NOTE: The Acting Deputy Administrator signed the following document on July 23, 2009, and we are submitting it for publication in the Federal Register. While we have taken steps to ensure the accuracy of this Internet version of the document, it is not the official version. Please refer to the official version in a forthcoming Federal Register publication or on GPO's Web Site. You can access the Federal Register at: http://www.gpoaccess.gov/fr/index.html.
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Parts 512 and 599
[ Docket No. NHTSA-2009-0120 ]
RIN 2127-AK53
Requirements and Procedures for Consumer Assistance to Recycle and Save
Program
AGENCY: National Highway Traffic Safety Administration (NHTSA), Department of
Transportation (DOT)
ACTION: Final rule
SUMMARY: This final rule sets forth requirements and procedures for the voluntary
vehicle trade-in and purchase/lease program under the Consumer Assistance to Recycle
and Save Act of 2009. This program helps consumers pay for a new, more fuel efficient
car or truck from a participating dealer when they trade in a less fuel efficient car or
truck. The rule establishes a process by which dealers can register in order to participate
in the program and establishes the criteria this agency will use to determine which
disposal facilities are eligible to receive and either crush or shred the trade-in vehicles. It
also sets forth the criteria that trade-in vehicles and new vehicles must meet in order for
purchases and leases to qualify for assistance under this program and establishes the
requirements that must be met by consumers, dealers, disposal facilities and others.
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Finally, the rule sets forth enforcement procedures and provisions for punishing fraud and
other violations of the program requirements.
DATES: This final rule is effective [Insert the date of publication in the FEDERAL
REGISTER.] Petitions: If you wish to petition for reconsideration of this rule, your
petition must be received by [Insert the date 45 days after date of publication of this
document in the FEDERAL REGISTER.]
ADDRESSES: If you submit a petition for reconsideration of this rule, you should refer
in your petition to the docket number of this document and submit your petition to:
Administrator, National Highway Traffic Safety Administration, 1200 New Jersey
Avenue, S.E., West Building, Washington, DC 20590.
The petition will be placed in the public docket. Anyone is able to search the
electronic form of all documents received into any of our dockets by the name of the
individual submitting the document (or signing the document, if submitted on behalf of
an association, business, labor union, etc.). You may review the complete User Notice
and Privacy Notice for Regulations.gov at
http://www.regulations.gov/search/footer/privacyanduse.jsp.
FOR FURTHER INFORMATION CONTACT: You may obtain additional
information about the CARS program by calling the CARS Hotline at 1-866-CAR-7891.
It is dedicated to calls about the program. For non-legal issues, you may call, Mr. Frank
Borris, NHTSA Office of Enforcement, telephone (202) 366-8089. For legal issues, you
may call David Bonelli, NHTSA Office of Chief Counsel, telephone (202) 366-5834.
SUPPLEMENTARY INFORMATION:
Table of Contents
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I. Background
II. Questions and Comments from the Public about the CARS Program
III. Public Outreach and Consultation
IV. The Regulation
a. Definitions (§ 599.102)
b. Registration of Dealers (§ 599.200)
c. Identification of Disposal Facilities (§ 599.201)
d. Determining Eligibility of Trade-In Vehicles and New Vehicles (§ 599.300)
1. Vehicle Definitions
2. Eligibility of Trade-in Vehicles
3. Eligibility of New Vehicles
e. Requirements for Qualifying Transactions (§§ 599.300 and 301)
1. Vehicle Categories and Credit Amounts
2. Special Requirements for Trade-in Vehicles
3. Restrictions and Limitations on Transactions
f. Requirements for Dealer Reimbursement (§ 599.302-304)
g. Disposal of Trade-In Vehicles (§ 599.400-403)
h. Enforcement (§ 599.500-517)
1. Prevention of Fraud
2. Civil Penalties and Other Sanctions
V. Confidential Information and Privacy
a. Determinations of the Confidentiality of CARS Data Based on FOIA
Exemptions 4 and 6
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b. Approach -- Class Determinations vs. Individual Assessments
c. Class Determinations Based on FOIA Exemption 4
d. Data Submitted to NHTSA for the CARS Program
1. Manufacturer Data
2. Dealer Information and Transaction Data
3. Disposal Facility and Destruction Data
e. CARS Data Class Determinations Based on FOIA Exemption 4
1. Manufacturer Assigned Dealer Identification
2. Dealer Bank Name, ABA Routing Number, Bank Account Number
3. CARS Dealer ID and CARS Authorization Codes
f. Class Determination Based on FOIA Exemption 6
VI. Costs and Benefits
VII. Statutory Basis for This Action
VIII. Effective Date
IX. Regulatory Analyses and Notices
I. Background
On June 24, 2009, the President signed into law the Consumer Assistance to
Recycle and Save Act of 2009 (the CARS Act or the Act) (Pub. L. No. 111-32). The Act
establishes, within the National Highway Traffic Safety Administration (NHTSA or the
agency), a temporary program under which an owner of a motor vehicle meeting
statutorily specified criteria may trade in the vehicle and receive a monetary credit from
the dealer toward the purchase or lease of a new motor vehicle meeting statutorily
specified criteria.
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Generally, the trade-in vehicle must have a combined fuel economy, as
determined by the Environmental Protection Agency (EPA), below a specified value and
the new vehicle must have an EPA combined fuel economy above a higher specified
value. (Combined fuel economy is an EPA calculation representing the weighted average
of a vehicle’s city and highway fuel economy as determined according to the method
described in EPA regulations at 40 CFR 600.210-08(c).) The program covers qualifying
transactions that occur between July 1, 2009 and November 1, 2009, so long as funds
appropriated by Congress are not exhausted. If all of the conditions of eligibility are met
and the dealer provides NHTSA with sufficient documentation relating to the transaction,
NHTSA will make an electronic payment to the dealer equal to the amount of the credit
extended by the dealer to the consumer, not exceeding the statutorily authorized amount.
The dealer must agree to transfer the trade-in vehicle to a disposal facility that will crush
or shred it so that it will never be returned to the road, although parts of the vehicle, other
than the engine block and drive train (unless the drive train is sold in separate parts), may
be sold prior to disposal.
The CARS Act requires the Secretary of Transportation, acting through NHTSA,
to issue final regulations within 30 days after enactment (i.e., by July 24, 2009),
“notwithstanding” the notice and comment requirements of the Administrative Procedure
Act (5 U.S.C. 553). The regulations must, among other things: (1) provide for a means of
registering dealers for participation in the program; (2) establish procedures for
reimbursement of dealers participating in the program; (3) require that dealers use the
credit in addition to any other rebate or discount advertised by the dealer or offered by the
manufacturer and prohibit the dealer from using the credit to offset any such other rebate
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or discount; (4) require that dealers disclose to the person trading in an eligible vehicle
the best estimate of the scrappage value of such vehicle and permit dealers to retain $50
of the amount paid for the scrappage value as payment for any administrative costs of
participation in the program; (5) establish requirements and procedures for the disposal of
eligible trade-in vehicles; and (6) provide for the enforcement of penalties for violations
of the program requirements.
Separate from the rulemaking requirement, the CARS Act directs the agency to
establish a website to convey information about the program, including instructions on
how to determine if a vehicle is an eligible trade-in vehicle, how to participate in the
program and how to determine if a dealer is participating in the program. The agency
established this website at http://www.cars.gov. Among other things, the website
contains an interactive tool for determining eligible vehicles, a list of participating dealers
and disposal facilities, responses to frequently asked questions, and information on how
to determine the EPA combined fuel economy of trade-in vehicles and of new vehicles.
In addition, NHTSA set up a hotline ((866)-227-7891) to answer questions about the
program and, on July 2, 2009, published a document in the Federal Register (74 FR
31812) providing additional useful information, in advance of issuance of this final rule.
The Act provides that the program covers eligible transactions beginning on July
1, 2009, prior to today’s final rule. NHTSA advised the public through the July 2
Federal Register document, the website, and the hotline that it was prudent to wait until
the details of the program were specified in today’s final rule. Nevertheless, if
transactions occurring on or after July 1, 2009, but before today’s final rule, meet all of
the requirements identified in this final rule, registered dealers may follow the application procedures of the rule and apply for reimbursement for those transactions. To expedite
processing, the rule relies, wherever possible, on electronic submissions through secure
agency websites.
In order to implement this new program, NHTSA has had to quickly create a new
organization. NHTSA has established the Office of the Car Allowance Rebate System
within the Office of Enforcement. The new office will consist of three divisions. The
Transaction Oversight Division will work closely with the contractor NHTSA has
retained to review incoming requests for payment from dealers to ensure that those
requests are reviewed correctly and in a timely way. The Data Analysis and Reporting
Division will review data generated in connection with the program to help ensure the
system’s efficiency and detect problems with the process or indications of potential
compliance issues. That division will also produce reports on all aspects of the system.
The Compliance Division will work to detect and deter possible noncompliance related to
the program and coordinate closely with NHTSA’s Office of Chief Counsel when
possible violations are found. That division will also coordinate closely with the DOT’s
Office of Inspector General on issues related to possible fraud in connection with the
program.
The agency also has decided to use the name Car Allowance Rebate System
(CARS) for its program implementing the Act. The use of the term “rebate” in the name
NHTSA has chosen for the program is not intended to have any effect on how CARS
transactions are treated under State or federal tax laws. The CARS Act provides that the
credit is not income to the purchaser, but does not address any other possible tax issues.
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NHTSA lacks expertise and authority in tax matters and makes no attempt here to
provide any guidance on those matters.
II. Questions and Comments from the Public about the CARS Program
During the period between enactment of the CARS Act and publication of today’s
rule, the agency received numerous questions and comments about various provisions of
the Act. The final rule seeks to address these comments and questions, and details appear
later in this document. However, the agency provides here a brief summary discussion of
some of the issues raised. As noted earlier, NHTSA’s website for the CARS program
contains responses to frequently asked questions by members of the public.
The CARS program assists consumers who trade in their older, less fuel efficient
vehicles for new, more fuel efficient vehicles. The program is designed to remove these
older, less fuel efficient vehicles from the road, by requiring the trade-in vehicle to be
crushed or shredded. Some consumers were unaware that their trade-in vehicle must be
destroyed as a statutory condition of participating in this program. Because of that
condition, consumers purchasing or leasing a new vehicle under this program should not
expect to receive the full trade-in value of their old vehicle when negotiating with a
dealer.
As detailed below, the program has different requirements for different types of
trade-in vehicles (e.g., passenger cars, SUVs and vans, pickups, and trucks) because these
vehicles have varying levels of EPA combined fuel economy. In general, passenger cars
have the highest combined fuel economy. Therefore, even though a passenger car may
be quite old and/or in poor condition, it may not be an eligible trade-in vehicle under the
program because its combined fuel economy at the time of its manufacture (as measured
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by the EPA) exceeds statutory limits. Some consumers have expressed surprise at this
result. However, the agency must follow the requirements of the statute. Larger, older
pickups and SUVs, on the other hand, do not typically have very high fuel economy. The
statutory requirements for trading in these vehicles are less strict than for trading in
passenger cars. Consumers may find that more of the vehicles in these categories are
eligible as trade-in vehicles under the program.
Questions have arisen as to which persons are eligible to participate in the
program and whether a person can trade in a vehicle owned by someone else, such as a
family member. The agency has concluded that individuals as well as legal entities, such
as corporations and partnerships, may participate in the program. However, a person may
not trade in a vehicle owned by someone else under the program. The Act’s one-year
insurance requirement is satisfied so long as the trade-in vehicle is insured, irrespective of
the identity of the person holding the insurance policy. The specifics of these
requirements are explained later in this document.
The agency has received questions regarding the value and disposition of the
trade-in vehicle. The CARS Act specifies that while many parts of the trade-in vehicle
are permitted to be removed and sold, in the end the residual vehicle, including the
engine block, must be crushed or shredded. Therefore, the trade-in value of the vehicle is
not likely to exceed its scrap value. Purchasers should not expect to receive the same
trade-in value as they might if the vehicle were to remain on the road. The Act also
requires dealers to disclose to purchasers the scrap value of the trade-in vehicle at the
time of the trade-in and allows dealers to retain up to $50 of the scrap value of the vehicle
for their administrative costs of participation in the program.
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Some consumers have expressed concern that the combined fuel economy value
of their vehicles, as determined on the fueleconomy.gov website of the EPA, is not an
accurate measure of the actual fuel economy they experience. EPA determines these
values for each make, model, and model year with regard to each vehicle at the time of its
manufacture. These consumers contend that if another means were used to calculate
combined fuel economy, their vehicle would be an eligible trade-in vehicle under the
program. The CARS Act is prescriptive in this regard, and requires NHTSA to use the
EPA calculation, and not any other calculation, to determine whether a trade-in vehicle is
eligible under the program.
Some consumers have asked whether they may participate in more than one
reimbursed transaction, either singly or as joint-registered owners of a vehicle. The
CARS Act specifies that each person may receive only one credit and that only one credit
may be issued to the joint-registered owners of a single trade-in vehicle under the
program. Consequently, a person may participate in a transaction that receives a credit
under this program only once.
The CARS Act is specific as to the characteristics of the vehicle that may be
traded in and the characteristics of the new vehicle that may be purchased or leased, and
these two requirements are interdependent (i.e., whether a new vehicle is eligible under
the program depends, in part, on the characteristics of the trade-in vehicle). For example,
the trade-in requirements for a large work truck differ from those of passenger cars under
the program. Similarly, some vehicles—notably motorcycles—simply are not eligible
under the CARS Act, either as trade-in vehicles or for purchase or lease, even though consumers have noted that transactions involving those vehicles might reduce fuel use
and improve the environment.
III. Public Outreach and Consultation
The extremely short time afforded by the Act to develop and complete this
rulemaking precluded publishing a proposed rule for notice and comment. Therefore, the
agency took a variety of steps to obtain public input as it moved forward to develop this
rule. It established a website that invited public inquiries. As it received inquiries, it
posted a steadily growing list of questions and answers, which in turn led to additional
inquiries. It hosted a “webinar” that elicited hundreds of inquiries. In addition, it met
with representatives of a wide variety of environmental interest groups.
The agency also directly consulted with organizations representing original
equipment manufacturers (OEMs), including the Alliance of Automobile Manufacturers
and the Association of International Automobile Manufacturers, to obtain information on
franchised dealerships. The agency involved the OEMs because they possess
comprehensive and readily available lists of new vehicle dealers licensed under State law.
As detailed below, the agency is using lists of franchised dealers provided by the OEMs
to aid in the process of registering dealers under the program.
NHTSA met with automobile dealers and dealer organizations, including the
National Automobile Dealers Association and the American International Automobile
Dealers Association, to better understand the typical vehicle trade-in and purchase/lease
transaction. The agency consulted with groups representing disposal facilities, salvage
auctions, and reporting entities, including the American Salvage Pool Association, the
Automotive Recyclers Association, CoPart, Mannheim, Insurance Auto Auctions, the
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Institute of Scrap Recycling Industries, Inc., and the National Salvage Vehicle Reporting
Program, to learn about the processes involved in recycling and scrapping old vehicles.
The information learned by the agency from dealer and disposal facility organizations
was critical to an informed rulemaking process.
The agency also consulted with officials from Texas, California and Germany.
These officials provided valuable information to the agency, based on their experience
administering and enforcing similar vehicle purchase and trade-in programs. Each of
these officials cautioned NHTSA that it would need to be vigilant to guard against fraud.
Finally, as required under the CARS Act, the agency coordinated with appropriate
Federal agencies. With respect to the National Motor Vehicle Title Information System
(NMVTIS), the agency met with the Department of Justice and its NMVTIS program
administrator, the American Association of Motor Vehicle Administrators, to develop
procedures for updating the NMVTIS to reflect the crushing or shredding of trade-in
vehicles under the program. The agency consulted with the EPA on the listing of
categories of eligible vehicles and on the listing of disposal facilities and requirements
and procedures for the proper disposal of refrigerants, antifreeze, mercury switches, and
other substances prior to crushing or shredding the trade-in vehicle. The agency also
consulted with EPA concerning a method to disable the engines of the vehicles that are
traded in.
Memoranda providing the dates and summaries of meetings with these
organizations and various other groups are included in the docket for this rule.
IV. The Regulation
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As directed by the CARS Act, today’s final rule sets forth requirements and
procedures for registering participating dealers and listing participating disposal facilities,
reimbursing dealers for qualifying transactions, disposing of trade-in vehicles, and
enforcing penalties for program violations.
The rule is being issued without first providing a notice and an opportunity for
public comment. As noted above, the Act provides that the rule shall be issued within 30
days after enactment, “notwithstanding” the requirements of 5 U.S.C. 553, the Federal
law requiring notice and comment. Further, given that schedule and the necessity of
quickly beginning to implement this 4-month program with a statutorily fixed end date,
the agency finds for good cause that providing notice and comment is impracticable and
contrary to the public interest. Drafting and issuing a proposed rule, providing a period
for public comment, and addressing those comments in the final rule would have been
highly impracticable in the time available and would have substantially delayed issuance
of this final rule beyond the legislatively mandated issuance date of July 24. We think
the public interest is best served by issuing this rule on the mandated date so that its
requirements are known and can be followed by all participants. This is especially true
because transactions since July 1 have been potentially eligible for credits under this
program.
The CARS Act prescribes a rulemaking period of just 30 days before the program
is to be fully implemented and capable of accommodating a potentially very large
number of transactions. Mindful of this requirement, the agency placed significant
emphasis on efficient transaction processes and data exchange. To that end, most of the
transactional requirements imposed by today’s rule are met through electronic online
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submissions. Where this is so, the rule identifies the particular data or information
required in the electronic submission and, in one case, refers to an appendix with a
facsimile of the electronic form for easy reference.
The Act requires the agency to develop certain lists to assist consumers and
dealers (e.g., a comprehensive list of new fuel efficient vehicles meeting the program
requirements, a list of disposal entities to which dealers may transfer eligible trade-in
vehicles). Here, the rule makes use of references to the CARS website for convenient
reference to these helpful lists.
Much of the CARS Act is specific and directive. However, where a statutory
term or provision is not clear or gives the agency discretion, the rule generally strikes the
balance in favor of an interpretation that promotes smooth and expeditious completion of
transactions or one that decreases opportunities for fraud.
a. Definitions (§ 599.102)
The CARS Act defines a dealer as a person licensed by a “State” and identifies an
eligible trade-in vehicle in terms of its insurance and registration status under “State”
law. Read together, these statutory provisions restrict the transactions that are eligible for
a credit under the CARS program. More specifically, a dealer must be a United States
dealer and a trade-in vehicle must be insured and registered in the United States.
However, nothing in the Act excludes U.S. territories from the reach of the program.
Consequently, in section 599.102, the agency has defined “State” to include the 50
United States, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American
Samoa, and the Commonwealth of the Northern Mariana Islands.
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The CARS Act uses the term “person” to describe those eligible to purchase or
lease a new vehicle under the Program. See Sections 1302(c-d). In the absence of a
definition of this term in the CARS Act, the agency relies on the universal definition that
appears in 1 U.S.C. 1, which includes corporations, companies, associations, firms,
partnerships, societies, and joint stock companies, as well as individuals. The agency
adopts this definition for the term “person” in Section 599.102, and also defines a
“purchaser” in that section as a person purchasing or leasing a new vehicle under the
CARS program. Of course, each person is subject to the statutory restriction that
precludes participation by any person in this program more than once.
b. Registration of Dealers (§ 599.200)
The Act requires the agency to provide for a means of registering dealers for
participation in the program. (Section 1302(d)(1)). A dealer is defined under the Act as a
person licensed by a State who engages in the sale of new automobiles to ultimate
purchasers (Section 1302(i)(6)), a definition we have restated in Section 599.102. After
consultation with dealer and OEM organizations, the agency is implementing the dealer
registration requirement through a several step process. First, on June 30, 2009, the
agency requested and later received a list of franchised dealers from their respective
OEMs, including each dealer’s legal business name, doing-business-as name, mailing
address, point of contact, and OEM franchise identifier.1 OEM franchised dealers, as a
group, satisfy the requirement for State licensing. The agency has learned that, without
an active OEM franchise agreement, a dealer is unable to offer manufacturer purchasing
incentives and may not be able, in some cases, to extend the full manufacturer warranty
1 The agency chose to involve the OEMs in this process to eliminate the opportunity for unscrupulous
individuals or entities to identify themselves as franchised dealers.
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to the new vehicles it sells. For this reason, the agency includes the requirement for a
currently active OEM franchise agreement as part of the dealer registration process. (The
OEMs have agreed to update this list weekly, to add newly franchised dealerships and
remove dealerships that are no longer under franchise agreement.) The agency then
contacted all listed dealers by mail, providing instructions on how to register under the
program. Dealers received separate letters and were instructed to register separately for
each make of vehicle they sell. Section 599.200(b) identifies the required dealer
qualifications for registration, which flow from the statutory requirement for State
licensing and from the need to perform transactions electronically. OEM franchised
dealers should easily satisfy these requirements.
As set forth in section 599.200(c), dealers that have been contacted by mail by the
agency and that wish to participate must register to do so electronically, using the
authorization code and following the instructions provided in the mailing, and fill out an
electronic screen providing, among other things, name and contact information and bank
account and routing data for receiving payment under the program.2 The agency will
review this information to ensure completeness, and verify that the dealer has a still
active franchise agreement (based on the continuously updated list provided by OEMs).
Section 599.200(d) sets forth the procedures for approving and disapproving registration
applications. Section 599.200(d)(1) provides that, where an application for registration is
approved, the agency will notify the dealer of approval by email, providing a user
identification and password with which to conduct transactions, and add the dealer to the
list of registered dealers on its website at http://www.cars.gov. Consumers may consult
this list to identify registered dealers in their locality. Section 599.200(d)(2) provides
2 The registration process was made available to dealers beginning on July 24, 2009.
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that, where an application for registration is rejected, the agency will notify the dealer by
email, and provide the reasons for rejection. The agency anticipates that, unless rejected,
confirmation of registration and addition to the list should occur within 2 to 4 business
days after a dealer submits the required information.
Section 599.200(e)(1) provides that the agency may automatically revoke a
registration as a matter of course for termination or discontinuance of a franchise but the
dealer’s registration may be reinstated upon a dealer’s showing of proper and adequate
license to sell new vehicles to ultimate purchasers. Section 599.200(e)(2) states that the
agency may suspend or revoke a dealer’s registration under the procedures in Section
599.504. Section 599.200(f) requires a registered dealer to immediately notify the
agency of any change in the registration information it submitted or any change in the
status of its State license or franchise. Finally, section 599.200(g) accommodates
transactions that occurred after July 1, 2009, but prior to the publication of today’s final
rule, by permitting registration after a qualifying sale or lease transaction has occurred.3
The agency believes that this process is the most efficient and appropriate method
to register dealers consistent with the requirements of the CARS Act. The Act requires
that a dealer be licensed under State law, and the list provided by OEMs ensures that this
is so. Using this list also allows the agency to verify dealer registration information in a
timely manner. Since the OEMs have agreed to provide weekly updated lists, this
process also will allow for registration of newly franchised dealers as they come into
existence and the discontinuance of registrations for dealers that are no longer franchised.
Newly franchised dealers will be contacted by mail with an authorization code, as the
agency becomes aware of them from the weekly updated lists. A dealer whose franchise
3 As discussed later in this document, other requirements apply to these earlier transactions as well.
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has been discontinued will be removed from the agency’s list, and will no longer be
eligible to receive credits for transactions under the program.
c. Identification of Disposal Facilities (§ 599.201)
Under the Act, the agency is required to provide a list of entities to which dealers
may transfer eligible trade-in vehicles for disposal. (Section 1302(d)(6)). The Act also
requires the Secretary to coordinate with the Attorney General to ensure that the National
Motor Vehicle Title Information System (NMVTIS) is timely updated to reflect the
crushing or shredding of trade-in vehicles and appropriate reclassification of their titles.
(Section 1302(c)(2)(C)).
The agency met with groups representing auto recyclers and other disposal
facilities and salvage auctions, as well as officials from AAMVA and the Department of
Justice responsible for administering the NMVTIS, to get an understanding of the vehicle
salvage and disposal process. From those meetings, the agency learned that there is a
wide range of entities involved in various aspects of the vehicle salvage and disposal
business. The agency also consulted with the EPA about the CARS program and the
requirement to produce a list of disposal facilities for disposition of the trade-in vehicles.
Mindful of environmental issues, NHTSA sought to identify a universe of disposal
facilities that was attentive to these concerns, while achieving the objectives of the CARS
program.
In the course of these consultations and based on advice from EPA, the agency
identified the National Vehicle Mercury Switch Recovery Program (NVMSRP) as a
comprehensive source of disposal facilities generally committed to meeting State and
Federal environmental laws. The NVMSRP was established in 2006 under a
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memorandum of understanding (MOU) among the EPA, environmental groups,
manufacturers and disposal facilities, to recover and recycle mercury switches from endof-
life vehicles before they are scrapped, crushed or shredded. This purpose is in
alignment with the CARS Act’s requirement for proper vehicle disposition, including the
removal of mercury switches. The MOU authorizes the End of Life Vehicle Solutions
(ELVS), a corporation established by vehicle manufacturers to carry out responsibilities
of the NVMSRP, including establishing a process for participants to enroll in the program
and maintaining a database of participants who recover and submit mercury switches.
Participants may enroll in the program by registering with ELVS. Information
about ELVS can be found on its website at www.elvsolutions.org. Currently,
approximately 7,700 disposal facilities are participants, and EPA estimates that
approximately 1,500 of these facilities actively turn in the switches. The agency has
determined that disposal facilities that are participants on the ELVS list present the best
assurance of compliance with State and Federal environmental laws.
With this in mind, NHTSA has identified disposal facilities that are ELVS
participants for listing as approved disposal facilities under this program, and these
disposal facilities are listed on the agency’s website at www.cars.gov/disposal. However,
some entities on this list may dispose of mercury switches as part of their business (for
example, auto repair businesses) but do not actually engage in dismantling or recycling of
vehicles. Therefore, the fact that a facility is on the list does not automatically ensure that
it is equipped to dispose of vehicles properly. To be eligible for participation in the
CARS Program, a facility on the ELVS list must be able to crush or shred motor vehicles,
either with its own equipment or by use of a mobile crusher. NHTSA was not able to
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obtain accurate lists of all entities that have this capacity within the time allowed, but is
informed that many of the entities on the ELVS list are capable of at least obtaining the
services of a mobile crusher. Dealers will have to inquire of specific entities concerning
their capacity to crush or shred the vehicle. Any facility that does participate will have to
certify that it has that capacity to crush or shred and will dispose of the vehicle through
crushing or shredding. Section
These facilities must additionally agree to turn in mercury switches in accordance
with the NVMSRP from any CARS trade-in vehicles they accept (to the extent the
vehicles have such switches), by certifying that they will do so. In addition, because the
CARS Act directs the agency to ensure that pollutants are removed from vehicles and
properly disposed of, that vehicles are crushed or shredded, and that NMVITS is updated
to reflect the disposition of the vehicle, as a condition of participation in the program, the
listed participants must also agree to remove pollutants from the CARS trade-in vehicles
in compliance with State and Federal law, crush or shred the vehicle, update NMVTIS to
reflect the disposition of the vehicle, and certify to having done so. The certification
requires the disposal facility to certify that it will dispose of refrigerants, antifreeze, lead
products, mercury switches, and other toxic or hazardous vehicle components prior to
crushing or shredding, in accordance with applicable Federal and State requirements.
The rule does not impose additional requirements; for example, it does not require
removal of all lead products such as lead solder connections that are ordinarily not
removed during the shredding process.
NHTSA is aware, from consultations with EPA, that the State of Maine and the
U.S. territories are not participants in the NVMSRP and that the ELVS list contains no
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