Interpretation ID: mvaltr.etl

Mr. John H. Strandquist
President
American Association of Motor Vehicle Administrators
4301 Wilson Boulevard, Suite 400
Arlington, VA 22203

Dear Mr. Strandquist:

I have received a copy of the Issue Alert dated April 17, 1997, that you sent to the members of the American Association of Motor Vehicle Administrators concerning the decision of the United States Court of Appeals for the Seventh Circuit in Diersen v. Chicago Car Exchange, 110 F.3d 481 (7th Cir. 1997). In that decision, issued on March 31, 1997, the court held that the NHTSA regulation that exempts vehicles ten years old and older from the requirement in 49 U.S.C. Chapter 327 that an odometer disclosure statement be completed when ownership of the vehicle is transferred (49 CFR 580.6(a)(3)) is invalid because Chapter 327 does not authorize exemptions from that requirement. Your Issue Alert noted that you had contacted NHTSA "to determine whether any action is planned to amend the current legislation for odometer disclosure requirements" in light of the Diersen decision.

NHTSA has concluded that amending legislation is unnecessary because Congress has already given the agency the authority to exempt vehicles from the disclosure requirements of Chapter 327. Specifically, in section 332 of the FY 1997 Department of Transportation and Related Agencies Appropriations Act, Pub. Law 104-205 (Sept. 30, 1996), Congress provided that "notwithstanding any other provisions of law, the Secretary may use funds appropriated under this Act, or any other subsequent Act, to administer and implement the exemption provisions of 49 CFR 580.6 and to adopt or amend exemptions from the disclosure requirements for any class or category of vehicles that the Secretary deems appropriate."

In light of the fact that Congress has now authorized NHTSA to expend funds to adopt or amend exemptions from the disclosure requirements, the agency has concluded that the most expeditious way to resolve the uncertainty caused by the Diersen decision is to publish a final rule repromulgating all of the exemptions currently contained in 49 CFR 580.6 under the statutory authority of section 332 of P. L. 104-205. Because the current situation can cause problems, such as confusion about whether or not an odometer disclosure statement is required when an older vehicle is transferred, inappropriate rejection of title applications and other delays in the titling process, particularly for vehicles transferred into states within the Seventh Circuit, we plan to make this final rule effective immediately upon publication in the Federal Register.

So that your members and others may have prompt access to information about actions NHTSA is taking in response to the Diersen decision, the agency plans to post this letter, the Federal Register notice and any other relevant information on its World Wide Web site, which is accessible on the Internet at http://www.nhtsa.dot.gov/new. We will also provide you with a copy of the Federal Register notice as soon as it is available.

I hope this information is helpful. If you have any further questions on this matter, please contact Eileen Leahy, an attorney on my staff, at 202-366-5263.

Sincerely,
John Womack
Acting Chief Counsel
5/28/97