[Federal Register Volume 60, Number 148 (Wednesday, August 2, 1995)]
[Rules and Regulations]
[Pages 39269-39271]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-19018]



=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 575

[Docket No. 95-19; Notice 2]
RIN 2127-AF-64


Consumer Information Regulations; Fees for Course Monitoring 
Tires and for Use of Traction Skid Pads

AGENCY: National Highway Traffic Safety Administration (NHTSA), 
Department of Transportation.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This rule amends NHTSA's consumer information regulations on 
uniform tire quality grading by establishing fees for the purchase of 
treadwear course monitoring tires and for the use of the traction skid 
pads at NHTSA's Uniform Tire Quality Grading Test Facility in San 
Angelo, Texas.

DATES: The amendment established by this final rule will become 
effective on September 1, 1995.
    Any petitions for reconsideration must be received by NHTSA not 
later than September 1, 1995.

ADDRESSES: Any petitions for reconsideration should refer to the docket 
and notice numbers above and be submitted to: Docket Section, National 
Highway Traffic Safety Administration, 400 Seventh Street, S.W., 
Washington, D.C. 20590. Docket hours are 9:30 a.m. to 4 p.m., Monday 
through Friday.

FOR FURTHER INFORMATION CONTACT: Mr. Clive Van Orden, Office of Vehicle 
Safety Compliance, National Highway Traffic Safety Administration, 400 
Seventh Street, S.W., Washington, D.C. 20590. (202-366-2830).

SUPPLEMENTARY INFORMATION: This rule was preceded by a notice of 
proposed rulemaking (NPRM) that NHTSA published on March 24, 1995 (60 
FR 15529). The NPRM noted that under uniform tire quality grading 
(UTQG) standards at 49 CFR 575.104, tires must be labelled with 
information indicating their relative performance in the areas of 
treadwear, traction, and temperature resistance. For the purpose of 
evaluating treadwear performance, NHTSA established a 400 mile roadway 
course near San Angelo, Texas, which is designed to produce treadwear 
rates that are generally representative of those encountered by tires 
in public use. Under the UTQG standards, the projected mileage obtained 
for tested tires must be corrected to account for environmental and 
other variations that occur during testing on the course. This is done 
by comparing the performance of the tested tires to that of course 
monitoring tires run in the same convoy. The course monitoring tires 
are specially manufactured under controlled conditions so that they can 
be used as a grading standard, and are made available by NHTSA for 
purchase at the San Angelo test facility.
    The NPRM noted that the UTQG standards also require that tire 
traction be evaluated on skid pads that have specified locked-wheel 
traction coefficients. Two of these traction skid pads have been 
constructed at NHTSA's facility in San Angelo, as well as at several 
commercial facilities that may also be used by tire manufacturers.
    The NPRM stated that an audit conducted by the Department of 
Transportation's Office of Inspector General (OIG) concluded that NHTSA 
was not recovering the full cost of the course monitoring tires that it 
sells at San Angelo and was not charging a user fee for the use of the 
traction skid pads at that facility, contrary to the requirements of 
Office of Management 

[[Page 39270]]
and Budget (OMB) Circular A-25, which establishes Federal policy 
regarding fees assessed for Government services and for the sale or use 
of Government goods or resources. To address these deficiencies, the 
NPRM proposed to establish $379.00 as the fee for each course 
monitoring tire that NHTSA sells, and to assess a user charge of $288 
per day for the use of the traction skid pads at San Angelo. The NPRM 
included calculations showing these amounts to be the minimum necessary 
for NHTSA to recover the direct and indirect costs that it incurs in 
furnishing these goods and services.
    Two comments were submitted in response to the NPRM. The first of 
these was from Standards Testing Labs (STL) of Massillon, Ohio. STL 
challenged the statement in the NPRM that manufacturers are not 
restricted to the use of the traction skid pads at NHTSA's facility in 
San Angelo, and may instead use those at any commercial facility. STL 
contended that the list of commercial facilities provided in the NPRM 
included ones that were abandoned and others that are ill suited to 
meet the grade testing criteria of the UTQG standards. STL further 
contended that the statement regarding the availability of commercial 
facilities is undermined by the fact that these facilities were already 
in existence when NHTSA constructed traction skid pads at San Angelo, 
and that the agency has since replaced the pads at least once in their 
original location, and then relocated the pads to an oval track with 
all new asphalt and concrete surfaces. In STL's opinion, these actions 
were taken so that a facility meeting the requirements of the UTQG 
standards would be available.
    STL further contended that because NHTSA built and must maintain 
traction skid pads at San Angelo in order to test assigned grades for 
traction compliance purposes, the agency incurs little if any 
additional costs in making the facility available for grade assignment 
purposes. STL estimated that the proposed fee for the traction skid 
pads will increase user costs by 70%, and will produce a decrease in 
the volume of testing. If costs are to be shared, STL stated it would 
be more equitable for the user fee to be imposed on a ``per set'' 
rather than a ``daily'' basis, since testing for any given day is 
sometimes aborted through no fault of the tester, due primarily to 
changes in the weather or to pad instability.
    In response to the first issue raised by STL, NHTSA notes that it 
identified commercial facilities with traction skid pads in the NPRM to 
support the agency's position that the government is not acting in a 
sovereign capacity in making the San Angelo facility available for 
traction tests, and that it may accordingly charge a market rate for 
those services, as provided in OMB Circular A-25. This listing was not 
intended to suggest that all of the named facilities are well suited to 
meet the grade testing criteria of the UTQG standards. The capability 
of any of these facilities to meet those criteria is a matter of 
objective analysis that does not turn on whether the facility predated 
NHTSA's construction of traction skid pads at San Angelo.
    STL's contention that NHTSA incurs little if any additional costs 
in making the traction skid pads at San Angelo available for commercial 
use is erroneous. Any use of the facility contributes to the 
deterioration of the skid pad surfaces, and reduces the service life of 
monitoring and maintenance support equipment. Even if this were not the 
case, NHTSA would still be obligated to impose a user fee for the use 
of the traction skid pads. As noted in the NPRM, OMB Circular A-25 
expresses the general policy that ``[a] user charge . . . will be 
assessed against each identifiable recipient for special benefits 
derived from Federal activities beyond those received by the general 
public.'' The OIG cited this policy in its audit report findings that 
NHTSA's failure to assess a fee for the use of the traction skid pads 
was contrary to the requirements of OMB Circular A-25. The agency 
proposed a user fee for the traction skid pads at San Angelo in order 
to correct this deficiency.
    As noted in the NPRM, NHTSA proposed a fee of $288.00 per day for 
the use of the traction skid pads at San Angelo by performing the 
following calculation, based on an equivalent of 360 days of industry 
use in 1993:

Skid pad calibration expenses................................     $6,210
General facility costs relating to skid pads.................      7,140
Depreciable items (skid system, water truck, air compressor,            
 skid track, tractor sweeper, equipment, buildings)..........     65,904
Salaries relating to skid pads...............................     24,375
                                                              ----------
      Total..................................................    103,629
$103,629/360 days industry use = $287.86 cost per day.                  
                                                                        

    Since NHTSA recognizes that some users may not need a full day to 
conduct traction testing, and that some tests may have to be aborted 
for reasons beyond the user's control, such as weather conditions or 
pad instability, the agency agrees with STL's contention that it would 
be more equitable for the user fee to be imposed on something other 
than a ``daily'' basis. STL recommended that the fee instead be imposed 
on a ``per set'' basis. Because inefficiencies may result in some users 
taking longer than others in performing each ``set,'' NHTSA has 
concluded that it would be more reasonable for the fee to be calculated 
at an hourly rate. The UTQG facility at San Angelo is open each day for 
eight and one-half hours, from 7:30 am to 4:00 pm. Based on a daily 
rate of $288.00, the hourly rate would be $34.00. NHTSA is adopting 
this hourly rate as the user fee for the traction skid pads at San 
Angelo. Fees will be assessed at this hourly rate for each hour and for 
each fraction of a hour that the traction skid pads are used.
    A second comment was submitted in response to the NPRM, by the 
Rubber Manufacturers Association (RMA), on behalf of U.S. tire 
manufacturers. The RMA took exception to the proposed charge of $379.00 
for each course monitoring tire that NHTSA sells, on the basis that 
manufacturers are obliged to purchase these tires from a single 
source--the Federal government--and that such a circumstance can lead 
to what the RMA characterized as excessive ``monopoly-type'' pricing. 
The RMA acknowledged that the government must cover its costs in 
setting the purchase price for course monitoring tires, but requested 
that NHTSA devise a plan for controlling and reducing overhead costs to 
keep the program efficient for tire manufacturers and effective for 
U.S. taxpayers.
    NHTSA proposed a charge of $379.00 for each course monitoring tire, 
which was derived by performing the following calculation for the 700 
course monitoring tires that are purchased annually by the agency:

Purchase price of course monitoring tires..................     $175,000
General facility costs relating to tires...................        3,400
Warehouse storage fees.....................................       24,000
Salaries relating to tires.................................       29,825
Testing fees to establish base course wear rate for tires..       32,800
                                                            ------------
      Total................................................      265,025
Number of tires purchased= 700                                          
$265,025/700 = $378.61 cost per tire.                                   
                                                                        

    Two-thirds of the $379.00 proposed charge is attributable to 
NHTSA's acquisition cost of $250.00 for each tire. That price, which is 
set by the tire's manufacturer, is a matter beyond the government's 
control. An additional $45.00 is attributable to the testing that NHTSA 
must perform to establish the base course wear rate for these tires. 
Warehousing expenses result in an 

[[Page 39271]]
additional charge of $34.00 for each tire. The only component of the 
proposed charge attributable to overhead expenses is the $50.00 that 
covers general facility costs and salaries relating to the testing, 
maintenance, and sale of the tires. In order to control these costs, 
NHTSA uses a minimal staff and relies extensively on electronic mail in 
processing orders for course monitoring tires. The $50.00 overhead 
expense represents thirteen percent of the sale price of each tire, an 
amount that appears quite reasonable, particularly when compared to 
overhead charges in the range of 110 to 150 percent that are applied 
within the tire industry. Although it recognizes that it is the only 
source for the purchase of these tires, as a government agency, NHTSA 
is in no position to take advantage of this situation by charging what 
the RMA characterizes as ``monopoly'' rates. If it recovered more than 
its actual costs in the sale of course monitoring tires, NHTSA would be 
in violation of a law that prohibits government agencies from 
augmenting the funds that they are appropriated by Congress. In view of 
these circumstances, NHTSA is adopting the proposed charge of $379.00 
as the fee for the course monitoring tires that it sells.

Rulemaking Analyses and Notices

1. Executive Order 12866 (Federal Regulatory Planning and Review) and 
DOT Regulatory Policies and Procedures

    This rulemaking action was not reviewed under E.O. 12866. NHTSA has 
analyzed this rulemaking action and determined that it is not 
``significant'' within the meaning of the Department of 
Transportation's regulatory policies and procedures.

2. Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act, NHTSA has 
evaluated the effects of this action on small entities. Based upon this 
evaluation, I certify that the amendment resulting from this rulemaking 
will not have a significant economic impact on a substantial number of 
small entities. Accordingly, the agency has not prepared a regulatory 
flexibility analysis.
    The agency believes that motor vehicle and tire manufacturers and 
tire brand owners typically do not qualify as small entities. This 
amendment may affect small businesses, small organizations, and small 
governmental units to the extent that these entities purchase vehicles 
and tires. However, because the user fees established through this 
amendment can be spread across a manufacturer's entire production, the 
amendment should have a negligible cost impact on vehicles and tires. 
For these reasons, vehicle manufacturers, small businesses, small 
organizations, and small governmental units that purchase motor 
vehicles should not be significantly affected by these user fees.

3. Executive Order 12612 (Federalism)

    This action has been analyzed in accordance with the principles and 
criteria contained in Executive Order 12612, and it has been determined 
that this rule does not have sufficient Federalism implications to 
warrant preparation of a Federalism Assessment. No State laws will be 
affected.

4. National Environmental Policy Act

    The agency has considered the environmental implications of this 
rule in accordance with the National Environmental Policy Act of 1969 
and determined that it will not significantly affect the human 
environment.

5. Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1980, P.L. 96-
511, the agency notes that there are no information collection 
requirements associated with this rulemaking action.

6. Civil Justice Reform

    This rule does not have any retroactive effect. Under section 
103(d) of the National Traffic and Motor Vehicle Safety Act (49 U.S.C. 
30111), whenever a Federal motor vehicle safety standard is in effect, 
a state may not adopt or maintain a safety standard applicable to the 
same aspect of performance which is not identical to the Federal 
standard. Section 105 of the Act (49 U.S.C. 30161) sets forth a 
procedure for judicial review of final rules establishing, amending or 
revoking Federal motor vehicle safety standards. That section does not 
require submission of a petition for reconsideration or other 
administrative proceedings before parties may file suit in court.

List of Subjects in 49 CFR Part 575

    Consumer protection, Labeling, Motor vehicle safety, Motor 
vehicles, Rubber and rubber products, Tires.

    In consideration of the foregoing, Sec. 575.104, Uniform tire 
quality grading standards, in Title 49 of the Code of Federal 
Regulations at Part 575, is amended as follows:

PART 575--[AMENDED]

    1. The authority citation for Part 575 will continue to read as 
follows:

    Authority: 49 U.S.C. 322, 30111, and 30123; delegation of 
authority at 49 CFR 1.50.

    2. A new Appendix D is added to Sec. 575.104, to read as follows:


Sec. 575.104  Uniform tire quality grading standards.

* * * * *

Appendix D--User Fees
    1. Course Monitoring Tires: A fee of $379.00 will be assessed 
for each course monitoring tire purchased from NHTSA at Goodfellow 
Air Force Base, San Angelo, Texas This fee is based upon the direct 
and indirect costs attributable to: (a) The purchase of course 
monitoring tires by NHTSA, (b) a pro rata allocation of salaries and 
general facility costs associated with maintenance of the tires, (c) 
warehouse storage fees for the tires, and (d) testing fees paid by 
NHTSA to establish the base course wear rate for the tires.
    2. Use of Government Traction Skid Pads: A fee of $34.00 will be 
assessed for each hour, or fraction thereof, that the traction skid 
pads at Goodfellow Air Force Base, San Angelo, Texas are used. This 
fee is based upon the direct and indirect costs attributable to: (a) 
depreciation on facilities and equipment comprising or used in 
conjunction with the traction skid pads (i.e., skid system, water 
truck, air compressor, skid track, tractor sweeper, equipment, 
buildings), (b) the calibration of the traction skid pads, and (c) a 
pro rata allocation of salaries and general facility costs 
associated with maintenance of the traction skid pads.
    3. Fee payments shall be by check, draft, money order, or 
Electronic Funds Transfer System made payable to the Treasurer of 
the United States.
    4. The fees set forth in this Appendix continue in effect until 
adjusted by the Administrator of NHTSA. The Administrator reviews 
the fees set forth in this Appendix and, if appropriate, adjusts 
them by rule at least every 2 years.

    Issued on: July 27, 1995.
Ricardo Martinez,
Administrator.
[FR Doc. 95-19018 Filed 8-1-95; 8:45 am]
BILLING CODE 4910-59-P