WASHINGTON — The cap on civil penalties that can be levied by U.S. auto safety regulators has tripled to $105 million under a the highway bill signed into law on Dec. 4.
The new law also will 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 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 law rental car companies are 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 will be rewarded with up to 30 percent of the financial penalties collected if the information leads to a penalty.
Auto makers also are required to maintain safety data for 10 years, compared to five years under the previous version.
The legislationalso includes several provisions intended to improve the recall process. It will:
- 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; and
- 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 in Automotive News, a Detroit-based sister publication of Tire Business.