By Ryan Beene, Crain News Service
WASHINGTON (Dec. 3, 2015) — The cap on civil penalties that can be levied by U.S. auto safety regulators would be tripled to $105 million under a five-year highway bill that passed the U.S. House Dec. 3 and appears likely to become law.
The bill — which the U.S. Senate is scheduled to vote on Dec. 4 — would also increase the National Highway Traffic Safety Administration's (NHTSA) defect investigations budget to around $30 million per year from around $10 million currently, but only after implementing a series of reforms recommended by the Transportation Department's inspector general in its scathing report on NHTSA released this summer. NHTSA has promised to make the reforms by next June.
In a show of Congressional bipartisanship, the House of Representatives voted 359 to 65 Dec. 3 to send the $305 billion legislative package to the Senate. It is widely expected to be approved and forwarded to the White House for President Barack Obama's signature before a temporary funding measure expires on Dec. 4.
A panel of U.S. House and Senate lawmakers on Dec. 1 released a 1,300-page report on the final version of the highway funding bill after weeks of negotiations. The White House said Dec. 2 that President Obama would sign the bill if passed, which would make it the first highway funding plan in a decade to last longer than two years.
In addition to raising the maximum fine that auto makers face for safety violations, the roughly $300 billion surface transportation funding package also contains several other auto safety measures.
Under the bill — dubbed the Fixing America's Surface Transportation Act or FAST Act — rental car companies would be barred from renting vehicles with unfixed recalls. Auto dealers were spared from a ban on selling used vehicles with unrepaired recalls after such a prohibition was included in an earlier version of the highway bill considered by the Senate.
Auto maker and supplier employees who report concerns about dangerous potential safety violations would be rewarded with up to 30 percent of the financial penalties collected if the information leads to a penalty.
Auto makers would also be required to maintain safety data for 10 years, compared to five years currently.
The bill also includes several provisions intended to improve the recall process. It would:
• Create a grant program for states to inform consumers of open recalls when renewing vehicle registrations, a move to address the difficulty of notifying used car buyers of recalls.
• Require auto makers to provide part numbers of defective components involved in a recall to NHTSA.
• Require car dealers to inform customers of open recalls when visiting for service.
• Direct NHTSA to study the feasibility of an in-vehicle system to alert drivers of new recalls.
• Direct the Transportation Secretary to issue a rule allowing auto makers to notify customers about recalls electronically, such as via e-mail or social media ads.
• Extend the time that auto makers are required to pay for defect recalls from 10 years to 15 years and broaden the post-bankruptcy recall obligations of auto makers
Reuters contributed to this report, which appeared on the website of Automotive News, a Detroit-based sister publication of Tire Business.