Fuel Smarts

New Reporting Requirements for Sale of Recalled Tires

December 26, 2000

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Starting January 25, 2001, anyone who sells a recalled tire for use on a vehicle must report the sale to the National Highway Traffic Administration.

The interim final rule, published Dec. 26, implements one of several provisions of the Transportation Recall Enhancement, Accountability and Documentation Act (TREAD) passed by Congress after last year’s Firestone recall.
Under current rules, dealers are not allowed to sell or lease equipment if the manufacturer has notified them that the equipment contains a safety defect or doesn’t comply with federal safety standards. But the law doesn’t apply to the sale or lease of used vehicles or equipment, and during the Firestone recall there were numerous reports that tires turned in for replacement were being resold.
TREAD doesn’t expressly prohibit such sales, but it does impose a reporting requirement. Any person who knowingly and willfully sells or leases a defective or non-compliant tire for use on a motor vehicle must report that sale or lease to NHTSA. This is not limited to new tires and includes tires that are returned to dealers or other parties for replacement in a safety recall.
In general, the rule applies to tire retailers, including individuals. Vehicle dealers and lease/rental companies are subject to the reporting rule if they sell the tires separately.
Persons required to report must have knowledge that the manufacturer has notified its dealers or retailers of the defect or noncompliance, but that doesn’t necessarily mean the notification has to come directly to them. NHTSA also says that employers are responsible for the actions of their employees. If, for instance, the employee of a tire store sells a defective tire during the course of his/her duties, the store is liable for any reporting violations. The penalty for noncompliance is a maximum $5,000 per day up to $15 million for a series of violations.
Because NHTSA is required to implement TREAD provisions by the end of January, the regulation becomes effective 30 days after publication but comments may be submitted up to Feb. 26, 2001.
Separately, NHTSA issued an interim final rule establishing "safe harbor" provisions for persons who knowingly fail to report safety defects or submit falsified information. The regulation offers protection from criminal liability to persons who didn’t know at the time of the violation that the defect could result in death or serious bodily injury and who make necessary corrections within 21 days.
Details of both rules can be found in the Dec. 26, 2000, Federal Register, accessible on the Internet at www.nara.gov/fedreg.

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