Revision of Method for Calculating Monetary Threshold for Reporting Rail Equipment Accidents/Incidents, 22410-22426 [2019-09980]

Download as PDF 22410 Federal Register / Vol. 84, No. 96 / Friday, May 17, 2019 / Proposed Rules DEPARTMENT OF TRANSPORTATION Federal Railroad Administration 49 CFR Part 225 [Docket No. FRA–2014–0099, Notice No. 1] RIN 2130–AC49 Revision of Method for Calculating Monetary Threshold for Reporting Rail Equipment Accidents/Incidents Federal Railroad Administration (FRA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). AGENCY: Under FRA’s accident/ incident reporting regulation, railroads are required to report to FRA all rail equipment accidents/incidents above the monetary reporting threshold (reporting threshold) applicable to that calendar year. FRA proposes to amend this regulation to modify the way it calculates periodic adjustments to the reporting threshold. DATES: Comments are requested no later than July 16, 2019. FRA will consider comments received after that date to the extent possible without incurring additional expense or delay. ADDRESSES: Comments: Comments related to Docket No. FRA–2014–0099 may be submitted by any of the following methods: • Website: The Federal eRulemaking Portal, www.regulations.gov. Follow the website’s online instructions for submitting comments. • Fax: 202–493–2251. • Mail: Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Avenue SE, Room W12–140, Washington, DC 20590. • Hand Delivery: Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Avenue SE, Room W12–140 on the Ground level of the West Building, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Instructions: All submissions must include the agency name, docket name, and docket number. Note that all comments received will be posted without change to http:// www.regulations.gov, including any personal information provided. Please see the Privacy Act heading in the SUPPLEMENTARY INFORMATION section of this document for Privacy Act information related to any submitted comments or materials. Docket: For access to the docket to read background documents or comments received, go to http:// jbell on DSK3GLQ082PROD with PROPOSALS SUMMARY: VerDate Sep<11>2014 16:42 May 16, 2019 Jkt 247001 www.regulations.gov at any time or visit the Docket Management Facility at the address noted in the ADDRESSES section of this notice, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: Miriam Kloeppel, Staff Director, Risk Reduction Program Division, U.S. Department of Transportation, Federal Railroad Administration, Office of Safety Analysis, RRS–26, W35–204, 1200 New Jersey Ave. SE, Washington, DC 20590 (telephone 202–493–6224); or Senya Waas, Trial Attorney, U.S. Department of Transportation, Federal Railroad Administration, Office of Chief Counsel, RCC–10, W31–223, 1200 New Jersey Ave. SE, Washington, DC 20590 (telephone 202–493–0665). SUPPLEMENTARY INFORMATION: Table of Contents for Supplementary Information I. Executive Summary II. Background A. FRA’s Current Formula B. Proposed Revisions to the Method for Calculating the Reporting Threshold C. Proposal To Issue an Annual Notice of Reporting Threshold D. Notice and Comment Procedures III. Regulatory Review and Notices A. Executive Orders 12866 and 13771 and DOT Regulatory Policies and Procedures B. Regulatory Flexibility Determination C. Paperwork Reduction Act D. Federalism E. Environmental Impact F. Unfunded Mandates Reform Act of 1995 G. Energy Impact H. Privacy Act I. Regulation Identifier Number (RIN) I. Executive Summary FRA regulation (49 CFR part 225) requires railroads to report to FRA all rail equipment accidents/incidents that cause damage above a specified monetary threshold amount. FRA also requires railroads to report each highway-rail grade crossing accident/ incident, and accidents/incidents involving death, injury, and occupational illness that meet certain criteria. FRA uses data from these reported accidents/incidents to identify hazard and risk trends, and to develop policies which help to mitigate and/or prevent similar train accidents in the future. The reporting threshold accounts for inflation in labor and materials in reported rail equipment accidents/ incidents. Without a reporting threshold, railroads would need to report every minor event. Without this reported information, FRA would lack sufficient data to be effective in addressing even the most significant safety issues. PO 00000 Frm 00016 Fmt 4702 Sfmt 4702 FRA’s current formula for computing the reporting threshold has three primary components: Equipment costs, labor costs (i.e., wages), and the prior reporting threshold. To keep pace with any increases or decreases in equipment and labor costs, FRA reviews the reporting threshold periodically and, if necessary, adjusts the threshold following the procedures in Appendix B to part 225 (Appendix B). See 49 CFR 225.19. This approach ensures that each year rail equipment accidents/incidents involving the same real amount of damages are included in the rail equipment accidents/incidents count and allows for comparing accident/ incident statistics across years. In this NPRM, FRA proposes two technical revisions to the formula for calculating the threshold, and an administrative change to the way FRA communicates the reporting threshold applicable to the upcoming year. First, FRA proposes a minor technical correction to the formula (i.e., a revision to the percentage term used to determine a change in equipment costs, so it is consistent with the percentage term used to determine a change in labor costs). Second, to better reflect overall data trends, FRA proposes using full-year data (i.e., 12 consecutive months) instead of only second-quarter data (i.e., 3 consecutive months) to calculate the reporting threshold. Third, FRA proposes to issue an annual notice on FRA’s website stating the reporting threshold for the upcoming calendar year (CY). Issuing a notice each year, as opposed to a final rule, will simplify and expedite the communication of the reporting threshold, and will be more practical and efficient than FRA’s current practice of annually publishing a final rule incorporating the reporting threshold amount in the rule text in 49 CFR 225.19 (c) and (e). FRA uses the current reporting threshold as the basis for calculating the next year’s reporting threshold. Therefore, any error in the reporting threshold is reflected in the reporting thresholds for the following years. FRA also presents an alternative approach to calculate the reporting threshold using a fixed, base year for the reporting threshold (which may also reduce this error). The threshold corresponding to the base year would be updated using a composite wage-equipment price index, similar to how the Consumer Price Index (CPI) is used to adjust prices for inflation. FRA expects that this NPRM’s proposed revisions will result in more accurate and consistent train accident data for analyzing railroad safety trends, which will in turn help focus railroad industry and FRA resources where most E:\FR\FM\17MYP1.SGM 17MYP1 Federal Register / Vol. 84, No. 96 / Friday, May 17, 2019 / Proposed Rules needed to reduce the occurrence of rail equipment accidents/incidents. Additionally, users of FRA’s data (including states, researchers, and other stakeholders), will benefit from access to more accurate and consistent data. Overall, the proposed revisions would benefit a broad range of analyses. II. Background A ‘‘rail equipment accident/incident’’ is a collision, derailment, fire, explosion, act of God, or other event involving the operation of railroad ontrack equipment (standing or moving) that results in damages to railroad ontrack equipment, signals, tracks, track structures, or roadbed, including labor costs and the costs for acquiring new equipment and materials, greater than the reporting threshold for the year in which the event occurs. See 49 CFR 225.19(c). Section 225.5 also defines these rail equipment accidents/ incidents as ‘‘train accidents.’’ A railroad must report each rail equipment accident/incident to FRA using the Rail Equipment Accident/Incident Report (Form FRA F 6180.54). See 49 CFR 225.19(b), (c) and 225.21(a). Paragraphs (c) and (e) of section 225.19 further provide that FRA will review the reporting threshold periodically, and if 22411 necessary, adjust the number every year under the procedures outlined in Appendix B to reflect any cost increases or decreases. In addition to reviewing and adjusting the reporting threshold under Appendix B, as necessary, FRA periodically amends its method for calculating the reporting threshold. The Federal Railroad Safety statutes require FRA to base the reporting threshold on publicly available information obtained from the Bureau of Labor Statistics (BLS), other objective government sources, or other information subject to notice and comment. See 49 U.S.C. 20901(b). In 1996, FRA adopted a new method for calculating the reporting threshold for train accidents to allow for use of publicly available data and statistics. See 61 FR 30940 (June 18, 1996); 61 FR 60632 (Nov. 29, 1996). In 2005, FRA again amended its method for calculating the reporting threshold because BLS ceased collecting and publishing the railroad wage data used by FRA in the formula. FRA substituted railroad employee wage data collected by the Surface Transportation Board (STB) for the BLS data that was no longer available. See 70 FR 75414 (Dec. 20, 2005). A. FRA’s Current Formula Wnew = New average hourly wage rate, in dollars.2 Wprior = Prior average hourly wage rate, in dollars. Enew = New equipment average Producer Price Index (PPI) value.3 Eprior = Prior equipment average PPI value. that the STB data was a reasonable substitute. FRA’s analysis showed weighting the wage component by 40% (0.4) and the equipment component by 60% (0.6) more closely approximated the existing threshold at the time, which is the reason for the 40/60 weights in the current formula. See 70 FR 75414 (Dec. 20, 2005). As noted above, FRA’s current formula for computing the reporting threshold has three primary components: Equipment, labor (i.e., wages), and the prior year’s reporting threshold. To calculate the reporting threshold for the upcoming year, FRA updates the previous year’s reporting threshold by the change in labor and equipment costs year-over-year from the second quarter of the year. For example, in late CY 2017 FRA calculated the threshold for CY 2018 by using the threshold for CY 2017, as adjusted for the changes in wage data from STB and the railroad equipment producer price index from BLS for the second-quarter of CY 2016, to the second-quarter of CY 2017. In other words, calculating the reporting threshold is an iterative process using each year’s reporting threshold as the ‘‘seed’’ value to estimate next year’s threshold. Therefore, any error in the prior or current reporting threshold is reflected in the following years. Additionally, the figure below illustrates the time frame currently used to calculate the year-over-year changes, using the calculation of the CY 2018 reporting threshold as an example. jbell on DSK3GLQ082PROD with PROPOSALS Where: Tnew = New reporting threshold. Tprior = Prior reporting threshold (i.e., the previous year’s threshold) as adopted in 49 CFR 225.19(e)). 1 49 CFR part 225, app. B. In 2005, when FRA replaced the unavailable BLS wage data with STB wage data, it recalculated the 1997 to 2002 reporting thresholds using STB data to demonstrate VerDate Sep<11>2014 16:42 May 16, 2019 Jkt 247001 PO 00000 Frm 00017 Fmt 4702 Sfmt 4702 E:\FR\FM\17MYP1.SGM 17MYP1 EP17MY19.002</GPH> EP17MY19.003</GPH> The current formula for computing the reporting threshold is: 1 22412 Federal Register / Vol. 84, No. 96 / Friday, May 17, 2019 / Proposed Rules With reference to wages and equipment, ‘‘prior’’ refers to the previous wage and equipment averages used to calculate the prior reporting threshold, Tprior. In calculating the new reporting threshold, the goal is to capture the changes between the previous wage and equipment prices, and the current wage and equipment prices. In the current formula, the wage component represents STB wage data as a fractional change relative to the previous-year wage, and follows a standard percentage change formulation The equipment component, on the other hand, is presented as the change in the PPI relative to 100, which was the value of the PPI in the base year of 1982 FRA essentially used the difference in index points to represent the percent change. Over time, this methodology has resulted in the gradual overstatement of the change in equipment costs and consequently higher reporting thresholds. Moreover, This proposed revised formula differs from the current formula by replacing the number 100 in the denominator of the equipment component of the formula with Eprior (the prior equipment average PPI). The use of Eprior as the denominator of the equipment component will better reflect the actual changes in equipment prices BLS has cautioned against this approach. On June 5, 2015, BLS issued a report entitled ‘‘Escalation Guide for Contracting Parties’’ warning, in part, against using index points to represent percent changes, because changes in index levels do not reflect percent changes in prices when the values move away from their base level of 100. [. . .] Escalating by index point changes has the effect of overestimating the percentage change in prices when the index is above 100 and underestimating the percentage change in prices when the index level is below 100.4 Finally, the result of the calculation, the new threshold, is rounded to the nearest $100. B. Proposed Revisions to the Method for Calculating the Reporting Threshold The following analysis first discusses each of the proposed changes to the threshold formula individually (i.e., changing the calculation method for equipment cost changes, and using fullyear data), and then examines their combined effect. Changing the Calculation Method for Equipment Costs to a Simple Percentage Method FRA analysis found the current formula for computing the reporting over time, resulting in a more accurate reporting threshold from year-to-year. Conversely, in the absence of this revision the threshold will continue to overestimate the actual changes in equipment costs, and the degree of inaccuracy will progressively increase in the future as each year’s threshold becomes artificially inflated by using threshold does not accurately capture the changes in equipment prices due to a technical error. The PPI values have been steadily increasing relative to the 1982 base value of 100 for the Railroad Equipment PPI used in the formula, and continue to rise. In fact, by 2018 the average equipment PPI was twice as large as the base equipment PPI currently used as the denominator in the formula (i.e., 203.3 vs. 100). As a result, the reporting threshold calculated using the current formula is about $1,400 higher than it would have been if calculated using the proposed formula with the equipment component correction (i.e., if the formula used the same methodology to calculate changes in equipment prices as it did to calculate changes in labor prices.) See Table 1 below. FRA proposes to remedy this inconsistency between the wage and equipment components by amending the formula for calculating the reporting threshold so that changes in equipment prices are calculated using the same methodology as currently used to calculate changes in labor prices. In short, FRA proposes to revise the formula to read as follows: the number 100 as the denominator in the equipment component. Table 1 below illustrates the artificial acceleration in the reporting threshold using the current formula as compared to the threshold calculated using the proposed revised formula. TABLE 1—COMPARING REPORTING THRESHOLDS CALCULATED USING THE CURRENT AND PROPOSED FORMULAE: USING 100 IN DENOMINATOR FOR Eprior OVERESTIMATES THRESHOLD 100 100 100 2 Since 2005, FRA has used wage data collected and maintained by the STB, reported on Forms A and B—STB Wage Statistics. Railroads report employee service hours and compensation to the STB on a quarterly basis on these forms. FRA uses second-quarter data reported for the Maintenance of Way and Structures Group (Group No. 300), and the VerDate Sep<11>2014 16:42 May 16, 2019 Jkt 247001 135.6 160.2 169.7 $7,700 8,200 8,500 Maintenance of Equipment and Stores Group (Group No. 400). 3 BLS provides equipment index data, reported under LABSTAT Series Report, PPI for Commodities, Series ID WPU144 for Railroad Equipment, base date 1982. As the index numbers are reported monthly, the index numbers for the PO 00000 Frm 00018 Fmt 4702 Sfmt 4702 Reporting threshold (proposed formula, equipment component correction only) $7,700 8,200 8,500 $7,500 7,800 8,000 Difference between proposed and current thresholds (calculated) * ¥$200 (¥3%) ¥400 (¥5%) ¥500 (¥6%) months of April, May, and June are averaged to produce a second-quarter equipment index number. 4 See Bureau of Labor Statistics, ‘‘Escalation Guide for Contracting Parties,’’ Item (9)(c), June 5, 2015 (available at http://www.bls.gov/ppi/ppi escalation.htm#example). E:\FR\FM\17MYP1.SGM 17MYP1 EP17MY19.006</GPH> jbell on DSK3GLQ082PROD with PROPOSALS 2006 ................................................. 2007 ................................................. 2008 ................................................. Proposed equipment price denominator Reporting threshold as calculated (current formula) EP17MY19.004</GPH> EP17MY19.013</GPH> Current equipment price denominator Calendar year Reporting threshold as published (current formula) Federal Register / Vol. 84, No. 96 / Friday, May 17, 2019 / Proposed Rules 22413 TABLE 1—COMPARING REPORTING THRESHOLDS CALCULATED USING THE CURRENT AND PROPOSED FORMULAE: USING 100 IN DENOMINATOR FOR Eprior OVERESTIMATES THRESHOLD—Continued Calendar year Current equipment price denominator Proposed equipment price denominator 2009 ................................................. 2010 ................................................. 2011 ................................................. 2012 ................................................. 2013 ................................................. 2014 ................................................. 2015 ................................................. 2016 ................................................. 2017 ................................................. 2018 ................................................. Average ............................................ Standard Deviation .......................... 100 100 100 100 100 100 100 100 100 100 100 ........................ 175.6 180.2 182.0 184.6 186.4 191.5 197.2 196.6 200.6 203.3 181.8 ........................ Reporting threshold as published (current formula) Reporting threshold as calculated (current formula) 8,900 9,200 9,400 9,500 9,900 10,500 10,500 10,500 10,700 10,700 9,554 1,016 Reporting threshold (proposed formula, equipment component correction only) 8,900 9,200 9,400 9,500 9,900 10,500 10,900 11,200 11,400 11,400 9,746 1,253 8,300 8,500 8,700 8,800 9,000 9,400 9,800 9,900 10,000 10,000 8,900 868 Difference between proposed and current thresholds (calculated) * ¥600 (¥7%) ¥700 (¥8%) ¥700 (¥7%) ¥700 (¥7%) ¥900 (¥9%) ¥1,100 (¥10%) ¥1,100 (¥10%) ¥1,300 (¥12%) ¥1,400 (¥12%) ¥1,400 (¥12%) ¥846 (¥8%) 389 jbell on DSK3GLQ082PROD with PROPOSALS * Calculation: The percent change between the proposed reporting threshold and the current reporting threshold (calculated) is the difference between the two thresholds divided by the current reporting threshold (calculated). For example, for year 2007, percent change = ($7,800– $8,200)/$8,200 = ¥0.04878 or about ¥5%. In Table 1, the Reporting Threshold as Published (Current Formula) column lists the reporting thresholds as published in the Federal Register. The Reporting Threshold as Calculated (Current Formula) column differs by listing the reporting thresholds resulting from strictly following the formula. (In both cases, the reporting thresholds are rounded to the nearest $100 after performing the calculation.) The two columns show the same values until 2015. However, for 2015 FRA exercised its discretion and kept the reporting threshold at the calendar year 2014 amount because wage data for 2014 were abnormally high, and so FRA did not use the reporting threshold produced by the formula. The 2014 wages were unusually high because of the retroactive payment of wage increases in the second quarter of 2014 resulting from labor contract agreements (i.e., backpay that was paid as a lump sum in the second quarter). For 2016, FRA again kept the reporting threshold (as published in the Federal Register) the same as for 2014 because wages and equipment for the second quarter of 2015 changed only slightly (about one percent) from the second quarter of 2014. Subsequent reporting thresholds listed in the Reporting Threshold as Published (Current Formula) column were determined using the published value as the Tprior ‘‘seed value’’ in the formula, while subsequent reporting VerDate Sep<11>2014 16:42 May 16, 2019 Jkt 247001 thresholds shown in the Reporting Threshold as Calculated (Current Formula) column use the higher, calculated values of the reporting threshold formula as the value of Tprior to calculate the new thresholds. The final column illustrates the widening difference between the reporting threshold calculated using the current formula, and the reporting threshold calculated using the proposed formula with Eprior in the denominator of the equipment percentage change term instead of 100. Using Full-Year Data Instead of SecondQuarter Data for Wages and Equipment Prices Currently, when FRA calculates a new reporting threshold for an upcoming calendar year, it relies solely on secondquarter data from the current year, which is the most recent data available at the time of the calculation, and second-quarter data from the previous year. Second-quarter data captures data from the three months of April, May, and June. In FRA’s estimation, relying on second-quarter data does not accurately represent the data for the entire year because it may fail to reflect overall data trends, seasonal effects, or other changes occurring throughout the year. FRA proposes to improve its ability to capture and account for seasonal and other changes throughout the year by PO 00000 Frm 00019 Fmt 4702 Sfmt 4702 using a full-year of wage and equipment data in the formula instead of only second-quarter data. STB provides the wages quarterly, but the BLS provides the equipment PPI monthly. To put both wages and equipment PPI in the same time frame, the equipment PPI are grouped into quarters corresponding to the STB wage data. As noted above, the most recent data available at the time the new reporting threshold is calculated are for the second-quarter of the current year. Therefore, to calculate the percent change between current and prior costs, FRA proposes to use data from the second half (third and fourth quarters) of the previous calendar year and the first half (first and second quarters) of the current calendar year to determine the new costs. To calculate the prior costs, FRA would use data spanning the second half of the calendar year two years prior and the first half of the previous calendar year. For example, to calculate the threshold for year 2018 while in year 2017, FRA would use data from the third and fourth quarters of 2016 and from the first and second quarters of 2017 to calculate Enew and Wnew. For Eprior and Wprior, FRA would use data from the third and fourth quarters of 2015 and the first and second quarters of 2016. The timeline below demonstrates using full-year data (as four quarters) in this example. E:\FR\FM\17MYP1.SGM 17MYP1 22414 Federal Register / Vol. 84, No. 96 / Friday, May 17, 2019 / Proposed Rules With this approach, the estimated threshold would have smaller bias by including the seasonal variations of the railroad wages and the rail equipment PPIs in the threshold estimations.5 To see the effect of using full-year data (arrayed as four consecutive quarters) on the reporting threshold independently of other changes, FRA re- calculated the reporting threshold for each year since 2006 using the current formula, but using full-year data as proposed. Table 2 below presents the results. The differences between the reporting thresholds calculated using full-year data and those calculated using second-quarter data are small. The use of 100 in the denominator instead of Eprior appears as the primary factor in increasing the reporting thresholds over time. Conceptually, however, encompassing a greater data period for use in the formula would help reduce the influence of sudden increases or decreases in wages or equipment prices in the second-quarter, which have occurred in the past. TABLE 2—COMPARING REPORTING THRESHOLDS CALCULATED USING FULL-YEAR DATA INSTEAD OF ONLY SECONDQUARTER DATA [Current formula] Calendar year Reporting threshold as calculated (current formula) Reporting threshold (current formula with full-year data) Difference between thresholds using full-year and 2nd quarter data $7,700 8,200 8,500 8,900 9,200 9,400 9,500 9,900 10,500 10,900 11,200 11,400 11,400 9,746 1,253 $7,600 8,100 8,500 8,900 9,400 9,600 9,700 10,000 10,600 10,900 11,300 11,600 11,600 9,831 1,324 ¥$100 (¥1%) ¥100 (¥1%) 0 (0%) 0 (0%) 200 (2%) 200 (2%) 200 (2%) 100 (1%) 100 (1%) 0 (0%) 100 (1%) 200 (2%) 200 (2%) 85 (1%) 114 2006 ..................................................................................................................... 2007 ..................................................................................................................... 2008 ..................................................................................................................... 2009 ..................................................................................................................... 2010 ..................................................................................................................... 2011 ..................................................................................................................... 2012 ..................................................................................................................... 2013 ..................................................................................................................... 2014 ..................................................................................................................... 2015 ..................................................................................................................... 2016 ..................................................................................................................... 2017 ..................................................................................................................... 2018 ..................................................................................................................... Average ................................................................................................................ Standard Deviation .............................................................................................. Combining Both Proposed Changes: Changing the Calculation Method for Equipment Costs to a Simple Percentage Method, and Using Full-Year Data Finally, to demonstrate the results of FRA’s proposals in this document to (1) correct the mathematical error in the equipment component of the existing formula (i.e., substitute Eprior for 100 in the denominator of the equipment term), and (2) use full-year data instead of only second-quarter data, FRA recalculated the reporting threshold for each year since 2006 implementing both these proposals. Table 3 lists the results of these calculations. Table 3 demonstrates that adopting both of these proposals will generally result in a slightly lower reporting threshold, which may increase the number of reported incidents. TABLE 3—COMPARING REPORTING THRESHOLDS CALCULATED USING THE PROPOSED FORMULA WITH FULL-YEAR DATA, TO THE REPORTING THRESHOLDS CALCULATED USING THE CURRENT FORMULA 2006 2007 2008 2009 2010 Reporting threshold as calculated (current formula) Reporting threshold (proposed formula with full-year data, NPRM) $7,700 8,200 8,500 8,900 9,200 $7,500 7,800 8,100 8,400 8,800 ..................................................................................................................... ..................................................................................................................... ..................................................................................................................... ..................................................................................................................... ..................................................................................................................... 5 Using full-year data is less biased and more accurate than using only second-quarter data, but in VerDate Sep<11>2014 16:42 May 16, 2019 Jkt 247001 some years by chance using second-quarter data PO 00000 Frm 00020 Fmt 4702 Sfmt 4702 Difference between proposed full-year, and current thresholds ¥$200 ¥400 ¥400 ¥500 ¥400 (¥3%) (¥5%) (¥5%) (¥6%) (¥4%) might yield wage and equipment data closer to the actual prices for these inputs. E:\FR\FM\17MYP1.SGM 17MYP1 EP17MY19.007</GPH> jbell on DSK3GLQ082PROD with PROPOSALS Calendar year Federal Register / Vol. 84, No. 96 / Friday, May 17, 2019 / Proposed Rules 22415 TABLE 3—COMPARING REPORTING THRESHOLDS CALCULATED USING THE PROPOSED FORMULA WITH FULL-YEAR DATA, TO THE REPORTING THRESHOLDS CALCULATED USING THE CURRENT FORMULA—Continued Calendar year Reporting threshold as calculated (current formula) Reporting threshold (proposed formula with full-year data, NPRM) Difference between proposed full-year, and current thresholds 9,400 9,500 9,900 10,500 10,900 11,200 11,400 11,400 9,746 1,253 9,000 9,100 9,300 9,700 9,900 10,100 10,300 10,300 9,100 947 ¥400 (¥4%) ¥400 (¥4%) ¥600 (¥6%) ¥800 (¥8%) ¥1,000 (¥9%) ¥1,100 (¥10%) ¥1,100 (¥10%) ¥1,100 (¥10%) ¥646 (¥6%) 328 2011 ..................................................................................................................... 2012 ..................................................................................................................... 2013 ..................................................................................................................... 2014 ..................................................................................................................... 2015 ..................................................................................................................... 2016 ..................................................................................................................... 2017 ..................................................................................................................... 2018 ..................................................................................................................... Average ................................................................................................................ Standard Deviation .............................................................................................. Figure 3 below further illustrates the differences between the current and proposed reporting thresholds incorporating both proposed changes. BILLING CODE 4910–06–P The table and chart demonstrate that, over time, the differences increase between the reporting threshold as currently calculated, and the reporting threshold calculated with the proposed changes. The proposed threshold also increases more gradually, and shows less variability than the thresholds VerDate Sep<11>2014 16:42 May 16, 2019 Jkt 247001 calculated using the current formula. FRA expects the proposed threshold will more accurately reflect the changes in wages and equipment costs railroads incur because the proposed threshold corrects a mathematical flaw, and uses a longer period of data upon which to base the new estimated threshold. PO 00000 Frm 00021 Fmt 4702 Sfmt 4702 Alternative Approach: Calculate the Reporting Threshold Using a Price Index An alternative to the current procedure for calculating the reporting threshold is to update the reporting threshold using a price index. A commonly-used price index is the CPI, E:\FR\FM\17MYP1.SGM 17MYP1 EP17MY19.008</GPH> jbell on DSK3GLQ082PROD with PROPOSALS BILLING CODE 4910–06–C 22416 Federal Register / Vol. 84, No. 96 / Friday, May 17, 2019 / Proposed Rules by dividing them by the 2006 average wage, and multiplying by 100: but it is primarily used to adjust prices paid by consumers, not businesses. Instead of the CPI, a more appropriate price index could be constructed using the equipment PPI and STB wages already used in the threshold formula. Using an index may reduce the effect of carrying forward flawed Tprior values when calculating the new thresholds, and may also be a simpler approach. However, the lag in prices used to calculate the new reporting thresholds will still exist. There are several steps to calculate the price index. First, FRA selects a base year for the price index, and sets the value of the index at 100 for the base year. Then the equipment PPI and STB wages can be re-based to the selected base year to form two price indices. Next, the equipment PPI and wage indices can be combined to construct a composite wage-equipment price index. Finally, the base-year reporting threshold can be updated using the composite price index. For the base year, FRA selects 2006 because the threshold for that year reflects the last substantive change that was made to the threshold calculation by substituting STB wage data for BLS wage data that were no longer available. (Other base years are possible as well.) The equipment PPI can be re-based to 2006 by dividing the PPI for future years by the 2006 PPI, and then multiplying by 100: To make the wage index, first the hourly wages for Group No. 300 employees (Maintenance of Way and Structures) and the Group No. 400 employees (Maintenance of Equipment and Stores) are averaged (i.e., the same STB wage data that is currently used in the threshold formula). Next, the average wages are expressed as an index To calculate the composite wageequipment price index, FRA calculated the weighted average of the wage and equipment PPI indices using the weights of 0.4 and 0.6 respectively, for each calendar year in the period of analysis. To determine the new threshold, a ratio of the composite price index for the base year to the composite price index for the calendar year of interest, equal to the ratio of the reporting threshold for the base year to the reporting threshold for the calendar year of interest (the unknown threshold) is set-up. Solving for the unknown threshold for the calendar year of interest yields: Continuing with year 2007 for an example, the threshold for that year is calculated by: 2007 Threshold = (104.5 * $7,700) / 100 = $8,045 or $8,000 when rounded to the nearest $100. The data used to construct the composite price index and resulting thresholds for this alternative are summarized in the table below. Equipment PPI with 2006 Base Year = (Calendar Year Equipment PPI ÷ 2006 Equipment PPI) × 100 For example, the 2007 re-based PPI is calculated by: 2007 equipment PPI with 2006 base year = (176.4/169.4) *100 = 104.1. (See table below.) Average Wage with 2006 Base Year = (Calendar Year Average Wage ÷ 2006 Average Wage) × 100 For example, the 2007 wage index is calculated by: 2007 wage index with 2006 base year = ($23.31/$22.20) * 100 = 105.0. TABLE 4—ALTERNATIVE APPROACH TO CALCULATING THE REPORTING THRESHOLD USING A COMPOSITE WAGEEQUIPMENT PRICE INDEX Calendar year Equipment PPI PPI re-based index Wage, group no. 300 ($) Wage, group no. 400 ($) Average wage ($) Wage re-based index Composite price index 2006 .................................. 2007 .................................. 2008 .................................. 2009 .................................. 2010 .................................. 2011 .................................. 2012 .................................. 2013 .................................. 2014 .................................. 2015 .................................. 2016 .................................. 2017 .................................. 2018 .................................. Average ............................. Standard Deviation ............ 169.4 176.4 180.2 181.9 184.4 187.0 191.8 195.7 197.7 201.9 203.3 203.2 202.9 ........................ ........................ 100.0 104.1 106.4 107.4 108.9 110.4 113.2 115.5 116.7 119.2 120.0 120.0 119.8 ........................ ........................ 22.17 23.65 24.44 24.81 24.01 25.43 27.05 28.07 29.34 30.49 30.67 30.98 32.62 ........................ ........................ 22.22 22.96 24.01 26.25 25.70 25.81 27.20 28.46 29.48 30.80 30.86 30.91 32.60 ........................ ........................ 22.20 23.31 24.23 25.53 24.86 25.62 27.13 28.27 29.41 30.64 30.76 30.95 32.61 ........................ ........................ 100.0 105.0 109.1 115.0 112.0 115.4 122.2 127.4 132.5 138.1 138.6 139.4 146.9 ........................ ........................ 100.0 104.5 107.5 110.4 110.1 112.4 116.8 120.3 123.0 126.7 127.4 127.7 130.6 ........................ ........................ Alternative threshold ($) 7,700 8,000 8,300 8,500 8,500 8,700 9,000 9,300 9,500 9,800 9,800 9,800 10,100 9,000 777 Going forward, if this alternative approach is adopted, FRA anticipates calculating the reporting threshold in December of every year. At that time, 3 quarters of wage data and 11 months of equipment PPI data would be available, VerDate Sep<11>2014 16:42 May 16, 2019 Jkt 247001 which is only slightly less than a full calendar year of data. For the missing one quarter of wage data, and one month of equipment PPI data, FRA could average the available time periods for that calendar year to substitute for PO 00000 Frm 00022 Fmt 4702 Sfmt 4702 the missing values. Using an average to estimate the missing values may be more simple than extending the time period into the previous calendar year to capture a full-year’s worth of data. FRA requests comment on this E:\FR\FM\17MYP1.SGM 17MYP1 EP17MY19.009</GPH> jbell on DSK3GLQ082PROD with PROPOSALS Sources: Equipment PPI from the Bureau of Labor Statistics (BLS), PPI for commodities, Series ID WPU144 for Railroad Equipment, base data 1982. Wage data from the Surface Transportation Board, Composite of Annual Wage Forms A and B submitted by Class I railroads. 22417 Federal Register / Vol. 84, No. 96 / Friday, May 17, 2019 / Proposed Rules alternative approach and which year FRA should use as the base year for calculating future reporting thresholds. The series of thresholds produced by the alternative method are similar to, but slightly lower than, the thresholds calculated using the NPRM proposed formula with full-year data. The average of both the alternative thresholds and NPRM thresholds is $9,000. Both the alternative thresholds and NPRM thresholds are lower than the thresholds calculated by the current formula, which average $9,746. C. Proposal To Issue an Annual Notice of Reporting Threshold FRA proposes to discontinue its current practice of issuing a final rule each year incorporating into 49 CFR part 225 the reporting threshold for the upcoming calendar year (CY). Instead, FRA proposes to issue an annual notice on FRA’s website stating the reporting threshold amount for the upcoming CY. This notice would be more practical and efficient than FRA’s current practice of issuing a final rule each year. Using a notice would allow FRA to quickly make the adjusted reporting threshold available. While FRA did not seek comment on its annual final rules adjusting the reporting threshold, FRA did receive one comment about the reporting threshold from the Association of American Railroads (AAR) in its comments to the proposed information collection request (ICR) for the Accident/Incident Reporting and Recordkeeping (part 225) regulation, ICR OMB Control Number 2130–0500. In November 2016, AAR commented that FRA should update the reporting threshold because it had not been updated since December 2013. AAR noted that not updating the threshold reduced the value of the accident statistics, which are used by the railroad industry to evaluate safety and develop safety initiatives. FRA acknowledges the reporting threshold was not changed from 2014 through 2016 as explained earlier under Table 1. FRA is reviewing the method for calculating the reporting threshold in this rulemaking. Given the new reporting threshold is based upon a set formula—the development of which is subject to notice and comment in this rulemaking—notice and comment procedures associated with annual adjustments to the reporting threshold are not necessary. D. Notice and Comment Procedures FRA believes 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. III. Regulatory Review and Notices A. Executive Orders 12866 and 13771 and DOT Regulatory Policies and Procedures This NPRM is a non-significant rulemaking and evaluated in accordance with existing policies and procedures under Executive Order 12866 and DOT Order 2100.6. See 58 FR 51735, Sep. 30, 1993 and https:// www.transportation.gov/regulations/ 2018-dot-rulemaking-order. This rulemaking is not a regulatory action under Executive Order 13771, ‘‘Reducing Regulation and Controlling Regulatory Costs,’’ because this proposed rule is not significant under E.O. 12866. See 82 FR 9339, Jan. 30, 2017. FRA proposes to revise its formula for determining the reporting threshold. The changes have been described in detail in the ‘‘Background’’ section above. The changes are intended to improve the accuracy of the reporting threshold, and the resulting rail equipment accident/incident data gathered from the railroads over time. The improved data is expected to help formulate regulations that better address safety risks. Table 5 below summarizes these costs and benefits. TABLE 5—SUMMARY OF COSTS AND BENEFITS [Over a 10-year period of analysis] New costs Undiscounted, Nominal ........................................................ Present Value (PV) at 3% .................................................... Present Value (PV) at 7% .................................................... Annualized at 3% ................................................................. Annualized at 7% ................................................................. $202,032 170,744 138,913 20,016 19,778 Cost savings * $12,710 10,842 8,927 1,271 1,271 Benefits Qualitative: Qualitative: Qualitative: Qualitative: Qualitative: More More More More More Accurate Accurate Accurate Accurate Accurate Data. Data. Data. Data. Data. jbell on DSK3GLQ082PROD with PROPOSALS * FRA will save some costs from the proposal to issue a notice, which is easier administratively and reduces printing costs, than the current practice of publishing a final rule. The regulatory evaluation uses the noaction baseline to describe the expected impacts of the proposed rule. The noaction baseline is simply the threshold calculated using the current formula without any proposed changes. The potential incremental costs and benefits of the proposed rule are compared to the no-action baseline. The two proposed revisions of standardizing the change in the equipment costs calculation, and using full-year data (in terms of four consecutive quarters) would result in a more accurate reporting threshold in comparison to the current threshold. The proposed reporting threshold with both revisions averages about six percent lower than the current threshold VerDate Sep<11>2014 16:42 May 16, 2019 Jkt 247001 (see Table 3). The lower threshold would result in marginally higher numbers of reported rail equipment accidents/incidents in comparison to the reporting threshold calculated using the current flawed formula. However, railroads already maintain these accident/incident records (for accidents/ incidents which are below the current reporting threshold) even though they are not submitted to FRA. Under 49 CFR 225.25(d)–(g), railroads maintain these ‘‘accountable rail equipment accident/ incident’’ events (as defined in section 225.5) on Form FRA F 6180.97 or an alternative form. Thus, the potential burden to submit additional accident/ incident data would primarily be an administrative burden. PO 00000 Frm 00023 Fmt 4702 Sfmt 4702 FRA estimates the cost of submitting these potential additional rail equipment accident/incident reports as the cost of an individual rail equipment accident/incident report multiplied by the number of additional reports. Furthermore, the cost of an individual rail equipment accident/incident report may be decomposed into the amount of labor hours needed to complete an accident report multiplied by the wage rate for the railroad personnel most likely to perform this task. The amount of labor hours to complete a Form F 6180.54 to report a rail equipment accident/incident was previously estimated for the railroad accidents/ incidents reporting rule in ‘‘Miscellaneous Amendments to the E:\FR\FM\17MYP1.SGM 17MYP1 22418 Federal Register / Vol. 84, No. 96 / Friday, May 17, 2019 / Proposed Rules Federal Railroad Administration’s Accident/Incident Reporting Requirements; Final Rule.’’ See 75 FR 68862 (Nov. 9, 2010). For that rule, the Paperwork Reduction Act analysis estimated two hours per response to complete a rail equipment accident/ incident report. (Note the task to transfer information from Form FRA F 6180.97 to Form F 6180.54 to report rail equipment accidents/incidents to FRA may take less time.) The personnel most likely to complete a rail equipment accident/incident report would be administrative personnel, such as a railroad safety officer, or someone performing those assigned functions. This analysis uses the wage rate for Professional and Administrative employees, STB Group No. 200, as an appropriate wage for estimating the costs of completing a report.6 The average straight time wage rate of $41.15 is burdened for overhead expenses by 75 percent to produce an hourly rate of $72.01 per hour. The marginal cost of submitting an accident/incident report is therefore: 2 hours per Form F 6180.54 * $72.01 per hour = $144.02 per additional accident/incident report, rounded to $144. By definition, railroads are not required to submit reports for accidents/ incidents resulting in monetary damages below the current threshold, making it difficult to estimate the number of potential extra rail equipment accident/ incident reports that may be submitted because of a slightly lower proposed threshold. However, rather than provide little information about the impacts of this proposed rule, FRA makes the following assumptions and inferences in order to at least describe the potential impacts. (1) This analysis reasons the rail equipment accidents/incidents affected by the proposed rule would be those with monetary damages ‘‘near’’ the threshold amount. That is, rail equipment accidents/incidents with far greater monetary damages, or those with much lower monetary damages, than the current reporting threshold will not be affected by a small decrease in the reporting threshold. (2) ‘‘Near’’ the reporting threshold is set at $12,000 for the purposes of this analysis. (3) FRA broadly assumes the pattern of rail equipment accidents/incidents occurring near and above the threshold is the same as the pattern of accidents/ incidents occurring near and below the threshold. Essentially, the rail equipment accidents/incidents that are not reported to FRA are assumed to be a mirror image of the rail equipment accidents/incidents near and above the threshold that are reported to FRA. For the narrow band of accidents under consideration for this analysis, the distribution of accidents/incidents above and below the threshold may reasonably be similar. (4) As sample data for discussion purposes, the distribution of rail equipment accidents/incidents near the threshold for the years 2014 to 2018 (5 years) is used. Those years represent a more recent data sample for the threshold. For 2014 to 2016, the $12,000 ‘‘near’’ boundary is about 15 percent above those years’ reporting threshold of $10,500 (which forms the lower boundary for those years). Similarly, for 2017 and 2018, the $12,000 ‘‘near’’ boundary is about 12 percent above those years’ reporting threshold amount of $10,700 (again, the lower boundary for those year). The train accident data are presented below. TABLE 6—NUMBER OF REPORTED TRAIN ACCIDENTS ‘‘NEAR’’ THE REPORTING THRESHOLD, FOR EVERY $100 INCREASE IN THE THRESHOLD Reported train accident monetary damage interval ($) 10,400–10,500 10,500–10,600 10,600–10,700 10,700–10,800 10,800–10,900 10,900–11,000 11,000–11,100 11,100–11,200 11,200–11,300 11,300–11,400 11,400–11,500 11,500–11,600 11,600–11,700 11,700–11,800 11,800–11,900 11,900–12,000 No. of train accidents 2014 No. of train accidents 2015 No. of train accidents 2016 No. of train accidents 2017 No. of train accidents 2018 ..................................................................... ..................................................................... ..................................................................... ..................................................................... ..................................................................... ..................................................................... ..................................................................... ..................................................................... ..................................................................... ..................................................................... ..................................................................... ..................................................................... ..................................................................... ..................................................................... ..................................................................... ..................................................................... 3 11 8 9 10 11 8 12 9 4 13 9 10 7 10 14 0 4 8 4 5 19 13 5 4 8 10 9 17 7 9 8 2 6 5 9 9 7 1 3 7 8 6 8 6 9 8 10 ........................ ........................ 1 14 3 14 9 10 7 7 9 13 3 5 4 13 0 7 7 18 8 4 5 8 6 3 3 9 8 13 Total .............................................................................. Average (Overall Avg. = 7.8) ............................................... Standard Deviation .............................................................. 148 9.3 2.9 130 8.1 4.9 104 6.5 2.6 112 8.0 4.4 99 7.1 4.5 jbell on DSK3GLQ082PROD with PROPOSALS * The reporting threshold was $10,500 from 2014 to 2016, and $10,700 from 2017 to 2018. In the above table, the lower and upper boundaries for the separate monetary intervals in the first column contain reported damages greater than the lower boundary amount for that interval, up to and including the upper boundary amount for that interval. For example, if $X is the reported accident damage falling in the range $11,000– 6 See STB, ‘‘Annual Compilation of Wage Statistics of Class I Railroads in the United States, 2017,’’ at http://www.stb.dot.gov/stb/industry/econ_ reports.html. VerDate Sep<11>2014 16:42 May 16, 2019 Jkt 247001 PO 00000 Frm 00024 Fmt 4702 Sfmt 4702 $11,100, then the interval may be written as: $11,000 < $X ≤ $11,100. Table 6 shows railroads reported 148 total rail equipment accidents/incidents near the threshold in 2014, representing E:\FR\FM\17MYP1.SGM 17MYP1 22419 about 8 percent of all the rail equipment accidents/incidents reported in that calendar year (calculated as 148/1886 total rail equipment accidents/incidents for 2014 = 0.078 ≈ 8 percent). Additionally, in 2014, on average there were about 9 rail equipment accidents/ incidents for every $100 increase in reported monetary damages. (Calculated as 148/16 intervals = 9.3 ≈ 9 rail equipment accidents/incidents). The rail equipment accident/incident experience near the threshold for the other years (2015 to 2018) was slightly lower, representing about 5 to 7 percent of the total rail equipment accidents/ incidents reported for those years. Overall, for the years 2014 to 2018, the railroads reported an average of 8 rail equipment accidents/incidents for every $100 increase in reported monetary damages. Next, FRA determined the number of additional rail equipment accident/ incident reports that railroads may be required to submit to FRA in the future under the proposed rule. To estimate these future accident/incident reports, FRA forecast both the reporting thresholds calculated using the current formula, and the reporting thresholds calculated using the proposed formula with full-year data, for the years 2019 to 2028. The forecasted thresholds are illustrated below.7 The chart above shows the two reporting thresholds moving further apart as the flawed formula produces a higher and higher reporting threshold over time. From the forecast of current and proposed thresholds, FRA calculated the monetary difference between the two thresholds for each year from 2019 to 2028. To convert these monetary differences to the estimated number of accident/incident reports, FRA applied the previously-determined rate of 8 accidents for every $100 increase in reported monetary damages. For example, for year 2020, the expected difference between the current and proposed thresholds is $1,522. See Table 7. To convert this amount to the number of accident/incidents, the following proportion was used in which 8 accidents/incidents is to the unknown X-number of accidents/incidents per year, as $100 is to the $1,522 difference between the current and proposed thresholds. 7 FRA used the ‘‘Forecast Sheet’’ function in Microsoft Excel 2016 to forecast both the current reporting threshold, and the proposed reporting threshold for the years 2019 to 2028. The forecast was based on the series of current reporting thresholds and proposed thresholds for the period 2006 to 2018 as shown in Table 3. Given the data is historical in nature, the forecast function was used to perform the time series analysis. The forecast function uses the exponential smoothing (error, trend, seasonal) algorithm. For a description of the forecast sheet function, see: Create a Forecast In Excel for Windows, accessed at https:// support.office.com/en-us/article/create-a-forecastin-excel-for-windows-22c500da-6da7-45e5-bfdc60a7062329fd. VerDate Sep<11>2014 16:42 May 16, 2019 Jkt 247001 PO 00000 Frm 00025 Fmt 4702 Sfmt 4702 E:\FR\FM\17MYP1.SGM 17MYP1 EP17MY19.010</GPH> jbell on DSK3GLQ082PROD with PROPOSALS Federal Register / Vol. 84, No. 96 / Friday, May 17, 2019 / Proposed Rules 22420 Federal Register / Vol. 84, No. 96 / Friday, May 17, 2019 / Proposed Rules X =121.76 accidents_incidents ≈ 122 accidents_incidents for year 2020. The number of accidents/incidents for the other years in the forecast period are calculated similarly. Finally, to monetize these additional estimated accident/incident reports, FRA multiplied the $144 cost to submit an accident/incident report by the estimated number of additional reports. For example, for year 2020 the expected cost is $17,568. (Calculated as 122 accidents/incidents * $144 per accident/ incident report = $17,568.) Performing similar calculations for the remaining years in the forecast period results in the cost schedule below. The present value of total costs discounted at a 7 percent discount rate equals $138,913, and when discounted at a 3 percent rate equals $170,744. These costs may be overstated because the set of current reporting thresholds as calculated was subtracted from the proposed reporting thresholds. Instead, if the set of current reporting thresholds as published was used as the baseline and subtracted from the proposed thresholds, the differences would be somewhat smaller, resulting in fewer estimated incremental accident/incident reports. However, FRA did not forecast the reporting thresholds as published because they reflect FRA discretion and may not be representative of future thresholds. TABLE 7—ESTIMATED COSTS BASED ON FORECASTED NUMBER OF RAIL EQUIPMENT ACCIDENTS/INCIDENTS jbell on DSK3GLQ082PROD with PROPOSALS ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ¥$1,456 ¥1,522 ¥1,589 ¥1,655 ¥1,721 ¥1,788 ¥1,854 ¥1,921 ¥1,987 ¥2,053 Estimated annual cost @$144 per accident/ incident $16,704 17,568 18,288 19,008 19,872 20,592 21,312 22,176 22,896 23,616 Total Undiscounted Cost 2019–2028 (10 Years), Nominal ................................................................................................................ 202,032 Present Value (PV) of Total Cost Discounted at 7% 2019–2028 ....................................................................................................... Present Value (PV) of Total Cost Discounted at 3% 2019–2028 ....................................................................................................... Total Annualized Cost Using 7% Discount Rate 2019–2028 ............................................................................................................. Total Annualized Cost Using 3% Discount Rate 2019–2028 ............................................................................................................. 138,913 170,744 19,778 20,016 VerDate Sep<11>2014 16:42 May 16, 2019 Jkt 247001 $10,566 10,807 11,048 11,289 11,530 11,771 12,012 12,254 12,495 12,736 Number of extra accidents/ incidents reported (rounded) 116 122 127 132 138 143 148 154 159 164 To account for the costs of a lower reporting threshold resulting from the proposed changes, FRA would need to estimate the number of extra rail equipment accidents/incidents that railroads would report. However, those accidents/incidents are not currently reported. This analysis makes some assumptions about the distribution of those unreported accidents/incidents in order to offer some useful information about the proposed rule’s potential impacts. FRA seeks comments from the public on the assumptions used. Earlier, FRA presented an alternative approach to calculate the reporting thresholds using a wage-price composite index. The resulting thresholds were slightly lower than the thresholds produced using the proposed threshold formula with full-year data (i.e., the $12,021 12,329 12,637 12,944 13,252 13,559 13,867 14,174 14,482 14,789 Difference between proposed full-year and current thresholds NPRM proposal). Therefore, the marginal costs of the alternative approach are higher because railroads would report more accidents/incidents. If the alternative approach is adopted, the present value of total costs discounted at 7 percent would equal $175,492, and when discounted at 3 percent, would equal $216,568. The annualized cost using a 7 percent rate would be $24,986, and using a 3 percent rate would be $25,338.8 8 For brevity, the estimated extra accidents/ incidents reported under the alternative approach and the corresponding costs are shown as ordered pairs in the form of Year (Extra Accidents/ Incidents, Cost): {2019(138, $19,872), 2020(147, $21,168), 2021(156, $22,464), 2022(165, $23,760), 2023(174, $25,056), 2024(183, $26,325), 2025(192, $27,648), 2026(201, $28,944), 2027(210, $30,240), 2028(219, $31,536). PO 00000 Frm 00026 Fmt 4702 Sfmt 4702 To put the proposed rule’s potential costs into context, the incremental costs are compared to the total costs for reporting rail equipment accidents/ incidents with damages greater than the reporting threshold. The industry-total costs for reporting 1,886 rail equipment accidents/incidents in 2014, for example, was equal to $271,584 at a cost of $144 per accident/incident report. From above, the annualized cost using a 7 percent or 3 percent interest rate is about $20,000. Thus, the marginal cost of the proposed threshold revisions is about 7 percent of the total industry accident reporting costs. (Calculated as $20,000 approximate annual cost/ $271,584 sample total annual cost = 0.0736 ≈ 7 percent.) Thus, the typical cost of the proposed revisions is expected to be relatively small. E:\FR\FM\17MYP1.SGM 17MYP1 EP17MY19.011</GPH> Calendar year 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Reporting threshold (proposed formula with full-year data, NPRM) Reporting threshold (current formula) calculated 22421 Federal Register / Vol. 84, No. 96 / Friday, May 17, 2019 / Proposed Rules Furthermore, the effect of the proposed rule is expected to be even smaller in the context of all reported accidents/ incidents, which include rail equipment accidents/incidents above the reporting threshold (i.e., train accidents), highway-rail incidents, and other incidents. From 2014 to 2018, railroads reported approximately 12,000 accidents/incidents annually on average, or about six times as many rail equipment accidents/incidents. Separately from changes to the reporting threshold calculation, FRA proposes to publish an annual notice on FRA’s website notifying stakeholders of the new reporting threshold for the following year. Currently, FRA publishes a final rule in the Federal Register. The publication of an annual notice instead of an annual final rule would result in less administrative costs for FRA. By not having to publish a final rule in the Federal Register, FRA would save on printing costs. The Government Printing Office (GPO) charges agencies $151 per column to publish material in the Federal Register, and $85 per page to publish material in the Code of Federal Regulations (CFR).9 FRA counted the number of columns in the Federal Register occupied by the reporting threshold final rule for the years 2007 to 2018.10 The reporting threshold final rule occupied an average of 8 columns annually, for an average annual cost of $1,271. (Calculated as 8 columns * $151 per column = $1,271 per year for publishing costs.) The new reporting thresholds are also printed in the CFR in 49 CFR 225.19(c) and (e). FRA amends the existing list of reporting thresholds by adding the new threshold. Since only the new threshold amount is added (seven characters), only a small amount of additional space on the page is needed, even over the 10 year period of analysis. Therefore, the publishing cost for the additional space in the CFR for adding the new threshold amount will be small. The table below accounts for the cost savings from publishing a notice of the new reporting threshold to FRA’s website, instead of publishing it in a final rule in the Federal Register. TABLE 8—COST SAVINGS RESULTING FROM NOT PUBLISHING THE NEW YEARS’ REPORTING THRESHOLD NOTICE IN THE Federal Register Avg. number of columns printed in Federal Register for new reporting threshold notice Calendar Year jbell on DSK3GLQ082PROD with PROPOSALS 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 ......................................................................................................................................................................... ......................................................................................................................................................................... ......................................................................................................................................................................... ......................................................................................................................................................................... ......................................................................................................................................................................... ......................................................................................................................................................................... ......................................................................................................................................................................... ......................................................................................................................................................................... ......................................................................................................................................................................... ......................................................................................................................................................................... Printing cost for Federal Register reporting threshold notice @$151 per column 8 8 8 8 8 8 8 8 8 8 $1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 Total Undiscounted Cost 2019–2028 (10 Years), Nominal ................................................................................................................ 12,710 Present Value (PV) of Total Cost Discounted at 7% 2019–2028 ....................................................................................................... Present Value (PV) of Total Cost Discounted at 3% 2019–2028 ....................................................................................................... Total Annualized Cost Using 7% Discount Rate 2019–2028 ............................................................................................................. Total Annualized Cost Using 3% Discount Rate 2019–2028 ............................................................................................................. 8,927 10,842 1,271 1,271 The rail equipment accident/incident data FRA gathers under 49 CFR part 225 is used in support of many safety regulations and programs. The proposed revisions would help ensure the reporting threshold accurately reflects the cost changes over time that occur in incident damages. Admittedly, as the small number of rail equipment accidents/incidents near the threshold reduces the costs of these proposed changes, it also reduces the potential benefits of the proposed changes. Nevertheless, through greater accuracy of the reporting threshold, the quality of the collected train accident data is expected to improve. With access to higher quality data, future analyses supporting rulemakings will improve the efficiency of safety risk targeting, and help to better identify accident/ incident trends. A more accurate reporting threshold will also permit valid comparisons of rail equipment accident/incident rates across years. In addition to FRA, other users of railroad safety data, such as students, researchers, industry stakeholders, and the general public will benefit from adopting the revisions in the proposed rule. FRA makes the train accident data, along with other rail accident/incident data, available to the public on the FRA Office of Safety Analysis website.11 As of March 2019, over 2.7 million people have visited the website. These users will benefit by having access to higherquality data. Given the wide range of regulations and projects that use train accident data, it is difficult to monetize the marginal contributions that better data might make to these regulations. Also, higher quality data might benefit other projects for which private parties use the data. Based on the cost analysis and benefits discussion above, FRA believes the proposed rule may have a positive 9 See GPO Circular Letter No. 1007 (June 4, 2018), available at https://www.gpo.gov/how-to-work-withus/agency/circular-letters/open-requisitions-sf1-forfederal-register-and-code-of-federal-regulations. 10 Year 2006 was excluded because FRA made a substantive change to the formula and the Federal Register notice for that year was atypically longer at 13 columns. 11 See http://safetydata.fra.dot.gov/Officeof Safety/Default.aspx. VerDate Sep<11>2014 16:42 May 16, 2019 Jkt 247001 PO 00000 Frm 00027 Fmt 4702 Sfmt 4702 E:\FR\FM\17MYP1.SGM 17MYP1 22422 Federal Register / Vol. 84, No. 96 / Friday, May 17, 2019 / Proposed Rules impact on analyses by improving the accuracy of FRA’s rail equipment accident/incident data. The proposed rule will impact a small number of rail equipment accidents/incidents that occur near the reporting threshold, resulting in minimal costs. The benefits of the proposed rule will affect users conducting analysis in support of safety programs, as well as other data users. FRA invites comments on the assumptions and analysis employed in this analysis. B. Regulatory Flexibility Determination This section examines the impact of the proposed rule on small entities. FRA is proposing changes to the way the reporting threshold is calculated. FRA proposes a minor mathematical correction to the way the percent change in equipment costs is calculated in the reporting threshold formula. Also, FRA proposes to use 12 months of data in the reporting threshold calculation, instead of the current practice of using only 3 months of data. Finally, FRA proposes to notify railroads of the new reporting threshold for the upcoming year by publishing an annual notice on FRA’s website, as opposed to its current procedure of publishing an annual final rule in the Federal Register. These changes are explained in more detail in the ‘‘Background’’ section above. FRA expects the proposed, technical changes to the reporting threshold formula to yield lower reporting thresholds in the future in comparison to reporting thresholds calculated using the current formula. The technical changes are expected to improve the accuracy of train accident data, but may result in marginally increasing the number of rail equipment accidents/ incidents railroads are required to 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 having a reportable occurrence of any type, and even longer without having a rail equipment accident/incident with monetary damages greater than the reporting threshold, as defined in 49 CFR part 225. For example, over the five-year period from 2014 to 2018, small railroads reported an average of 14 percent of the total number of rail equipment accidents/incidents.12 report. FRA estimates the number of extra rail equipment accidents/incidents reported will be small, and therefore the corresponding burden on small entities will be minimal. The Regulatory Flexibility Act of 1980, 5 U.S.C. 601–612, and Executive Order 13272, Proper Consideration of Small Entities in Agency Rulemaking, 67 FR 53461 (Aug. 16, 2002), require agency 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. Under section 312 of the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104–121, FRA has issued a final policy statement that formally establishes ‘‘small entities’’ are railroads that meet the line-haulage revenue requirements of a Class III railroad, which is $20 million or less in inflationadjusted annual revenues, and commuter railroads or small governmental jurisdictions that serve populations of 50,000 or less. See 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. Substantial Number of Small Entities Description of Regulated Entities All railroads currently governed by 49 CFR part 225 railroad accident/incident reporting requirements will be subject to this proposed rule. Of those, FRA considers about 735 of the approximately 784 railroads in the United States to be small entities. Although most of the railroads are small entities, the frequency of rail equipment accidents/incidents, and the frequency of subsequent required reporting, is generally proportional to the size of the For the small railroads, FRA conducted a similar analysis for all railroads above and reviewed the rail equipment accidents/incidents ‘‘near’’ the threshold. Following the analysis for all railroads, ‘‘near’’ is defined for the purposes of this analysis as $12,000. These rail equipment accidents/ incidents represent those most likely affected by the proposed rule. (As noted earlier, accidents/incidents below the reporting threshold are not reported.) As an example, in 2014, 18 small railroads reported 20 rail equipment accidents/ incidents near the threshold (the high). In 2016, 8 small railroads reported 8 rail equipment accidents/incidents near the threshold (the low, see Table 8). Based on the period from 2014 to 2018, the small railroads likely affected by this proposed rule range between 1.1 to 2.4 percent of all small railroads, averaging 1.7 percent (about 12 small railroads). (Calculation example for 2014: 18 small railroads with rail equipment accidents/ incidents near the threshold/735 small railroads = 0.024.) TABLE 8—NUMBER OF REPORTED TRAIN ACCIDENTS ‘‘NEAR’’ THE REPORTING THRESHOLD, FOR EVERY $100 INCREASE IN THE THRESHOLD: SMALL ENTITIES jbell on DSK3GLQ082PROD with PROPOSALS Reported train accident monetary damage interval ($) 10,400–10,500 10,500–10,600 10,600–10,700 10,700–10,800 10,800–10,900 10,900–11,000 11,000–11,100 11,100–11,200 11,200–11,300 11,300–11,400 11,400–11,500 11,500–11,600 11,600–11,700 Number of train accidents 2015 Number of train accidents 2016 Number of train accidents 2017 Number of train accidents 2018 1 2 2 1 0 3 3 2 0 2 1 0 1 0 0 2 1 0 3 3 2 0 0 1 0 2 2 0 0 0 0 0 0 1 0 0 0 2 0 ........................ ........................ ........................ 0 1 2 0 1 1 1 0 1 1 ........................ ........................ ........................ 0 0 2 0 1 0 1 1 0 0 ..................................................................... ..................................................................... ..................................................................... ..................................................................... ..................................................................... ..................................................................... ..................................................................... ..................................................................... ..................................................................... ..................................................................... ..................................................................... ..................................................................... ..................................................................... 12 Class III rail equipment accidents/incidents divided by all railroad rail equipment accidents/ incidents, by year: Year 2014—272/1,886=14%; VerDate Sep<11>2014 Number of train accidents 2014 16:42 May 16, 2019 Jkt 247001 year 2015—292/1,934=15%; year 2016—251/ 1,721=15%; year 2017—237/1,760=13%; year 2018—240/1,836=13%. Source: Agency query of PO 00000 Frm 00028 Fmt 4702 Sfmt 4702 FRA Safety Data website at http:// safetydata.fra.dot.gov/OfficeofSafety/Default.aspx. E:\FR\FM\17MYP1.SGM 17MYP1 22423 Federal Register / Vol. 84, No. 96 / Friday, May 17, 2019 / Proposed Rules TABLE 8—NUMBER OF REPORTED TRAIN ACCIDENTS ‘‘NEAR’’ THE REPORTING THRESHOLD, FOR EVERY $100 INCREASE IN THE THRESHOLD: SMALL ENTITIES—Continued Number of train accidents 2014 Number of train accidents 2015 Number of train accidents 2016 Number of train accidents 2017 Number of train accidents 2018 11,700–11,800 ..................................................................... 11,800–11,900 ..................................................................... 11,900–12,000 ..................................................................... 0 1 1 1 2 0 0 1 2 0 1 2 2 1 3 Total .............................................................................. Average (Overall Avg.=0.9) ................................................. Standard Deviation .............................................................. 20 1.3 1.0 17 1.1 1.1 8 0.5 08 11 0.8 0.7 11 0.8 1.0 Reported train accident monetary damage interval ($) No Significant Economic Impact To determine the potential compliance costs for small entities, FRA conducted an analysis such as that presented in the economic analysis for all railroads. The steps in the analysis are summarized here, and the calculations and results described below. First, FRA calculated the rate of additional rail equipment accidents/ incidents that small entities may have to report for every $100 change in the reporting threshold. This rate is based on rail equipment accidents/incidents reported by the small entities in the past for the period 2006 to 2018. Because FRA lacks information on accidents/ incidents below the current threshold as railroads do not have to report these, FRA broadly assumes the pattern of accidents/incidents below a proposed, lower threshold will be similar to those above the threshold. To estimate the trend of the thresholds calculated using the current formula, and the thresholds calculated using the proposed formula, FRA forecast both current and proposed thresholds for the years 2019 to 2028. The forecasts allowed FRA to calculate the monetary differences between the current and proposed reporting thresholds in the future, by year. Next, FRA converted the monetary difference between the reporting thresholds to the number of additional rail equipment accident/incident reports that small railroads may have to submit to FRA under the proposed threshold. FRA estimated these additional accident/ incident reports by applying the rate of accidents/incidents per $100 change in the reporting threshold. Finally, FRA multiplied the railroad’s cost to submit an accident/incident report to FRA by the number of additional rail equipment accident/incident reports, to produce the compliance cost per year for the small entities. Table 8 above is used to determine the rate of additional rail equipment accidents/incidents per a $100 change in the reporting threshold. The data for the years 2014 to 2018 are used as sample data for analysis. Those years represent a more recent part of the period of analysis (i.e., 2006 to 2018) used to describe the effects of the proposed rule on the reporting threshold. For example, in 2014, there was an average of 1.3 more rail equipment accident/incidents reported for every $100 change in the reporting threshold. (Calculated as 20 rail equipment accident/incidents ÷ 16 intervals = 1.250 ≈ 1.3 rail equipment accident/incident per $100 change in the threshold, on average.) The rates for the other years between 2015 to 2018 were calculated similarly and are slightly lower, ranging between 0.5 to 1.1, or an overall average rate of about 1 more rail equipment accident/incident for every $100 change in the reporting threshold. In the analysis for all railroads, FRA forecast the reporting thresholds and is employing that forecast in this analysis for small entities. Using the forecasts, FRA calculated the difference between the current reporting threshold and the proposed reporting threshold on an annual basis. FRA then combined the resulting differences with the rate of additional rail equipment accidents/ incidents per $100 change in the reporting threshold to calculate the number of additional accident/incident reports expected. For example, for year 2020, the monetary difference between the forecast current threshold and the forecast proposed threshold was $1,522. Using the proportion below, FRA expects the small railroads to report 15 more rail equipment accidents/incidents in that year: X = 15.22 accidents_incidents ≈ 15 accidents_incidents for year 2020. FRA calculated the expected number of additional accidents/incidents for the small railroads for the other years in the forecast period using the same method. jbell on DSK3GLQ082PROD with PROPOSALS As noted above, small railroads account for about 14 percent on average of all reported rail equipment accidents/ incidents in any given year. Additionally, FRA estimates less than three percent of the small railroads subject to this proposed rule are likely to be impacted by being required to submit more accident/incident reports. These are the small railroads that reported rail equipment accidents/ incidents near the reporting thresholds calculated using the current formula (e.g., 18 smalls for 2014 and 8 smalls for 2016 in the example above). Given the low portion of small railroads impacted, this proposed rule is not expected to impact a substantial number of small entities. VerDate Sep<11>2014 16:42 May 16, 2019 Jkt 247001 PO 00000 Frm 00029 Fmt 4702 Sfmt 4702 E:\FR\FM\17MYP1.SGM 17MYP1 EP17MY19.012</GPH> * The reporting threshold was $10,500 from 2014 to 2016, and $10,700 from 2017 to 2018. 22424 Federal Register / Vol. 84, No. 96 / Friday, May 17, 2019 / Proposed Rules Finally, to monetize these estimated extra accident/incident reports, FRA used the cost incurred by a railroad to submit an accident/incident report to FRA, which was previously determined in the analysis for all railroads at $144 per report. FRA multiplied this cost by the estimated number of additional reports to arrive at annual costs. Continuing to use year 2020 as an example, the expected cost is $2,160. (Calculated as 15 accidents/incidents * $144 per accident/incident report = $2,160.) FRA calculated the costs for the other years in the forecast period similarly, resulting in the cost schedule below. For the 10-year period, the undiscounted (nominal) costs sum to $25,488. The present value of total costs discounted at a 7 percent discount rate equals $17,526, and when discounted at a 3 percent rate equals $21,541. TABLE 9—ESTIMATED COSTS BASED ON FORECASTED NUMBER OF RAIL EQUIPMENT ACCIDENTS/INCIDENTS: SMALL ENTITIES Calendar year jbell on DSK3GLQ082PROD with PROPOSALS 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Reporting threshold (proposed formula with full-year data) Reporting threshold (current formula calculated) ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ..................................................................................... ¥$1,456 ¥1,522 ¥1,589 ¥1,655 ¥1,721 ¥1,788 ¥1,854 ¥1,921 ¥1,987 ¥2,053 Estimated annual cost @ $144 per accident/ incident $2,160 2,160 2,304 2,448 2,448 2,592 2,736 2,736 2,880 3,024 Total Undiscounted Cost 2019–2028 (10 Years), Nominal ................................................................................................................ 25,488 Present Value (PV) of Total Cost Discounted at 7% 2019–2028 ....................................................................................................... Present Value (PV) of Total Cost Discounted at 3% 2019–2028 ....................................................................................................... Total Annualized Cost Using 7% Discount Rate 2019–2028 ............................................................................................................. Total Annualized Cost Using 3% Discount Rate 2019–2028 ............................................................................................................. 17,526 21,541 2,495 2,525 13 See American Short Line and Regional Railroad Association. (2014). Short Line and Regional Railroad Facts and Figures. (Pamphlet). Washington, DC: Author. VerDate Sep<11>2014 16:42 May 16, 2019 Jkt 247001 $10,566 10,807 11,048 11,289 11,530 11,771 12,012 12,254 12,495 12,736 Number of extra accidents/ incidents reported (rounded) 15 15 16 17 17 18 19 19 20 21 In terms of the estimated economic impact of the proposed rule on small entities, FRA expects the impact to be minimal based on the above analysis. From the analysis of rail equipment accident/incident data, FRA found 8 to 18 small railroads reported these accidents/incidents near the reporting threshold in any given year. These are the small railroads that will most likely experience an impact from the proposed rule. Given the annualized cost is approximately $2,500, the cost per railroad for this group of railroads is about $139 to $313 per year—or on average about $210 per year per railroad. (Calculated as $2,500/18 railroads = $139; and $2,500/8 railroads = $312.50; for a range of about $139 to $313.) When compared to annual revenues, the impact is very small. The industry trade organization representing small railroads, the American Short Line and Regional Railroad Association (ASLRRA), reports the average freight revenue per Class III railroad is $4.8 million.13 Relative to the average freight revenue per railroad, FRA estimates the proposed rule will affect less than 0.1 $12,021 12,329 12,637 12,944 13,252 13,559 13,867 14,174 14,482 14,789 Difference between proposed full-year and current thresholds percent of revenues. (Calculated as $210 compliance cost per year per railroad/ $4,800,000 average freight revenue per railroad = 0.00004 = 0.004 percent.) FRA therefore expects the average or typical compliance costs for a small entity to be not significant. Small Entities This proposed rule affects all small entities subject to FRA’s accident reporting rule. However, FRA’s analysis shows that the number of small entities reporting rail equipment accidents/ incidents near the threshold represent only about two percent of the small entities. Given that the proposed changes to the reporting threshold formula will result in a potentially lower reporting threshold, FRA also estimates the potential cost to file additional accident reports to FRA. FRA estimates about 15 to 20 additional train accident reports will be filed annually, using information the railroads already are required to maintain, at an annualized cost of about $2,500 for the group of affected small entities. The average cost per small railroad is estimated at about $210 per railroad. These compliance costs represent a very small percentage, less than 0.1 percent, of a small railroad’s PO 00000 Frm 00030 Fmt 4702 Sfmt 4702 annual freight revenues. FRA therefore expects that the economic impact of the proposed rule on small entities will be minimal. FRA invites comment from small entities or the public who believe there will be a significant economic impact on a substantial number of small entities affected by this proposed rule. C. Paperwork Reduction Act The burden for Accident/Incident Reporting and Recordkeeping is approved in the information collection for 49 CFR part 225 under OMB No. 2130–0500. OMB re-approval for this collection of information was granted on June 6, 2018, and the new expiration date is June 30, 2021. D. Federalism Executive Order 13132, ‘‘Federalism,’’ 64 FR 43255 (Aug. 10, 1999), requires FRA to develop an accountable process to ensure ‘‘meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.’’ ‘‘Policies that have federalism implications’’ are defined in the Executive Order to include regulations that have ‘‘substantial direct effects on the States, on the relationship between the national government and the States, or on the E:\FR\FM\17MYP1.SGM 17MYP1 jbell on DSK3GLQ082PROD with PROPOSALS Federal Register / Vol. 84, No. 96 / Friday, May 17, 2019 / Proposed Rules distribution of power and responsibilities among the various levels of government.’’ Under E.O. 13132, the agency may not issue a regulation with federalism implications that imposes substantial direct compliance costs and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, the agency consults with State and local governments, or the agency consults with State and local government officials early in the process of developing the regulation. Where a regulation has federalism implications and preempts State law, the agency seeks to consult with State and local officials in the process of developing the regulation. This NPRM has been analyzed in accordance with the principles and criteria contained in E.O. 13132. FRA has determined that, if adopted, the proposed rule would not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. In addition, FRA has determined that this proposed rule will not impose substantial direct compliance costs on State and local governments. Therefore, the consultation and funding requirements of E.O. 13132 do not apply. However, this proposed rule could have preemptive effect by operation of law under certain provisions of the Federal railroad safety statutes, specifically the former Federal Railroad Safety Act of 1970 (FRSA), repealed and recodified at 49 U.S.C. 20106, and the former Accident Reports Act of 1910, repealed and recodified at 49 U.S.C. 20901. See Public Law 103–272 (July 5, 1994). The former FRSA provides that States may not adopt or continue in effect any law, regulation, or order related to railroad safety or security that covers the subject matter of a regulation prescribed or order issued by the Secretary of Transportation (with respect to railroad safety matters) or the Secretary of Homeland Security (with respect to railroad security matters), except when the State law, regulation, or order qualifies under the ‘‘local safety or security hazard’’ exception to section 20106. In sum, FRA has analyzed this proposed rule in accordance with the principles and criteria contained in E.O. 13132. As explained above, FRA has determined that this proposed rule has no federalism implications, other than the possible preemption of State laws VerDate Sep<11>2014 16:42 May 16, 2019 Jkt 247001 under the former FRSA. Accordingly, FRA has determined that preparation of a federalism summary impact statement for this proposed rule is not required. E. Environmental Impact FRA has evaluated this proposed rule in accordance with the National Environmental Policy Act (NEPA), 42 U.S.C. 4321 et seq., other environmental statutes, related regulatory requirements, and its ‘‘Procedures for Considering Environmental Impacts’’ (FRA’s Procedures) (64 FR 28545, May 26, 1999). FRA has determined that this proposed rule is categorically excluded from detailed environmental review pursuant to section 4(c)(20) of FRA’s NEPA Procedures, ‘‘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.’’ See 64 FR 28547 (May 26, 1999). Categorical exclusions (CEs) are actions identified in an agency’s NEPA implementing procedures that do not normally have a significant impact on the environment and therefore do not require either an environmental assessment (EA) or environmental impact statement (EIS). See 40 CFR 1508.4. In analyzing the applicability of a CE, the agency must also consider whether extraordinary circumstances are present that would warrant a more detailed environmental review through the preparation of an EA or EIS. Id. 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 this rule is not a major Federal action that significantly affects the quality of the human environment. F. Unfunded Mandates Reform Act of 1995 Under Section 201 of the Unfunded Mandates Reform Act of 1995, Public Law 104–4 (Mar. 22, 1995); 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 PO 00000 Frm 00031 Fmt 4702 Sfmt 4702 22425 may result in expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one 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. This proposed rule is not expected to result in the expenditure, in the aggregate, of $100,000,000 or more, adjusted for inflation, in any one year, and thus preparation of such a statement is not required. G. Energy Impact Executive Order 13211 requires Federal agencies to prepare a Statement of Energy Effects for any ‘‘significant energy action.’’ See 66 FR 28355 (May 22, 2001). Under the Executive Order, a ‘‘significant energy action’’ is defined as ‘‘[a]ny 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 under Executive Order 13211. FRA does not anticipate that this proposed rule is 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. H. Privacy Act Under 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, including any personal information the commenter provides, to www.regulations.gov, as described in the system of records notice (DOT/ALL– 14 FDMS), which can be reviewed at www.dot.gov/privacy. In order to facilitate comment tracking and response, we encourage commenters to provide their name, or the name of their organization; however, submission of names is completely optional. Whether or not commenters identify themselves, all timely comments will be fully E:\FR\FM\17MYP1.SGM 17MYP1 22426 Federal Register / Vol. 84, No. 96 / Friday, May 17, 2019 / Proposed Rules considered. If you wish to provide comments containing proprietary or confidential information, please contact the agency for alternate submission instructions. I. Regulation Identifier Number (RIN) A regulation identifier number (RIN) is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN contained in the heading of this document can be used to crossreference this action with the Unified Agenda. List of Subjects in 49 CFR Part 225 Investigations, Penalties, Railroad safety, Reporting and recordkeeping requirements. The Proposed Rule In consideration of the foregoing, FRA proposes to amend part 225 of chapter II, subtitle B of title 49, Code of Federal Regulations, as follows: ■ 1. The authority citation for part 225 continues to read as follows: Authority: 49 U.S.C. 103, 322(a), 20103, 20107, 20901–02, 21301, 21302, 21311; 28 U.S.C. 2461, note; and 49 CFR 1.89. ■ 2. Revise 225.19(e) to read as follows: § 225.19 Primary groups of accidents/ incidents. Issued in Washington, DC. Ronald L. Batory, Administrator. * [FR Doc. 2019–09980 Filed 5–16–19; 8:45 am] * * * * (e) Notice. Each year, the Administrator publishes a notice on FRA’s website announcing the reporting threshold that will take effect on January 1 of the following calendar year. ■ 3. Appendix B to part 225 is revised to read as follows: Appendix B to Part 225—Procedure for Determining Reporting Threshold jbell on DSK3GLQ082PROD with PROPOSALS Index (PPI) Series WPU 144 for Railroad Equipment is used. 4. In the month of October, second-quarter and first-quarter wage data for the current year, and fourth-quarter and third-quarter wage data for the previous year are obtained from the STB. For equipment costs, the corresponding BLS railroad equipment indices for the same time period as the STB wage data are obtained. 5. The wage data are reported in terms of dollars earned per hour, while the equipment cost data are indexed to a base year of 1982. 6. The procedure for adjusting the reporting threshold is shown in the formula below. The wage and equipment components appear as fractional changes relative to the prior year. After performing the calculation, the result is rounded to the nearest $100. 7. The weightings result from using STB wage data and BLS equipment cost data to produce a reasonable estimation of the reporting threshold that was calculated using the threshold formula in effect immediately before calendar year 2006, a formula that assumed damage repair costs, at levels at or near the threshold, were split approximately evenly between labor and materials. 8. Formula: New Threshold = Prior Threshold × [1 + 0.4(Wnew¥Wprior)/Wprior + 0.6(Enew¥Eprior)/Eprior] Where: Wnew = New average hourly wage rate ($). Wprior = Prior average hourly wage rate ($). Enew = New equipment average PPI value. Eprior = Prior equipment average PPI value. 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 is used. 3. For the equipment component, LABSTAT Series Report, Producer Price VerDate Sep<11>2014 16:42 May 16, 2019 Jkt 247001 BILLING CODE 4910–06–P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 648 [Docket No. 190415375–9375–01] RIN 0648–BI92 Fisheries of the Northeastern United States; Recreational Management Measures for the Summer Flounder Fishery; Fishing Year 2019 National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Proposed rule; request for comments. AGENCY: NMFS proposes management measures for the 2019 summer flounder recreational fishery. The implementing regulations for this fishery require NMFS to publish recreational measures for the fishing year and to provide an SUMMARY: PO 00000 Frm 00032 Fmt 4702 Sfmt 4702 opportunity for public comment. The intent of this action is to constrain recreational catch to the summer flounder recreational harvest limit and thereby, prevent overfishing on the summer flounder stock. DATES: Comments must be received by June 3, 2019. ADDRESSES: You may submit comments on this document, identified by NOAA– NMFS–2019–0025, by either of the following methods: Electronic submission: Submit all electronic public comments via the Federal e-Rulemaking Portal. • Go to www.regulations.gov/ #!docketDetail;D=NOAA-NMFS-20190025, • Click the ‘‘Comment Now!’’ icon, complete the required fields • Enter or attach your comments. –OR– Mail: Submit written comments to Michael Pentony, Regional Administrator, Greater Atlantic Region, 55 Great Republic Drive, Gloucester, MA 01930. Instructions: Comments sent by any other method, to any other address or individual, or received after the end of the comment period, may not be considered by NMFS. All comments received are a part of the public record and will generally be posted for public viewing on www.regulations.gov without change. All personal identifying information (e.g., name, address, etc.), confidential business information, or otherwise sensitive information submitted voluntarily by the sender will be publicly accessible. NMFS will accept anonymous comments (enter ‘‘N/ A’’ in the required fields if you wish to remain anonymous). FOR FURTHER INFORMATION CONTACT: Emily Gilbert, Fishery Policy Analyst, (978) 281–9244. SUPPLEMENTARY INFORMATION: Summary of Proposed Management Measures In this rule, NMFS proposes management measures for the 2019 summer flounder recreational fishery consistent with the recommendations of the Mid-Atlantic Fishery Management Council (Council) and the Atlantic States Marine Fisheries Commission (Commission). NMFS proposes to waive Federal summer flounder recreational measures in Federal waters of the exclusive economic zone (EEZ) and to all federally permitted summer flounder party/charter vessels, regardless of where they fish, so long as the states, through the Commission, collectively implement measures designed to constrain landings to the 2019 recreational harvest limit. E:\FR\FM\17MYP1.SGM 17MYP1

Agencies

[Federal Register Volume 84, Number 96 (Friday, May 17, 2019)]
[Proposed Rules]
[Pages 22410-22426]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-09980]



[[Page 22410]]

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DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

49 CFR Part 225

[Docket No. FRA-2014-0099, Notice No. 1]
RIN 2130-AC49


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 (NPRM).

-----------------------------------------------------------------------

SUMMARY: Under FRA's accident/incident reporting regulation, railroads 
are required to report to FRA all rail equipment accidents/incidents 
above the monetary reporting threshold (reporting threshold) applicable 
to that calendar year. FRA proposes to amend this regulation to modify 
the way it calculates periodic adjustments to the reporting threshold.

DATES: Comments are requested no later than July 16, 2019. FRA will 
consider comments received after that date to the extent possible 
without incurring additional expense or delay.

ADDRESSES: Comments: Comments related to Docket No. FRA-2014-0099 may 
be submitted by any of the following methods:
     Website: The Federal eRulemaking Portal, 
www.regulations.gov. Follow the website's online instructions for 
submitting comments.
     Fax: 202-493-2251.
     Mail: Docket Management Facility, U.S. Department of 
Transportation, 1200 New Jersey Avenue SE, Room W12-140, Washington, DC 
20590.
     Hand Delivery: Docket Management Facility, U.S. Department 
of Transportation, 1200 New Jersey Avenue SE, Room W12-140 on the 
Ground level of the West Building, between 9 a.m. and 5 p.m., Monday 
through Friday, except Federal holidays.
    Instructions: All submissions must include the agency name, docket 
name, and docket number. Note that all comments received will be posted 
without change to http://www.regulations.gov, including any personal 
information provided. Please see the Privacy Act heading in the 
SUPPLEMENTARY INFORMATION section of this document for Privacy Act 
information related to any submitted comments or materials.
    Docket: For access to the docket to read background documents or 
comments received, go to http://www.regulations.gov at any time or 
visit the Docket Management Facility at the address noted in the 
ADDRESSES section of this notice, between 9 a.m. and 5 p.m., Monday 
through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Miriam Kloeppel, Staff Director, Risk 
Reduction Program Division, U.S. Department of Transportation, Federal 
Railroad Administration, Office of Safety Analysis, RRS-26, W35-204, 
1200 New Jersey Ave. SE, Washington, DC 20590 (telephone 202-493-6224); 
or Senya Waas, Trial Attorney, U.S. Department of Transportation, 
Federal Railroad Administration, Office of Chief Counsel, RCC-10, W31-
223, 1200 New Jersey Ave. SE, Washington, DC 20590 (telephone 202-493-
0665).

SUPPLEMENTARY INFORMATION:

Table of Contents for Supplementary Information

I. Executive Summary
II. Background
    A. FRA's Current Formula
    B. Proposed Revisions to the Method for Calculating the 
Reporting Threshold
    C. Proposal To Issue an Annual Notice of Reporting Threshold
    D. Notice and Comment Procedures
III. Regulatory Review and Notices
    A. Executive Orders 12866 and 13771 and DOT Regulatory Policies 
and Procedures
    B. Regulatory Flexibility Determination
    C. Paperwork Reduction Act
    D. Federalism
    E. Environmental Impact
    F. Unfunded Mandates Reform Act of 1995
    G. Energy Impact
    H. Privacy Act
    I. Regulation Identifier Number (RIN)

I. Executive Summary

    FRA regulation (49 CFR part 225) requires railroads to report to 
FRA all rail equipment accidents/incidents that cause damage above a 
specified monetary threshold amount. FRA also requires railroads to 
report each highway-rail grade crossing accident/incident, and 
accidents/incidents involving death, injury, and occupational illness 
that meet certain criteria. FRA uses data from these reported 
accidents/incidents to identify hazard and risk trends, and to develop 
policies which help to mitigate and/or prevent similar train accidents 
in the future. The reporting threshold accounts for inflation in labor 
and materials in reported rail equipment accidents/incidents. Without a 
reporting threshold, railroads would need to report every minor event. 
Without this reported information, FRA would lack sufficient data to be 
effective in addressing even the most significant safety issues.
    FRA's current formula for computing the reporting threshold has 
three primary components: Equipment costs, labor costs (i.e., wages), 
and the prior reporting threshold. To keep pace with any increases or 
decreases in equipment and labor costs, FRA reviews the reporting 
threshold periodically and, if necessary, adjusts the threshold 
following the procedures in Appendix B to part 225 (Appendix B). See 49 
CFR 225.19. This approach ensures that each year rail equipment 
accidents/incidents involving the same real amount of damages are 
included in the rail equipment accidents/incidents count and allows for 
comparing accident/incident statistics across years.
    In this NPRM, FRA proposes two technical revisions to the formula 
for calculating the threshold, and an administrative change to the way 
FRA communicates the reporting threshold applicable to the upcoming 
year. First, FRA proposes a minor technical correction to the formula 
(i.e., a revision to the percentage term used to determine a change in 
equipment costs, so it is consistent with the percentage term used to 
determine a change in labor costs). Second, to better reflect overall 
data trends, FRA proposes using full-year data (i.e., 12 consecutive 
months) instead of only second-quarter data (i.e., 3 consecutive 
months) to calculate the reporting threshold. Third, FRA proposes to 
issue an annual notice on FRA's website stating the reporting threshold 
for the upcoming calendar year (CY). Issuing a notice each year, as 
opposed to a final rule, will simplify and expedite the communication 
of the reporting threshold, and will be more practical and efficient 
than FRA's current practice of annually publishing a final rule 
incorporating the reporting threshold amount in the rule text in 49 CFR 
225.19 (c) and (e).
    FRA uses the current reporting threshold as the basis for 
calculating the next year's reporting threshold. Therefore, any error 
in the reporting threshold is reflected in the reporting thresholds for 
the following years. FRA also presents an alternative approach to 
calculate the reporting threshold using a fixed, base year for the 
reporting threshold (which may also reduce this error). The threshold 
corresponding to the base year would be updated using a composite wage-
equipment price index, similar to how the Consumer Price Index (CPI) is 
used to adjust prices for inflation. FRA expects that this NPRM's 
proposed revisions will result in more accurate and consistent train 
accident data for analyzing railroad safety trends, which will in turn 
help focus railroad industry and FRA resources where most

[[Page 22411]]

needed to reduce the occurrence of rail equipment accidents/incidents. 
Additionally, users of FRA's data (including states, researchers, and 
other stakeholders), will benefit from access to more accurate and 
consistent data. Overall, the proposed revisions would benefit a broad 
range of analyses.

II. 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 results in 
damages to railroad on-track equipment, signals, tracks, track 
structures, or roadbed, including labor costs and the costs for 
acquiring new equipment and materials, greater than the reporting 
threshold for the year in which the event occurs. See 49 CFR 225.19(c). 
Section 225.5 also defines these rail equipment accidents/incidents as 
``train accidents.'' A railroad must report each rail equipment 
accident/incident to FRA using the Rail Equipment Accident/Incident 
Report (Form FRA F 6180.54). See 49 CFR 225.19(b), (c) and 225.21(a). 
Paragraphs (c) and (e) of section 225.19 further provide that FRA will 
review the reporting threshold periodically, and if necessary, adjust 
the number every year under the procedures outlined in Appendix B to 
reflect any cost increases or decreases.
    In addition to reviewing and adjusting the reporting threshold 
under Appendix B, as necessary, FRA periodically amends its method for 
calculating the reporting threshold. The Federal Railroad Safety 
statutes require FRA to base the reporting threshold on publicly 
available information obtained from the Bureau of Labor Statistics 
(BLS), other objective government sources, or other information subject 
to notice and comment. See 49 U.S.C. 20901(b). In 1996, FRA adopted a 
new method for calculating the reporting threshold for train accidents 
to allow for use of publicly available data and statistics. See 61 FR 
30940 (June 18, 1996); 61 FR 60632 (Nov. 29, 1996). In 2005, FRA again 
amended its method for calculating the reporting threshold because BLS 
ceased collecting and publishing the railroad wage data used by FRA in 
the formula. FRA substituted railroad employee wage data collected by 
the Surface Transportation Board (STB) for the BLS data that was no 
longer available. See 70 FR 75414 (Dec. 20, 2005).

A. FRA's Current Formula

    As noted above, FRA's current formula for computing the reporting 
threshold has three primary components: Equipment, labor (i.e., wages), 
and the prior year's reporting threshold. To calculate the reporting 
threshold for the upcoming year, FRA updates the previous year's 
reporting threshold by the change in labor and equipment costs year-
over-year from the second quarter of the year. For example, in late CY 
2017 FRA calculated the threshold for CY 2018 by using the threshold 
for CY 2017, as adjusted for the changes in wage data from STB and the 
railroad equipment producer price index from BLS for the second-quarter 
of CY 2016, to the second-quarter of CY 2017. In other words, 
calculating the reporting threshold is an iterative process using each 
year's reporting threshold as the ``seed'' value to estimate next 
year's threshold. Therefore, any error in the prior or current 
reporting threshold is reflected in the following years.
    Additionally, the figure below illustrates the time frame currently 
used to calculate the year-over-year changes, using the calculation of 
the CY 2018 reporting threshold as an example.
[GRAPHIC] [TIFF OMITTED] TP17MY19.002

    The current formula for computing the reporting threshold is: \1\
---------------------------------------------------------------------------

    \1\ 49 CFR part 225, app. B. In 2005, when FRA replaced the 
unavailable BLS wage data with STB wage data, it recalculated the 
1997 to 2002 reporting thresholds using STB data to demonstrate that 
the STB data was a reasonable substitute. FRA's analysis showed 
weighting the wage component by 40% (0.4) and the equipment 
component by 60% (0.6) more closely approximated the existing 
threshold at the time, which is the reason for the 40/60 weights in 
the current formula. See 70 FR 75414 (Dec. 20, 2005).
[GRAPHIC] [TIFF OMITTED] TP17MY19.003

---------------------------------------------------------------------------
Where:

Tnew = New reporting threshold.
Tprior = Prior reporting threshold (i.e., the previous year's 
threshold) as adopted in 49 CFR 225.19(e)).
Wnew = New average hourly wage rate, in dollars.\2\
Wprior = Prior average hourly wage rate, in dollars.
Enew = New equipment average Producer Price Index (PPI) value.\3\
Eprior = Prior equipment average PPI value.

[[Page 22412]]


---------------------------------------------------------------------------

    \2\ Since 2005, FRA has used wage data collected and maintained 
by the STB, reported on Forms A and B--STB Wage Statistics. 
Railroads report employee service hours and compensation to the STB 
on a quarterly basis on these forms. FRA uses second-quarter data 
reported for the Maintenance of Way and Structures Group (Group No. 
300), and the Maintenance of Equipment and Stores Group (Group No. 
400).
    \3\ BLS provides equipment index data, reported under LABSTAT 
Series Report, PPI for Commodities, Series ID WPU144 for Railroad 
Equipment, base date 1982. As the index numbers are reported 
monthly, the index numbers for the months of April, May, and June 
are averaged to produce a second-quarter equipment index number.
---------------------------------------------------------------------------

    With reference to wages and equipment, ``prior'' refers to the 
previous wage and equipment averages used to calculate the prior 
reporting threshold, Tprior. In calculating the new reporting 
threshold, the goal is to capture the changes between the previous wage 
and equipment prices, and the current wage and equipment prices. In the 
current formula, the wage component represents STB wage data as a 
fractional change relative to the previous-year wage, and follows a 
standard percentage change formulation
[GRAPHIC] [TIFF OMITTED] TP17MY19.004

The equipment component, on the other hand, is presented as the change 
in the PPI relative to 100, which was the value of the PPI in the base 
year of 1982
[GRAPHIC] [TIFF OMITTED] TP17MY19.013

FRA essentially used the difference in index points to represent the 
percent change. Over time, this methodology has resulted in the gradual 
overstatement of the change in equipment costs and consequently higher 
reporting thresholds. Moreover, BLS has cautioned against this 
approach. On June 5, 2015, BLS issued a report entitled ``Escalation 
Guide for Contracting Parties'' warning, in part, against using index 
points to represent percent changes,

because changes in index levels do not reflect percent changes in 
prices when the values move away from their base level of 100. [. . 
.] Escalating by index point changes has the effect of 
overestimating the percentage change in prices when the index is 
above 100 and underestimating the percentage change in prices when 
the index level is below 100.\4\
---------------------------------------------------------------------------

    \4\ See Bureau of Labor Statistics, ``Escalation Guide for 
Contracting Parties,'' Item (9)(c), June 5, 2015 (available at 
http://www.bls.gov/ppi/ppiescalation.htm#example).

Finally, the result of the calculation, the new threshold, is rounded 
to the nearest $100.

B. Proposed Revisions to the Method for Calculating the Reporting 
Threshold

    The following analysis first discusses each of the proposed changes 
to the threshold formula individually (i.e., changing the calculation 
method for equipment cost changes, and using full-year data), and then 
examines their combined effect.
Changing the Calculation Method for Equipment Costs to a Simple 
Percentage Method
    FRA analysis found the current formula for computing the reporting 
threshold does not accurately capture the changes in equipment prices 
due to a technical error. The PPI values have been steadily increasing 
relative to the 1982 base value of 100 for the Railroad Equipment PPI 
used in the formula, and continue to rise. In fact, by 2018 the average 
equipment PPI was twice as large as the base equipment PPI currently 
used as the denominator in the formula (i.e., 203.3 vs. 100). As a 
result, the reporting threshold calculated using the current formula is 
about $1,400 higher than it would have been if calculated using the 
proposed formula with the equipment component correction (i.e., if the 
formula used the same methodology to calculate changes in equipment 
prices as it did to calculate changes in labor prices.) See Table 1 
below. FRA proposes to remedy this inconsistency between the wage and 
equipment components by amending the formula for calculating the 
reporting threshold so that changes in equipment prices are calculated 
using the same methodology as currently used to calculate changes in 
labor prices. In short, FRA proposes to revise the formula to read as 
follows:
[GRAPHIC] [TIFF OMITTED] TP17MY19.006

    This proposed revised formula differs from the current formula by 
replacing the number 100 in the denominator of the equipment component 
of the formula with Eprior (the prior equipment average PPI). The use 
of Eprior as the denominator of the equipment component will better 
reflect the actual changes in equipment prices over time, resulting in 
a more accurate reporting threshold from year-to-year. Conversely, in 
the absence of this revision the threshold will continue to 
overestimate the actual changes in equipment costs, and the degree of 
inaccuracy will progressively increase in the future as each year's 
threshold becomes artificially inflated by using the number 100 as the 
denominator in the equipment component.
    Table 1 below illustrates the artificial acceleration in the 
reporting threshold using the current formula as compared to the 
threshold calculated using the proposed revised formula.

 Table 1--Comparing Reporting Thresholds Calculated Using the Current and Proposed Formulae: Using 100 in Denominator for Eprior Overestimates Threshold
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                         Reporting
                                                                                                                         threshold
                                                          Current        Proposed        Reporting       Reporting       (proposed    Difference between
                                                         equipment       equipment     threshold as    threshold as      formula,        proposed and
                    Calendar year                          price           price         published      calculated       equipment    current thresholds
                                                        denominator     denominator      (current        (current        component      (calculated) *
                                                                                         formula)        formula)       correction
                                                                                                                           only)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2006................................................             100           135.6          $7,700          $7,700          $7,500         -$200 (-3%)
2007................................................             100           160.2           8,200           8,200           7,800          -400 (-5%)
2008................................................             100           169.7           8,500           8,500           8,000          -500 (-6%)

[[Page 22413]]

 
2009................................................             100           175.6           8,900           8,900           8,300          -600 (-7%)
2010................................................             100           180.2           9,200           9,200           8,500          -700 (-8%)
2011................................................             100           182.0           9,400           9,400           8,700          -700 (-7%)
2012................................................             100           184.6           9,500           9,500           8,800          -700 (-7%)
2013................................................             100           186.4           9,900           9,900           9,000          -900 (-9%)
2014................................................             100           191.5          10,500          10,500           9,400       -1,100 (-10%)
2015................................................             100           197.2          10,500          10,900           9,800       -1,100 (-10%)
2016................................................             100           196.6          10,500          11,200           9,900       -1,300 (-12%)
2017................................................             100           200.6          10,700          11,400          10,000       -1,400 (-12%)
2018................................................             100           203.3          10,700          11,400          10,000       -1,400 (-12%)
Average.............................................             100           181.8           9,554           9,746           8,900          -846 (-8%)
Standard Deviation..................................  ..............  ..............           1,016           1,253             868                 389
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Calculation: The percent change between the proposed reporting threshold and the current reporting threshold (calculated) is the difference between
  the two thresholds divided by the current reporting threshold (calculated). For example, for year 2007, percent change = ($7,800-$8,200)/$8,200 = -
  0.04878 or about -5%.

    In Table 1, the Reporting Threshold as Published (Current Formula) 
column lists the reporting thresholds as published in the Federal 
Register. The Reporting Threshold as Calculated (Current Formula) 
column differs by listing the reporting thresholds resulting from 
strictly following the formula. (In both cases, the reporting 
thresholds are rounded to the nearest $100 after performing the 
calculation.) The two columns show the same values until 2015. However, 
for 2015 FRA exercised its discretion and kept the reporting threshold 
at the calendar year 2014 amount because wage data for 2014 were 
abnormally high, and so FRA did not use the reporting threshold 
produced by the formula. The 2014 wages were unusually high because of 
the retroactive payment of wage increases in the second quarter of 2014 
resulting from labor contract agreements (i.e., backpay that was paid 
as a lump sum in the second quarter). For 2016, FRA again kept the 
reporting threshold (as published in the Federal Register) the same as 
for 2014 because wages and equipment for the second quarter of 2015 
changed only slightly (about one percent) from the second quarter of 
2014. Subsequent reporting thresholds listed in the Reporting Threshold 
as Published (Current Formula) column were determined using the 
published value as the Tprior ``seed value'' in the formula, while 
subsequent reporting thresholds shown in the Reporting Threshold as 
Calculated (Current Formula) column use the higher, calculated values 
of the reporting threshold formula as the value of Tprior to calculate 
the new thresholds. The final column illustrates the widening 
difference between the reporting threshold calculated using the current 
formula, and the reporting threshold calculated using the proposed 
formula with Eprior in the denominator of the equipment percentage 
change term instead of 100.
Using Full-Year Data Instead of Second-Quarter Data for Wages and 
Equipment Prices
    Currently, when FRA calculates a new reporting threshold for an 
upcoming calendar year, it relies solely on second-quarter data from 
the current year, which is the most recent data available at the time 
of the calculation, and second-quarter data from the previous year. 
Second-quarter data captures data from the three months of April, May, 
and June. In FRA's estimation, relying on second-quarter data does not 
accurately represent the data for the entire year because it may fail 
to reflect overall data trends, seasonal effects, or other changes 
occurring throughout the year.
    FRA proposes to improve its ability to capture and account for 
seasonal and other changes throughout the year by using a full-year of 
wage and equipment data in the formula instead of only second-quarter 
data. STB provides the wages quarterly, but the BLS provides the 
equipment PPI monthly. To put both wages and equipment PPI in the same 
time frame, the equipment PPI are grouped into quarters corresponding 
to the STB wage data. As noted above, the most recent data available at 
the time the new reporting threshold is calculated are for the second-
quarter of the current year. Therefore, to calculate the percent change 
between current and prior costs, FRA proposes to use data from the 
second half (third and fourth quarters) of the previous calendar year 
and the first half (first and second quarters) of the current calendar 
year to determine the new costs. To calculate the prior costs, FRA 
would use data spanning the second half of the calendar year two years 
prior and the first half of the previous calendar year. For example, to 
calculate the threshold for year 2018 while in year 2017, FRA would use 
data from the third and fourth quarters of 2016 and from the first and 
second quarters of 2017 to calculate Enew and Wnew. For Eprior and 
Wprior, FRA would use data from the third and fourth quarters of 2015 
and the first and second quarters of 2016. The timeline below 
demonstrates using full-year data (as four quarters) in this example.

[[Page 22414]]

[GRAPHIC] [TIFF OMITTED] TP17MY19.007

    With this approach, the estimated threshold would have smaller bias 
by including the seasonal variations of the railroad wages and the rail 
equipment PPIs in the threshold estimations.\5\
---------------------------------------------------------------------------

    \5\ Using full-year data is less biased and more accurate than 
using only second-quarter data, but in some years by chance using 
second-quarter data might yield wage and equipment data closer to 
the actual prices for these inputs.
---------------------------------------------------------------------------

    To see the effect of using full-year data (arrayed as four 
consecutive quarters) on the reporting threshold independently of other 
changes, FRA re-calculated the reporting threshold for each year since 
2006 using the current formula, but using full-year data as proposed. 
Table 2 below presents the results. The differences between the 
reporting thresholds calculated using full-year data and those 
calculated using second-quarter data are small. The use of 100 in the 
denominator instead of Eprior appears as the primary factor in 
increasing the reporting thresholds over time. Conceptually, however, 
encompassing a greater data period for use in the formula would help 
reduce the influence of sudden increases or decreases in wages or 
equipment prices in the second-quarter, which have occurred in the 
past.

   Table 2--Comparing Reporting Thresholds Calculated Using Full-Year Data Instead of Only Second-Quarter Data
                                                [Current formula]
----------------------------------------------------------------------------------------------------------------
                                                           Reporting           Reporting      Difference between
                                                         threshold as     threshold (current   thresholds using
                    Calendar year                         calculated      formula with full-   full-year and 2nd
                                                       (current formula)      year data)         quarter data
----------------------------------------------------------------------------------------------------------------
2006................................................              $7,700              $7,600         -$100 (-1%)
2007................................................               8,200               8,100          -100 (-1%)
2008................................................               8,500               8,500              0 (0%)
2009................................................               8,900               8,900              0 (0%)
2010................................................               9,200               9,400            200 (2%)
2011................................................               9,400               9,600            200 (2%)
2012................................................               9,500               9,700            200 (2%)
2013................................................               9,900              10,000            100 (1%)
2014................................................              10,500              10,600            100 (1%)
2015................................................              10,900              10,900              0 (0%)
2016................................................              11,200              11,300            100 (1%)
2017................................................              11,400              11,600            200 (2%)
2018................................................              11,400              11,600            200 (2%)
Average.............................................               9,746               9,831             85 (1%)
Standard Deviation..................................               1,253               1,324                 114
----------------------------------------------------------------------------------------------------------------

Combining Both Proposed Changes: Changing the Calculation Method for 
Equipment Costs to a Simple Percentage Method, and Using Full-Year Data
    Finally, to demonstrate the results of FRA's proposals in this 
document to (1) correct the mathematical error in the equipment 
component of the existing formula (i.e., substitute Eprior for 100 in 
the denominator of the equipment term), and (2) use full-year data 
instead of only second-quarter data, FRA recalculated the reporting 
threshold for each year since 2006 implementing both these proposals. 
Table 3 lists the results of these calculations. Table 3 demonstrates 
that adopting both of these proposals will generally result in a 
slightly lower reporting threshold, which may increase the number of 
reported incidents.

    Table 3--Comparing Reporting Thresholds Calculated Using the Proposed Formula With Full-Year Data, to the
                            Reporting Thresholds Calculated Using the Current Formula
----------------------------------------------------------------------------------------------------------------
                                                                               Reporting
                                                           Reporting           threshold      Difference between
                    Calendar year                        threshold as      (proposed formula    proposed full-
                                                          calculated        with full-year     year, and current
                                                       (current formula)      data, NPRM)         thresholds
----------------------------------------------------------------------------------------------------------------
2006................................................              $7,700              $7,500         -$200 (-3%)
2007................................................               8,200               7,800          -400 (-5%)
2008................................................               8,500               8,100          -400 (-5%)
2009................................................               8,900               8,400          -500 (-6%)
2010................................................               9,200               8,800          -400 (-4%)

[[Page 22415]]

 
2011................................................               9,400               9,000          -400 (-4%)
2012................................................               9,500               9,100          -400 (-4%)
2013................................................               9,900               9,300          -600 (-6%)
2014................................................              10,500               9,700          -800 (-8%)
2015................................................              10,900               9,900        -1,000 (-9%)
2016................................................              11,200              10,100       -1,100 (-10%)
2017................................................              11,400              10,300       -1,100 (-10%)
2018................................................              11,400              10,300       -1,100 (-10%)
Average.............................................               9,746               9,100          -646 (-6%)
Standard Deviation..................................               1,253                 947                 328
----------------------------------------------------------------------------------------------------------------

    Figure 3 below further illustrates the differences between the 
current and proposed reporting thresholds incorporating both proposed 
changes.
BILLING CODE 4910-06-P
[GRAPHIC] [TIFF OMITTED] TP17MY19.008

BILLING CODE 4910-06-C
    The table and chart demonstrate that, over time, the differences 
increase between the reporting threshold as currently calculated, and 
the reporting threshold calculated with the proposed changes. The 
proposed threshold also increases more gradually, and shows less 
variability than the thresholds calculated using the current formula. 
FRA expects the proposed threshold will more accurately reflect the 
changes in wages and equipment costs railroads incur because the 
proposed threshold corrects a mathematical flaw, and uses a longer 
period of data upon which to base the new estimated threshold.
Alternative Approach: Calculate the Reporting Threshold Using a Price 
Index
    An alternative to the current procedure for calculating the 
reporting threshold is to update the reporting threshold using a price 
index. A commonly-used price index is the CPI,

[[Page 22416]]

but it is primarily used to adjust prices paid by consumers, not 
businesses. Instead of the CPI, a more appropriate price index could be 
constructed using the equipment PPI and STB wages already used in the 
threshold formula. Using an index may reduce the effect of carrying 
forward flawed Tprior values when calculating the new thresholds, and 
may also be a simpler approach. However, the lag in prices used to 
calculate the new reporting thresholds will still exist.
    There are several steps to calculate the price index. First, FRA 
selects a base year for the price index, and sets the value of the 
index at 100 for the base year. Then the equipment PPI and STB wages 
can be re-based to the selected base year to form two price indices. 
Next, the equipment PPI and wage indices can be combined to construct a 
composite wage-equipment price index. Finally, the base-year reporting 
threshold can be updated using the composite price index.
    For the base year, FRA selects 2006 because the threshold for that 
year reflects the last substantive change that was made to the 
threshold calculation by substituting STB wage data for BLS wage data 
that were no longer available. (Other base years are possible as well.) 
The equipment PPI can be re-based to 2006 by dividing the PPI for 
future years by the 2006 PPI, and then multiplying by 100:

Equipment PPI with 2006 Base Year = (Calendar Year Equipment PPI / 2006 
Equipment PPI) x 100

    For example, the 2007 re-based PPI is calculated by:

2007 equipment PPI with 2006 base year = (176.4/169.4) *100 = 104.1. 
(See table below.)

    To make the wage index, first the hourly wages for Group No. 300 
employees (Maintenance of Way and Structures) and the Group No. 400 
employees (Maintenance of Equipment and Stores) are averaged (i.e., the 
same STB wage data that is currently used in the threshold formula). 
Next, the average wages are expressed as an index by dividing them by 
the 2006 average wage, and multiplying by 100:

Average Wage with 2006 Base Year = (Calendar Year Average Wage / 2006 
Average Wage) x 100

    For example, the 2007 wage index is calculated by:

2007 wage index with 2006 base year = ($23.31/$22.20) * 100 = 105.0.

    To calculate the composite wage-equipment price index, FRA 
calculated the weighted average of the wage and equipment PPI indices 
using the weights of 0.4 and 0.6 respectively, for each calendar year 
in the period of analysis. To determine the new threshold, a ratio of 
the composite price index for the base year to the composite price 
index for the calendar year of interest, equal to the ratio of the 
reporting threshold for the base year to the reporting threshold for 
the calendar year of interest (the unknown threshold) is set-up. 
Solving for the unknown threshold for the calendar year of interest 
yields:
[GRAPHIC] [TIFF OMITTED] TP17MY19.009

    Continuing with year 2007 for an example, the threshold for that 
year is calculated by: 2007 Threshold = (104.5 * $7,700) / 100 = $8,045 
or $8,000 when rounded to the nearest $100. The data used to construct 
the composite price index and resulting thresholds for this alternative 
are summarized in the table below.

                                        Table 4--Alternative Approach to Calculating the Reporting Threshold Using a Composite Wage-Equipment Price Index
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                   PPI re-based     Wage, group     Wage, group    Average wage    Wage re-based     Composite      Alternative
                          Calendar year                            Equipment PPI       index        no. 300 ($)     no. 400 ($)         ($)            index        price index    threshold ($)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2006............................................................           169.4           100.0           22.17           22.22           22.20           100.0           100.0           7,700
2007............................................................           176.4           104.1           23.65           22.96           23.31           105.0           104.5           8,000
2008............................................................           180.2           106.4           24.44           24.01           24.23           109.1           107.5           8,300
2009............................................................           181.9           107.4           24.81           26.25           25.53           115.0           110.4           8,500
2010............................................................           184.4           108.9           24.01           25.70           24.86           112.0           110.1           8,500
2011............................................................           187.0           110.4           25.43           25.81           25.62           115.4           112.4           8,700
2012............................................................           191.8           113.2           27.05           27.20           27.13           122.2           116.8           9,000
2013............................................................           195.7           115.5           28.07           28.46           28.27           127.4           120.3           9,300
2014............................................................           197.7           116.7           29.34           29.48           29.41           132.5           123.0           9,500
2015............................................................           201.9           119.2           30.49           30.80           30.64           138.1           126.7           9,800
2016............................................................           203.3           120.0           30.67           30.86           30.76           138.6           127.4           9,800
2017............................................................           203.2           120.0           30.98           30.91           30.95           139.4           127.7           9,800
2018............................................................           202.9           119.8           32.62           32.60           32.61           146.9           130.6          10,100
Average.........................................................  ..............  ..............  ..............  ..............  ..............  ..............  ..............           9,000
Standard Deviation..............................................  ..............  ..............  ..............  ..............  ..............  ..............  ..............             777
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sources: Equipment PPI from the Bureau of Labor Statistics (BLS), PPI for commodities, Series ID WPU144 for Railroad Equipment, base data 1982. Wage data from the Surface Transportation Board,
  Composite of Annual Wage Forms A and B submitted by Class I railroads.

    Going forward, if this alternative approach is adopted, FRA 
anticipates calculating the reporting threshold in December of every 
year. At that time, 3 quarters of wage data and 11 months of equipment 
PPI data would be available, which is only slightly less than a full 
calendar year of data. For the missing one quarter of wage data, and 
one month of equipment PPI data, FRA could average the available time 
periods for that calendar year to substitute for the missing values. 
Using an average to estimate the missing values may be more simple than 
extending the time period into the previous calendar year to capture a 
full-year's worth of data. FRA requests comment on this

[[Page 22417]]

alternative approach and which year FRA should use as the base year for 
calculating future reporting thresholds.
    The series of thresholds produced by the alternative method are 
similar to, but slightly lower than, the thresholds calculated using 
the NPRM proposed formula with full-year data. The average of both the 
alternative thresholds and NPRM thresholds is $9,000. Both the 
alternative thresholds and NPRM thresholds are lower than the 
thresholds calculated by the current formula, which average $9,746.

C. Proposal To Issue an Annual Notice of Reporting Threshold

    FRA proposes to discontinue its current practice of issuing a final 
rule each year incorporating into 49 CFR part 225 the reporting 
threshold for the upcoming calendar year (CY). Instead, FRA proposes to 
issue an annual notice on FRA's website stating the reporting threshold 
amount for the upcoming CY. This notice would be more practical and 
efficient than FRA's current practice of issuing a final rule each 
year. Using a notice would allow FRA to quickly make the adjusted 
reporting threshold available.
    While FRA did not seek comment on its annual final rules adjusting 
the reporting threshold, FRA did receive one comment about the 
reporting threshold from the Association of American Railroads (AAR) in 
its comments to the proposed information collection request (ICR) for 
the Accident/Incident Reporting and Recordkeeping (part 225) 
regulation, ICR OMB Control Number 2130-0500. In November 2016, AAR 
commented that FRA should update the reporting threshold because it had 
not been updated since December 2013. AAR noted that not updating the 
threshold reduced the value of the accident statistics, which are used 
by the railroad industry to evaluate safety and develop safety 
initiatives. FRA acknowledges the reporting threshold was not changed 
from 2014 through 2016 as explained earlier under Table 1. FRA is 
reviewing the method for calculating the reporting threshold in this 
rulemaking. Given the new reporting threshold is based upon a set 
formula--the development of which is subject to notice and comment in 
this rulemaking--notice and comment procedures associated with annual 
adjustments to the reporting threshold are not necessary.

D. Notice and Comment Procedures

    FRA believes 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.

III. Regulatory Review and Notices

A. Executive Orders 12866 and 13771 and DOT Regulatory Policies and 
Procedures

    This NPRM is a non-significant rulemaking and evaluated in 
accordance with existing policies and procedures under Executive Order 
12866 and DOT Order 2100.6. See 58 FR 51735, Sep. 30, 1993 and https://www.transportation.gov/regulations/2018-dot-rulemaking-order. This 
rulemaking is not a regulatory action under Executive Order 13771, 
``Reducing Regulation and Controlling Regulatory Costs,'' because this 
proposed rule is not significant under E.O. 12866. See 82 FR 9339, Jan. 
30, 2017.
    FRA proposes to revise its formula for determining the reporting 
threshold. The changes have been described in detail in the 
``Background'' section above. The changes are intended to improve the 
accuracy of the reporting threshold, and the resulting rail equipment 
accident/incident data gathered from the railroads over time. The 
improved data is expected to help formulate regulations that better 
address safety risks. Table 5 below summarizes these costs and 
benefits.

                                                         Table 5--Summary of Costs and Benefits
                                                           [Over a 10-year period of analysis]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   New costs        Cost savings *                                 Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Undiscounted, Nominal........................           $202,032            $12,710  Qualitative: More Accurate Data.
Present Value (PV) at 3%.....................            170,744             10,842  Qualitative: More Accurate Data.
Present Value (PV) at 7%.....................            138,913              8,927  Qualitative: More Accurate Data.
Annualized at 3%.............................             20,016              1,271  Qualitative: More Accurate Data.
Annualized at 7%.............................             19,778              1,271  Qualitative: More Accurate Data.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* FRA will save some costs from the proposal to issue a notice, which is easier administratively and reduces printing costs, than the current practice
  of publishing a final rule.

    The regulatory evaluation uses the no-action baseline to describe 
the expected impacts of the proposed rule. The no-action baseline is 
simply the threshold calculated using the current formula without any 
proposed changes. The potential incremental costs and benefits of the 
proposed rule are compared to the no-action baseline.
    The two proposed revisions of standardizing the change in the 
equipment costs calculation, and using full-year data (in terms of four 
consecutive quarters) would result in a more accurate reporting 
threshold in comparison to the current threshold. The proposed 
reporting threshold with both revisions averages about six percent 
lower than the current threshold (see Table 3). The lower threshold 
would result in marginally higher numbers of reported rail equipment 
accidents/incidents in comparison to the reporting threshold calculated 
using the current flawed formula. However, railroads already maintain 
these accident/incident records (for accidents/incidents which are 
below the current reporting threshold) even though they are not 
submitted to FRA. Under 49 CFR 225.25(d)-(g), railroads maintain these 
``accountable rail equipment accident/incident'' events (as defined in 
section 225.5) on Form FRA F 6180.97 or an alternative form. Thus, the 
potential burden to submit additional accident/incident data would 
primarily be an administrative burden.
    FRA estimates the cost of submitting these potential additional 
rail equipment accident/incident reports as the cost of an individual 
rail equipment accident/incident report multiplied by the number of 
additional reports. Furthermore, the cost of an individual rail 
equipment accident/incident report may be decomposed into the amount of 
labor hours needed to complete an accident report multiplied by the 
wage rate for the railroad personnel most likely to perform this task. 
The amount of labor hours to complete a Form F 6180.54 to report a rail 
equipment accident/incident was previously estimated for the railroad 
accidents/incidents reporting rule in ``Miscellaneous Amendments to the

[[Page 22418]]

Federal Railroad Administration's Accident/Incident Reporting 
Requirements; Final Rule.'' See 75 FR 68862 (Nov. 9, 2010). For that 
rule, the Paperwork Reduction Act analysis estimated two hours per 
response to complete a rail equipment accident/incident report. (Note 
the task to transfer information from Form FRA F 6180.97 to Form F 
6180.54 to report rail equipment accidents/incidents to FRA may take 
less time.) The personnel most likely to complete a rail equipment 
accident/incident report would be administrative personnel, such as a 
railroad safety officer, or someone performing those assigned 
functions. This analysis uses the wage rate for Professional and 
Administrative employees, STB Group No. 200, as an appropriate wage for 
estimating the costs of completing a report.\6\ The average straight 
time wage rate of $41.15 is burdened for overhead expenses by 75 
percent to produce an hourly rate of $72.01 per hour. The marginal cost 
of submitting an accident/incident report is therefore:
---------------------------------------------------------------------------

    \6\ See STB, ``Annual Compilation of Wage Statistics of Class I 
Railroads in the United States, 2017,'' at http://www.stb.dot.gov/stb/industry/econ_reports.html.
---------------------------------------------------------------------------

    2 hours per Form F 6180.54 * $72.01 per hour = $144.02 per 
additional accident/incident report, rounded to $144.
    By definition, railroads are not required to submit reports for 
accidents/incidents resulting in monetary damages below the current 
threshold, making it difficult to estimate the number of potential 
extra rail equipment accident/incident reports that may be submitted 
because of a slightly lower proposed threshold. However, rather than 
provide little information about the impacts of this proposed rule, FRA 
makes the following assumptions and inferences in order to at least 
describe the potential impacts.
    (1) This analysis reasons the rail equipment accidents/incidents 
affected by the proposed rule would be those with monetary damages 
``near'' the threshold amount. That is, rail equipment accidents/
incidents with far greater monetary damages, or those with much lower 
monetary damages, than the current reporting threshold will not be 
affected by a small decrease in the reporting threshold.
    (2) ``Near'' the reporting threshold is set at $12,000 for the 
purposes of this analysis.
    (3) FRA broadly assumes the pattern of rail equipment accidents/
incidents occurring near and above the threshold is the same as the 
pattern of accidents/incidents occurring near and below the threshold. 
Essentially, the rail equipment accidents/incidents that are not 
reported to FRA are assumed to be a mirror image of the rail equipment 
accidents/incidents near and above the threshold that are reported to 
FRA. For the narrow band of accidents under consideration for this 
analysis, the distribution of accidents/incidents above and below the 
threshold may reasonably be similar.
    (4) As sample data for discussion purposes, the distribution of 
rail equipment accidents/incidents near the threshold for the years 
2014 to 2018 (5 years) is used. Those years represent a more recent 
data sample for the threshold. For 2014 to 2016, the $12,000 ``near'' 
boundary is about 15 percent above those years' reporting threshold of 
$10,500 (which forms the lower boundary for those years). Similarly, 
for 2017 and 2018, the $12,000 ``near'' boundary is about 12 percent 
above those years' reporting threshold amount of $10,700 (again, the 
lower boundary for those year). The train accident data are presented 
below.

  Table 6--Number of Reported Train Accidents ``Near'' the Reporting Threshold, for Every $100 Increase in the
                                                    Threshold
----------------------------------------------------------------------------------------------------------------
Reported train accident monetary   No. of train    No. of train    No. of train    No. of train    No. of train
       damage interval ($)        accidents 2014  accidents 2015  accidents 2016  accidents 2017  accidents 2018
----------------------------------------------------------------------------------------------------------------
10,400-10,500...................               3               0               2  ..............  ..............
10,500-10,600...................              11               4               6
10,600-10,700...................               8               8               5               1               0
10,700-10,800...................               9               4               9              14               7
10,800-10,900...................              10               5               9               3               7
10,900-11,000...................              11              19               7              14              18
11,000-11,100...................               8              13               1               9               8
11,100-11,200...................              12               5               3              10               4
11,200-11,300...................               9               4               7               7               5
11,300-11,400...................               4               8               8               7               8
11,400-11,500...................              13              10               6               9               6
11,500-11,600...................               9               9               8              13               3
11,600-11,700...................              10              17               6               3               3
11,700-11,800...................               7               7               9               5               9
11,800-11,900...................              10               9               8               4               8
11,900-12,000...................              14               8              10              13              13
                                 -------------------------------------------------------------------------------
    Total.......................             148             130             104             112              99
Average (Overall Avg. = 7.8)....             9.3             8.1             6.5             8.0             7.1
Standard Deviation..............             2.9             4.9             2.6             4.4             4.5
----------------------------------------------------------------------------------------------------------------
* The reporting threshold was $10,500 from 2014 to 2016, and $10,700 from 2017 to 2018.

    In the above table, the lower and upper boundaries for the separate 
monetary intervals in the first column contain reported damages greater 
than the lower boundary amount for that interval, up to and including 
the upper boundary amount for that interval. For example, if $X is the 
reported accident damage falling in the range $11,000-$11,100, then the 
interval may be written as: $11,000 < $X <= $11,100.
    Table 6 shows railroads reported 148 total rail equipment 
accidents/incidents near the threshold in 2014, representing

[[Page 22419]]

about 8 percent of all the rail equipment accidents/incidents reported 
in that calendar year (calculated as 148/1886 total rail equipment 
accidents/incidents for 2014 = 0.078 [ap] 8 percent). Additionally, in 
2014, on average there were about 9 rail equipment accidents/incidents 
for every $100 increase in reported monetary damages. (Calculated as 
148/16 intervals = 9.3 [ap] 9 rail equipment accidents/incidents). The 
rail equipment accident/incident experience near the threshold for the 
other years (2015 to 2018) was slightly lower, representing about 5 to 
7 percent of the total rail equipment accidents/incidents reported for 
those years. Overall, for the years 2014 to 2018, the railroads 
reported an average of 8 rail equipment accidents/incidents for every 
$100 increase in reported monetary damages.
    Next, FRA determined the number of additional rail equipment 
accident/incident reports that railroads may be required to submit to 
FRA in the future under the proposed rule. To estimate these future 
accident/incident reports, FRA forecast both the reporting thresholds 
calculated using the current formula, and the reporting thresholds 
calculated using the proposed formula with full-year data, for the 
years 2019 to 2028. The forecasted thresholds are illustrated below.\7\
---------------------------------------------------------------------------

    \7\ FRA used the ``Forecast Sheet'' function in Microsoft Excel 
2016 to forecast both the current reporting threshold, and the 
proposed reporting threshold for the years 2019 to 2028. The 
forecast was based on the series of current reporting thresholds and 
proposed thresholds for the period 2006 to 2018 as shown in Table 3. 
Given the data is historical in nature, the forecast function was 
used to perform the time series analysis. The forecast function uses 
the exponential smoothing (error, trend, seasonal) algorithm. For a 
description of the forecast sheet function, see: Create a Forecast 
In Excel for Windows, accessed at https://support.office.com/en-us/article/create-a-forecast-in-excel-for-windows-22c500da-6da7-45e5-bfdc-60a7062329fd.
[GRAPHIC] [TIFF OMITTED] TP17MY19.010

    The chart above shows the two reporting thresholds moving further 
apart as the flawed formula produces a higher and higher reporting 
threshold over time.
    From the forecast of current and proposed thresholds, FRA 
calculated the monetary difference between the two thresholds for each 
year from 2019 to 2028. To convert these monetary differences to the 
estimated number of accident/incident reports, FRA applied the 
previously-determined rate of 8 accidents for every $100 increase in 
reported monetary damages. For example, for year 2020, the expected 
difference between the current and proposed thresholds is $1,522. See 
Table 7. To convert this amount to the number of accident/incidents, 
the following proportion was used in which 8 accidents/incidents is to 
the unknown X-number of accidents/incidents per year, as $100 is to the 
$1,522 difference between the current and proposed thresholds.

[[Page 22420]]

[GRAPHIC] [TIFF OMITTED] TP17MY19.011

X =121.76 accidents_incidents [ap] 122 accidents_incidents for year 
2020.

The number of accidents/incidents for the other years in the forecast 
period are calculated similarly.
    Finally, to monetize these additional estimated accident/incident 
reports, FRA multiplied the $144 cost to submit an accident/incident 
report by the estimated number of additional reports. For example, for 
year 2020 the expected cost is $17,568. (Calculated as 122 accidents/
incidents * $144 per accident/incident report = $17,568.) Performing 
similar calculations for the remaining years in the forecast period 
results in the cost schedule below. The present value of total costs 
discounted at a 7 percent discount rate equals $138,913, and when 
discounted at a 3 percent rate equals $170,744. These costs may be 
overstated because the set of current reporting thresholds as 
calculated was subtracted from the proposed reporting thresholds. 
Instead, if the set of current reporting thresholds as published was 
used as the baseline and subtracted from the proposed thresholds, the 
differences would be somewhat smaller, resulting in fewer estimated 
incremental accident/incident reports. However, FRA did not forecast 
the reporting thresholds as published because they reflect FRA 
discretion and may not be representative of future thresholds.

            Table 7--Estimated Costs Based on Forecasted Number of Rail Equipment Accidents/Incidents
----------------------------------------------------------------------------------------------------------------
                                                     Reporting      Difference       Number of
                                     Reporting       threshold        between          extra         Estimated
                                     threshold       (proposed    proposed full-    accidents/      annual cost
          Calendar year              (current      formula with      year and        incidents       @$144 per
                                     formula)        full-year        current        reported        accident/
                                    calculated      data, NPRM)     thresholds       (rounded)       incident
----------------------------------------------------------------------------------------------------------------
2019............................         $12,021         $10,566         -$1,456             116         $16,704
2020............................          12,329          10,807          -1,522             122          17,568
2021............................          12,637          11,048          -1,589             127          18,288
2022............................          12,944          11,289          -1,655             132          19,008
2023............................          13,252          11,530          -1,721             138          19,872
2024............................          13,559          11,771          -1,788             143          20,592
2025............................          13,867          12,012          -1,854             148          21,312
2026............................          14,174          12,254          -1,921             154          22,176
2027............................          14,482          12,495          -1,987             159          22,896
2028............................          14,789          12,736          -2,053             164          23,616
----------------------------------------------------------------------------------------------------------------
Total Undiscounted Cost 2019-2028 (10 Years), Nominal...........................................         202,032
----------------------------------------------------------------------------------------------------------------
Present Value (PV) of Total Cost Discounted at 7% 2019-2028.....................................         138,913
Present Value (PV) of Total Cost Discounted at 3% 2019-2028.....................................         170,744
Total Annualized Cost Using 7% Discount Rate 2019-2028..........................................          19,778
Total Annualized Cost Using 3% Discount Rate 2019-2028..........................................          20,016
----------------------------------------------------------------------------------------------------------------

    To account for the costs of a lower reporting threshold resulting 
from the proposed changes, FRA would need to estimate the number of 
extra rail equipment accidents/incidents that railroads would report. 
However, those accidents/incidents are not currently reported. This 
analysis makes some assumptions about the distribution of those 
unreported accidents/incidents in order to offer some useful 
information about the proposed rule's potential impacts. FRA seeks 
comments from the public on the assumptions used.
    Earlier, FRA presented an alternative approach to calculate the 
reporting thresholds using a wage-price composite index. The resulting 
thresholds were slightly lower than the thresholds produced using the 
proposed threshold formula with full-year data (i.e., the NPRM 
proposal). Therefore, the marginal costs of the alternative approach 
are higher because railroads would report more accidents/incidents. If 
the alternative approach is adopted, the present value of total costs 
discounted at 7 percent would equal $175,492, and when discounted at 3 
percent, would equal $216,568. The annualized cost using a 7 percent 
rate would be $24,986, and using a 3 percent rate would be $25,338.\8\
---------------------------------------------------------------------------

    \8\ For brevity, the estimated extra accidents/incidents 
reported under the alternative approach and the corresponding costs 
are shown as ordered pairs in the form of Year (Extra Accidents/
Incidents, Cost): {2019(138, $19,872), 2020(147, $21,168), 2021(156, 
$22,464), 2022(165, $23,760), 2023(174, $25,056), 2024(183, 
$26,325), 2025(192, $27,648), 2026(201, $28,944), 2027(210, 
$30,240), 2028(219, $31,536).
---------------------------------------------------------------------------

    To put the proposed rule's potential costs into context, the 
incremental costs are compared to the total costs for reporting rail 
equipment accidents/incidents with damages greater than the reporting 
threshold. The industry-total costs for reporting 1,886 rail equipment 
accidents/incidents in 2014, for example, was equal to $271,584 at a 
cost of $144 per accident/incident report. From above, the annualized 
cost using a 7 percent or 3 percent interest rate is about $20,000. 
Thus, the marginal cost of the proposed threshold revisions is about 7 
percent of the total industry accident reporting costs. (Calculated as 
$20,000 approximate annual cost/$271,584 sample total annual cost = 
0.0736 [ap] 7 percent.) Thus, the typical cost of the proposed 
revisions is expected to be relatively small.

[[Page 22421]]

Furthermore, the effect of the proposed rule is expected to be even 
smaller in the context of all reported accidents/incidents, which 
include rail equipment accidents/incidents above the reporting 
threshold (i.e., train accidents), highway-rail incidents, and other 
incidents. From 2014 to 2018, railroads reported approximately 12,000 
accidents/incidents annually on average, or about six times as many 
rail equipment accidents/incidents.
    Separately from changes to the reporting threshold calculation, FRA 
proposes to publish an annual notice on FRA's website notifying 
stakeholders of the new reporting threshold for the following year. 
Currently, FRA publishes a final rule in the Federal Register. The 
publication of an annual notice instead of an annual final rule would 
result in less administrative costs for FRA. By not having to publish a 
final rule in the Federal Register, FRA would save on printing costs. 
The Government Printing Office (GPO) charges agencies $151 per column 
to publish material in the Federal Register, and $85 per page to 
publish material in the Code of Federal Regulations (CFR).\9\ FRA 
counted the number of columns in the Federal Register occupied by the 
reporting threshold final rule for the years 2007 to 2018.\10\ The 
reporting threshold final rule occupied an average of 8 columns 
annually, for an average annual cost of $1,271. (Calculated as 8 
columns * $151 per column = $1,271 per year for publishing costs.)
---------------------------------------------------------------------------

    \9\ See GPO Circular Letter No. 1007 (June 4, 2018), available 
at https://www.gpo.gov/how-to-work-with-us/agency/circular-letters/open-requisitions-sf1-for-federal-register-and-code-of-federal-regulations.
    \10\ Year 2006 was excluded because FRA made a substantive 
change to the formula and the Federal Register notice for that year 
was atypically longer at 13 columns.
---------------------------------------------------------------------------

    The new reporting thresholds are also printed in the CFR in 49 CFR 
225.19(c) and (e). FRA amends the existing list of reporting thresholds 
by adding the new threshold. Since only the new threshold amount is 
added (seven characters), only a small amount of additional space on 
the page is needed, even over the 10 year period of analysis. 
Therefore, the publishing cost for the additional space in the CFR for 
adding the new threshold amount will be small. The table below accounts 
for the cost savings from publishing a notice of the new reporting 
threshold to FRA's website, instead of publishing it in a final rule in 
the Federal Register.

   Table 8--Cost Savings Resulting From not Publishing the New Years'
           Reporting Threshold Notice in the Federal Register
------------------------------------------------------------------------
                                          Avg. number of
                                              columns      Printing cost
                                            printed in      for Federal
                                              Federal        Register
              Calendar Year                Register for      reporting
                                           new reporting     threshold
                                             threshold     notice @$151
                                              notice        per column
------------------------------------------------------------------------
2019....................................               8          $1,271
2020....................................               8           1,271
2021....................................               8           1,271
2022....................................               8           1,271
2023....................................               8           1,271
2024....................................               8           1,271
2025....................................               8           1,271
2026....................................               8           1,271
2027....................................               8           1,271
2028....................................               8           1,271
------------------------------------------------------------------------
Total Undiscounted Cost 2019-2028 (10 Years), Nominal...          12,710
------------------------------------------------------------------------
Present Value (PV) of Total Cost Discounted at 7% 2019-            8,927
 2028...................................................
Present Value (PV) of Total Cost Discounted at 3% 2019-           10,842
 2028...................................................
Total Annualized Cost Using 7% Discount Rate 2019-2028..           1,271
Total Annualized Cost Using 3% Discount Rate 2019-2028..           1,271
------------------------------------------------------------------------

    The rail equipment accident/incident data FRA gathers under 49 CFR 
part 225 is used in support of many safety regulations and programs. 
The proposed revisions would help ensure the reporting threshold 
accurately reflects the cost changes over time that occur in incident 
damages. Admittedly, as the small number of rail equipment accidents/
incidents near the threshold reduces the costs of these proposed 
changes, it also reduces the potential benefits of the proposed 
changes. Nevertheless, through greater accuracy of the reporting 
threshold, the quality of the collected train accident data is expected 
to improve. With access to higher quality data, future analyses 
supporting rulemakings will improve the efficiency of safety risk 
targeting, and help to better identify accident/incident trends. A more 
accurate reporting threshold will also permit valid comparisons of rail 
equipment accident/incident rates across years.
    In addition to FRA, other users of railroad safety data, such as 
students, researchers, industry stakeholders, and the general public 
will benefit from adopting the revisions in the proposed rule. FRA 
makes the train accident data, along with other rail accident/incident 
data, available to the public on the FRA Office of Safety Analysis 
website.\11\ As of March 2019, over 2.7 million people have visited the 
website. These users will benefit by having access to higher-quality 
data.
---------------------------------------------------------------------------

    \11\ See http://safetydata.fra.dot.gov/OfficeofSafety/Default.aspx.
---------------------------------------------------------------------------

    Given the wide range of regulations and projects that use train 
accident data, it is difficult to monetize the marginal contributions 
that better data might make to these regulations. Also, higher quality 
data might benefit other projects for which private parties use the 
data.
    Based on the cost analysis and benefits discussion above, FRA 
believes the proposed rule may have a positive

[[Page 22422]]

impact on analyses by improving the accuracy of FRA's rail equipment 
accident/incident data. The proposed rule will impact a small number of 
rail equipment accidents/incidents that occur near the reporting 
threshold, resulting in minimal costs. The benefits of the proposed 
rule will affect users conducting analysis in support of safety 
programs, as well as other data users.
    FRA invites comments on the assumptions and analysis employed in 
this analysis.

B. Regulatory Flexibility Determination

    This section examines the impact of the proposed rule on small 
entities. FRA is proposing changes to the way the reporting threshold 
is calculated. FRA proposes a minor mathematical correction to the way 
the percent change in equipment costs is calculated in the reporting 
threshold formula. Also, FRA proposes to use 12 months of data in the 
reporting threshold calculation, instead of the current practice of 
using only 3 months of data. Finally, FRA proposes to notify railroads 
of the new reporting threshold for the upcoming year by publishing an 
annual notice on FRA's website, as opposed to its current procedure of 
publishing an annual final rule in the Federal Register. These changes 
are explained in more detail in the ``Background'' section above.
    FRA expects the proposed, technical changes to the reporting 
threshold formula to yield lower reporting thresholds in the future in 
comparison to reporting thresholds calculated using the current 
formula. The technical changes are expected to improve the accuracy of 
train accident data, but may result in marginally increasing the number 
of rail equipment accidents/incidents railroads are required to report. 
FRA estimates the number of extra rail equipment accidents/incidents 
reported will be small, and therefore the corresponding burden on small 
entities will be minimal.
    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, and 
Executive Order 13272, Proper Consideration of Small Entities in Agency 
Rulemaking, 67 FR 53461 (Aug. 16, 2002), require agency 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. 
Under section 312 of the Small Business Regulatory Enforcement Fairness 
Act of 1996, Public Law 104-121, FRA has issued a final policy 
statement that formally establishes ``small entities'' are railroads 
that meet the line-haulage revenue requirements of a Class III 
railroad, which is $20 million or less in inflation-adjusted annual 
revenues, and commuter railroads or small governmental jurisdictions 
that serve populations of 50,000 or less. See 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.
Description of Regulated Entities
    All railroads currently governed by 49 CFR part 225 railroad 
accident/incident reporting requirements will be subject to this 
proposed rule. Of those, FRA considers about 735 of the approximately 
784 railroads in the United States to be small entities. Although most 
of the railroads are small entities, the frequency of rail equipment 
accidents/incidents, and the frequency of subsequent 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 having a reportable occurrence of any type, and even longer 
without having a rail equipment accident/incident with monetary damages 
greater than the reporting threshold, as defined in 49 CFR part 225. 
For example, over the five-year period from 2014 to 2018, small 
railroads reported an average of 14 percent of the total number of rail 
equipment accidents/incidents.\12\
---------------------------------------------------------------------------

    \12\ Class III rail equipment accidents/incidents divided by all 
railroad rail equipment accidents/incidents, by year: Year 2014--
272/1,886=14%; year 2015--292/1,934=15%; year 2016--251/1,721=15%; 
year 2017--237/1,760=13%; year 2018--240/1,836=13%. Source: Agency 
query of FRA Safety Data website at http://safetydata.fra.dot.gov/OfficeofSafety/Default.aspx.
---------------------------------------------------------------------------

Substantial Number of Small Entities
    For the small railroads, FRA conducted a similar analysis for all 
railroads above and reviewed the rail equipment accidents/incidents 
``near'' the threshold. Following the analysis for all railroads, 
``near'' is defined for the purposes of this analysis as $12,000. These 
rail equipment accidents/incidents represent those most likely affected 
by the proposed rule. (As noted earlier, accidents/incidents below the 
reporting threshold are not reported.) As an example, in 2014, 18 small 
railroads reported 20 rail equipment accidents/incidents near the 
threshold (the high). In 2016, 8 small railroads reported 8 rail 
equipment accidents/incidents near the threshold (the low, see Table 
8). Based on the period from 2014 to 2018, the small railroads likely 
affected by this proposed rule range between 1.1 to 2.4 percent of all 
small railroads, averaging 1.7 percent (about 12 small railroads). 
(Calculation example for 2014: 18 small railroads with rail equipment 
accidents/incidents near the threshold/735 small railroads = 0.024.)

  Table 8--Number of Reported Train Accidents ``Near'' the Reporting Threshold, for Every $100 Increase in the
                                            Threshold: Small Entities
----------------------------------------------------------------------------------------------------------------
                                     Number of       Number of       Number of       Number of       Number of
Reported train accident monetary       train           train           train           train           train
       damage interval ($)        accidents 2014  accidents 2015  accidents 2016  accidents 2017  accidents 2018
----------------------------------------------------------------------------------------------------------------
10,400-10,500...................               1               0               2  ..............  ..............
10,500-10,600...................               2               0               0  ..............  ..............
10,600-10,700...................               2               2               0  ..............  ..............
10,700-10,800...................               1               1               0               0               0
10,800-10,900...................               0               0               0               1               0
10,900-11,000...................               3               3               0               2               2
11,000-11,100...................               3               3               0               0               0
11,100-11,200...................               2               2               1               1               1
11,200-11,300...................               0               0               0               1               0
11,300-11,400...................               2               0               0               1               1
11,400-11,500...................               1               1               0               0               1
11,500-11,600...................               0               0               2               1               0
11,600-11,700...................               1               2               0               1               0

[[Page 22423]]

 
11,700-11,800...................               0               1               0               0               2
11,800-11,900...................               1               2               1               1               1
11,900-12,000...................               1               0               2               2               3
                                 -------------------------------------------------------------------------------
    Total.......................              20              17               8              11              11
Average (Overall Avg.=0.9)......             1.3             1.1             0.5             0.8             0.8
Standard Deviation..............             1.0             1.1              08             0.7             1.0
----------------------------------------------------------------------------------------------------------------
* The reporting threshold was $10,500 from 2014 to 2016, and $10,700 from 2017 to 2018.

    As noted above, small railroads account for about 14 percent on 
average of all reported rail equipment accidents/incidents in any given 
year. Additionally, FRA estimates less than three percent of the small 
railroads subject to this proposed rule are likely to be impacted by 
being required to submit more accident/incident reports. These are the 
small railroads that reported rail equipment accidents/incidents near 
the reporting thresholds calculated using the current formula (e.g., 18 
smalls for 2014 and 8 smalls for 2016 in the example above). Given the 
low portion of small railroads impacted, this proposed rule is not 
expected to impact a substantial number of small entities.
No Significant Economic Impact
    To determine the potential compliance costs for small entities, FRA 
conducted an analysis such as that presented in the economic analysis 
for all railroads. The steps in the analysis are summarized here, and 
the calculations and results described below. First, FRA calculated the 
rate of additional rail equipment accidents/incidents that small 
entities may have to report for every $100 change in the reporting 
threshold. This rate is based on rail equipment accidents/incidents 
reported by the small entities in the past for the period 2006 to 2018. 
Because FRA lacks information on accidents/incidents below the current 
threshold as railroads do not have to report these, FRA broadly assumes 
the pattern of accidents/incidents below a proposed, lower threshold 
will be similar to those above the threshold. To estimate the trend of 
the thresholds calculated using the current formula, and the thresholds 
calculated using the proposed formula, FRA forecast both current and 
proposed thresholds for the years 2019 to 2028. The forecasts allowed 
FRA to calculate the monetary differences between the current and 
proposed reporting thresholds in the future, by year. Next, FRA 
converted the monetary difference between the reporting thresholds to 
the number of additional rail equipment accident/incident reports that 
small railroads may have to submit to FRA under the proposed threshold. 
FRA estimated these additional accident/incident reports by applying 
the rate of accidents/incidents per $100 change in the reporting 
threshold. Finally, FRA multiplied the railroad's cost to submit an 
accident/incident report to FRA by the number of additional rail 
equipment accident/incident reports, to produce the compliance cost per 
year for the small entities.
    Table 8 above is used to determine the rate of additional rail 
equipment accidents/incidents per a $100 change in the reporting 
threshold. The data for the years 2014 to 2018 are used as sample data 
for analysis. Those years represent a more recent part of the period of 
analysis (i.e., 2006 to 2018) used to describe the effects of the 
proposed rule on the reporting threshold. For example, in 2014, there 
was an average of 1.3 more rail equipment accident/incidents reported 
for every $100 change in the reporting threshold. (Calculated as 20 
rail equipment accident/incidents / 16 intervals = 1.250 [ap] 1.3 rail 
equipment accident/incident per $100 change in the threshold, on 
average.) The rates for the other years between 2015 to 2018 were 
calculated similarly and are slightly lower, ranging between 0.5 to 
1.1, or an overall average rate of about 1 more rail equipment 
accident/incident for every $100 change in the reporting threshold.
    In the analysis for all railroads, FRA forecast the reporting 
thresholds and is employing that forecast in this analysis for small 
entities. Using the forecasts, FRA calculated the difference between 
the current reporting threshold and the proposed reporting threshold on 
an annual basis. FRA then combined the resulting differences with the 
rate of additional rail equipment accidents/incidents per $100 change 
in the reporting threshold to calculate the number of additional 
accident/incident reports expected. For example, for year 2020, the 
monetary difference between the forecast current threshold and the 
forecast proposed threshold was $1,522. Using the proportion below, FRA 
expects the small railroads to report 15 more rail equipment accidents/
incidents in that year:
[GRAPHIC] [TIFF OMITTED] TP17MY19.012

X = 15.22 accidents_incidents [ap] 15 accidents_incidents for year 
2020.

FRA calculated the expected number of additional accidents/incidents 
for the small railroads for the other years in the forecast period 
using the same method.

[[Page 22424]]

    Finally, to monetize these estimated extra accident/incident 
reports, FRA used the cost incurred by a railroad to submit an 
accident/incident report to FRA, which was previously determined in the 
analysis for all railroads at $144 per report. FRA multiplied this cost 
by the estimated number of additional reports to arrive at annual 
costs. Continuing to use year 2020 as an example, the expected cost is 
$2,160. (Calculated as 15 accidents/incidents * $144 per accident/
incident report = $2,160.) FRA calculated the costs for the other years 
in the forecast period similarly, resulting in the cost schedule below. 
For the 10-year period, the undiscounted (nominal) costs sum to 
$25,488. The present value of total costs discounted at a 7 percent 
discount rate equals $17,526, and when discounted at a 3 percent rate 
equals $21,541.

    Table 9--Estimated Costs Based on Forecasted Number of Rail Equipment Accidents/Incidents: Small Entities
----------------------------------------------------------------------------------------------------------------
                                                     Reporting      Difference       Number of
                                     Reporting       threshold        between          extra         Estimated
                                     threshold       (proposed    proposed full-    accidents/     annual cost @
          Calendar year              (current      formula with      year and        incidents       $144 per
                                      formula        full-year        current        reported        accident/
                                    calculated)        data)        thresholds       (rounded)       incident
----------------------------------------------------------------------------------------------------------------
2019............................         $12,021         $10,566         -$1,456              15          $2,160
2020............................          12,329          10,807          -1,522              15           2,160
2021............................          12,637          11,048          -1,589              16           2,304
2022............................          12,944          11,289          -1,655              17           2,448
2023............................          13,252          11,530          -1,721              17           2,448
2024............................          13,559          11,771          -1,788              18           2,592
2025............................          13,867          12,012          -1,854              19           2,736
2026............................          14,174          12,254          -1,921              19           2,736
2027............................          14,482          12,495          -1,987              20           2,880
2028............................          14,789          12,736          -2,053              21           3,024
----------------------------------------------------------------------------------------------------------------
Total Undiscounted Cost 2019-2028 (10 Years), Nominal...........................................          25,488
----------------------------------------------------------------------------------------------------------------
Present Value (PV) of Total Cost Discounted at 7% 2019-2028.....................................          17,526
Present Value (PV) of Total Cost Discounted at 3% 2019-2028.....................................          21,541
Total Annualized Cost Using 7% Discount Rate 2019-2028..........................................           2,495
Total Annualized Cost Using 3% Discount Rate 2019-2028..........................................           2,525
----------------------------------------------------------------------------------------------------------------

    In terms of the estimated economic impact of the proposed rule on 
small entities, FRA expects the impact to be minimal based on the above 
analysis. From the analysis of rail equipment accident/incident data, 
FRA found 8 to 18 small railroads reported these accidents/incidents 
near the reporting threshold in any given year. These are the small 
railroads that will most likely experience an impact from the proposed 
rule. Given the annualized cost is approximately $2,500, the cost per 
railroad for this group of railroads is about $139 to $313 per year--or 
on average about $210 per year per railroad. (Calculated as $2,500/18 
railroads = $139; and $2,500/8 railroads = $312.50; for a range of 
about $139 to $313.) When compared to annual revenues, the impact is 
very small. The industry trade organization representing small 
railroads, the American Short Line and Regional Railroad Association 
(ASLRRA), reports the average freight revenue per Class III railroad is 
$4.8 million.\13\ Relative to the average freight revenue per railroad, 
FRA estimates the proposed rule will affect less than 0.1 percent of 
revenues. (Calculated as $210 compliance cost per year per railroad/
$4,800,000 average freight revenue per railroad = 0.00004 = 0.004 
percent.) FRA therefore expects the average or typical compliance costs 
for a small entity to be not significant.
---------------------------------------------------------------------------

    \13\ See American Short Line and Regional Railroad Association. 
(2014). Short Line and Regional Railroad Facts and Figures. 
(Pamphlet). Washington, DC: Author.
---------------------------------------------------------------------------

Small Entities
    This proposed rule affects all small entities subject to FRA's 
accident reporting rule. However, FRA's analysis shows that the number 
of small entities reporting rail equipment accidents/incidents near the 
threshold represent only about two percent of the small entities.
    Given that the proposed changes to the reporting threshold formula 
will result in a potentially lower reporting threshold, FRA also 
estimates the potential cost to file additional accident reports to 
FRA. FRA estimates about 15 to 20 additional train accident reports 
will be filed annually, using information the railroads already are 
required to maintain, at an annualized cost of about $2,500 for the 
group of affected small entities. The average cost per small railroad 
is estimated at about $210 per railroad. These compliance costs 
represent a very small percentage, less than 0.1 percent, of a small 
railroad's annual freight revenues. FRA therefore expects that the 
economic impact of the proposed rule on small entities will be minimal. 
FRA invites comment from small entities or the public who believe there 
will be a significant economic impact on a substantial number of small 
entities affected by this proposed rule.

C. Paperwork Reduction Act

    The burden for Accident/Incident Reporting and Recordkeeping is 
approved in the information collection for 49 CFR part 225 under OMB 
No. 2130-0500. OMB re-approval for this collection of information was 
granted on June 6, 2018, and the new expiration date is June 30, 2021.

D. Federalism

    Executive Order 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), 
requires FRA to develop an accountable process to ensure ``meaningful 
and timely input by State and local officials in the development of 
regulatory policies that have federalism implications.'' ``Policies 
that have federalism implications'' are defined in the Executive Order 
to include regulations that have ``substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the

[[Page 22425]]

distribution of power and responsibilities among the various levels of 
government.'' Under E.O. 13132, the agency may not issue a regulation 
with federalism implications that imposes substantial direct compliance 
costs and that is not required by statute, unless the Federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by State and local governments, the agency consults with 
State and local governments, or the agency consults with State and 
local government officials early in the process of developing the 
regulation. Where a regulation has federalism implications and preempts 
State law, the agency seeks to consult with State and local officials 
in the process of developing the regulation.
    This NPRM has been analyzed in accordance with the principles and 
criteria contained in E.O. 13132. FRA has determined that, if adopted, 
the proposed rule would not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. In addition, FRA has determined that this 
proposed rule will not impose substantial direct compliance costs on 
State and local governments. Therefore, the consultation and funding 
requirements of E.O. 13132 do not apply.
    However, this proposed rule could have preemptive effect by 
operation of law under certain provisions of the Federal railroad 
safety statutes, specifically the former Federal Railroad Safety Act of 
1970 (FRSA), repealed and recodified at 49 U.S.C. 20106, and the former 
Accident Reports Act of 1910, repealed and recodified at 49 U.S.C. 
20901. See Public Law 103-272 (July 5, 1994). The former FRSA provides 
that States may not adopt or continue in effect any law, regulation, or 
order related to railroad safety or security that covers the subject 
matter of a regulation prescribed or order issued by the Secretary of 
Transportation (with respect to railroad safety matters) or the 
Secretary of Homeland Security (with respect to railroad security 
matters), except when the State law, regulation, or order qualifies 
under the ``local safety or security hazard'' exception to section 
20106.
    In sum, FRA has analyzed this proposed rule in accordance with the 
principles and criteria contained in E.O. 13132. As explained above, 
FRA has determined that this proposed rule has no federalism 
implications, other than the possible preemption of State laws under 
the former FRSA. Accordingly, FRA has determined that preparation of a 
federalism summary impact statement for this proposed rule is not 
required.

E. Environmental Impact

    FRA has evaluated this proposed rule in accordance with the 
National Environmental Policy Act (NEPA), 42 U.S.C. 4321 et seq., other 
environmental statutes, related regulatory requirements, and its 
``Procedures for Considering Environmental Impacts'' (FRA's Procedures) 
(64 FR 28545, May 26, 1999). FRA has determined that this proposed rule 
is categorically excluded from detailed environmental review pursuant 
to section 4(c)(20) of FRA's NEPA Procedures, ``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.'' See 64 
FR 28547 (May 26, 1999). Categorical exclusions (CEs) are actions 
identified in an agency's NEPA implementing procedures that do not 
normally have a significant impact on the environment and therefore do 
not require either an environmental assessment (EA) or environmental 
impact statement (EIS). See 40 CFR 1508.4.
    In analyzing the applicability of a CE, the agency must also 
consider whether extraordinary circumstances are present that would 
warrant a more detailed environmental review through the preparation of 
an EA or EIS. Id. 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 this rule is not a major Federal action that significantly 
affects the quality of the human environment.

F. Unfunded Mandates Reform Act of 1995

    Under Section 201 of the Unfunded Mandates Reform Act of 1995, 
Public Law 104-4 (Mar. 22, 1995); 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 $100,000,000 or more (adjusted 
annually for inflation) in any one 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. 
This proposed rule is not expected to result in the expenditure, in the 
aggregate, of $100,000,000 or more, adjusted for inflation, in any one 
year, and thus preparation of such a statement is not required.

G. Energy Impact

    Executive Order 13211 requires Federal agencies to prepare a 
Statement of Energy Effects for any ``significant energy action.'' See 
66 FR 28355 (May 22, 2001). Under the Executive Order, a ``significant 
energy action'' is defined as ``[a]ny 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 under Executive Order 
13211. FRA does not anticipate that this proposed rule is 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.

H. Privacy Act

    Under 5 U.S.C. 553(c), DOT solicits comments from the public to 
better inform its rulemaking process. DOT posts these comments, without 
edit, including any personal information the commenter provides, to 
www.regulations.gov, as described in the system of records notice (DOT/
ALL-14 FDMS), which can be reviewed at www.dot.gov/privacy. In order to 
facilitate comment tracking and response, we encourage commenters to 
provide their name, or the name of their organization; however, 
submission of names is completely optional. Whether or not commenters 
identify themselves, all timely comments will be fully

[[Page 22426]]

considered. If you wish to provide comments containing proprietary or 
confidential information, please contact the agency for alternate 
submission instructions.

I. Regulation Identifier Number (RIN)

    A regulation identifier number (RIN) is assigned to each regulatory 
action listed in the Unified Agenda of Federal Regulations. The 
Regulatory Information Service Center publishes the Unified Agenda in 
April and October of each year. The RIN contained in the heading of 
this document can be used to cross-reference this action with the 
Unified Agenda.

List of Subjects in 49 CFR Part 225

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

The Proposed Rule

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

0
1. The authority citation for part 225 continues to read as follows:

    Authority: 49 U.S.C. 103, 322(a), 20103, 20107, 20901-02, 21301, 
21302, 21311; 28 U.S.C. 2461, note; and 49 CFR 1.89.

0
2. Revise 225.19(e) to read as follows:


Sec.  225.19   Primary groups of accidents/incidents.

* * * * *
    (e) Notice. Each year, the Administrator publishes a notice on 
FRA's website announcing the reporting threshold that will take effect 
on January 1 of the following calendar year.
0
3. Appendix B to part 225 is revised 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 is 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 and first-quarter 
wage data for the current year, and fourth-quarter and third-quarter 
wage data for the previous year are obtained from the STB. For 
equipment costs, the corresponding BLS railroad equipment indices 
for the same time period as the STB wage data are obtained.
    5. The wage data are reported in terms of dollars earned per 
hour, while the equipment cost data are indexed to a base year of 
1982.
    6. The procedure for adjusting the reporting threshold is shown 
in the formula below. The wage and equipment components appear as 
fractional changes relative to the prior year. After performing the 
calculation, the result is rounded to the nearest $100.
    7. The weightings result from using STB wage data and BLS 
equipment cost data to produce a reasonable estimation of the 
reporting threshold that was calculated using the threshold formula 
in effect immediately before calendar year 2006, a formula that 
assumed 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)/Eprior]

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.
Ronald L. Batory,
Administrator.
[FR Doc. 2019-09980 Filed 5-16-19; 8:45 am]
BILLING CODE 4910-06-P