[Federal Register Volume 66, Number 75 (Wednesday, April 18, 2001)]
[Notices]
[Pages 20028-20030]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-9581]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2001-8827; Notice 2]


Dan Hill & Associates, Inc.; Red River Manufacturing, Inc.; Grant 
of Applications for Temporary Exemption From Federal Motor Vehicle 
Safety Standard No. 224

    This notice grants the applications by Dan Hill & Associates, Inc. 
(``Dan Hill'') of Norman, Oklahoma, and by Red River Manufacturing 
(``Red River'') of West Fargo, North Dakota, for a temporary exemption 
from Motor Vehicle Safety Standard No. 224, Rear Impact Protection. 
Both petitioners assert that compliance would cause substantial 
economic hardship to manufacturers that have tried in good faith to 
comply with the standard.
    Notice of receipt of Dan Hill's petition was published in the 
Federal Register on February 13, 2001, and an opportunity afforded for 
comment (66 FR 10050). Twenty-two comments were received, 21 of which 
supported the petition. As we explain more fully below, we view the 
issues and arguments by Red River as equivalent to those of Dan Hill 
and the comments as equally pertinent, and we are proceeding to a 
decision on Red River without issuing a separate comment notice.
    Dan Hill and Red River have been the beneficiaries of temporary 
exemptions from Standard No. 224, and renewals of exemptions, from 
January 26, 1998 to February 1, 2001. (For Federal Register notices 
granting the petitions by Dan Hill, see 63 FR 3784 and 64 FR 49047; by 
Red River, see 63 FR 15909 and 64 FR 49049). The information below is 
based on material from the petitioners' original and renewal 
applications of 1998 and 1999, and their most recent applications.

Why the Petitioners Say That They Continue To Need an Exemption.

    Dan Hill and Red River manufacture and sell horizontal discharge 
trailers that are used in the road construction industry to deliver 
asphalt and other road building materials to construction sites (``the 
trailers''). The trailers are designed to connect with and latch onto 
various paving machines (``pavers''). With their hydraulically 
controlled horizontal discharge systems, the trailers discharge hot mix 
asphalt at a controlled rate into pavers which overlay the road surface 
with asphalt material.
    Standard No. 224 requires, effective January 26, 1998, that all 
trailers with a GVWR of 4536 Kg or more, including the trailers, be 
fitted with a rear impact guard that conforms to Standard No. 223, Rear 
impact guards. Both petitioners have argued that installation of a 
fixed rear impact guard will prevent the trailers from connecting to 
the paver. Thus, the trailers will no longer be functional. Paving 
contractors will be forced to use standard dump body trucks or trailers 
which, according to Dan Hill, have inherent limitations and safety 
risks. In spite of exemptions totaling three years, each petitioner 
avers that it has been unable to develop a movable rear guard that will 
enable its trailers to conform and needs more time in which to do so. 
Dan Hill has asked for a one-year exemption and Red River, a two-year 
exemption. We discuss below their efforts to conform in greater detail.

The Petitioners' Reasons Why They Believe That Compliance Would 
Cause Them Substantial Economic Hardship and That They Have Tried 
in Good Faith To Comply With Standard No. 224.

    Dan Hill. Dan Hill is a small volume manufacturer. Its total 
production in the 12-month period preceding its latest petition was 151 
units. In the absence of a further exemption, Dan Hill asserts that 
approximately 70 percent of its work force would have to be laid off. 
If the exemption were not granted, Dan Hill's gross sales would 
decrease by $8,313,337 in 2001. Its cumulative net income after taxes 
for the fiscal years 1998, 1999, and 2000 was $454,556, but net income 
has declined in 2000 and

[[Page 20029]]

1999 from the year before. It projects a net loss of $291,947 for 
fiscal year 2001.
    The Federal Register notices cited above contain Dan Hill's 
arguments of its previous good faith efforts to conform with Standard 
No. 224 and form the basis of our previous grants of Dan Hill's 
petitions. Dan Hill originally asked for a year's exemption in order to 
explore the feasibility of a rear impact guard that would allow the 
Flow Boy trailer to connect to a conventional paver. It concentrated 
its efforts between 1998 and 1999 in investigating the feasibility of a 
retractable rear impact guard, which would enable Flow Boys to continue 
to connect to pavers. The company has examined the various 
alternatives: installation of a fixed rear impact guard, redesign of 
pavers, installation of a removable rear impact guard, installation of 
a retractable rear impact guard, and installation of a ``swing-up'' 
style tailgate with an attached bumper. Its latest efforts to conform, 
from September 1999 until December 2000, involve the design of a swing-
in retractable rear impact guard. A review of its design, by Tech, 
Inc., shows that this, too, is not feasible. Among other things, Tech, 
Inc., is concerned that ``the tailgate, hinges, and air cylinders will 
not meet the criteria of the Standard 224-plasticity requirement,'' and 
that ``the bumper is a potential safety hazard'' because if the gate 
were raised and ``a flagman or a trailer stager is in between the paver 
and the bumper while the gate and bumper is rising, the bumper could 
cause serious injury or death.'' A copy of Tech Inc.''s report has been 
filed in the docket as part of Dan Hill's petition. The report also 
indicates that the costs associated with this design may be cost 
prohibitive ``when trying to win business in a highly competitive, yet 
narrow marketplace.''
    Red River. Red River is also a small volume manufacturer. It 
produced a total of 376 trailers of in the 12-month period before 
February 2001 including 163 Live Bottoms. In the absence of a further 
exemption, Red River asserts that approximately 35 percent of its work 
force would have to be laid off. If the exemption is not granted, Red 
River's projected loss of sales would be $6,000,000 to $7,000,000 per 
year. Its cumulative net income for fiscal years 1998-2000 was 
$1,099,024. It projects a net income of $238,706 for 2001.
    The Federal Register notices cited above contain Red River's 
arguments of its previous good faith efforts to conform with Standard 
No. 224 and form the basis of our previous grants of Red River's 
petitions. Its exemptions originally covered horizontal agriculture-
discharge trailers as well, but the company has been able to develop a 
wheels-back configuration which removes the agriculture trailer from 
the applicability of the standard. Such a reconfiguration, however, is 
not feasible for the asphalt trailer ``because of variability in the 
clearances required by the many different kinds of pavers used in the 
road construction industry.''
    Since its last exemption on September 9, 1999, Red River has tested 
a ``third generation'' prototype retractable underride guard on two 
Live Bottoms. Several shortcomings have become apparent. The most 
serious of these is asphalt buildup on the sliding members which 
affected maintenance. If the mechanism was not thoroughly cleaned on a 
regular basis, ``resistance to motion quickly overcame the available 
semi-tractor air pressure to retract the bumper. The driver would then 
be required to move to the rear of the trailer and agitate the bumper 
(usually by kicking it) to enable it to retract.'' As a result, the 
bumper was often left in the retracted position. The most serious 
shortcoming of the prototype ``was attributable to the nature of the 
`flexible yet strong' bumper support structure.'' The bumpers are 
subject to contacts or collisions with unyielding structures, such as 
occurs when trailers are backed into pavers without their bumpers 
retracted. Contacts and collisions such as these, even though at low 
speeds, were damaging because space limitations forced Red River to 
design a system in which the bumper support structure would absorb the 
energy required by Standard No. 223. In a single season's use, such 
repeated instances of deflection rendered one of the bumpers virtually 
unusable. Efforts to strengthen the bumper continued during the winter 
of 2000-01. These efforts resulted in designs which failed the energy 
absorption requirements of Standard No. 223. Although Red River intends 
to continue its efforts to comply during the next two years, it informs 
us that it will also file a petition for rulemaking to amend Standard 
No. 224 to exclude horizontal asphalt-discharge trailers such as the 
Live Bottom and the Flow Boy.

The Petitioners' Reasons Why They Believe That a Temporary 
Exemption Would Be in the Public Interest and Consistent With 
Objectives of Motor Vehicle Safety

    Dan Hill. Dan Hill believes that an exemption would be in the 
public interest and consistent with traffic safety objectives because, 
without an exemption, ``within a short time, production of the trailer 
will cease entirely. Jobs will be lost and a major employer in McClain 
County will be lost. This would mean a significant loss to many people 
in the state, including shareholders, lenders, employees, families, and 
other stakeholders.'' Dan Hill's production represents less than .05% 
of trailers manufactured. The amount of time actually spent on the road 
is limited because of the need to move the asphalt to the job site 
before it hardens. Nevertheless, Dan Hill has taken recent efforts to 
enhance the conspicuity of Flow Boy trailers by: 1. adding ``High 
intensity flashing safety lights; 2. Doubling the legally required 
amount of conspicuity taping at the rear of the trailer; 3. [adding] 
Safety signage; 4. [adding] Red clearance lights that normally emit 
light in twilight or night-time conditions; and 5. Installation of a 
rear under-ride protection assembly 28'' above the ground and 60'' in 
width.'' Finally, the location of the rear tires is such that the tires 
act as a buffer ``and reduce the likelihood of impact with the semi-
trailer and the vehicle's windshield or interior of the vehicle 
significantly.''
    Red River. Red River argues that an exemption will be in the public 
interest because its horizontal asphalt-discharge trailer is ``more 
commercially versatile'' than its chief rival, ``the steel end dump 
trailer, which is not generally subject to FMVSS Nos. 223 and 224.'' 
Its sloped trailer wall design ``prevents segregation of material in 
transport,'' and ``can be used safely where it would be hazardous or 
impractical to use end dump trailers, such as on uneven terrain or in 
places with low overhead clearances.''
    The exemption is consistent with considerations of safety as well. 
The trailers spend a large portion of its operating time off the public 
roads. Further, ``typical hauls are short and have a minimal amount of 
highway time when compared with other trailers.'' Red River knows of no 
rear end collisions involving this type of trailer that has resulted in 
injuries.

The Comments Received Supported Dan Hill's Petition. We View Them 
as Equally Applicable to Red River's Petition

    Twenty-two trade associations, companies, and individuals submitted 
comments by April 2, 2001, on Dan Hill's petition. Twenty-one of them 
supported granting the company another exemption from Standard No. 224. 
E. D. Etnyre & Co. of Oregon, Illinois, opposed it. The company states 
that it has

built horizontal discharge trailers with a combination of 
retractable guards, retractable

[[Page 20030]]

chutes, and wheels back configuration to meet the regulations. We 
have tested our guard to prove that it meets the energy absorption 
requirements. As Dan Hill asserts, the hydraulic, pneumatic 
mechanisms, with their controls and valving are certainly costly and 
heavy. The extra cost and weight have placed us at a competitive 
disadvantage. We have shown that it can be done. Whether it can be 
done at a reasonable cost is questionable.

E.D. Etnyre made a similar comment in opposition to Red River's 1999 
application of renewal (64 FR 48049). Dan Hill supported Red River's 
application, and commented that E.D. Etnyre was a far larger company 
than it and Red River with ``considerably more resources to allocate to 
research and development.''
    We have carefully reviewed this comment. NHTSA has no information 
on how Etnyre designed its retractable rear impact guard, nor the costs 
involved. However, we have found no indication in NHTSA's statutory 
hardship exemption authority that an application by one manufacturer 
for an exemption from a standard should be denied because a competitor 
is complying with that standard. In granting a hardship application, 
the statute requires only that we find that ``compliance with the 
standard would cause substantial economic hardship to a manufacturer 
that has tried to comply with the standard in good faith'' (49 U.S.C. 
30113(b)(3)(B)). Such a finding is necessarily dependent upon a 
weighing of the resources of an individual applicant against the 
efforts it has made to conform. As discussed below, we have concluded 
that each manufacturer has made a good faith attempt to conform to 
Standard No. 224.
    Although 49 U.S.C. 30113(b)(2) requires NHTSA ``to publish notice 
of the application and provide an opportunity to comment,'' we are 
proceeding to a decision without publishing notice of the application. 
We believe that we have met the statutory requirement to provide an 
opportunity to comment in publishing the Dan Hill notice. Given that 
Red River's petition covers the same type of trailer as Dan Hill, that 
the company has had similar difficulties in achieving compliance with 
Standard No. 224, and that 22 members of the public commented on these 
issues in the past two months, we have concluded that no further 
arguments or relevant information would be forthcoming were we to 
publish a notice requesting comments on Red River's petition. We note, 
furthermore, that a timely decision on Red River's petition will reduce 
the hardship on a small volume manufacturer by allowing it to resume 
production several months earlier than if we had followed the process 
of a comment notice, comment period, and decision notice.

Our Findings and Decision

    As the exemption petitions by Dan Hill and by Red River 
Manufacturing, Inc. demonstrate, small manufacturers of horizontal 
asphalt-discharge trailers continue to find it difficult to develop a 
retractable rear impact guard that complies with Standard No. 223, and 
to fit it to its trailers to comply with Standard No. 224. Dan Hill's 
yearly net income is substantially less than half a million dollars 
under the best of circumstances. Were the exemption denied, its 
estimated loss of gross sales exceeding $8,273,117 would appear to 
create a net loss of some magnitude. Red River's yearly net income is, 
on the average, also less than half a million dollars and its estimated 
loss of sales of up to $7,000,000, lacking an exemption, would be 
almost of the same magnitude. During the period that the final 
extensions of the previous exemptions were in effect, we believe that 
each applicant demonstrated a continuing good faith effort to meet 
Standard No. 224. Dan Hill has submitted a consultant's report 
detailing the problems involved in developing a compliant and 
acceptable retractable or swinging rear guard. Red River developed and 
field-tested a design that fell short of expectations and 
acceptability.
    Given the fact that Dan Hill and Red River dominate the horizontal 
asphalt-discharge trailer market, and that both are experiencing the 
same difficulties in achieving compliance, it is in the public interest 
to maintain the existing level of competition between the two companies 
by affording equal treatment to both companies and granting them 
temporary exemptions of identical duration. We note, also, that the 
risk to safety is minimized to the extent that road construction 
trailers spend comparatively little of their operating life traveling 
on the highways.
    Accordingly, for the reasons set forth above, we hereby find that 
compliance with Standard No. 224 would cause substantial economic 
hardship to Dan Hill and Red River, who have tried in good faith to 
comply with Standard No. 224, and that an exemption would be in the 
public interest and consistent with the objectives of traffic safety. 
We accordingly grant NHTSA Temporary Exemptions No. 2001-3 and NHTSA 
Temporary Exemption No. 2001-4 to, respectively, Dan Hill Associates 
for its Flow Boy horizontal asphalt-discharge trailers, and Red River 
Manufacturing for its Live Bottom horizontal asphalt-discharge 
trailers. The temporary exemptions are from Federal Motor Vehicle 
Safety Standard No. 224, Rear Impact Protection, and expire on April 1, 
2003.

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

    Issued on April 13, 2001.
L. Robert Shelton,
Executive Director.
[FR Doc. 01-9581 Filed 4-17-01; 8:45 am]
BILLING CODE 4910-59-P