[Federal Register Volume 66, Number 85 (Wednesday, May 2, 2001)]
[Notices]
[Pages 22069-22070]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-10971]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-98-3848; Notice 4]


Beall Trailers of Washington, Inc.; Grant of Petition for Renewal 
of Temporary Exemption From Federal Motor Vehicle Safety Standard No. 
224

    This notice grants the petition by Beall Trailers of Washington, 
Inc., of Kent, Washington (``Beall''), a wholly-owned subsidiary of 
Beall Corporation, for a renewal of the temporary exemption we granted 
it in July 1998 from Federal Motor Vehicle Safety Standard No. 224 Rear 
Impact Protection. The basis of the petition is that compliance would 
cause substantial economic hardship to a manufacturer that has tried in 
good faith to comply with the standard.
    Notice of receipt of the petition was published on January 20, 
2000, and an opportunity afforded for comment (65 FR 3267).
    On July 8, 1998, we granted Beall's initial exemption petition, 
assigning it NHTSA Temporary Exemption No. 98-5, expiring July 1, 1999 
(63 FR 36989). On April 20, 1999, we received Beall's application for 
renewal , which was filed in time to stay the expiration date of the 
exemption, as provided by 49 CFR 555.8(e). Following our request, Beall 
provided more current financial and production information on October 
28, 1999 to supplement its new petition.
    Beall manufactures and sells dump body trailers. It (identified in 
the petition as ``Truckweld'') produced a total of 311 trailers in 
1997, of which 124 were dump body types. Truckweld trailer production 
in 1998 was down to 135 units but the number of dump body types was not 
stated.
    Standard No. 224 requires, effective January 26, 1998, that all 
trailers with a GVWR of 4536 Kg or more, including dump body types, be 
fitted with a rear impact guard that conforms to Standard No. 223 Rear 
impact guards. Beall argued earlier that ``alterations may have to be 
made to the trailer chassis or even raising the dump box to provide 
space for the retractable guard,'' indicating that a guard that 
retracts when the dump body is in operation is the solution it is 
seeking in order to comply. During the time that its exemption has been 
in effect, Beall ``has, in good faith, made attempts to design a 
compliant device.'' It states that it has developed ``a number of 
potential designs'' including an articulating design, but ``these 
devices * * * do not meet FMVSS 224, have interferences with paving 
equipment, or have severe maintenance issues.'' The company is still 
testing hinged, retractable devices but three issues must be overcome. 
First, space for a retracted device is not readily available ``due to 
the clearance issues in connecting to pavers.'' Raising the box also 
raises the center of gravity and reduces the stability of the trailers 
``thereby endangering others.'' Second, ``asphalt service will, over a 
period of time, render such devices unusable.'' Finally, ``it would be 
possible to operate a trailer with these type (sic) of devices in the 
retracted position, therefore not in compliance.'' It will continue its 
efforts to conform during the three-year exemption period it has 
requested.
    If a renewal of the exemption is not granted, substantial economic 
hardship will result. First, it would lose a trailer that accounts for 
40 percent of its overall production. In addition, ``some percentage of 
the remaining 60% would be lost since our customers typically purchase 
matching truck mounted dump bodies which may also be lost.'' It also 
believes that 31 of its 63 employees would have to be laid off if its 
application is denied. It argues that maintenance of full employment 
would be in the public interest . Beall's net income was $39,317 in 
fiscal year 1995, $72,213 in 1996, $697,040 before income taxes in 
1997, and $326,255 in 1998.
    One comment was received on the petition, from Pioneer Truck 
Equipment of Salem, Oregon, which opposed it. Pioneer, a manufacturer 
of ``multi axle dump body trailers,'' argues that Beall's exemption has 
given it a competitive advantage. It believes that Beall's petition 
should be denied, or, alternatively, that there be ``a blanket 
exemption for all affected manufacturers.'' In considering whether to 
grant a temporary exemption, however, the test we must apply is whether 
denying an exemption would cause substantial economic hardship to a 
manufacturer that has tried in good faith to comply.
    Beall is a small volume manufacturer by any standard, producing 
only 135 units in the year preceding the filing of its application for 
renewal. Its net income at that point was $326,255. We note that this 
figure reflects Beall's financial situation during the first year that 
Standard No. 224 and its exemption was in effect. This new income was 
substantially lower than the previous year, before Standard No. 224's 
effective date, when it was $697,040 (which, however, was more than six 
times the combined net income for the two years prior to that). While 
the company is not showing net losses, its average net income over the 
four-year period 1995-98 is roughly $284,000. If we assume that Beall's 
net income is reduced 50% if an exemption is not granted, the possible 
result is a net income of only $142,000. In the meantime, it must 
continue to expend resources in searching for means to conform to 
Standard No. 224 within the strictures of reduced income. The company 
assures us that it has been testing hinged, retractable devices, but 
reports that it continues to experience difficulty. An exemption will 
be in the public interest because it will allow it to retain full 
employment. The effect upon safety will be minimal due to the low 
volume of production.
    In consideration of the foregoing, we hereby find that the 
petitioner has met its burden of persuasion that compliance would cause 
substantial economic hardship to a manufacturer that has tried to meet 
the standard in good faith, and that a temporary exemption would be in 
the public interest and consistent with the objectives of motor vehicle 
safety. Given the facts that more than two years have passed between 
our receipt of Beall's petition and our decision to grant it, and that 
Beall has continued to manufacture its trailers as allowed by the 
tolled expiration date, we are providing an exemption until August 1, 
2001, which, is in effect, slightly more than a two-year exemption. In 
view of the comment from Pioneer, we are not providing the three-year 
exemption Beall requested. If Beall has still not achieved compliance, 
this exemption period should be sufficient to allow the company to file

[[Page 22070]]

a further exemption request in time to toll the new expiration date, 
and to provide us with updated compliance and financial information. 
Accordingly, NHTSA Temporary Exemption No. 98-5 from 49 CFR 571.224 
Standard No. 224, Rear Impact Protection is hereby extended to, and 
will expire on, August 1, 2001.

L. Robert Shelton,
Executive Director.
[FR Doc. 01-10971 Filed 5-1-01; 8:45 am]
BILLING CODE 4910-59-P