Interpretation ID: title.ztv

Mr. Philip Trupiano
President
Auto Enterprises
28801 Universal Drive
Warren, MI 48092
FAX:

Dear Mr. Trupiano:

This is in reply to your letter of November 11, 1999, to Taylor Vinson of this Office asking for an interpretation of 49 U.S.C. 30146 as implemented by 49 CFR 592.8.

You have informed us that

Auto Enterprises, Inc., and some of the customers on behalf of whom Auto Enterprises is performing importing services, wish to obtain United States titles for re-sale purposes only for vehicles imported into the United States during the period that the vehicles are still within the custody and control of Auto Enterprises.

Specifically, you want "to obtain such titles for re-sale purposes prior to the time that the performance bond . . . is released." You asked:

May a Registered Importer, or the customer on whose behalf the vehicle is imported, obtain a title for re-sale purposes for a vehicle which it has imported, prior to the time that the applicable performance bond has been released by the Administrator?

As you know, pursuant to 49 U.S.C. 30146(a)(1), a Registered Importer (RI) "may license or register an imported motor vehicle for use on the public streets, roads, or highways, or release custody of a motor vehicle . . . to a person for license or registration for use on the public streets, roads, or highways, only after 30 days after" the RI has certified to NHTSA that the vehicle complies with all applicable Federal motor vehicle safety standards. We are unsure of precisely what you are referring to by "a title for re-sale purposes." However, we do not construe the statutory provisions as prohibiting a RI from obtaining a title in its own name to a vehicle it has imported for resale, while the vehicle is still bound by its performance bond, in order to expedite the subsequent licensing or registration of that vehicle for on-road use after the bond has been released.

You have also asked if "the customer on whose behalf the vehicle is imported" may obtain a title for re-sale purposes before the bond is released. The answer is no; the title may not be in the name of the customer. One of the conditions of the bond is that the vehicle it covers be exported or abandoned to the United States in the event that an insufficient showing of conformity is made and the bond and the vehicle are not released (49 U.S.C. 30141(d)(1), as implemented by 49 CFR 591.8(e), and Appendices A and B, and 49 CFR 592,6(a)). If the RI has transferred or reassigned title to the vehicle to "the customer on whose behalf the vehicle is imported" before the bond has been released, the RI could not fulfill its duty to export or abandon the nonconforming vehicle because it would no longer own the vehicle. In that instance, NHTSA's sole remedy would be to foreclose on the bond. This is insufficient to fulfill the safety purpose of the statute and the bond which is to ensure that imported noncomplying vehicles be brought into compliance before being licensed for use, and used, on the public roads.

I hope that this answers your question.

Sincerely,
Frank Seales, Jr.
Chief Counsel
ref:591
d.4/17/00