00-15530. Raising the Threshold of Property Damage for Reports of Accidents Involving Recreational Vessels

AGENCY:

Coast Guard, DOT.

ACTION:

Notice of Proposed Rulemaking.

SUMMARY:

The Coast Guard proposes to raise the threshold of property damage for reports of accidents involving recreational vessels to $2,000 for Calendar Year 2001. We have also modified the methodology used to achieve the threshold, to better account for the rising cost of repairs on recreational vessels. This higher threshold would reduce the number of accident reports for minor or cosmetic damage, help us maintain statistics for future years comparable to those for past ones, and reduce the paperwork burden on the public to report such incidents.

DATES:

Comments must reach the Docket Management Facility on or before October 18, 2000.

ADDRESSES:

Identify your comments and related material by the docket number for this rulemaking [USCG 1999-6094]. To make sure they do not enter the docket more than once, please submit them by only one of the following means:

(1) By mail to the Docket Management Facility, U.S. Department of Transportation, room PL-401, 400 Seventh Street SW., Washington, D.C. 20590-0001.

(2) By delivery to room PL-401 on the Plaza level of the Nassif Building, 400 Seventh Street SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The phone number is 202-366-9329.

(3) By fax to the Facility at 202-493-2251.

(4) Electronically through the web site for the Facility at http://dms.dot.gov.

The Facility maintains the public docket for this rulemaking. Comments and materials received from the public, as well as documents mentioned in this preamble as being available in the docket, will become part of this docket. They will be available for inspection or copying at room PL-401 on the Plaza level of the Nassif Building, 400 Seventh Street SW., Washington, DC. Hours are between 10 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The telephone number is 202-366-9329. You may also find this docket on the Internet at http://dms.dot.gov. You may obtain a copy of this proposed rule by calling the U. S. Coast Guard Infoline at 1-800-368-5647, or read it on the Internet, at the Web Site for the Office of Boating Safety, at http://www.uscgboating.org or at http://dms.dot.gov.

FOR FURTHER INFORMATION CONTACT:

With questions on this rulemaking, contact Bruce Schmidt, Project Manager, Office of Boating Safety, Program Management Division, Coast Guard, by e-mail at [e-mail] or by telephone at 202-267-0955.

With questions on viewing the docket, call Dorothy Walker, Chief, Dockets, Department of Transportation, telephone [phone].

SUPPLEMENTARY INFORMATION:

Request for Comments

We encourage you to participate in this rulemaking by submitting comments and related material. If you do so, please include your name and address, identify the docket number for this rulemaking [USCG 1999-6094], and indicate the specific section of this document to which each comment applies, and give your reason for each comment. You may submit your comments and material by mail, delivery, fax, or electronic means to the Docket Management Facility at the address under ADDRESSES; but please submit them by only one means. If you submit them by mail or delivery, submit them in an unbound format, no larger than 81/2 by 11 inches, suitable for copying and electronic filing. If you submit them by mail and would like to know they reached the Facility, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period. We may change this proposed rule in view of them.

Public Meeting

We do not now plan to hold a public meeting. But you may submit a request for one to the Docket Management Facility at the address under ADDRESSES explaining why one would be beneficial. If we determine that one would aid this rulemaking, we will hold one at a time and place announced by a later notice in the Federal Register.

Background and Purpose

Regulatory Authority and History

46 U.S.C. 6101 requires the Secretary (who has delegated the authority to the Commandant) to prescribe rules on the reporting of “marine casualties”. We use that authority to describe different types of marine casualties, including those involving certain amounts of property damage, that must be reported. 33 CFR Part 173, Subpart C, contains the rules applicable to recreational vessels.

In 1972, the original threshold of property damage for reports of accidents involving recreational vessels was $100. In 1979, the effects of inflation on the original figure dictated that we raise the threshold to $200. The purpose of this adjustment was to reduce the number of reports filed for minor incidents.

Even the threshold of $200, however, eventually resulted in the submission of an excessive number of accident reports on minor incidents. This trend increased the reporting burden on the boating public and the administrative burden on both the States and the Coast Guard. On February 6, 1989, to reduce these burdens, we published a Final Rule [54 FR 5608] raising the threshold to $500. As it had been in 1979, the effect of inflation on repair costs was the basis for this change.

The formula described in the preamble of the Final Rule of 1989 rested on a methodology allowing us to adjust the threshold annually by applying a deflator based on the Gross National Product (GNP) to account for inflation. In that preamble we also stated our intent to review the threshold annually and, if necessary, adjust the threshold each time it rose by another $100.

How We Developed the New Methodology for Adjusting the Threshold

After analyzing the formula described in the preamble of the Final Rule of 1989, we determined that further adjustments both in the threshold and in the methodology used to determine it were necessary. Non-safety-related accident reports continued even after the threshold increased to $500 in 1989. We now believe both that the threshold was too low and that the methodology itself was amiss. An inflation index based on the GNP and applied to a base-year value of $500 yields a threshold for 2001 still low enough for a significant number of cosmetic damages to be reported. We determined that it is necessary to adjust the base-year value of the threshold to reach the level only where accident damage becomes a safety issue.

The National Association of State Boating Law Administrators (NASBLA) is a professional association consisting of officials of States, commonwealths, and provinces having responsibilities for administering or enforcing the boating laws of those bodies. Within NASBLA, the Boating Accident Investigation, Reporting, and Analysis Committee (BAIRAC) has responsibility for accident reporting and analysis.

The Boating Law Administrators (BLAs) who serve on BAIRAC are experts in enforcement, education for boating safety, and investigation of boating accidents. Through their ongoing relationships with facilities that repair recreational boats, as well as through their experience with and knowledge of various types of boat damage and costs needed to repair it, they have strongly conveyed the need for the Coast Guard to raise the threshold of property damage for reports of accidents involving recreational vessels to a level that accurately reflects current prices of boats and costs of repair.

BAIRAC is calling on the Coast Guard to initiate rulemaking that would change the threshold for reports of accidents involving only property damage from $500 to $2,000 and would amend the reportable conditions to include all accidents involving collisions of multiple vessels. The BLAs and the Coast Guard concur that a threshold of $2,000 for those accidents involving only property damage would enable States' accident investigators to focus on reports of safety-related damage and eliminate most of the reports of cosmetic damage.

Data within the Boating Accident Report Database (BARD) for 1998 show that 1,718 reported multi-boat collisions involved only property damage. Of those 1,718, 1,002 involved property damage below the proposed threshold of $2,000. Taking a closer look at the data, we discover that nearly 90% of those 1,002 involve property damage at or below a threshold of $1,500. We consider most of these more cosmetic than safety-related. So, recognizing the need to reduce the number of reports for minor or cosmetic damage, the need to reduce the administrative burden on the public and the States of reports for such damage, and the need for States' accident investigators to focus on safety-related damage, we do not plan to mandate reports of all multi-boat collisions.

The proposed threshold of $2,000 for reports of accidents with only property damage would be the minimum set by Federal regulation, but States would remain free to impose stricter requirements. Thus, a State could require reports of accidents involving collisions of multiple vessels, even if they resulted only in property damage below the proposed threshold of $2,000.

We have also determined that it is necessary to find an inflation index that tracks the trends in the boat-repair industry more accurately than does the GNP. The GNP is the total market value of all final goods and services produced in the U.S. for a given year. It comprises spending by all sectors of the economy. Therefore, the GNP deflator measures all changes in prices affecting consumers, private industry, and government.

The Producer Price Index (PPI) is an indicator of inflation that measures the average change over time of prices received by sellers of domestic goods and services. The data constituting the PPI are organized by industry and product, making it possible to find specific data about prices of repairs to non-military boats. These data track the specific changes in prices of repairs to recreational boats. As this rulemaking concerns these very prices, we believe the PPI to be more suitable for measuring the changes in those prices with an appropriate threshold of property damage for reports of accidents involving those vessels.

How We Calculate the New Threshold

For 2001 and beyond, we would use the PPI for Standard Industrial Classification (SIC) 3732, “Boat Building and Repairing: Boat repairing, non-military boats”, to reckon the threshold. The new value for 2001, of $2,000, would serve as the base value. To reckon the value of the threshold for 2002 using 2001 as the base year, one should run the following calculation:

(Base threshold for 2001) × ([PPI for 2002] / [PPI for 2001])

For example, if the preliminary estimate of the PPI by the Bureau of Labor Statistics for 2002 were 191.0, and for 2001 it were 189.0, the calculation would run as follows:

$2,000 × (191.0/189.0) = $2,021.16

Since this amount is below $2,050, we would round down to the nearest $100. Therefore, the reporting threshold for 2002 would remain at $2,000. If the amount had been $2,050 or above, though, we would have rounded up to the nearest $100. In that case, the threshold would have risen to $2,100. We would adjust the threshold according to the results. We would review the new threshold every year; when it increased by $500, we would raise it appropriately.

Regulatory Evaluation

This proposed rule is not a significant regulatory action under section 3(f) of Executive Order 12866 and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget (OMB) has not reviewed this rule under that Order. It is not significant under the regulatory policies and procedures of the Department of Transportation (DOT) (44 FR 11040 (February 26, 1979)). We expect the economic impact of this rule to be so minimal that a full Regulatory Evaluation under paragraph 10e of the regulatory policies and procedures of DOT is unnecessary.

Cost of Rule

This proposed rule would impose no monetary costs on the operator or owner of a recreational vessel or on anyone else. On the contrary, it would relieve either of costs that the current rule imposes.

Benefits of Rule

Raising the threshold of property damage for reports of accidents involving recreational vessels to $2,000 for the year 2001 would benefit owners and operators of recreational vessels, and officials of States and the Coast Guard, by reducing the current burden of submitting and administering accident reports. There were 3,836 accidents involving only property damage reported in 1998. We estimate that the proposed threshold would have rendered 1,997 of those accidents non-reportable. We further estimate that it would have rendered about 25% of all 8,061 reported accidents non-reportable.

Small Entities

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we considered whether this proposed rule would have a significant economic impact on a substantial number of small entities. “Small entities” include small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

Because it expects the effects of this rule to be minimal, the Coast Guard certifies under 5 U.S.C. 605(b) that this rule would not have a significant economic impact on a substantial number of small entities. Furthermore, as private citizens own the vast majority of recreational vessels and are not small entities, the Regulatory Flexibility Act does not even apply to most of the public that would be regulated by this rule.

Assistance for Small Entities

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 [Pub. L. 104-121], we offer assistance to small entities in understanding this proposed rule so that they can better evaluate its effects on them and participate in the rulemaking. For clarification of the new threshold, they can consult Bruce Schmidt, Program Management Division, Office of Boating Safety, Coast Guard, telephone [phone] (email: [e-mail]).

The Small Business and Agriculture Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards were established to receive comments from small businesses about Federal enforcement. The Ombudsman will annually evaluate the enforcement and rate each agency's responsiveness to small business. If you wish to comment on enforcement by the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).

Collection of Information

This proposed rule would call for no new collection of information under the Paperwork Reduction Act of 1995 [44 U.S.C. 3501-3520]. In fact, it should result in an actual reduction of paperwork as it would require reports of fewer accidents.

Federalism

We have analyzed this proposed rule under E.O. 13132 and have determined that it would not have sufficient implications for federalism to warrant the preparation of a Federalism Assessment. States would remain free to impose stricter requirements for reports of accidents involving recreational vessels.

Unfunded Mandates Reform Act and Enhancing the Intergovernmental Partnership

The Unfunded Mandates Reform Act of 1995 [2 U.S.C. 1531-1538] and E.O. 12875, Enhancing the Intergovernmental Partnership [58 FR 58093 (October 28, 1993)], govern the issuance of Federal rules that impose unfunded mandates. An unfunded mandate is a requirement that a State, local, or tribal government or the private sector incur direct costs without the Federal Government's having first provided the funds to pay those costs. This proposed rule would not impose an unfunded mandate.

Taking of Private Property

This proposed rule would not effect a taking of private property or otherwise have implications for taking under E.O. 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

Reform of Civil Justice

This proposed rule meets applicable standards in sections 3(a) and 3(b)(2) of E.O. 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

Protection of Children

We have analyzed this proposed rule under E.O. 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule would not be an economically significant rule and would not create or condone an environmental risk to health or safety that may disproportionately affect children.

Environment

We have considered the environmental impact of this proposed rule and concluded that under figure 2-1, paragraph (34)(a), of Commandant Instruction M16475.1C, the rule is categorically excluded from further environmental documentation. The rule would merely adjust the threshold of property damage for reports of accidents involving recreational vessels. A Determination of Categorical Exclusion has been prepared and is available in the docket where indicated under ADDRESSES.

List of Subjects in 33 CFR Part 173

• Marine safety
• Reporting and recordkeeping requirements

For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 173 as follows:

Subpart C—Casualty and Accident Reporting

1. The citation of authority citation for part 173 continues to read as follows:

Authority: 46 U.S.C. 6101, 12302; 49 CFR 1.46.

2. Revise § 173.55(a)(3) to read as follows:

§ 173.55

Report of casualty or accident.

(a) * * *

(3) Damage to vessels and other property totals more than $2,000 an accident or there is a complete loss of any vessel; or

* * * * *

Dated: June 12, 2000.

Terry M. Cross,

Rear Admiral, U.S. Coast Guard, Assistant Commandant for Operations.