Dan Hill & Associates, Inc.; Grant of Application for Renewal of Temporary Exemption From Federal Motor Vehicle Safety Standard No. 224

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-99-5683; Notice 2]

Dan Hill & Associates, Inc.; Grant of Application for Renewal of

Temporary Exemption From Federal Motor Vehicle Safety Standard No. 224

For the reasons explained below, we are granting the application by

Dan Hill & Associates, Inc. (``Dan Hill''), of Norman, Oklahoma, for a

renewal of its existing temporary exemption from Motor Vehicle Safety

Standard No. 224, Rear Impact Protection. As it did in applying for the

existing exemption, Dan Hill asserts that compliance would cause

substantial economic hardship and that it has tried in good faith to

comply with the standard.

We published notice of receipt of the application in the Federal

Register on May 19, 1999, and afforded an opportunity for comment 64 FR

27353). No comments were received.

We granted Dan Hill a 1-year temporary exemption from Standard No.

224 on January 26, 1998 (63 FR 3784). The exemption was to expire on

February 1, 1999, but Dan Hill filed a timely application for renewal.

Under 49 CFR 555.8(e), the timely filing of a renewal application had

the effect of automatically extending the exemption until we make a

decision on the application. The company has requested an extension of

this exemption until February 1, 2001.

The information below is based on material from Dan Hill's original

and renewal applications.

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Why Dan Hill Says That it Needs to Renew its Exemption.

Dan Hill manufactures and sells a horizontal discharge trailer

(``Flow Boy'') that is used in the road construction industry to

deliver asphalt and other road building materials to the construction

site. The Flow Boy is designed to connect with and latch onto various

paving machines (``pavers''). The Flow Boy, with its hydraulically

controlled horizontal discharge system, discharges hot mix asphalt at a

controlled rate into a paver which overlays the road surface with

asphalt material.

Standard No. 224 required, effective January 26, 1998, that all

trailers with a GVWR of 4536 Kg or more, including Flow Boy trailers,

be fitted with a rear impact guard that conforms to Standard No. 223,

Rear impact guards. Installation of the rear impact guard will prevent

the Flow Boy from connecting to the paver. Thus, Flow Boy trailers will

no longer be functional and contractors will be forced to use standard

dump body trucks or trailers with their inherent limitations and safety

risks.

Why Dan Hill Says That Compliance Would Cause it Substantial

Economic Hardship and That it has Tried in Good Faith to Comply

With Standard No. 224.

At the time of its application for the existing exemption, Dan Hill

told us that it had manufactured 81 Flow Boy trailers in 1996 (plus 21

other trailers). Its production in the 12-month period preceding its

application for renewal was ``130 units for the domestic market and 35

units for the international market.''

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 has

concentrated its efforts this past year in investigating the

feasibility of a retractable rear impact guard, which will enable Flow

Boys to continue to connect to pavers.

In the absence of an exemption, Dan Hill originally asserted that

approximately 60 percent of its work force would have to be laid off;

it now argues that failure to extend its exemption would ultimately

cause a lay off of ``approximately 70 percent'' of its work force. If

the exemption were not renewed, Dan Hill's gross sales would decrease

by $8,273,117. Its cumulative net income after taxes for the fiscal

years 1995, 1996, and 1997 was $303,303. It projected a net income of

$356,358 for fiscal year 1998.

At the time of its original application, its studies show that the

placement of the retractable rear impact guard would likely catch

excess asphalt as it was discharged into the pavement hopper. Further,

the increased cost of the Flow Body would likely cause contractors to

choose the cheaper alternative of dump trucks. Finally, the increased

weight of the retractable rear impact guard would significantly

decrease the payload of the Flow Boy.

Dan Hill sent its Product Specialist to Germany in 1994 to view

underride protection guards installed by a German customer on Flow Boy

trailers but the technology proved inapplicable because of differences

between German and American pavers. Manufacturers of paving machines

are not interested in redesigning their equipment to accommodate a Flow

Boy with a rear impact guard. Dan Hill contacted a British manufacturer

of a retractable rear impact guard but the information received by the

time of its initial application did not look encouraging.

During the time that the exemption has been in effect, Dan Hill has

continued its efforts to locate a source for a retractable rear impact

guard, locating one in Europe which ``was in the process of designing a

retractable guard that would meet Standard No. 223 specifications and

attach to the Flow Boy trailer while allowing the Flow Boy to attach to

a paver.'' However, the European retractable rear impact guard, which

was of a ``swing out'' design, raised problems of worker safety,

reduced payload because of the guard's weight, accumulation of asphalt

paving material on the guard, and prohibitive costs.

Dan Hill is now examining the feasibility of a ``swing in'' guard.

It is working with an English source to develop a guard that will

comply with Standard No. 223. Dan Hill will then install the guard on

several Flow Boy trailers to determine whether further design

modifications are required. It anticipates full compliance at the end

of a further exemption of 2 years.

Why Dan Hill Says That a Temporary Exemption Would be in the Public

Interest and Consistent With Objectives of Motor Vehicle Safety

Dan Hill believes that an exemption would be in the public interest

and consistent with traffic safety objectives because the Flow Boy aids

in the construction of the national road system. Flow Boy spends very

little of its operating life on the highway and the likelihood of its

being involved in a rear-end collision is minimal. In addition, the

design of the Flow Boy is such that the rear tires act as a buffer and

reduce the likelihood of impact with the trailer.

Our Findings and Decision

As the exemption renewal petitions by Dan Hill and by Red River

Manufacturing, Inc. (see 64 FR 10737) demonstrate, manufacturers of

horizontal 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. During

the past year, Dan Hill has investigated the feasibility of a ``swing-

out'' design, which presented problems of an accumulation of asphalt

paving material on the guard. Presently, it is examining a ``swing-in''

guard, and working with an English source to develop it. It anticipates

full compliance by February 1, 2001. 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.

Given the fact that Dan Hill and its principal competitor 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 by

affording equal treatment to both companies. 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 a manufacturer that has 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. NHTSA Temporary

Exemption No. 98-1 from Federal Motor Vehicle Safety Standard No. 224,

Rear Impact Protection, applicable to Flow Boy horizontal discharge

construction trailers, is hereby extended to expire on February 1,

2001. That date is slightly more than five years after Standard No. 224

was issued, and NHTSA does not anticipate providing further extensions

of exemptions from compliance with Standard No. 224.

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

1.50 and 501.4.

[[Page 49049]]

Issued on September 1, 1999.

Ricardo Martinez,

Administrator.

[FR Doc. 99-23427 Filed 9-8-99; 8:45 am]

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