehicle" that applies to the Federal odometer law is:
. . . a vehicle driven or drawn by mechanical power and manufactured primarily for use on public streets, roads and highways, but does not include a vehicle operated only on a rail line.
49 U.S.C. 32101(7).
According to your letter, UPS purchases the chassis of its vehicles from various chassis manufacturers, and then the chassis is shipped to a body manufacturer, which installs the body on the chassis. The body manufacturer never obtains ownership of the chassis. Accordingly, the only transfer of ownership that takes place between the body manufacturer and UPS is the sale of the body to UPS. This is not a transfer of ownership of a motor vehicle as that term is defined for purposes of the Federal odometer law, because the body alone is not "driven or drawn by mechanical power." This interpretation is also supported by NHTSA's regulation, which exempts vehicles that are not self-propelled from the odometer disclosure requirements of 49 CAR Part 580. 49 CAR 580.6(a)(2). From the outset, NHTSA has exempted transfers of such vehicles from the odometer disclosure requirements because it determined that for this category of vehicles, odometer mileage is not used as a guide for value, because most non-self-propelled vehicles lack an odometer. 38 Fed. Reg. 2978-79 (Jan. 31, 1973).
Therefore, the states that require odometer disclosure when the chassis is transferred from the chassis manufacturer to UPS are following the correct procedure under Federal odometer law. Any state that does not require disclosure for that transfer is not following the correct procedure under Federal law. Federal law does not require any odometer disclosure at the time that the body manufacturer transfers ownership of the body to UPS. A state may on its own decide to impose this as an additional requirement to register the vehicle, but it is not a requirement of the Federal law, and such a disclosure would not have to comply with the Federal regulations governing odometer disclosure statements.
I hope this interpretation is responsive to your request. If you have further questions concerning interpretation of the Federal odometer statute and regulations, please contact
Eileen Leahy, an attorney on my staff, at the above address, or at (202) 366-5263.
Sincerely,
Samuel J. Dubbin
Chief Counsel
ref:580
d:3/21/96