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Raising the Threshold of Property Damage for Reports of Accidents Involving Recreational Vessels
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[Federal Register: May 1, 2001 (Volume 66, Number 84)]
[Rules and Regulations]
[Page 21671-21675]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01my01-9]
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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: Final Rule.
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SUMMARY: The Coast Guard raises the threshold of property damage for
reports of accidents involving recreational vessels when damage to
vessels and other property totals $2,000 or more in any one accident
or--this represents a change from the Notice of Proposed Rulemaking--
when a collision occurs involving two or more vessels, regardless of
the amount of damage to property. The higher threshold better accounts
for the rising cost of repairs to recreational vessels. This Final Rule
will reduce the number of reports of accidents for minor or cosmetic
damage, help us maintain statistics for future years comparable to
those for past ones, and reduce the burden of paperwork on the public
to report such incidents.
DATES: This final rule is effective July 2, 2001.
ADDRESSES: Comments and materials received from the public, as well as
documents mentioned in this preamble as being available in the docket,
are part of docket USCG-1999-6094 and are available for inspection or
copying at the Docket Management Facility, U. S. Department of
Transportation, room PL-401, 400 Seventh Street SW., Washington, DC,
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.
FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
contact Bruce Schmidt, Project Manager, Office of Boating Safety,
Program Management Division, Coast Guard, by e-mail at
bschmidt@comdt.uscg.mil or by telephone at 202-267-0955.
If you have questions on viewing the docket, call Dorothy Beard,
Chief, Dockets, Department of Transportation, telephone 202-366-9329.
You may obtain a copy of this rule by calling the U. S. Coast Guard
Infoline at 1-800-368-5647 or by accessing either the Web Site for the
Office of Boating Safety, at http://www.uscgboating.org, or the
Internet Site for the Docket Management Facility, at http://
dms.dot.gov.
SUPPLEMENTARY INFORMATION:
Background and Purpose
On June 20, 2000, we published a Notice of Proposed Rulemaking
(NPRM) entitled Raising the Threshold of Property Damage for Reports of
Accidents Involving Recreational Vessels (65 FR 38229). We received 17
letters commenting on the proposed rule. No public hearing was
requested and none was held.
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 various parties must report. 33 CFR Part 173,
Subpart C, contains the rules applicable to recreational vessels.
In 1972, the threshold of property damage for reports of accidents
involving recreational vessels was $100. (This was the original
threshold.) In 1979, the effects of inflation on the original threshold
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 reports of accidents 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
in law 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
rose 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 the reporting of too many damages that
are merely cosmetic. We decided that it is necessary to adjust the
base-year value of the threshold to reach the level only where damage
due to accidents implicates safety.
The National Association of State Boating Law Administrators
(NASBLA) is a professional association consisting of officials of
States, commonwealths, and provinces responsible for administering or
enforcing the boating laws of those bodies. Within NASBLA,
[[Page 21672]]
the Committee on Boating Accident Investigation, Reporting, and
Analysis (BAIRAC) has responsibility for reporting and analyzing
accidents.
The Boating Law Administrators (BLAs) who serve on BAIRAC are
experts in enforcement, in education for boating safety, and in
investigation of boating accidents. From their ongoing relationships
with facilities that repair recreational boats, as well as from their
experience with and knowledge of various types of damage to boats and
costs 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 called on the Coast Guard to initiate rulemaking to raise
the threshold for reports of accidents involving only property damage
from $500 to $2,000 and to amend the reportable conditions to include
all accidents involving collisions of two or more vessels. The BLAs and
the Coast Guard agreed 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 would
eliminate most of the reports of cosmetic damage. However, as we stated
in the NPRM we published in 2000, we did not then see the benefit of
requiring reports of all accidents involving collisions of two or more
vessels, regardless of the amount of damage to property.
In that NPRM, we attempted to define a level of cosmetic damage
using data contained in the Boating Accident Report Database (BARD).
Data for 1998 show that 1,718 reported collisions of two or more
vessels 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 discovered that nearly 90% of those 1,002 involved
property damage at or below a threshold of $1,500. At that time, we
considered most of these more cosmetic than safety-related,
notwithstanding that they involved collisions. So, recognizing the need
to reduce the number of reports for minor or cosmetic damage, the need
to reduce the administrative burden on the public and the States of
reports for such damage, and the need for States' accident
investigators to focus on safety-related damage, we did not plan to
mandate reports of all accidents involving collisions of two or more
vessels. However, as will become clear in our discussion of comments,
our position has changed. We now fully concur with BAIRAC that we
should require reports of such accidents, regardless of the amount of
damage to property.
The threshold of property damage for reports of accidents involving
recreational vessels when damage to vessels and other property totals
$2,000 or more in any one accident or of accidents involving collisions
of two or more vessels, regardless of the amount of damage to property,
is the minimum set by Federal rule; but States are free to impose
stricter requirements. Thus, a State could require reports of all
accidents, even if each report results only in property damage below
the 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 gives 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 alternative inflation-index.
It gives 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 will
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, will 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 increase, rounded to the nearest $100, is less than
$500, the threshold would remain at $2000. (An increment of $500 is
small enough to serve the interest of safety and yet not so small as to
entail too-frequent changes in the threshold.) We will calculate the
increase every year; once it, rounded to the nearest $100, reaches
$500, we will raise the threshold accordingly.
Discussion of Comments and Changes
We received a total of 17 comments on the proposed amendments to
the rules. Eleven comments came from BLAs, and a twelfth from NASBLA.
Two came from boating organizations, two from members of the general
public, and one from an associate professor of education and safety
research. Of the 17, one, from the State of California, arrived after
the closing date of October 18, 2000; we accepted it because of the
high volume of accident reports generated by the State each year, about
10 percent of all reported accidents occurring there, and because we
could accept it without prejudice to other participants in the
rulemaking.
Twelve comments, including seven submitted by BLAs and the one
submitted by NASBLA, supported raising the threshold of property damage
to $2,000 or more. Five of those twelve comments also supported
requiring the reporting of all accidents involving collisions of two or
more vessels, regardless of the amount of property damage.
The remaining five comments, including the remaining four submitted
by BLAs, opposed raising the threshold of property damage at all.
Here follows a summary of each adverse comment:
The first stated that published accident figures are already too
low by a factor of 16, and that raising the threshold would only worsen
the situation. It further stated that the whole system of reporting
accidents needs to be strengthened, not weakened.
The second, from the State of Alabama, suggested that we eliminate
the threshold altogether. It argued that the amount of property damage
has no relevance for analyzing accidents with the object of preventing
them. It also presented criteria for reporting them that the State has
been using for around 15 years.
The third, from the State of Connecticut, maintained that the cost
of property damage alone does not furnish a fair proxy for safety and
that adopting the revised threshold could eliminate the reporting of
many important accidents involving smaller boats. Next, it concurs with
NASBLA that any reporting should reach all collisions involving any
numbers of vessels. Last,
[[Page 21673]]
it states that eliminating or not mandating the reporting of all such
collisions would likely reduce the value of BARD in illustrating the
variety of boating accidents witnessed and investigated in Connecticut.
The fourth, submitted by the State of Ohio, presented a variety of
arguments against raising the threshold. (1) We were failing to
differentiate what we called ``minor or cosmetic damage'' from what we
considered damage worthy of reporting. (2) An instant increase in the
threshold from $500 to $2,000 would eliminate statistical comparability
for most accidents. (3) Although the Coast Guard wishes to reduce the
burden of paperwork on the public, (a) Congress, which enacted the
reporting system, must have held that the information warranted the
burden; (b) the threshold of $2,000 is totally arbitrary and
subjective, with no basis in relevant experience; (c) the Coast Guard
appears to have used a criterion other than inflation as the factor for
determining the increase from $200 in 1979 to $500 in 1989; and (d) the
Coast Guard has not defined a ``non-safety-related accident,'' it has
not offered any authority for addressing itself solely to ``safety-
related accidents,'' and it has not stated why one level of ``material
loss'' is a proper concern of its while another is not. (4) If the
Coast Guard accepts the demand of BAIRAC for proposing this change, it
should also follow the full recommendation of BAIRAC-specifically, the
call to cover all accidents involving collisions of two or more
vessels, regardless of dollar amount of damage. (5) To set the
threshold at a ``proper'' amount now, the Coast Guard should either fix
it at $500 (where it arrived in 1989) but raise it with the PPI from
now on or drop it back to the original $100 and raise it appropriately
with the PPI. And, last, (6) the system for reporting accidents arose
in the first place to benefit the boating community, and, if
administered correctly, would be not a burden but rather a benefit.
The fifth, submitted by the State of California, stated that we had
not demonstrated that all accidents in which property damage falls
below $2,000 or even $500 are any less important, in establishing
causation, than those where it falls above $2,000. California believes
that even accidents where damage is nominal may serve in identifying
problems and may benefit safety analysts as they conceive safety
programs for needs emerging in their State. Further, California
recommends the reporting of all accidents caused by factors under the
control of operators as well as accidents involving defects in
equipment, unmarked hazards, and other matters bearing on safety. When
analyzing any accident, California considers two questions: whether, if
this operator had acted in a more prudent manner, this accident could
have been avoided and whether this accident could have been avoided but
for the defects in equipment, unmarked hazards, and other matters. If
the answer is yes to either question, California considers that
accident very seriously when structuring safety programs.
Included in one comment was a recommendation to clarify that
reports would be required when the damage in an accident stood not just
above but at $2,000. Thus, it would have the Final Rule read not
``Damage to vessels and other property totals more than $2,000 an
accident * * *'' but ``Damage to vessels and other property totals
$2,000 or more an accident * * *''
After thoughtfully considering all of the above comments, the Coast
Guard has decided to raise the threshold of property damage for reports
of accidents involving recreational vessels to a level where such
damage totals $2,000 or more an accident and to require reports of
accidents for collisions involving two or more vessels, regardless of
amount of property damage. The higher threshold will go into effect for
the remainder of calendar year 2001 after the EFFECTIVE DATE.
Our decision to amend the proposed rule so as to require reports of
accidents for collisions involving two or more vessels, regardless of
amount of property damage, rests on information furnished by the five
comments that supported requiring reports of such accidents as well as
raising the threshold to a level of $2,000 or more an accident. Even
two of the five adverse comments agreed with BAIRAC, on requiring
reports of such accidents. The primary justification for reporting all
such accidents is that they owe to violation of the Navigation Rules
(that is, No Proper Lookout, Excessive Speed, Reckless Operation, or
the like). We concur, and add that these accidents are necessarily
``safety-related.''
Over time, collisions involving two or more vessels are the most-
reported kind of accident; every year, they represent about a third of
all reported accidents. For 1999, BARD shows 2,774 such accidents. Of
those, 1,707 (nearly two-thirds) resulted in property damage only: no
fatalities and no injuries. The average damage for each of those 1,707
was around $2,900; but the damage for 1,023 (60%) of them came to less
than $2,000, and the average damage for those 1,023 was around $1,000.
We acknowledge that excluding those 1,023 (about 12 percent of all
reported accidents) because of low damage alone would compromise the
quality and scope of data captured by BARD. Next, the absence of 1,023
accidents most or all of which were due to violations of Navigation
Rules would diminish the usefulness of the data in structuring safety
programs. Last, we do not want to forgo valuable data on factors
controllable by operators of less-expensive boats just because their
boats incur less-expensive repairs. We agree that the reporting of all
collisions involving two or more vessels is important both for
understanding safety-related incidents at any moment and for tracking
statistics over time. Thus, the benefits for the public of our
collecting these data outweigh the burden on the public of supplying
them.
In conclusion, our intent is to raise the threshold for reporting
property damage to a level where we capture almost all useful data and
almost no useless ones. Damage worthy of reporting comprises that whose
cause implicates the safe operation and navigation of the vessel and
whose effect implicates the ``structural integrity'' or
``seaworthiness'' of the vessel. Damage worthy of reporting is by
definition worth the paperwork entailed by reporting. And more-
selective reporting can only yield more-useful statistics. Again,
States remain free to capture all the data they want.
In our previous Final Rule (54 FR 5608 (February 6, 1989)), we
proposed to raise the threshold in increments of $100 over time to
ensure the adjustment of the threshold to an appropriate level. We have
not, nevertheless, raised it since then. Moreover, we doubt whether
even the threshold of $500, set then, was high enough and we suspect
that the methodology used to calculate it was amiss. (For instance,
applying that methodology to the latter threshold would yield a
threshold of barely $700 today. Our research suggests, and most of the
comments confirm, that such a threshold would fail to capture many
useful data.)
We will review the new threshold every year. When it should
increase by $500, we will raise it to an appropriate level by
appropriate means: Notice-and-comment rulemaking with the participation
of all willing parties.
Regulatory Evaluation
This Final 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
[[Page 21674]]
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 Final Rule would impose no added monetary costs on the
operator or owner of a recreational vessel or on anyone else. On the
contrary, it would decrease 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 or more an accident and
requiring the reporting of accidents involving collisions of two or
more vessels, regardless of amount of damage, for most of the remainder
of 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. In 1999, there were
1,189 reported accidents that involved only property damage--no
fatalities and no injuries--and also did not involve any collisions of
two or more vessels. Requiring a threshold of $2,000 or more in
property damage for reporting an accident would have kept the following
1,189 accidents from being published in our statistics on accidents for
1999:
------------------------------------------------------------------------
Number of
accidents Damage amount
------------------------------------------------------------------------
Capsizing........................... 112 85,879
Collision with Fixed Object......... 302 239,242
Collision with Floating............. 54 44,702
Falls in Boat....................... 10 5,702
Falls Overboard..................... 14 11,661
Fire or Explosion of Fuel........... 36 29,010
Fire or Explosion (Other)........... 46 34,482
Flooding or Swamping................ 213 161,227
Grounding........................... 186 130,864
Other............................... 39 27,018
Sinking............................. 81 59,985
Skiers' Mishaps..................... 7 5,251
Struck by Boat...................... 19 13,657
Struck by Motor or Propeller........ 3 1,250
Struck Submerged Object............. 54 45,809
Unknown Type........................ 13 10,759
-----------------------------------
Total......................... 1,189 906,498
------------------------------------------------------------------------
For these 1,189 accidents, the average amount of damage is about
$762.00. If this level of property damage were enough to declare the
particular vessel or vessels total losses, the accidents would meet
Federal reporting-requirements. If not, this level of damage would
count as more ``cosmetic'' than ``safety-related'' and therefore would
not meet those requirements.
Small Entities
Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we
considered whether this Final Rule will have a significant economic
impact on a substantial number of small entities. The term ``small
entities'' comprises 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.
This Rule applies exclusively to private citizens who own or
operate recreational vessels and by definition are not ``small
entities''. Further, this Rule will reduce the reporting burden on
those private citizens for reporting accidents involving recreational
vessels.
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 will 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 apply to most of the public that this Rule
would regulate.
Assistance for Small Entities
Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small
entities in understanding this Final Rule so that they could better
evaluate its effects on them and participate in the rulemaking. We
provided the name, telephone number, and e-mail address of a contact
for any small entities that felt either that the Rule would affect
their small businesses, organizations, or governmental jurisdictions or
that had questions concerning its provisions or options for compliance.
Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
rules to the Small Business and Agriculture Regulatory Enforcement
Ombudsman and the Regional Small Business Regulatory Fairness Boards.
The Ombudsman evaluates these actions annually and rates each agency's
responsiveness to small business. If you wish to comment on actions by
employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).
Collection of Information
This Final Rule calls 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 requires
reports of fewer accidents.
Federalism
We have analyzed this Final Rule under E.O. 13132, Federalism, and
have determined that it does not have enough implications for
federalism to warrant the preparation of a Federalism Assessment.
States will remain free to impose stricter requirements for reports of
accidents involving recreational vessels.
[[Page 21675]]
Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their regulatory
actions not specifically required by law. In particular, the Act
addresses actions that may result in the expenditure by State, local,
and tribal governments, in the aggregate, or by the private sector of
$100,000,000 or more in any one year. Though this Final Rule will not
result in such an expenditure, we do discuss the effects of this Rule
elsewhere in this preamble.
Taking of Private Property
This Final Rule will not effect a taking of private property or
otherwise have taking implications under Executive Order 12630,
Governmental Actions and Interference with Constitutionally Protected
Property Rights.
Reform of Civil Justice
This Final Rule meets applicable standards in sections 3(a) and
3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize
litigation, eliminate ambiguity, and reduce burden.
Protection of Children
We have analyzed this Final Rule under Executive Order 13045,
Protection of Children from Environmental Health Risks and Safety
Risks. This Rule is not an economically significant rule and does not
concern an environmental risk to health or risk to safety that may
disproportionately affect children.
Indian Tribal Governments
This rule does not have tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments. A
rule with tribal implications has a substantial direct effect on one or
more Indian tribe, on the relationship between the Federal Government
and Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.
Environment
We have considered the environmental impact of this Final Rule and
concluded that, under figure 2-1, paragraph (34)(a), of Commandant
Instruction M16475.lC, this Rule is categorically excluded from further
environmental documentation. The Rule would merely raise the threshold
of property damage for reports of accidents involving recreational
vessels. A Determination of Categorical Exclusion 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 amends
33 CFR part 173 as follows:
Subpart C--Casualty and Accident Reporting
1. The citation of authority for part 173 continues to read as
follows:
Authority: 31 U.S.C. 9701; 46 U.S.C. 2110, 6101, 12301, 12302;
OMB Circular A-25; 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 $2,000 or more or
there is a complete loss of any vessel; or a collision occurs involving
two or more vessels, regardless of the amount of damage to property; or
* * * * *
3. Revise the heading of Sec. 173.57 to read as follows:
Sec. 173.57 Contents of report.
4. Revise the heading of Sec. 173.59 to read as follows:
Sec. 173.59 Where to submit report.
Dated: March 15, 2001.
Terry M. Cross,
Rear Admiral, U. S. Coast Guard, Assistant Commandant for Operations.
[FR Doc. 01-10839 Filed 4-30-01; 8:45 am]
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