[Federal Register Volume 84, Number 96 (Friday, May 17, 2019)]
[Proposed Rules]
[Pages 22410-22426]
[FR Doc No: 2019-09980]

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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).

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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:<PHONE_NUMBER>.
     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<PHONE_NUMBER>);
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

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\
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    \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

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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.

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    \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.
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    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\
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    \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
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                                                                                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)
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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%)

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
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* 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.

[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\
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    \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.
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    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]
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                                                           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
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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
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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
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                                                                               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%)

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,

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

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

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

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.

[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.

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

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

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.

    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

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

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