Revision of Method for Calculating Monetary Threshold for Reporting Rail Equipment Accidents/Incidents, 20333-20337 [05-7740]

Agencies

• Federal Railroad Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 70, Number 74 (Tuesday, April 19, 2005)]
[Proposed Rules]
[Pages 20333-20337]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-7740]


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DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

49 CFR Part 225

[FRA-2005-20680, Notice No. 1]
RIN 2130-AB65


Revision of Method for Calculating Monetary Threshold for 
Reporting Rail Equipment Accidents/Incidents

AGENCY: Federal Railroad Administration (FRA), Department of 
Transportation (DOT).

ACTION: Notice of proposed rulemaking.

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SUMMARY: FRA is proposing to amend a portion of the accident reporting 
regulations. Specifically, FRA proposes to amend the method for 
calculating the monetary threshold for reporting rail equipment 
accidents/incidents. The amendment is necessary because, in 2001, the 
Bureau of Labor Statistics (BLS) ceased collecting and publishing 
railroad wage data used by FRA in the calculation. Consequently, FRA 
has had to seek a new source of publicly-available data. FRA is 
recommending the use of wage data collected and maintained by the 
Surface Transportation Board (STB) in place of the unavailable BLS wage 
data. As equipment data remain available from the BLS, no change is 
proposed in the source of the equipment component of the reporting 
threshold. The purpose of the rule is to ensure and maintain 
comparability between different years of accident data by having the 
threshold keep pace with any increases or decreases in equipment and 
labor costs so that each year accidents involving the same minimum 
amount of railroad property damage are included in the reportable 
accident counts.

DATES: (1) Written comments: Must be received on or before June 20, 
2005. Comments received after that date will be considered to the 
extent possible without incurring additional expense or delay.
    (2) Public Hearing: If any person desires an opportunity for oral 
comment, he or she should notify FRA in writing and specify the basis 
for the request. FRA will schedule a public hearing in connection with 
this proceeding if the agency receives a written request for a hearing 
by June 3, 2005.

ADDRESSES: Anyone wishing to file a comment should refer to the FRA 
docket and notice numbers (Docket No. FRA-2005-20860, Notice No. 1). 
You may submit your comments and related material by only one of the 
following methods:
    By mail to the Docket Management System, United States Department 
of Transportation, room PL-401, 400 7th Street, SW., Washington, DC 
20590-0001; or electronically through DOT's Web site for the Docket 
Management System at https://dms.dot.gov. For instructions on how to 
submit comments electronically, visit the Docket Management System Web 
site and click on the ``Help'' menu.
    The Docket Management Facility maintains the public docket for this 
rulemaking. Comments and documents, as indicated in this preamble, will 
become part of this docket, and will be available for inspection or 
copying at room PL-401 on the Plaza Level of the Nassif Building at the 
same address during regular business hours. You may also obtain access 
to this docket on the Internet at https://dms.dot.gov.

FOR FURTHER INFORMATION CONTACT: Robert L. Finkelstein, Special 
Assistant to the Director, Office of Safety Analysis, RRS-22, Mail Stop 
17, FRA, 1120 Vermont Ave., NW., Washington, DC 20590 (telephone 202-
493-6280) or Roberta Stewart, Trial Attorney, Office of Chief Counsel, 
RCC-12, Mail Stop 10, FRA, 1120 Vermont Ave., NW., Washington, DC 20590 
(telephone 202-493-6027).

SUPPLEMENTARY INFORMATION:

Background

    A ``rail equipment accident/incident'' is a collision, derailment, 
fire, explosion, act of God, or other event involving the operation of 
railroad on-track equipment (standing or moving) that causes reportable 
damages greater than the reporting threshold for the year in which the 
event occurs to railroad on-track equipment, signals, tracks, track 
structures, or roadbed, including labor costs and the costs for 
acquiring new equipment and materials. 49 CFR 225.19(c). Each rail 
equipment accident/incident must be reported to FRA using the Rail 
Equipment Accident/Incident Report (Form FRA F 6180.54). 49 CFR 
225.19(b), (c). As revised, effective in 1997, paragraphs (c) and (e) 
of 49 CFR 225.19 provide that the dollar figure that constitutes the 
reporting threshold for rail equipment accidents/incidents will be 
adjusted, if necessary, every year in accordance with the procedures 
outlined in appendix B to part 225, to reflect any cost increases or 
decreases. 61 FR 30942, 30969 (June 18, 1996); 61 FR 60632, 60634 (Nov. 
29, 1996); 61 FR 67477, 67490 (Dec. 23, 1996). As stated in the 
procedures in appendix B, data from the BLS are used to calculate the

[[Page 20334]]

threshold. ``The equation used to adjust the reporting threshold uses 
the average hourly earnings reported for Class I railroads and Amtrak, 
and an overall railroad equipment cost index determined by the BLS.'' 
49 CFR Part 225, App. B, paragraph 1. The formula set forth in appendix 
B is consistent with 49 U.S.C. 20901(b), which reads as follows:

    (b) Monetary threshold for reporting.
    (1) In establishing or changing a monetary threshold for the 
reporting of a railroad accident or incident, the Secretary shall 
base damage cost calculations only on publicly available information 
obtained from--
    (A) the Bureau of Labor Statistics; or
    (B) another department, agency, or instrumentality of the United 
States Government if the information has been collected through 
objective, statistically sound survey methods or has been previously 
subject to a public notice and comment process in a proceeding of a 
Government department, agency, or instrumentality.
    (2) If information is not available as provided in paragraph 
(1)(A) or (B) of this subsection, the Secretary may use any other 
source to obtain the information. However, use of the information 
shall be subject to public notice and an opportunity for written 
comment.

The Current Reporting Threshold and Formula for Computing It

    Approximately two years have passed since the rail equipment 
accident/incident reporting threshold was last reviewed and revised. 67 
FR 79533 (Dec. 30, 2002). At that time, FRA published an interim final 
rule carrying over the $6,700 threshold from calendar year 2002 to 2003 
and subsequent years until a new threshold is adopted. 49 CFR 
225.19(c). The calendar year 2002 threshold has been kept in place 
because the BLS ceased publishing certain data required to compute the 
wage component of the calculation, i.e., the average hourly earnings of 
production workers for Class I railroads and Amtrak, due to inadequate 
sampling data. Specifically, the Class I railroads and Amtrak did not 
provide the monthly hours and earnings data for production workers that 
BLS needed to publish these numbers for calendar year 2002. BLS did not 
foresee a better response rate in future years and, as a result, 
changed its methodology and the information that it publishes. 
Therefore, it was not possible for FRA to calculate a new threshold for 
calendar years 2003 and beyond based on the existing formula.
    Starting with the calculation of the 1997 calendar year threshold, 
FRA has used the method described in Appendix B to Part 225--Procedure 
for Determining Reporting Threshold. This procedure uses data from the 
BLS to update both labor and equipment prices. The threshold is 
currently calculated according to the following formula:

    Tnew = Tprior * [1 + 0.5(Wnew-Wprior)/Wprior + 0.5(Enew-Eprior)/
100]

Where:
Tnew = New threshold.
Tprior = Prior threshold.

    With reference to the threshold, ``prior'' refers to the previous 
threshold rounded to the nearest $100, as reported in the Federal 
Register.

Wnew = New average hourly wage rate, in dollars.
Wprior = Prior average hourly wage rate, in dollars.
Enew = New equipment average PPI [Producer Price Index] value
Eprior = Prior equipment average PPI value.

    With reference to wages and equipment, ``prior'' refers to the 
previous wage and equipment averages used to calculate the prior 
threshold, Tprior. ``Prior'' does not necessarily refer to the wage and 
equipment averages for the immediately preceding year (although it may 
if the threshold is calculated annually). In calculating the threshold, 
the goal is to capture the change between the old wage and equipment 
prices and the new prices for these inputs.
    The existing formula represents the general assumption that damage 
repair costs, at levels at or near the threshold, are split 
approximately evenly between labor and materials. Thus, labor and 
materials each comprise 50%, or 0.5 of the total cost. For the 
equipment component, BLS reports prices under LABSTAT Series Report, 
Producer Price Index (PPI) for Commodities, Series ID WPU144 for 
Railroad Equipment. These prices are reported as a monthly index 
number. For the wage component, BLS reported the wage in LABSTAT Series 
Report, Standard Industrial Code (SIC) 4011 for Class I Railroad 
Average Hourly Earnings. The wage was reported monthly in dollars. In 
calculating the threshold, the monthly labor and equipment figures for 
the 12-month period ending in June are summed and then divided by 12, 
to provide a monthly average of each component. After calculating the 
new threshold, it is rounded to the nearest $100.

FRA's Proposed Revision of the Formula

    Since publishing that interim final rule, FRA has conducted 
research to find a new source of similar wage data, and evaluated 
possible revisions of the existing formula. FRA last revised the 
monetary threshold formula in 1996. 61 FR 30940 (June 18, 1996); 61 FR 
60632 (November 29, 1996). Currently, the accident/incident reporting 
threshold adjustment is calculated utilizing two components. The first 
component is the average hourly earnings for Class I railroads and 
Amtrak workers. BLS was collecting these data and reporting them under 
LABSTAT Series Report, Standard Industrial Code (SIC) 4011 for Class I 
Railroad Average Hourly Earnings, Series ID EEU41401106, Not Seasonally 
Adjusted. These data are no longer available from BLS.
    In order to update the reporting threshold, FRA has searched for a 
new source of the wage component used in the reporting threshold 
formula. FRA found that railroads report wage data to the DOT/Surface 
Transportation Board (STB), and proposes to use these data as an 
alternative to the obsolete BLS data. The Class I railroads and Amtrak 
report hours of service and compensation data quarterly to the STB, on 
Form A--STB Wage Statistics. Form A organizes hours of service and 
compensation by five reporting groups: Executives, Officials, and Staff 
Assistants (Group No. 100); Professional and Administrative (Group No. 
200); Maintenance of Way and Structures (Group No. 300); Maintenance of 
Equipment and Stores (Group No. 400); and Transportation, other than 
train and engine (Group No. 500). By dividing the compensation by the 
corresponding hours of service, the wage rate for any reporting group 
can be found. FRA proposes to use the average wage rate of reporting 
Groups No. 300 and 400 as a substitute for the BLS wage data.
    FRA feels that the STB wage data are a suitable substitute for 
several reasons. Most significantly, the data directly measure the 
wages for the two groups of employees whose skills are most used in 
repairing or replacing damaged railroad equipment. In contrast, BLS 
wage data were a broader measure of all Class I and Amtrak employee 
wages. Alternative BLS wage data currently available also provide only 
broad measures.
    STB data are, additionally, consistent with Congressional 
requirements set forth in 49 U.S.C. 20901(b). The STB data are publicly 
available, although currently only in paper hardcopy, and the 
information is statistically sound. STB data are almost a census of 
Class I and Amtrak railroads (though the occasional railroad may be 
late in reporting) and should therefore represent a more accurate and 
statistically valid account of railroad wages.

[[Page 20335]]

    To further ascertain the suitability of STB wage data as a 
substitute for unavailable BLS wage data, FRA recalculated the 1997 to 
2002 reporting thresholds using STB data. This a posteriori comparison 
of STB- and BLS-based thresholds showed STB data are a reasonable 
substitute. The analysis also showed that weighting the wage component 
by 40% and the equipment component by 60%, rather than the 50/50 
current weights, produced a threshold that better approximated the 
existing threshold. The STB-based threshold, however, does increase at 
a faster rate than the BLS-based threshold. With 40/60 weights on wages 
and equipment, the new reporting threshold formula changes to:

Tnew = Tprior * [1 + 0.4(Wnew-Wprior)/Wprior + 0.6(Enew-Eprior)/100]

where the broad definitions of the variables remain the same as before 
but the underlying definitions of ``Wnew'' and ``Wprior'' are revised 
to reflect the use of STB wage data.
    In applying this new formula to periodically update the reporting 
threshold, FRA proposes using the latest data that would be available 
when the threshold is updated, instead of an average based on yearly 
data. As the threshold is typically calculated in the second half of 
the calendar year, and STB wage data are due 30 days after the close of 
a quarter, the latest STB data available will be second-quarter data. 
For example, if the new proposed formula is adopted, the calculation 
for the 2005 threshold would use the second-quarter 2004 wage data from 
the STB. For equipment costs, FRA would continue to use the 
corresponding BLS railroad equipment index in the equation. As the 
equipment index is reported monthly rather than quarterly, the average 
for the months of April, May, and June would be inputted into the 
threshold calculation. The newly calculated threshold would reflect the 
changes in wages and equipment from the last time the threshold was 
updated to the present.
    For example, the values inserted into the proposed new formula for 
calculating a new threshold would be as follows:
    Tprior = Prior threshold. The previously calculated threshold, 
rounded to the nearest $100. For 2002 and subsequent years, until 
further notice, the threshold has been $6,700.
    Wnew = New average hourly wage rate, in dollars. Based on STB wage 
data, Wnew is the average of Group No. 300 and Group No. 400 employee 
wages for the second quarter 2004, equal to about $20.53. All railroads 
had reported, except Amtrak, at the time of calculation.
    Wprior = Prior average hourly wage rate, in dollars. Based on STB 
wage data, Wprior is the average of the same STB wage data as used for 
Wnew, for the second quarter of 2001 in this case, equal to about 
$20.62.
    Enew = New equipment average PPI value. Based on the BLS railroad 
equipment index, Enew is the average of the index values for April, 
May, and June (i.e., the second quarter) of 2004, equal to 142.63.
    Eprior = Prior equipment average PPI value. Based on the BLS 
railroad equipment index, Eprior is the average of the index values for 
the second quarter of 2001, equal to 135.60.
    Substituting the above values into the proposed new formula would 
yield a threshold value of $6,971.35, rounded to $7,000, for calendar 
year 2005. Explicitly, the threshold is calculated by the following 
steps. The result is rounded at the end of the calculation.

Tnew = Tprior x [1 + 0.4(Wnew-Wprior)/Wprior + 0.6(Enew-Eprior)/100]
Tnew = $6,700 x [1 + 0.4($20.52902-$20.61667)/$20.61667 + 
0.6(142.63333-135.60)/100]
Tnew = $6,700 x [1 + 0.4(-0.00425) + 0.6(0.07033)]
Tnew = $6,700 x [1 + (-0.00170) + (0.04220)]
Tnew = $6,700 + (-$11.39) + $282.74
Tnew = $6,971.35, which rounded to the nearest $100 is Tnew = $7,000.

    By way of explanation, the -$11.39 amount represents the change in 
the wage component and the $282.74 amount represents the change in the 
equipment component. The new threshold is found by adding the changes 
to the prior threshold. t number, 312 were reported by small railroads. 
In 2002, 2,738 rail equipment accidents/incidents were reported, with 
small railroads reporting 255 of them. Most recently, 2,950 rail 
equipment accidents/incidents were reported in 2003, and small 
railroads reported 269 of them. In each of those three calendar years, 
small railroads reported ten percent or less of the total number of 
rail equipment accidents/incidents.

Notice-and-Comment Procedures

    In accordance with Executive Order 12866, FRA is allowing 60 days 
for comments. FRA believes that a 60-day comment period is appropriate 
to allow the public to comment on this proposed rule. FRA solicits 
written comments on all aspects of this proposed rule.

Regulatory Impact and Notices

Executive Order 12866 and DOT Regulatory Policies and Procedures

    This rule has been evaluated in accordance with existing policies 
and procedures, and determined to be non-significant under both 
Executive Order 12866 and DOT policies and procedures (44 FR 11034; 
Feb. 26, 1979).

Regulatory Flexibility Act of 1980 and Executive Order 13272

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612) requires 
a review of proposed and final rules to assess their impact on small 
entities, unless the Secretary certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
Pursuant to Section 312 of the Small Business Regulatory Enforcement 
Fairness Act of 1996 (Pub. L. 104-121), FRA has issued a final policy 
that formally establishes ``small entities'' as including railroads 
that meet the line-haulage revenue requirements of a Class III 
railroad. 49 CFR part 209, app. C. For other entities, the same dollar 
limit in revenues governs whether a railroad, contractor, or other 
respondent is a small entity. Id.
    About 630 of the approximately 680 railroads in the United States 
are considered small entities by FRA. FRA certifies that this proposed 
rule will have no significant economic impact on a substantial number 
of small entities. To the extent that this rule has any impact on small 
entities, the impact will be neutral or insignificant. The frequency of 
rail equipment accidents/incidents, and therefore also the frequency of 
required reporting, is generally proportional to the size of the 
railroad. A railroad that employs thousands of employees and operates 
trains millions of miles is exposed to greater risks than one whose 
operation is substantially smaller. Small railroads may go for months 
at a time without have a reportable occurrence of any type, and even 
longer without having a rail equipment accident/incident. For example 
3,023 rail equipment accidents/incidents were reported as occurring in 
calendar year 2001. Of that number, 312 were reported by small 
railroads. In 2002, 2,738 rail equipment accidents/incidents were 
reported, with small railroads reporting 255 of them. Most recently, 
2,950 rail equipment accidents/incidents were reported in 2003, and 
small railroads reported 269 of them. In each of those three calendar 
years, small railroads ten percent or less of the total number of rail 
equipment accidents/incidents.

[[Page 20336]]

    Absent this rulemaking (i.e., any increase in the monetary 
reporting threshold), the number of reportable accidents/incidents 
would increase, as keeping the 2002 threshold in place would not allow 
it to keep pace with the increasing dollar amounts of wages and rail 
equipment repair costs. Therefore, this rule will be neutral in effect. 
Increasing the reporting threshold will slightly decrease the 
recordkeeping burden for railroads over time. Any recordkeeping burden 
would not be significant, and would affect the large railroads more 
than the small entities, due to the higher proportion of reportable 
rail equipment accidents/incidents experienced by large entities.

Paperwork Reduction Act of 1995

    There are no new information collection requirements associated 
with this proposed rule. Therefore, no estimate of a public reporting 
burden is required.

Federalism Implications

    Executive Order 13132, entitled, ``Federalism,'' issued on August 
4, 1999, requires that each agency ``in a separately identified portion 
of the preamble to the regulation as it is to be issued in the Federal 
Register, provides to the Director of the Office of Management and 
Budget a federalism summary impact statement, which consists of a 
description of the extent of the agency's prior consultation with State 
and local officials, a summary of the nature of their concerns and the 
agency's position supporting the need to issue the regulation, and a 
statement of the extent to which the concerns of the State and local 
officials have been met. * * * '' This rulemaking action has been 
analyzed in accordance with the principles and criteria contained in 
Executive Order 13132. This rule will not have a substantial direct 
effect on States, on the relationship between the national government 
and the States, or on the distribution of power and the 
responsibilities among the various levels of government, as specified 
in the Executive Order 13132. Accordingly, FRA has determined that this 
rule will not have sufficient federalism implications to warrant 
consultation with State and local officials or the preparation of a 
Federalism Assessment. Accordingly, a Federalism Assessment has not 
been prepared.

Environmental Impact

    FRA has evaluated this regulation in accordance with its 
``Procedures for Considering Environmental Impacts'' (FRA's Procedures) 
(64 FR 28545, May 26, 1999) as required by the National Environmental 
Policy Act (42 U.S.C. 4321 et seq.), other environmental statutes, 
Executive Orders, and related regulatory requirements. FRA has 
determined that this regulation is not a major FRA action (requiring 
the preparation of an environmental impact statement or environmental 
assessment) because it is categorically excluded from detailed 
environmental review pursuant to section 4(c)(20) of FRA's Procedures. 
64 FR 28545, 28547, May 26, 1999. Section 4(c)(20) reads as follows:

    (c) Actions Categorically Excluded. Certain classes of FRA 
actions have been determined to be categorically excluded from the 
requirements of these Procedures as they do not individually or 
cumulatively have a significant effect on the human environment. * * 
* The following classes of FRA actions are categorically excluded:
* * * * *
    (20) Promulgation of railroad safety rules and policy statements 
that do not result in significantly increased emissions of air or 
water pollutants or noise or increased traffic congestion in any 
mode of transportation.

In accordance with section 4(c) and (e) of FRA's Procedures, the agency 
has further concluded that no extraordinary circumstances exist with 
respect to this regulation that might trigger the need for a more 
detailed environmental review. As a result, FRA finds that this 
regulation is not a major Federal action significantly affecting the 
quality of the human environment.

Unfunded Mandates Reform Act of 1995

    Pursuant to Section 201 of the Unfunded Mandates Reform Act of 1995 
(Pub. L. 104-4, 2 U.S.C. 1531), each Federal agency ``shall, unless 
otherwise prohibited by law, assess the effects of Federal regulatory 
actions on State, local, and tribal governments, and the private sector 
(other than to the extent that such regulations incorporate 
requirements specifically set forth in law).'' Section 202 of the Act 
(2 U.S.C. 1532) further requires that ``before promulgating any general 
notice of proposed rulemaking that is likely to result in the 
promulgation of any rule that includes any Federal mandate that may 
result in expenditure by State, local, and tribal governments, in the 
aggregate, or by the private sector, of [$120,700,000 or more (as 
adjusted for inflation)] in any 1 year and before promulgating any 
final rule for which a general notice of proposed rulemaking was 
published, the agency shall prepare a written statement'' detailing the 
effect on State, local, and tribal governments and the private sector. 
The proposed rule would not result in the expenditure, in the 
aggregate, of $120,700,000 or more in any one year, and thus 
preparation of such a statement is not required.

Energy Impact

    Executive Order 13211 requires Federal agencies to prepare a 
Statement of Energy Effects for any ``significant energy action.'' 66 
FR 28355 ( May 22, 2001). Under the Executive Order, a ``significant 
energy action'' is defined as any action by an agency (normally 
published in the Federal Register) that promulgates or is expected to 
lead to the promulgation of a final rule or regulation, including 
notices of inquiry, advance notices of proposed rulemaking, and notices 
of proposed rulemaking: (1)(i) That is a significant regulatory action 
under Executive Order 12866 or any successor order, and (ii) is likely 
to have a significant adverse effect on the supply, distribution, or 
use of energy; or (2) that is designated by the Administrator of the 
Office of Information and Regulatory Affairs as a significant energy 
action. FRA has evaluated this proposed rule in accordance with 
Executive Order 13211. FRA has determined that this proposed rule is 
not likely to have a significant adverse effect on the supply, 
distribution, or use of energy. Consequently, FRA has determined that 
this regulatory action is not a ``significant energy action'' within 
the meaning of Executive Order 13211.

Privacy Act

    Anyone is able to search the electronic form of all our comments 
received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review DOT's 
complete Privacy Act Statement in the Federal Register published on 
April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit 
https://dms.dot.gov.

List of Subjects in 49 CFR Part 225

    Investigations, Penalties, Railroad safety, Reporting and 
recordkeeping requirements.

The Rule

    In consideration of the foregoing, FRA proposes to amend part 225, 
chapter II, subtitle B of title 49, Code of Federal Regulations as 
follows:

PART 225--RAILROAD ACCIDENTS/INCIDENTS: REPORTS CLASSIFICATION, AND 
INVESTIGATIONS

    1. The authority citation for part 225 continues to read as 
follows:


[[Page 20337]]


    Authority: 49 U.S.C. 103, 322(a), 20103, 20107, 20901-02, 21301, 
21302, 21311; 28 U.S.C. 2461, note; 49 CFR 1.49.

    2. Appendix B to part 225 is amended by revising paragraphs 1, 2, 
3, 4, 7, and 8 to read as follows:

Appendix B to Part 225--Procedure for Determining Reporting Threshold

    1. Wage data used in the calculation are collected from 
railroads by the Surface Transportation Board (STB) on Form A--STB 
Wage Statistics. Rail equipment data from the U.S. Department of 
Labor, Bureau of Labor Statistics (BLS), LABSTAT Series reports are 
used in the calculation. The equation used to adjust the reporting 
threshold has two components: (a) The average hourly earnings of 
certain railroad maintenance employees as reported to the STB by the 
Class I railroads and Amtrak; and (b) an overall rail equipment cost 
index determined by the BLS. The wage component is weighted by 40% 
and the equipment component by 60%.
    2. For the wage component, the average of the data from Form A--
STB Wage Statistics for Group No. 300 (Maintenance of Way and 
Structures) and Group No. 400 (Maintenance of Equipment and Stores) 
employees are used.
    3. For the equipment component, LABSTAT Series Report, Producer 
Price Index (PPI) Series WPU 144 for Railroad Equipment is used.
    4. In the month of October, second-quarter wage data are 
obtained from the STB. For equipment costs, the corresponding BLS 
railroad equipment indices for the second quarter are obtained. As 
the equipment index is reported monthly rather than quarterly, the 
average for the months of April, May and June is used for the 
threshold calculation.
* * * * *
    7. The weightings result from using STB wage data and BLS 
equipment cost data to produce a reasonable estimation of the 
previous reporting threshold, which had assumed that damage repair 
costs, at levels at or near the threshold, were split approximately 
evenly between labor and materials.
    8. Formula:

New Threshold=Prior Threshold x [1 + 0.4(Wnew-Wprior)/Wprior + 
0.6(Enew-Eprior)/100]

Where:
Wnew = New average hourly wage rate ($).
Wprior = Prior average hourly wage rate ($).
Enew = New equipment average PPI value.
Eprior = Prior equipment average PPI value.

    Issued in Washington, DC, on April 12, 2005.
Robert D. Jamison,
Acting Administrator, Federal Railroad Administration.
[FR Doc. 05-7740 Filed 4-18-05; 8:45 am]
BILLING CODE 4910-06-P