Interpretation ID: nht71-5.47

DATE: 07/09/71

FROM: AUTHOR UNAVAILABLE; Lawrence R. Schneider; NHTSA

TO: Nance; Caston; Hefner and Green

TITLE: FMVSR INTERPRETATION

TEXT: This is in reply to your letter of May 20, 1971, concerning a marketing practice used by your client, Hale Trailer Salco, Inc., which consists of allowing purchasers of new trailers to specify that the trailer be delivered with either new or used tires. When used tires are chosen, you indicate that they are for the limited purpose of delivering the trailer to the purchaser, and are usually replaced by him with other tires. You further indicate that this practice is widespread in the particular industry.

You ask in your letter whether the Tire Identification and Recordkeeping regulations (49 CFR Part 574) apply to the trailers that are sold equipped with used tires. The answer to this question is no. However, as you apparently realize, trailers sold with new tires that have been manufactured on or after May 22, 1971, are subject to the regulation.

Your letter also discusses the possibility of future requirements for trailer tires, and suggests three possible courses of action under such requirements by which trailers might be sold with used tires. An Advance Notice of Proposed Rulemaking concerning multipurpose passenger vehicle, truck, bus, motorcycle, and trailer tires was published October 14, 1967, (32 F.R. 14279) and a public meeting was held on the subject in June 1970. Since that time there has been no public issuance concerning this matter, and it is thus impossible to

2 send you the proposed rule you requested. The matter is under active consideration within the agency, however, and the proposed requirements should be issued in the near future.

The proposals will solicit comments from interested persons, which will be considered before any final regulations are issued. Your comments and any additional suggestions you might have would be appreciated in response to these proposals.

If you have additional questions, please feel free to write.

NANCE, CASTON, HEFNER AND GREEN

May 20, 1971

George Shifflett U.S. Department of Transportation National Highway Safety Bureau

Re: Hale Trailer Sales, Inc. 4-122 CIR-185.1

This letter will confirm our telephone conversation of May 19, 1971, with regard to our above client. I would appreciate opinions as I will hereafter numerate, and for purposes of these opinions the following facts are partinent: For a number of years, and purely as a convenience to our client's customers they have purchased in hugh lots, primarily from wrecking yards, used tires at $ 1.00 per tire. Since these tires are purchased from wrecking yards as merely a convenience item in huge lots we do not know the history of any of the tires concerning whether or not it has been retreaded, and if so, how recently and by whom, nor do we know when the tire was produced or whether the tire is a "second" in the production sense. Obviously, the products which we manufacture cannot be transported with convenience, from place to place, or delivered to customers without the use of tires. Many of the farmers and stockmen which we sell these tires to (approximately 40-50%) use these tires merely to deliver the vehicle from our stores, our dealer's store or our construction sights, and then discard them replacing on the vehicle tires which they have purchased at reduced rates either from tire manufacturers giving farmers discounts, or some cooperatives which purchase tires in bulk at reduced rates for members. Therefore, there is not real interest on the part that the vehicle even be equipped with tires, and in many instances they are not willing to pay for tires. However, this factor does not overcome the progmatic problem of transporting and delivering the vehicle. This problem is very characteristic of this particular industry, and at no time is a charge made for these tires. In fact, as I am sure you are aware, the invoices are marked "less tire" and with a notation of "no charge" on the sales invoices.

In addition, if Hale is required to put new tires on these vehicles, it will require on unnecessary increase in inventory of approximately $ 40,000.00 which is totally unnecessary for the sale of the vehicles and as stated above, are generally unwanted in 40-50% of the sales that are made. The other 50 - 60% of the sales that we make we are now furnishing tires and beginning May 22, 1971, will be complying with the record keeping

2 rules, even though, as you stated, there is no applicability to any tires manufactured prior to May 22, 1971. Presumably, we will continue to furnish these new tires and make appropriate charges for them, because in these instances the purchasers do not have the benefit of discount purchases, or they otherwise do desire to purchase tires with the vehicle and pay appropriate changes for them - we have no reason to suspect that we will not continue this in the future.

Based upon the above described facts, I would appreciate the following opinions:

1. Does the law as it becomes effective May 22, 1971, require us to keep records with regard to complying therewith with regard to these used tires?

2. You indicated that trailers are not covered by pertinent aspects of the present law, but that they would be covered in the future, and you indicated you would forward me a copy of the law which will become effective some time in the future. Based upon this extended application to which you referred, and in order that we may make preparations necessary to comply therewith, will it be possible for us to furnish any used tires under the facts stated above with the use of any one or more of the following whether singularly or in grouping:

a. Prepare a disclaimer certificate to deliver to the purchaser that the tires do not conform to the National Transportation Rules and are delivered merely as a convenience to the customer, and should not be used on any public road, street or highway; b. Some type of making on the tire to indicate that it is or may be a noncomplying tire.

c. The purchase by Hale of only tires manufactured after May 22, 1971, which are used tires, with the accompanying use of disclaimers described in either "a" or "b", and/or the use of any other method of your suggestion that would avoid this unnecessary increase in inventory.

As you know, I am totally unaware of what the new law will contain, since you have not had a chance to mail this to me. However, I thought that I would attempt to draft a request for opinion based upon our conversation in order to give you some additional time to consider and investigate this matter while I am reviewing this law as inacted, since the sizable outlay will have great implication on the economic structure of the corporation,

3 and will involve a great deal of planning and preparation, if a change is in fact necessary.

I hope that I have stated all necessary facts in order to illicit these opinions; however, if you need any additional facts which you feel are pertinent, please do not hesitate to let me know.

Thank you very much for your consideration and cooperation in this matter. Kindest regards.

Stephen F. Hefner

cc: Mr. Stanley Hale