[Federal Register Volume 64, Number 126 (Thursday, July 1, 1999)]
[Notices]
[Pages 35709-35711]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16718]


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

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration
[Docket No. NHTSA 99-5476; Notice 2]


Electric Vehicles International; Grant of Application for 
Temporary Exemption From Federal Motor Vehicle Safety Standard No. 121

    We are granting the application by Electric Vehicles International 
LLC (``EVI'') of Anderson, Indiana, to be exempted from portions of 
Federal Motor Vehicle Safety Standard No. 121, Air Brake Systems. The 
statutory basis

[[Page 35710]]

for granting this request is our finding that ``compliance would cause 
substantial economic hardship to a manufacturer that has tried in good 
faith to comply with the standard.'' 49 U.S.C. 30113.
    We published a notice of receipt of the application on April 12, 
1999 (64 FR 17715), and asked for comments on it. There was one 
comment: Gillig Corporation opposed granting the application. We 
present Gillig's comment in our discussion below on why we have decided 
to grant EVI's request.
    The discussion below is based on information that EVI provided in 
its application.

Why EVI Needs an Exemption

    EVI requested an exemption for three years. In August 1997, EVI was 
organized as a corporation, acquiring some of the assets of Specialty 
Vehicle Mfg. Corp. of California, a manufacturer of buses and trolleys 
for use in transit and shuttle service. EVI's goal is to turn the 
operation into ``a first class bus company.'' It estimated its 
projected start-up costs at $4,000,000, and has raised $3,000,000 
through a private placement offering.
    Effective with vehicles manufactured on or after March 1, 1998, 
S5.1.6.1(a) of Standard No. 121 requires each single unit vehicle 
including buses to be equipped with an antilock brake system. EVI's 
product line consists of battery-powered and hybrid electric buses and 
trolleys, primarily used by transit agencies. Presently, it produces 
Generation III buses and trolleys. These vehicles are rated at 18,000 
to 22,000 GVW, ``so they do not fall in either the light vehicle or 
heavy vehicle class.'' It knows ``from experience working with axle 
suppliers that it would take a minimum of 18-24 months to receive a 
prototype axle with antilock brakes.'' After receiving the prototype 
system, it would have to review for further design changes necessary to 
install on future vehicles.

Why Compliance Would Cause EVI Substantial Economic Hardship

    To design, develop, and test an antilock brake system for a 
production rate of 50 to 300 vehicles per year would create a 
substantial increase in the price of the buses and trolleys that EVI 
intends to manufacture. If EVI is unable to obtain an exemption, it 
would have to ``cease production and close the company.'' Its net loss 
for the 5 months it was in existence in 1997 was $437,900, increasing 
to $1,632,800 for the 12 months of 1998. The company had manufactured 
two vehicles as of the end of January 1998.

How EVI Has Tried in Good Faith To Comply With Standard No. 121

    EVI's buses use an air-over-hydraulic brake system. The company has 
searched the industry to find an antilock brake system for vehicles 
defined as ``medium duty vehicles.'' To date, it has been unable to 
find any manufacturer that has a system available to meet its braking 
requirements. Attachment 3 to EVI's application listed 19 manufacturers 
and suppliers that it contacted in its attempt to comply with the 
antilock brake system requirements in Standard No. 121.

Why an Exemption for EVI Would Be in the Public Interest and 
Consistent with the Objectives of Motor Vehicle Safety

    The City of Anderson is assisting EVI financially with additional 
capital with the stipulation that EVI hire ``at least 51% low and 
moderate income persons by creating jobs.'' EVI will offer prospective 
assembly positions extensive training in conjunction with the County's 
job training and partnership administration.
    EVI enclosed data purporting to show that the total service and 
emergency brake stopping distance of its bus already comply with the 
maximum stopping distances specified in Table II of Standard No. 121, 
and will be unaffected by an exemption.

Why Gillig Corporation Opposes Granting EVI a Temporary Exemption

    As noted earlier, we received one comment on EVI's application, 
from Gillig Corporation, which opposed it.
    Gillig describes itself as ``a manufacturer of heavy duty buses, 
primarily for transit operations.'' It views the antilock features of 
Standard No. 121 as a justifiable safety requirement, and not an option 
dependent on the profitability of a corporation. Given the April 1994 
SNPRM that proposed applicability of antilock feature to buses 
initially in 1998, Gillig argues that this ``is more than enough notice 
to plan for a business like change over,'' and concludes that ``EVI 
ignored this important standard for at least two years.'' It criticizes 
EVI's ``development time claims [as] obviously overstated.'' Gillig 
asserts that all EVI's competitors ``have exactly the same business 
problems and economic hardships,'' and feels that it is ``unfair for 
EVI to seek relief . . . for their business mismanagement.'' Gillig 
comments that ``virtually all transit buses are included in 
F[ederal]T[ransit]A[dministration] funding programs'' and that the 
taxpayers will not be receiving buses that fully comply with the FMVSS. 
Finally, in Gillig's view, we ``encouraged this petition last year with 
a large scale exception to Orion Bus Industries.''

Our Finding That a Denial Would Cause Substantial Economic Hardship 
to a Manufacturer That Has Tried in Good Faith To Comply With 
Standard No. 121

    According to its application, EVI was organized in August 1997, 
slightly over 6 months before the effective date of the requirement 
from which it seeks temporary relief. For this reason, Gillig's comment 
that ``EVI ignored this important standard for at least two years'' 
does not seem to be accurate. Nor does it appear that ``all EVI's 
competitors have exactly the same business problems and economic 
hardships,'' because we have received no other applications from start-
up manufacturers who cannot find a supplier. The Orion exemption (63 FR 
26248) that Gillig mentioned is not on point; Orion simply was unable 
to complete an order of 148 buses before the effective date of the 
anti-lock requirement because of the insolvency of one of its 
suppliers. The rest of Orion's production complied as of March 1, 1998.
    EVI's total production to date appears to be two buses, produced 
before March 1, 1998. The company first approached us about applying 
for an exemption at the end of September 1998. It appears obvious that 
it did not do so until it concluded that it could not find a supplier, 
after contacting 19 prospects. Although Gillig commented that EVI's 
``development times are obviously overstated,'' EVI's inability to find 
a supplier was not contested. In the meantime, EVI's cumulative net 
losses as of the end of 1998 were approximately $2,000,000.
    We find therefore that denial of an exemption will cause 
substantial economic hardship to a company that has made a good faith 
attempt to meet the anti-lock requirements of the air brake standard.

Our Finding That a Temporary Exemption Would Be in the Public 
Interest and Consistent With the Objectives of Motor Vehicle Safety

    EVI informed us that, under a financing agreement with the City of 
Anderson, it is required to hire at least 51% low and moderate income 
persons by creating jobs, in conjunction with the County's job training 
and partnership administration. We have concluded that it is in the 
public interest as well to

[[Page 35711]]

facilitate the development of electric and hybrid propulsion systems.
    EVI enclosed data which it believes show that the total service and 
emergency brake stopping distances of its bus already comply with the 
maximum stopping distances specified in Table II of Standard No. 121, 
and will be unaffected by an exemption.
    We find therefore that a temporary exemption is in the public 
interest and consistent with the objectives of motor vehicle safety. We 
are nevertheless mindful that vehicles engaged in carrying the public 
on a daily basis ought to comply with anti-lock requirements at the 
earliest possible time. Although EVI has asked for a 3-year exemption, 
and we are granting it, we have the authority to impose appropriate 
terms on the grant (49 U.S.C. 30113(b)(1)). We are therefore asking EVI 
to provide us with a yearly report on the progress it is making in 
bringing its buses into full compliance with Standard No. 121, with the 
hope that this may be achieved before the end of the exemption period. 
This report will also include the number of buses produced under the 
exemption as of that date.

Grant of the Temporary Exemption

    Electric Vehicles International is hereby granted NHTSA Temporary 
Exemption No. 99-7 from S5.1.6.1(a) of 49 CFR 571.121 Standard No. 121 
Air brake systems, expiring May 1, 2002, subject to the condition that 
it provide a report to the Administrator on May 1, 2000, and May 1, 
2001, detailing its continuing efforts to conform, and including the 
number of buses manufactured under the exemption.

    Authority: 49 U.S.C. 30113; delegations of authority at 49 CFR 
1.50 and 501.4.

    Issued on: June 22, 1999.
Ricardo Martinez,
Administrator.
[FR Doc. 99-16718 Filed 6-30-99; 8:45 am]
BILLING CODE 4910-59-P