[Federal Register Volume 65, Number 119 (Tuesday, June 20, 2000)]
[Proposed Rules]
[Pages 38229-38232]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-15530]


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DEPARTMENT OF TRANSPORTATION

Coast Guard

33 CFR Part 173

[USCG 1999-6094]
RIN 2115-AF87


Raising the Threshold of Property Damage for Reports of Accidents 
Involving Recreational Vessels

AGENCY: Coast Guard, DOT.

ACTION: Notice of Proposed Rulemaking.

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

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

ADDRESSES: Identify your comments and related material by the docket 
number for this rulemaking [USCG 1999-6094]. To make sure they do not 
enter the docket more than once, please submit them by only one of the 
following means:
    (1) By mail to the Docket Management Facility, U.S. Department of 
Transportation, room PL-401, 400 Seventh Street SW., Washington, D.C. 
20590-0001.
    (2) By delivery to room PL-401 on the Plaza level of the Nassif 
Building, 400 Seventh Street SW., Washington, DC, between 9 a.m. and 5 
p.m., Monday through Friday, except Federal holidays. The phone number 
is 202-366-9329.

[[Page 38230]]

    (3) By fax to the Facility at 202-493-2251.
    (4) Electronically through the web site for the Facility at http://dms.dot.gov.
    The Facility maintains the public docket for this rulemaking. 
Comments and materials received from the public, as well as documents 
mentioned in this preamble as being available in the docket, will 
become part of this docket. They will be available for inspection or 
copying at room PL-401 on the Plaza level of the Nassif Building, 400 
Seventh Street SW., Washington, DC. Hours are between 10 a.m. and 5 
p.m., Monday through Friday, except Federal holidays. The telephone 
number is 202-366-9329. You may also find this docket on the Internet 
at http://dms.dot.gov. You may obtain a copy of this proposed rule by 
calling the U. S. Coast Guard Infoline at 1-800-368-5647, or read it on 
the Internet, at the Web Site for the Office of Boating Safety, at 
http://www.uscgboating.org or at http://dms.dot.gov.

FOR FURTHER INFORMATION CONTACT: With questions on this rulemaking, 
contact Bruce Schmidt, Project Manager, Office of Boating Safety, 
Program Management Division, Coast Guard, by e-mail at 
[email protected] or by telephone at 202-267-0955.
    With questions on viewing the docket, call Dorothy Walker, Chief, 
Dockets, Department of Transportation, telephone 202-366-9329.

SUPPLEMENTARY INFORMATION:

Request for Comments

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

Public Meeting

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

Background and Purpose

Regulatory Authority and History

    46 U.S.C. 6101 requires the Secretary (who has delegated the 
authority to the Commandant) to prescribe rules on the reporting of 
``marine casualties''. We use that authority to describe different 
types of marine casualties, including those involving certain amounts 
of property damage, that must be reported. 33 CFR Part 173, Subpart C, 
contains the rules applicable to recreational vessels.
    In 1972, the original threshold of property damage for reports of 
accidents involving recreational vessels was $100. In 1979, the effects 
of inflation on the original figure dictated that we raise the 
threshold to $200. The purpose of this adjustment was to reduce the 
number of reports filed for minor incidents.
    Even the threshold of $200, however, eventually resulted in the 
submission of an excessive number of accident reports on minor 
incidents. This trend increased the reporting burden on the boating 
public and the administrative burden on both the States and the Coast 
Guard. On February 6, 1989, to reduce these burdens, we published a 
Final Rule [54 FR 5608] raising the threshold to $500. As it had been 
in 1979, the effect of inflation on repair costs was the basis for this 
change.
    The formula described in the preamble of the Final Rule of 1989 
rested on a methodology allowing us to adjust the threshold annually by 
applying a deflator based on the Gross National Product (GNP) to 
account for inflation. In that preamble we also stated our intent to 
review the threshold annually and, if necessary, adjust the threshold 
each time it rose by another $100.

How We Developed the New Methodology for Adjusting the Threshold

    After analyzing the formula described in the preamble of the Final 
Rule of 1989, we determined that further adjustments both in the 
threshold and in the methodology used to determine it were necessary. 
Non-safety-related accident reports continued even after the threshold 
increased to $500 in 1989. We now believe both that the threshold was 
too low and that the methodology itself was amiss. An inflation index 
based on the GNP and applied to a base-year value of $500 yields a 
threshold for 2001 still low enough for a significant number of 
cosmetic damages to be reported. We determined that it is necessary to 
adjust the base-year value of the threshold to reach the level only 
where accident damage becomes a safety issue.
    The National Association of State Boating Law Administrators 
(NASBLA) is a professional association consisting of officials of 
States, commonwealths, and provinces having responsibilities for 
administering or enforcing the boating laws of those bodies. Within 
NASBLA, the Boating Accident Investigation, Reporting, and Analysis 
Committee (BAIRAC) has responsibility for accident reporting and 
analysis.
    The Boating Law Administrators (BLAs) who serve on BAIRAC are 
experts in enforcement, education for boating safety, and investigation 
of boating accidents. Through their ongoing relationships with 
facilities that repair recreational boats, as well as through their 
experience with and knowledge of various types of boat damage and costs 
needed to repair it, they have strongly conveyed the need for the Coast 
Guard to raise the threshold of property damage for reports of 
accidents involving recreational vessels to a level that accurately 
reflects current prices of boats and costs of repair.
    BAIRAC is calling on the Coast Guard to initiate rulemaking that 
would change the threshold for reports of accidents involving only 
property damage from $500 to $2,000 and would amend the reportable 
conditions to include all accidents involving collisions of multiple 
vessels. The BLAs and the Coast Guard concur that a threshold of $2,000 
for those accidents involving only property damage would enable States' 
accident investigators to focus on reports of safety-related damage and 
eliminate most of the reports of cosmetic damage.
    Data within the Boating Accident Report Database (BARD) for 1998 
show that 1,718 reported multi-boat collisions involved only property 
damage. Of those 1,718, 1,002 involved property damage below the 
proposed threshold of $2,000. Taking a closer look at the data, we 
discover that nearly 90% of those 1,002 involve property damage at or 
below a threshold of $1,500. We consider most of these more cosmetic 
than safety-related. So, recognizing the need to reduce the number of 
reports for minor or cosmetic damage, the need to reduce the 
administrative burden on the

[[Page 38231]]

public and the States of reports for such damage, and the need for 
States' accident investigators to focus on safety-related damage, we do 
not plan to mandate reports of all multi-boat collisions.
    The proposed threshold of $2,000 for reports of accidents with only 
property damage would be the minimum set by Federal regulation, but 
States would remain free to impose stricter requirements. Thus, a State 
could require reports of accidents involving collisions of multiple 
vessels, even if they resulted only in property damage below the 
proposed threshold of $2,000.
    We have also determined that it is necessary to find an inflation 
index that tracks the trends in the boat-repair industry more 
accurately than does the GNP. The GNP is the total market value of all 
final goods and services produced in the U.S. for a given year. It 
comprises spending by all sectors of the economy. Therefore, the GNP 
deflator measures all changes in prices affecting consumers, private 
industry, and government.
    The Producer Price Index (PPI) is an indicator of inflation that 
measures the average change over time of prices received by sellers of 
domestic goods and services. The data constituting the PPI are 
organized by industry and product, making it possible to find specific 
data about prices of repairs to non-military boats. These data track 
the specific changes in prices of repairs to recreational boats. As 
this rulemaking concerns these very prices, we believe the PPI to be 
more suitable for measuring the changes in those prices with an 
appropriate threshold of property damage for reports of accidents 
involving those vessels.

How We Calculate the New Threshold

    For 2001 and beyond, we would use the PPI for Standard Industrial 
Classification (SIC) 3732, ``Boat Building and Repairing: Boat 
repairing, non-military boats'', to reckon the threshold. The new value 
for 2001, of $2,000, would serve as the base value. To reckon the value 
of the threshold for 2002 using 2001 as the base year, one should run 
the following calculation:
    (Base threshold for 2001)  x  ([PPI for 2002] / [PPI for 2001])
For example, if the preliminary estimate of the PPI by the Bureau of 
Labor Statistics for 2002 were 191.0, and for 2001 it were 189.0, the 
calculation would run as follows:
    $2,000  x  (191.0/189.0) = $2,021.16
Since this amount is below $2,050, we would round down to the nearest 
$100. Therefore, the reporting threshold for 2002 would remain at 
$2,000. If the amount had been $2,050 or above, though, we would have 
rounded up to the nearest $100. In that case, the threshold would have 
risen to $2,100. We would adjust the threshold according to the 
results. We would review the new threshold every year; when it 
increased by $500, we would raise it appropriately.

Regulatory Evaluation

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

Cost of Rule

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

Benefits of Rule

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

Small Entities

    Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we 
considered whether this proposed rule would have a significant economic 
impact on a substantial number of small entities. ``Small entities'' 
include small businesses, not-for-profit organizations that are 
independently owned and operated and are not dominant in their fields, 
and governmental jurisdictions with populations of less than 50,000.
    Because it expects the effects of this rule to be minimal, the 
Coast Guard certifies under 5 U.S.C. 605(b) that this rule would not 
have a significant economic impact on a substantial number of small 
entities. Furthermore, as private citizens own the vast majority of 
recreational vessels and are not small entities, the Regulatory 
Flexibility Act does not even apply to most of the public that would be 
regulated by this rule.

Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement 
Fairness Act of 1996 [Pub. L. 104-121], we offer assistance to small 
entities in understanding this proposed rule so that they can better 
evaluate its effects on them and participate in the rulemaking. For 
clarification of the new threshold, they can consult Bruce Schmidt, 
Program Management Division, Office of Boating Safety, Coast Guard, 
telephone 202-267-0955 (email: [email protected]).
    The Small Business and Agriculture Regulatory Enforcement Ombudsman 
and 10 Regional Fairness Boards were established to receive comments 
from small businesses about Federal enforcement. The Ombudsman will 
annually evaluate the enforcement and rate each agency's responsiveness 
to small business. If you wish to comment on enforcement by the Coast 
Guard, call 1-888-REG-FAIR (1-888-734-3247).

Collection of Information

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

Federalism

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

Unfunded Mandates Reform Act and Enhancing the Intergovernmental 
Partnership

    The Unfunded Mandates Reform Act of 1995 [2 U.S.C. 1531-1538] and 
E.O. 12875, Enhancing the Intergovernmental Partnership [58 FR 58093 
(October 28, 1993)], govern the issuance of Federal rules that impose 
unfunded mandates. An unfunded mandate is a requirement that a State, 
local, or tribal government or the private sector incur direct costs 
without the Federal Government's

[[Page 38232]]

having first provided the funds to pay those costs. This proposed rule 
would not impose an unfunded mandate.

Taking of Private Property

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

Reform of Civil Justice

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

Protection of Children

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

Environment

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

List of Subjects in 33 CFR Part 173

    Marine safety, Reporting and recordkeeping requirements.
    For the reasons discussed in the preamble, the Coast Guard proposes 
to amend 33 CFR part 173 as follows:

Subpart C--Casualty and Accident Reporting

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

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

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


Sec. 173.55  Report of casualty or accident.

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

    Dated: June 12, 2000.
Terry M. Cross,
Rear Admiral, U.S. Coast Guard, Assistant Commandant for Operations.
[FR Doc. 00-15530 Filed 6-19-00; 8:45 am]
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