specify the areas of the deck where the mobile auxiliary crane is
permitted to be positioned, travel, and operate. It would also have to
specify the parameters (that is, limitations) of such movements and
operation. For example, one aspect of the plan may be to specify that
the mobile crane is permitted to move within one particular area
without a load, and is permitted to handle a load only when in another
particular area.
    Under proposed paragraph (n)(5)(vi)(D), the employer would be
required to mark the deck to identify the permitted areas for
positioning, travel and operation of the mobile crane. This is
necessary for the operator to be able to maneuver and operate the crane
within the limitations identified in the plan.
    Under proposed paragraph (n)(5)(vi)(E), the plan would have to
specify the particular dynamic/environmental conditions that must be
present for movement and operation of the mobile auxiliary crane on the
vessel. Under proposed Sec.  1926.1437(n)(5)(vi)(F), if the necessary
dynamic/environmental conditions are not present, then the mobile
auxiliary crane would be required to be secured according to one of the
four options outlined in proposed Sec.  1926.1437(n)(5)(i) through
(iv). For example, the plan would have to address environmental
conditions such as maximum amount of wind and wave action; if those
were exceeded, the mobile crane would have to be secured using one of
the four options.
    In reviewing the C-DAC draft of proposed Sec.  1926.1437(n)(5)(vi),
the Agency realized that there is no explicit requirement that the
employer implement the written plan. Therefore, OSHA has modified the
introductory language of the proposed paragraph as follows:

    (vi) Exception. For mobile auxiliary cranes used on the deck of
a floating crane/derrick, the requirement to use Option (1), Option
(2), Option (3), or Option (4) of this section does not apply where
the employer demonstrates implementation of a plan and procedures
that meet the following requirements: * * *

    Proposed paragraph (n)(6) contains requirements regarding the
barge, pontoon, vessel or other means of flotation on which the land
crane/derrick will be located. The requirements of proposed Sec.
1926.1437(n)(6) are identical to those listed at proposed paragraph
(m)(5) of this section. These requirements are related to the stability
of the vessel and its structural ability to support the land crane/
derrick. These proposed provisions are designed to help prevent
unintended movement while operating equipment and to prevent capsizing.
The Committee determined it is necessary to include these requirements
to provide a safe, stable work environment.

Section 1438 Overhead and Gantry Cranes

    Currently, specific requirements for overhead and gantry cranes are
found in section 1926.550(d) of Subpart N. Section 1926.550(d)(4)
incorporates by reference ANSI B30.2.0-1967, safety code for ``Overhead
and Gantry Cranes.'' The general industry standard for overhead and
gantry cranes, Sec.  1910.179, is also derived from ANSI B30.2.0-1967.
Therefore, the current requirements for overhead and gantry cranes are
generally the same regardless of whether the equipment is used in
general industry or construction.
    As defined in proposed Sec.  1926.1401, overhead and gantry cranes
include overhead/bridge cranes, semigantry, cantilever gantry, wall
cranes, storage bridge cranes, launching gantry cranes, and similar
equipment, irrespective of whether it travels on tracks, wheels, or
other means. The Committee developed this definition to reflect the
wide range of this type of equipment that has been developed.
    Overhead and gantry cranes are commonly found on general industry
as well as construction worksites. Sometimes overhead and gantry cranes
installed in general industry facilities are used for construction
purposes (for example, the overhead/gantry crane in a factory is
sometimes used when a part of the factory is being renovated). The
Committee believed that applying the general industry standard for
overhead and gantry cranes, Sec.  1910.179, to the use of those cranes
for construction work would reduce compliance burdens without
jeopardizing employee protection.
    The Committee proposal therefore distinguishes between permanently
installed overhead and gantry cranes, which are primarily used in
general industry, and those that are not permanently installed, which
are primarily used in construction work. For the former, this proposed
rule would apply the requirements of Sec.  1910.179, the general
industry standard. For the latter, the C-DAC proposal would apply
specific provisions of both this standard and Sec.  1910.179.
Paragraph 1438(a) Permanently Installed Overhead and Gantry Cranes
    Proposed Sec.  1926.1438(a)(1) establishes the scope of Sec.
1926.1438(a). By its terms, Sec.  1926.1438(a) would pertain to
overhead and gantry cranes, including semigantry, cantilever gantry,
wall cranes, storage bridge cranes, and others with fundamentally
similar characteristics, when they are used in construction and are
permanently installed in a facility.
    Proposed paragraph (a)(2) would apply the requirements of Sec.
1910.179 to the equipment listed in Sec.  1926.1438(a)(1), with the
exception of Sec.  1910.179(b)(1). Section 1910.179(b)(1) sets forth
the scope of the general industry standard as defined under 29 CFR Part
1910. It is excluded to avoid any confusion that might arise from
having two separate scope provisions applicable to Sec.  1926.1438(a).
    Paragraph (a)(1) only applies to these cranes if they are used in
construction and are permanently installed in a facility. This will
typically be equipment that is used in general industry but may also be
used for construction purposes. For example, a manufacturing plant that
uses an overhead crane for lifting large components may use that same
crane when adding a new room to the facility or changing its floorplan.
Under the proposed provision, the requirements of Sec.  1910.179 would
apply to both uses.
Paragraph 1438(b) Overhead and Gantry Cranes That Are Not Permanently
Installed in a Facility
    Paragraph (b)(1) would provide the scope of Sec.  1926.1438(b). By
its terms,

Sec.  1926.1438(b) would pertain to overhead and gantry cranes,
overhead/bridge cranes, semigantry, cantilever gantry, wall cranes,
storage bridge cranes, launching gantry cranes, and similar equipment,
when they are used in construction and are not permanently installed in
a facility.
    Proposed paragraph (b)(2) specifies which requirements would apply
to the equipment identified in Sec.  1926.1438(b)(1).
    Proposed paragraph (b)(2)(i) would require overhead and gantry
cranes not permanently installed in a facility to comply with
Sec. Sec.  1926.1400 through 1926.1414; 1926.1417 through 1926.1425;
1926.1426(d); 1926.1427 through 1926.1434; 1926.1437, 1926.1439, and
1926.1441 of this standard. Sections 1926.1435, 1926.1436 and
1926.1440, entitled Tower cranes, Derricks, and Sideboom cranes,
respectively, would not be applicable because they pertain to different
kinds of equipment. Sections 1926.1415, 1926.1416 and 1926.1426(a)
through (c) would not apply because they refer to devices not used on
overhead and gantry cranes.
    Proposed paragraph (b)(2)(ii) would incorporate by reference
several requirements from Sec.  1910.179.
    Proposed paragraph (b)(2)(ii)(A) specifies the portions of Sec.
1910.179 that would be applicable to the equipment identified in Sec.
1926.1438(b)(1). The Committee selected these requirements because each
is a safety requirement that applies to this type of crane regardless
of whether it is used in construction or general industry. Other than
certain definitions (described below), these are the only provisions of
Sec.  1910.179 that would apply to the equipment identified in Sec.
1926.1438(b)(1). These requirements are:

1910.179 (b)(5)--Rated load marking
1910.179 (b)(6)--Clearance from obstruction
1910.179 (b)(7)--Clearance between parallel cranes
1910.179(e)(1)--Trolley stops
1910.179(e)(3)--Trolley bumpers
1910.179(e)(5)--Guards for hoisting ropes
1910.179(e)(6)--Guards for moving parts
1910.179(f)(1)--Brakes for hoists
1910.179(f)(4)--Brakes for trolleys and bridges
1910.179(g)--Electric equipment
1910.179(h)(1)--Sheaves
1910.179(h)(3)--Equalizers
1910.179(k)--Testing
1910.179(n)--Handling the load

    The C-DAC version of paragraph 1438(b)(2)(ii)(B) would have
incorporated the definitions in Sec.  1910.179(a) that do not differ
from those in Sec.  1926.1401 of this Subpart. Upon examining this
provision, OSHA believes that it can be stated more clearly without
changing its substance.
    Only three terms are defined in both Sec.  1926.1401 and Sec.
1910.179: ``hoist,'' ``load,'' and ``runway.'' With respect to
``hoist'' and ``load,'' the definitions in Sec.  1926.1401 and Sec.
1910.179(a) are similar but worded differently. ``Hoist'' is defined in
Sec.  1926.1401 as ``a mechanical device for lifting and lowering loads
by winding rope onto or off a drum.'' In Sec.  1910.179, ``hoist'' is
defined as ``an apparatus which may be part of a crane, exerting a
force for lifting and lowering.'' ``Load'' is defined in Sec.
1926.1401 as ``the object to be hoisted and the weight of the object
being lifted or lowered, including the weight of the load-attaching
equipment such as the load block, ropes, slings, shackles, and any
other ancillary equipment.'' Section 1910.179 defines ``load'' as ``the
total superimposed weight on the load block or hook.'' In both cases,
the Sec.  1926.1401 definition is clearer and more precise.
    With respect to ``runway,'' the Sec.  1926.1401 and Sec.  1910.179
definitions address different subject matter. The definition in Sec.
1926.1401 addresses the criteria for a ground surface used as a path of
travel for a mobile crane traveling with a suspended personnel
platform. The definition in Sec.  1910.179 refers to the rails, beams,
and other structural components along which an overhead or gantry crane
travels. Because the Sec.  1926.1401 definition of ``runway'' does not
pertain to overhead and gantry cranes, the Sec.  1910.179 definition
should apply under this section.
    The Agency believes it will be consistent with C-DAC's intent and
promote clarity to modify proposed Sec.  1926.1438(b)(2)(ii)(B) to list
the definitions in Sec.  1910.179(a) that do not apply to overhead and
gantry cranes under proposed Sec.  1926.1438(b). Accordingly, OSHA has
changed that paragraph to read as follows:

    (B) The definitions in Sec.  1910.179(a) except for ``hoist''
and ``load.'' For those words, the definitions in Sec.  1926.1401
apply.

    Proposed paragraph (b)(2)(ii)(C) would limit the application of
Sec.  1910.179(b)(2) to equipment identified in proposed Sec.
1926.1438(b)(1) that was manufactured before September 19, 2001.
Section 1910.179(b)(2) requires cranes manufactured after August 31,
1971 to comply with the design specifications in American National
Standard Safety Code for Overhead and Gantry Cranes, ANSI B30.2.0-1967.
As discussed below, equipment manufactured after September 19, 2001
would have to comply with the updated provisions of ASME B30.2-2001.
Proposed Sec.  1926.1438(b)(2)(ii)(C) is a transitional provision
covering equipment manufactured between August 31, 1971 and September
19, 2001.
    Proposed paragraph (b)(2)(iii) would have incorporated several
sections of the 2001 version of ASME B.30.2 into this section to update
the Subpart N of 29 CFR part 1926 provision, Sec.  1926.550(d), which
incorporates ANSI B.30.2.0-1967. The Committee agreed that the 2001
version should be used because it is more comprehensive than the 1967
version and thus more conducive to safety. The sections referenced are:

ASME B30.2-2001

2-1.3.1--Foundations and Anchorages
2-1.3.2--Crane Runways
2-1.4.1--Welded Construction
2-1.6--Lubrication
2-1.7.2--Ladders and Stairways
2-1.8.2--Bridge Bumpers
2-1.9.1--Bridge Rail Sweeps
2-1.9.2--Trolley Rail Sweeps
2-1.11--Truck Frame Drop
2-1.12.2--Hoist Control Braking Means
2-1.13.7--Lifting Magnets
2-1.14.2--Drums
2-1.14.3--Ropes
2-1.14.5--Hooks
2-1.15--Warning Devices or Means for a Crane with a Power-Traveling
Mechanism
2-2.2.2--Load Test
2-<IP_ADDRESS>--Planned Engineered Lifts
2-3.5--Crane Lockout/Tagout, except that in 2-3.5.1(b), ``29 CFR
1910.147,'' the OSHA general industry Lockout/Tagout standard, is
substituted for ``ANSI Z244.1.''

    When C-DAC drafted proposed paragraph (b)(2)(ii)(C), the current
version of ASME B30.2 was the 2001 edition. That has since been
superseded by a 2005 edition. OSHA notes that, in all material
respects, the 2001 and 2005 versions of the provisions listed in
proposed Sec.  1926.1438(b)(2)(iii) are the same. Except for section 2-
1.8.2, the 2001 and 2005 provisions are identical.
    Section 2-1.8.2 contains a wording change that does not
substantively alter that provision. The 2001 version of section 2-1.8.2
contains the following requirement, among others, for bridge bumpers:
``energy-absorbing (or -dissipating) capacity to stop the bridge when
traveling with power off in either direction at a speed of at least 40%
of rated load speed.'' In the 2005 version ``(or -dissipating)'' is
changed to ``(or

energy-dissipating).'' This is clearly a clarification rather than a
substantive change. Accordingly, OSHA has changed the reference in
proposed Sec.  1926.1438(b)(2)(iii) to refer to the 2005 version of
ASME B30.2.
    When employers engaged in construction work must lock or tag
components of overhead and gantry cranes during maintenance and repair
work, proposed Sec.  1926.1438(b)(2)(iii) would require them to comply
with OSHA's general industry lockout/tagout standard at Sec.  1910.147
instead of the ANSI lockout/tagout standard (ANSI Z244.1) referenced in
paragraph 2-3.5.1(b) of ASME B30.2-2005. The Committee believed that
the OSHA general industry lockout/tagout standard would be more
accessible and familiar to employers in the construction industry than
the ANSI standard. Therefore, requiring compliance with the OSHA
standard will promote compliance and, as a result, improve worker
protection.

Section 1439 Dedicated Pile Drivers

    The term ``dedicated pile driver'' is defined in Sec.  1926.1401 as
follows:

    [A] machine that is designed to function exclusively as a pile-
driver. These machines typically have the ability to both hoist the
material that will be pile-driven and to pile-drive that material.

    As the definition above indicates, this section covers equipment
that is designed to function exclusively as a pile driver. Unlike the
other equipment covered by Subpart N, dedicated pile drivers are not
designed primarily to hoist, lower, and horizontally move suspended
loads. However, the Committee decided to include dedicated pile drivers
in this standard because of similarities to cranes with respect to
hazards and functions. For a complete discussion of the Committee's
rationale for the inclusion of dedicated pile drivers within this
standard, see the discussion above of proposed Sec.  1926.1400, Scope.
    As discussed below, most of the provisions of this standard apply
to dedicated pile drivers, but this section includes certain provisions
that accommodate unique characteristics of such equipment. In addition
to the requirements established by this standard, pile driving
equipment will continue to be covered by Sec.  1926.603, Pile driving
equipment.
Paragraph 1439(a)
    This proposed paragraph would apply most of the provisions of this
proposed standard to dedicated pile drivers. The provisions that would
not apply, or would apply with some modification, are specified in
proposed Sec.  1926.1439(b) through (e) (discussed below).
Paragraph 1439(b)
    Under this proposed provision, proposed Sec.  1926.1416(d)(3),
which requires that cranes manufactured after February 28, 1992, be
equipped with anti-two-blocking devices, would not apply to dedicated
pile drivers. A note to this paragraph in the C-DAC draft states that
anti two-block devices are required under proposed Sec.
1926.1431(d)(5)(iv) when hoisting personnel. This note misstates the
requirement of proposed Sec.  1926.1431(d)(5)(iv), which provides that
an anti two-block device is not required when hoisting personnel in
pile driving operations. OSHA is therefore deleting the note to avoid
inconsistency and conform to C-DAC's intent.
    As discussed above in relation to proposed Sec.  1926.1416(d)(3),
anti two-block devices are not required during pile driving operations
because the heavy repetitive forces imposed on such devices during pile
driving cause them to malfunction. However, because anti two-block
protection is needed when hoisting personnel to prevent a sudden drop
of a personnel platform should a two-block condition occur, the
proposed rule specifies, in proposed Sec.  1926.1431(p)(2), that when
hoisting an employee in pile driving operations using a lattice boom
crane, the employer clearly mark the cable (so that it can be easily
seen by the operator) at a point that will give the operator sufficient
time to stop the hoist to prevent two-blocking, or use a spotter.
    When using a telescopic boom crane, the employer must similarly
clearly mark the cable (so that it can be easily seen by the operator)
at a point that will give the operator sufficient time to stop the
hoist to prevent two-blocking, and use a spotter. As discussed above in
relation to proposed Sec.  1926.1416(d)(3)(i), marking the cable is not
sufficient to prevent two-blocking when extending the boom of a
telescopic boom crane. Other requirements that apply when hoisting
personnel for pile driving operations are also listed in proposed Sec.
1926.1431(p) and are discussed under that paragraph.
Paragraph 1439(c)
    This provision would apply the requirements of proposed Sec.
1926.1416(e)(4) (load weighing and similar devices) to dedicated pile
drivers, except that only dedicated pile drivers manufactured more than
one year after the effective date of this standard would be required to
be equipped with load weighing or rated capacity devices. The purpose
of requiring load-weighing and rated capacity devices would be to
provide dedicated pile driver operators with a reliable load weight
prior to each lift to prevent the equipment from being overloaded. The
Committee believed that this phase-in period would be appropriate
because there are some technical challenges with designing this type of
equipment to work consistently and reliably on dedicated pile drivers.
    The C-DAC draft would have required dedicated pile drivers
manufactured after January 1, 2008 to be equipped with load weighing or
rated capacity devices. As explained in the Introduction, OSHA has
changed the January 1, 2008 date to ``more than one year after the
effective date of this standard'' wherever that date appears in the C-
DAC document. OSHA seeks public comment on the current availability of
load-weighing or rated capacity devices for dedicated pile drivers and
the related issue of whether a date other than one year after the
effective date of this standard would be the appropriate date for
requiring future dedicated pile drivers to be equipped with such
devices.
Paragraph 1439(d)
    Under this provision, the only aspects of proposed Sec.  1926.1433
(Design, construction and testing) that would apply to dedicated pile
drivers would be proposed Sec.  1926.1433(e) and (f). In Sec.
1926.1433, proposed Sec.  1926.1433(a) through (d) apply to specific
types of equipment other than dedicated pile drivers. By contrast,
proposed Sec.  1926.1433(e) and (f) would apply to equipment in general
(see the explanation of proposed Sec.  1926.1433 above).
Paragraph 1439(e)
    This proposed paragraph would require pile driver operators to be
qualified or certified pursuant to Sec.  1926.1427. The Committee
concluded that there was no reason to exclude dedicated pile drivers
from the requirements of that section; in its view, the concerns
underlying the need for Sec.  1926.1427 (see the discussion of that
proposed section above) are equally applicable to the operation of
dedicated pile drivers.
    Proposed `` 1926.1439(e) would modify the application of Sec.
1926.1427 in one respect. Dedicated pile driver operators would have to
have a qualification or certification applicable either to dedicated
pile drivers or equipment that is most similar to dedicated pile
drivers. This addresses a

concern of the Committee that there are relatively few dedicated pile
drivers in use. As a result, even with the four year phase-in period
provided under Sec.  1926.1427, certification testing specific to
dedicated pile drivers may be unavailable due to lack of market demand.
Similarly, there may be a lack of auditors for auditing employer
qualification programs for dedicated pile driver operators under
proposed Sec.  1926.1427(c).
    However, most of the aspects involved in the safe operation of a
dedicated pile driver are similar to those involved with operating
equipment that performs the same function as a dedicated pile driver.
For example, there is substantial similarity in the operation of a
crane with a pile driving attachment and the operation of a dedicated
pile driver. C-DAC believed that an operator who is qualified or
certified to operate a crane with a pile driving attachment would have
the knowledge and skill to operate a dedicated pile driver safely. C-
DAC concluded that any lack of qualification or certification services
specific to dedicated pile drivers would be alleviated by allowing
qualification or certification on similar equipment.

Section 1440 Requirements for Sideboom Cranes

    ``Sideboom crane'' is defined in Sec.  1926.1401 as ``a track-type
or wheel-type tractor having a boom mounted on the side of the tractor,
used for lifting, lowering, or transporting a load suspended on the
load hook. The boom or hook can be lifted or lowered in a vertical
direction only.''
    This is the definition of ``side boom tractor'' in ASME B30.14-
2004, ``Side Boom Tractors,'' which serves as the basis for most of the
requirements of this proposed section. C-DAC included a definition of
``side boom tractor'' in its original draft that stated only that the
term was synonymous with ``sideboom crane.'' However, this proposed
section uses ``sideboom crane'' exclusively. To avoid any confusion
that could be caused by the use of two different terms and to provide a
meaningful definition of ``sideboom crane,'' OSHA has deleted the
definition of ``side boom tractor'' from Sec.  1926.1401 and
substituted the above definition of ``sideboom crane.'' OSHA has also
substituted ``sideboom crane'' for ``side boom tractor'' in Sec.
1926.1400, Scope.
    This proposed section identifies which of the other sections of the
proposed standard would apply to this equipment and sets additional
requirements. These more limited requirements for this equipment
reflect the particular construction and more limited functions of
sideboom cranes. For a discussion of the Committee's rationale for the
inclusion of sideboom cranes within this standard, see the preamble of
Sec.  1400, Scope.
Paragraph 1440(a)
    Proposed paragraph (a) states that the provisions of this standard
apply with the exception of Sec.  1926.1402 (Ground conditions), Sec.
1926.1415 (Safety devices), Sec.  1926.1416 (Operational aids), and
Sec.  1926.1427 (Operator qualification and certification). The
Committee exempted sideboom cranes from the requirements of these four
sections because the Committee believed that, in light of the limited
capacity and relative simplicity of operation of sideboom cranes, these
requirements would be unnecessary.
    During the SBREFA process, one Small Entity Representative (SER)
raised a question as to whether small sideboom cranes incapable of
lifting above the height of a truck bed and with a capacity of not more
than 6,000 pounds should be covered by the proposed rule. This SER felt
that these small sideboom cranes should be exempted from the scope of
this Subpart. In light of this suggestion, the SBREFA panel recommended
that OSHA ask for public comment about the appropriateness of such an
exemption for these small sideboom cranes. OSHA requests comments on
this issue.
Paragraph 1440(b)
    This proposed paragraph addresses the hazards posed by boom free
fall (that is, ``live'' booms). For equipment other than sideboom
cranes, as explained above in the discussion of proposed Sec.
1926.1426 (Free fall and controlled load lowering), C-DAC determined
that, in general, the use of such equipment with live booms needs to be
prohibited. However, it also found that it would be appropriate to
allow equipment manufactured before consensus standards had prohibited
live booms to be used as long as certain limitations were applied. The
prohibition in Sec.  1926.1426 therefore applies to equipment
manufactured from October 31, 1984 onwards. Equipment manufactured
before that date with live booms may only be used where the specified
limitations are met.\91\
---------------------------------------------------------------------------

    \91\ Under proposed Sec.  1926.1426(a)(2)(i), the use of cranes
in which the boom is designed to free fall (live boom) is limited to
situations where both of the following criteria are met: (1) none of
the free fall prohibitions outlined in proposed Sec.
1926.1426(a)(1) are present and Sec.  1926.1426(a)(2) the equipment
was manufactured prior to October 31, 1984.
---------------------------------------------------------------------------

    C-DAC applied a similar approach to sideboom cranes in proposed
Sec.  1926.1440(b), which applies most of Sec.  1926.1426 to sideboom
cranes. The only difference is the cut-off date for the use of sideboom
cranes with live booms. As explained above in the discussion of
proposed Sec.  1926.1426(a)(2), C-DAC concluded that, in light of the
history of the ANSI B30.5 prohibition against live booms, most
equipment covered by this proposed standard manufactured after October
31, 1984 does not have live booms. In contrast, the ANSI/ASME standards
applicable to sideboom cranes (ANSI/ASME B30.14) have never prohibited
live booms. As a result, C-DAC recognized that sideboom cranes with
live booms continued to be manufactured after 1984.
    Consequently, under proposed Sec.  1926.1440(b), the cut-off date
for using sideboom cranes with live booms is the effective date of this
standard. Sideboom cranes in which the boom is designed to free fall
that were manufactured prior to that date could continue to be used
except under the circumstances specified in proposed Sec.
1926.1426(a)(1).
Paragraph 1440(c)
    As drafted by C-DAC, this proposed paragraph would have required
that sideboom cranes meet certain requirements of ASME B30.14-1996 with
addenda ASME B30.14a-1997, B30.14b-1999, and B30.14c -2001, ``Side Boom
Tractors.'' Since the Committee completed its work, ASME has
consolidated the requirements of the 1996 version with those in the
supplements, and these are now found in ASME B30.14-2004. In that
consolidation, ASME did not substantively change any of the provisions
of those prior consensus standards. Accordingly, OSHA has modified the
C-DAC paragraph to refer to the 2004 version of the ASME standard.
    In deciding which sections of ASME B30.14 to incorporate in this
section, the Committee was mindful that, as noted in the discussion of
Sec.  1926.1440(a), most provisions of this proposed standard apply to
sideboom cranes. To avoid any duplication, conflicts or possible
confusion, the Committee wanted to avoid incorporating provisions of
the ASME standard that dealt with issues addressed by other provisions
of this standard. The provisions of ASME B30.14 incorporated by the
Committee through this section consist of requirements that are
specific to sideboom cranes. The Committee believed that these ASME
requirements

are necessary and appropriate with respect to this equipment.
    Paragraph 1440 (c)(i) through Paragraph (c)(viii). These proposed
paragraphs set forth sections of ASME B30.14-2004 which would be
incorporated by reference to apply to sideboom cranes. Those sections
are section 14-1.1 (``Load Ratings''), section 14-1.3 (``Side Boom
Tractor Travel''), section 14-1.5 (``Ropes and Reeving Accessories''),
section 14-1.7.1 (``Booms''), section 14-1.7.2 (``General Requirements-
Exhaust Gases''), section 14-1.7.3 (``General Requirements-Stabilizers
[Wheel-Type Side Boom Tractors]''), section 14-1.7.4 (``General
Requirements-Welded Construction''), and section 14-1.7.6 (``General
requirements-Clutch and Brake Protection''). The Committee found that
each of these would provide appropriate employee protection.
    Paragraph 1440 (c)(9) through Paragraph (c)(12). These proposed
paragraphs set forth sections of ASME B30.14-2004 which would be
incorporated by reference to apply to sideboom cranes, but with some
exceptions or with only certain paragraphs selected from a section.
Those sections are section 14-2.2.2 (``Testing-Rated Load Test''),
except that it applies only to equipment that has been modified or
repaired; paragraph (a) of section 14-3.1.2 (``Operator
Qualifications'') except that the phrase ``when required by law'' would
be omitted; Paragraphs (e), (f)(1) through (4), (6), and (7), (h), and
(i) of section 14-3.1.3 (Operating Practices), and paragraphs (j),
(l),and (m) of section 14-3.2.3 (Moving the Load).

Section 1441 Requirements for Equipment with a Rated Hoisting/Lifting
Capacity of 2,000 Pounds or Less

    Proposed Sec.  1926.1441 would establish requirements for equipment
with a maximum-rated hoisting/lifting capacity of 2,000 pounds.
Equipment in this category is inherently less hazardous than higher-
capacity equipment for several reasons. First, the reduced mass of
these loads makes them easier to manipulate. Second, the working radius
of such equipment is very limited, which reduces the zone of danger
involved. Third, the equipment itself is less complex to operate, which
places fewer demands on the operator's ability to maneuver the
equipment and the load safely.
    Consequently, the Committee believed that not all of the
requirements proposed for higher-capacity equipment should apply to
this relatively light-duty equipment. For example, the Committee
believed that the operator certification requirement of proposed Sec.
1926.1427, which was developed with the complexities and hazards of
heavy equipment in mind, should not apply to the low-capacity equipment
addressed in this section. This proposed section identifies the
sections of this proposal that the Committee believed need to apply to
equipment with a capacity of 2,000 pounds or less and contains
provisions that would apply specifically to this category of equipment.
    Under the C-DAC document, this section would have applied to
equipment with a ``manufacturer-rated'' hoisting/lifting capacity of
2,000 pounds or less. However, as discussed below, Sec.  1926.1441(j)
was intended to address equipment designed and built at the jobsite,
rather than manufactured equipment. Changing the term ``manufacturer-
rated'' in the title and regulatory text to ``rated'' will clarify that
this section applies to both jobsite-built equipment and manufactured
equipment. OSHA requests public comment on this change.
    The 2,000 pound cutoff for this section corresponds to that found
in a number of consensus standards. For example, the ANSI standards
that are currently incorporated by reference into Subpart N (B30.2-1967
for overhead and gantry cranes; B30.5--1968 for crawler, locomotive and
truck cranes; and B30.6-1969 for derricks) do not apply to equipment
with a hoisting/lifting capacity of 2,000 pounds or less. ASME B30.5-
2004 continues to exclude equipment whose capacity is 2,000 pounds or
less.\92\
---------------------------------------------------------------------------

    \92\ There are some consensus standards that do not have a
capacity threshold. For example, the current ASME B30.6--2003 on
overhead and gantry cranes no longer limit their application by
hoisting/lifting capacity. Further, the current ASME standard for
floating cranes and derricks (ASME B30.8--204) and for construction
tower cranes (ASME B30.3--2004) similarly do not limit their
application by hoisting/lifting capacity.
---------------------------------------------------------------------------

    The requirements of 29 CFR part 1926 subpart N that do not
incorporate consensus standards by reference apply regardless of the
equipment's capacity, so equipment with a capacity of 2,000 pounds or
less is currently subject to those requirements. The Committee believed
that the requirements in proposed Sec.  1926.1441 would be more
appropriate for this category of equipment and would be adequate to
protect employees.
    In 2004, as discussed above, C-DAC found the 2,000 pound threshold
for the application of this section, which is consistent with the 2004
ASME standard and prior ANSI standards, to be appropriate. The Agency
is interested in information on whether there have been changes in
technology or other considerations that would suggest a different
threshold capacity for equipment covered by this proposed section. OSHA
solicits public comment on this issue.
Paragraph (a)
    Proposed paragraph (a) sets forth sections of the proposed standard
that would apply, in their entirety, to equipment with a rated capacity
of 2,000 pounds or less to the same extent that those sections would
apply to that type of equipment with a rated load capacity in excess of
2,000 pounds. Tower cranes (Sec.  1926.1435), Derricks (Sec.
1926.1436), Floating cranes & land cranes/derricks on barges (Sec.
1926.1437), and Overhead and gantry cranes (Sec.  1926.1438) are
included in the list and thus would be subject to uniform requirements
regardless of rated capacity. The Committee determined that the hazards
addressed by these sections apply irrespective of the equipment's rated
capacity.
    For example, the dangers associated with making electrical contact
with a power line do not depend on the lifting capacity of the
equipment, so C-DAC believed that proposed Sec. Sec.  1926.1407 through
1926.1411 on power line safety should apply to all equipment regardless
of rated capacity. Similarly, the proposed sections on Scope (Sec.
1926.1400), Definitions (Sec.  1926.1401), Ground conditions (Sec.
1926.1402), Wire rope (Sec. Sec.  1926.1413 through 1926.1414),
Authority to stop operation (Sec.  1926.1418), Signals (Sec. Sec.
1926.1419 through 1926.1422), Fall protection (Sec.  1926.1423), Free
fall/controlled load lowering (Sec.  1926.1426), Multiple crane lifts
(Sec.  1926.1432), and Equipment modifications (Sec.  1926.1434) are
listed and would apply to equipment with a rated capacity of 2,000
pounds or less to the same extent that those sections would apply to
that type of equipment with a rated capacity in excess of 2,000 pounds.
    The hazards addressed by the sections not listed in Sec.
1926.1441(a) are dealt with in the remainder of this proposed section
in a manner that takes into account the lower capacity of the
equipment. The discussion below explains how the Committee believed
those hazards should be addressed for the equipment covered by this
section.
    Note that proposed Sec.  1926.1441(b) (discussed below) addresses
assembly/disassembly, and identifies some sections and paragraphs
elsewhere in the standard that are applicable to this category of
equipment (it also provides other assembly/disassembly requirements
tailored to this category).

A note to this effect has been added to the regulatory text of proposed
Sec.  1926.1441(a), as follows:

    Note: Under paragraph (b)(1) of this section, Sec.  1926.1403
(Assembly/Disassembly--selection of manufacturer or employer
procedures) and Sec.  1926.1406 (Assembly/Disassembly--employer
procedures) also apply.

Paragraph (b) Assembly/Disassembly
    Paragraph (b)(1). This proposed paragraph identifies the provisions
related to assembly and disassembly that would apply to equipment with
rated capacities of 2,000 pounds or less. The Committee identified two
applicable Sections: Sec.  1926.1403 (Assembly/Disassembly--selection
of manufacturer or employer procedures) and Sec.  1926.1406 (Assembly/
Disassembly--employer procedures). Sections 1926.1404 (Assembly/
Disassembly--general requirements) and Sec.  1926.1405 (Disassembly--
additional requirements for disassembly of booms and jibs) were not
included. The Committee believed that those comprehensive assembly/
disassembly procedures are unnecessary for this category of equipment,
which typically involves substantially less complexity.
Paragraph (b)(2) Components and Configuration
    Paragraph (b)(2)(i). This proposed paragraph sets forth two options
for selecting components and configuration of the equipment that affect
capacity or safe operation. This paragraph, as well as the four
paragraphs below, mirror Sec.  1926.1404(m)(1), (m)(1)(i), (m)(1)(ii),
(m)(2), and (n) of this subpart. See Sec.  1926.1404(m) for further
explanation of these provisions.
    Paragraph (b)(2)(i)(A). This first option would allow employers to
select and configure components of the equipment in accordance with the
manufacturer instructions, recommendations, limitations, and
specifications. Furthermore, when the manufacturer instructions are not
available, this provision would require a registered professional
engineer, familiar with the type of equipment involved, to approve, in
writing, the selection and configuration of components.
    Paragraph (b)(2)(i)(B). In this second option, employers would be
able to select and configure components of the equipment in accordance
with equipment modifications that meet the requirements of Sec.
1926.1434 (Equipment modifications).
    Paragraph (b)(2)(ii). Post-assembly inspection. This proposed
paragraph would require employers to conduct an equipment inspection
when assembly is complete in order to ensure compliance with Sec.
1926.1441(b)(2)(i) above. The employer would be required to conduct
such post-assembly inspections in a manner that complied with proposed
Sec.  1926.1412(c). The same requirement applies to higher-capacity
equipment under proposed Sec.  1926.1404(m)(2). Ensuring that the
assembled equipment aligns with the manufacturer instructions,
recommendations, limitations, and specifications, would prevent hazards
from arising and ensure the safe operation of the equipment.
    Paragraph (b)(3). Manufacturer prohibitions. This proposed
paragraph would require employers to comply with applicable
manufacturer prohibitions when using equipment with manufacturer-rated
hoisting/lifting capacities of 2,000 pounds or less. The same
requirement applies to higher-capacity equipment under proposed Sec.
1926.1404(n). The Committee agreed on this provision because
manufacturers' prohibitions are designed to prevent hazards that can
arise with the use of their products.
Paragraph 1441(c) Operation--Procedures
    Paragraph (c)(1). This proposed paragraph would require the
employer to comply with all manufacturer procedures applicable to
equipment operation, including equipment operation with attachments.
The same requirement applies to higher-capacity equipment under
proposed Sec.  1926.1417(a). The Committee agreed on this provision
because manufacturer procedures are designed to prevent hazards that
can arise with the use of their products.
Paragraph (c)(2) Unavailable Operation Procedures\93\
---------------------------------------------------------------------------

    \93\The requirement in this paragraph are the same as those that
apply to higher-capacity equipment under proprosed Sec.
1926.1417(b).
---------------------------------------------------------------------------

    Paragraph (c)(2)(i). In the event that manufacturer procedures are
not available, this paragraph would require the employer to develop,
and ensure compliance with, its own procedures necessary for the safe
operation of the equipment and its attachments. This paragraph is
designed so that safe operation procedures, whether they come from the
manufacturer or an employer, are utilized.
    Paragraph (c)(2)(ii). This proposed paragraph would require that
when employers develop procedures as outlined in the previous
paragraph, the procedures for the operational controls must be
developed by a qualified person. The Committee concluded that, in light
of the critical nature of the operational controls and the degree of
expertise needed to develop safe procedures for their use, it is
necessary that they be developed by a qualified person.
    Paragraph (c)(2)(iii). When manufacturer procedures are
unavailable, this proposed paragraph would require that operational
procedures related to equipment capacity be developed and signed by a
professional engineer familiar with the equipment. The Committee
concluded that, in light of the critical nature of such procedures and
the high degree of complexity needed to develop them, a registered
professional engineer who is familiar with the equipment is needed for
this task. In addition, for the same reasons as discussed with respect
to proposed Sec.  1926.1417(b)(3), the Committee concluded that it is
necessary that they be signed by the engineer.
Paragraph (c)(3) Accessibility
    Paragraph (c)(3)(i). This proposed paragraph would require
employers to make the load chart available to the operator at the
control station. The Committee intended this provision to help prevent
cranes from being used to perform operations beyond their capacities.
The Committee believed that the load chart must be readily available to
crane operators since capacity varies according to a variety of factors
addressed in such charts, including, for example, boom length, radius,
boom angle, and equipment configuration.
    A similar requirement applies to higher-capacity equipment under
proposed Sec.  1926.1417(c)(1). However, Sec.  1926.1417(c)(1) requires
that the load chart be available in the cab. Because the equipment
covered by this section may not have a cab, this proposed paragraph
requires the chart to be available at the control station.
    Paragraph (c)(3)(ii). This proposed paragraph would require that
procedures applicable to equipment operation, including recommended
operating speeds, special hazard warnings, instructions, and the
operator's manual, be readily available for use by the operator. The
Committee intended operators to have easy access to these materials
because that information is needed to operate the equipment safely. A
similar requirement applies to higher-capacity equipment under proposed
Sec.  1926.1417(c)(1), but this provision omits the reference to ``the
cab'' for reasons explained above with respect to proposed Sec.
1926.1441(c)(3)(i).

    Paragraph (c)(3)(iii). Where rated capacities are available at the
control station only in electronic form, and in the event that a
failure makes the rated capacities inaccessible, this proposed
paragraph would require that the operator immediately cease operations
or follow safe shut-down procedures until the rated capacities become
available again. The same requirement applies to higher capacity
equipment under proposed Sec.  1926.1417(c)(2). The Committee agreed
that it is unsafe to continue to operate the equipment if the rated
capacities are inaccessible to the operator.
Paragraph (d) Safety Devices and Operational Aids
    Paragraph (d)(1). This proposed paragraph would require employers
to maintain originally-equipped safety devices and operational aids in
accordance with manufacturer procedures. The Committee believed that
the full range of safety devices and operational aids required by
proposed Sec. Sec.  1926.1415 and Sec.  1926.1416 were generally not
needed for this relatively low-capacity equipment to operate safely.
    However, C-DAC also concluded that if the manufacturer included
such devices or aids, it is probable that the manufacturer's design
relies on them working properly for the equipment to operate safely.
Therefore, it is appropriate for the standard to require them to be
maintained in accordance with the manufacturer's procedures.
    Paragraph (d)(2). Anti two-blocking By its terms, this proposed
paragraph would require that equipment covered by this section that is
manufactured more than one year after the effective date of this
standard be either equipped with an anti-two block device that would
meet the requirements of proposed Sec.  1926.1416(d)(3) or be designed
so that no damage or load failure would occur in the event of a two-
block situation.
    The provision identifies an example of equipment designed to
prevent equipment damage load failure--where the power unit of the
machine stalls in the event of a two-block situation. In such a case,
the power unit does not have sufficient power to cause the load to fail
or to damage the equipment. Instead, when the two-block occurs, the
power unit simply stalls out.
    The purpose of this paragraph is to prevent equipment damage and/or
failure stemming from contact between a component on the hoist line and
the boom tip, which occurs during a two-block. Such contact can lead to
a damaged or severed load line, as well as other types of equipment
failure.
    The Committee agreed to provide employers with discretion to choose
between two options for eliminating two-block hazards. The first option
is designed to prevent a two-block from occurring. The second option is
designed to prevent equipment damage and load failure in the event of a
two-block. The Committee believed that each option would, for this
category of equipment, be equally protective of employee safety.
    As discussed under proposed Sec.  1926.1416, Operational aids, the
Committee believed that anti two-block devices should be required on
higher-capacity cranes manufactured after the date that ANSI/ASME B30.5
began to require them. Consequently, proposed Sec.  1926.1416(d)(3)
states that telescopic boom cranes and lattice boom cranes manufactured
after February 28, 1992 are required to have an anti two-block device.
However, none of the various versions of ANSI/ASME B30.5 has applied to
equipment with a capacity under 2,000 pounds. C-DAC believed that it
would be inappropriate to apply this requirement to equipment
manufactured before either a voluntary consensus standard or federal
requirement has been in place. Therefore, proposed Sec.
1926.1441(d)(2) would only apply to equipment manufactured more than
one year after the effective date of this standard.
    As discussed above, an anti two-block device used to comply with
proposed 1926.1441(d)(2) must meet the requirements for such devices in
proposed Sec.  1926.1416(d)(3). Proposed Sec.  1926.1416(d)(3)
addresses two types of anti two-block devices: The warning type and the
automatic prevention type (these are explained above in the discussion
of proposed Sec.  1926.1416(d)(3)). The type required depends on the
type of crane and the date of manufacture. However, the automatic
prevention type is required on all equipment manufactured more than one
year after the effective date of this standard. Since proposed Sec.
1926.1441(d)(2) only applies to equipment with a capacity of 2,000
pounds or less manufactured more than one year after the effective date
of the standard, an anti two-block device on such equipment would need
to be the automatic prevention type.
    Note that, under proposed Sec.  1926.1441(d)(1) (discussed above),
equipment of 2,000 pounds or less capacity manufactured prior to the
standard's effective date, if manufactured with an anti-two-block
device, would be required to have that device properly maintained. For
further discussion of anti-two-blocking devices, see the explanation in
proposed Sec.  1926.1416, Operational aids.
Paragraph (e) Operator Qualifications
    This proposed paragraph would require that, before operating
equipment, the operator is trained on the safe operation of the type of
equipment the operator will be using. The Committee believed that
familiarizing operators with safe operation techniques would help
minimize operator error and thereby reduce the likelihood of accidents
and injuries. However, the Committee concluded that the operator
certification/qualification procedures that would be required for
higher capacity equipment under proposed Sec.  1926.1427 was not needed
for this lighter and less complicated equipment.
Paragraph 1441(f) Signal Person Qualifications
    This proposed paragraph would require employers to ensure that
signal persons are trained in the proper use of signals applicable to
the use of equipment with a rated capacity of 2,000 pounds or less.
Though the equipment covered by this section has limited capacity, in
some circumstances its safe operation depends on signals given by a
signal person. In that event, this paragraph would ensure that
communication between the crane operator and the signal person is clear
and effective.
    However, the Committee concluded that the comprehensive signal
person qualification procedures that would be required for higher
capacity equipment under proposed Sec.  1428 were not needed for this
equipment.
Paragraph 1441(g) Keeping Clear of the Load
    This proposed paragraph states that proposed Sec.  1926.1425 is
applicable to equipment with a rated capacity of 2,000 pounds or less,
with the exception of proposed Sec.  1926.1425(c)(3). Proposed Sec.
1926.1425(c)(3) would require materials to be rigged by a qualified
rigger. The Committee believed that, in light of the limited capacity
of this equipment, it was unnecessary to require a qualified rigger.
Paragraph 1441(h) Inspections
    The general provision on inspections, Sec.  1926.1412, would not
apply to this equipment. Instead, this proposed paragraph would require
that the equipment be inspected pursuant to the manufacturer's
procedures. The Committee believed that inspections

pursuant to manufacturers' procedures would be sufficient to detect
conditions that could lead to equipment failure because manufacturers
typically recommend procedures that are designed to prevent hazards
that can arise with the use of their products. The Committee concluded
that the comprehensive inspection procedures that would be required for
higher capacity equipment under proposed Sec.  1926.1412 were not
needed for this lighter and less complicated equipment.
Paragraph 1441(i) [Reserved.]
    This paragraph is reserved because it is inconvenient for the
reader to determine whether (i) is used as a letter or a Roman numeral.
Paragraph 1441(j) Hoisting Personnel
    This proposed paragraph would prohibit the practice of using
equipment with manufacturer-rated load capacities of 2,000 pounds or
less to hoist personnel. The Committee believed that this equipment is
inherently unsuited to lifting personnel safely due to its low capacity
and typically light construction.
Paragraph 1441(k) Design
    This proposed paragraph would require that the equipment be
designed by a qualified engineer. The Committee was concerned that some
employers may design and construct equipment in this category
themselves, rather than using equipment built by a manufacturer. This
provision is intended to ensure that the design of such equipment would
be sufficient from a safety standpoint.

V. Procedural Determinations

A. Legal Authority

    The purpose of the Occupational Safety and Health Act, 29 U.S.C.
651 et seq. (``the Act''), is ``to assure so far as possible every
working man and woman in the Nation safe and healthful working
conditions and to preserve our human resources.'' 29 U.S.C. 651(b). To
achieve this goal, Congress authorized the Secretary of Labor to
promulgate and enforce occupational safety and health standards, 655(b)
(authorizing promulgation of standards pursuant to notice and comment),
654(b) (requiring employers to comply with OSHA standards)).
    A safety or health standard is a standard ``which requires
conditions, or the adoption or use of one or more practices, means,
methods, operations, or processes, reasonably necessary or appropriate
to provide safe or healthful employment'' (29 U.S.C. 652(8)).
    A safety standard is reasonably necessary or appropriate within the
meaning of Section 652(8) if it substantially reduces or eliminates
significant risk, is economically and technologically feasible, is cost
effective, is consistent with or is a justified departure from prior
Agency action, is supported by substantial evidence, and is better able
to effectuate the Act's purposes than a relevant national consensus
standard.
    A standard is technologically feasible if the protective measures
it requires already exist, can be brought into existence with available
technology, or can be created with technology that can reasonably be
expected to be developed. American Textile Mfrs. Institute v. OSHA, 452
U.S. 490, 513 (1981) (``ATMI''); AISI v. OSHA, 939 F.2d 975, 980 (D.C.
Cir. 1991) (``AISI'').
    A standard is economically feasible if industry can absorb or pass
on the costs of compliance without threatening its long-term
profitability or competitive structure. See ATMI, 452 U.S. at 530 n.
55; AISI, 939 F.2d at 980. A standard is cost effective if the
protective measures it requires are the least costly of the available
alternatives that achieve the same level of protection. ATMI, 453 U.S.
at 514 n. 32; International Union, UAW v. OSHA, 37 F.3d 665, 668 (D.C.
Cir. 1994) (``LOTO III'').
    Section 6(b)(7) authorizes OSHA to include among a standard's
requirements labeling, monitoring, medical testing and other
information gathering and transmittal provisions. 29 U.S.C. 655(b)(7).
    Safety standards must be highly protective. See 58 FR at 16614-
16615; LOTO III, 37 F.3d at 669. Finally, whenever practical, standards
shall ``be expressed in terms of objective criteria and of the
performance desired.'' Id.

B. Preliminary Economic Analysis and Initial Regulatory Flexibility
Analysis

Summary
    Affected Industries
    The proposal would affect employers and employees in a variety of
different construction industries in which cranes and derricks are used
as part of the performance of work duties. These industries include
firms involved in renting cranes for use in construction projects such
as: Multi-family housing; industrial buildings and warehouses; other
nonresidential buildings; highway and street construction; and water,
sewer, power, and communication line construction. For purposes of this
preliminary economic analysis (PEA), the Agency has grouped affected
establishments, by industry, into the following categories:
     Crane Rental with Operators,
     Crane Rental without Operators,
     Own and Rent Cranes with Operators,
     Own but Do Not Rent, and
     Crane Lessees in the Construction Industry (or referred to
simply as just ``Crane Lessees'' throughout this preliminary economic
analysis).
    The full industrial profile of affected firms and establishments,
including information on number of employees, revenues, and profits, is
presented below in section 3 with data on affected employers presented
in Table B-2.
Benefits
    The proposed standard addressing construction work involving cranes
and derricks is expected to reduce accidents, fatalities, and injuries
in the construction industry. The Agency estimates that 53 fatalities
and 155 injuries would be avoided annually from compliance with the
provisions of the proposed standard. Applying an average monetary value
of $50,000 per prevented injury and a value of $7.5 million per
prevented fatality, the Agency estimates the monetized benefit at about
$406 million annually. The Agency believes that affected employers and
employees will also benefit from the additional clarity of the revised
standards as well as their comprehensiveness. Table B-1 provides a
summary of the benefits, costs, and net benefits of the proposed
standard. Net benefits are estimated to be $283 million annually.

           Table B-1--Annual Benefits, Costs, and Net Benefits
------------------------------------------------------------------------

------------------------------------------------------------------------
Annualized Costs
    Crane Assembly/Disassembly......  $33.5 million.
    Power Line Safety...............  30.8 million.
    Crane Inspections...............  21.6 million.

    Operator Qualification and        37.3 million.
     Certification.
                                     -----------------------------------
        Total Annual Costs..........  123.2 million.
                                     ===================================
Annual Benefits
    Number of Injuries Prevented....  155
    Number of Fatalities Prevented..  53
                                     -----------------------------------
        Total Monetized Benefits....  $406 million.
                                     ===================================
Annual Net Benefits (Benefits Minus   $283 million.
 Costs).
------------------------------------------------------------------------
Source: OSHA Office of Regulatory Analysis.
Benefits base year 2006; costs based on wages in BLS Employment and
  Earnings 2004.

Compliance Costs
    The estimated compliance costs for this proposed standard represent
the additional resources necessary for employers to achieve full
compliance. The Agency believes provisions in four areas of the
proposed standard will generate the largest costs for employers: Crane
assembly/disassembly; power-line safety; inspections; and operator
qualification and certification. Estimated costs do not include costs
when employers are already complying with the new requirements of the
proposed standard. The total annualized costs of compliance with the
proposed standard are estimated to be about $123 million.
    OSHA solicits comments from the public regarding the ranges of cost
and benefits calculated in the economic analysis.
Economic Impacts
    To assess the economic impacts associated with the proposed rule,
OSHA compared the estimated employer costs with employer revenues and
profits. The costs of compliance with the proposed rule are not large
in relation to the corresponding annual financial flows. The economic
impacts are presented in Table B-13. At most, the estimated costs of
compliance represent about 0.3 percent (less than 1 percent) of
revenues for each affected industry. Alternatively, the estimated
compliance costs also represent less than 1 percent of profits, for the
average establishment among the affected industries.
    The impact of the proposal measured by the ratio of costs to
profits varies across the affected sectors. Among the industries in the
Crane Lessees (in the construction industry) sector, which includes
about 142,500 of the 164,500 affected establishments, average employers
are expected to have costs that represent much less than 1 percent of
profits. Within the sector of employers which Own but Do Not Rent,
affected establishments in 11 of the 30 industry sectors have average
costs as high as a few percent of profits (from 2 to 6 percent).
    The economic impact of the proposed rulemaking is most likely to
consist of a small increase in prices for affected construction
projects--less than 0.3 percent, on average. (Note that costs/impacts
will be far less for the construction industry in its entirety, which
consists of over 700,000 establishments and over $1 trillion in
revenue.) It is unlikely that a price increase of this magnitude will
significantly alter the amount of construction goods demanded. If the
compliance costs of the proposed rule can be substantially recouped
with a minimal increase in prices, there will be little effect on
profits.
    OSHA concludes preliminarily that compliance with the requirements
of the proposed rulemaking is economically feasible in every affected
industry sector. In addition, based on an analysis of the costs and
economic impacts associated with this rulemaking, OSHA preliminarily
concludes that the effects of the proposed standard on international
trade, employment, wages, and economic growth for the United States
would be negligible.
Initial Regulatory Flexibility Analysis
    OSHA has analyzed the impact of the proposed rule on small entities
and has prepared an Initial Regulatory Flexibility Analysis (IRFA) (in
section 8, below), describing the potential effects on small entities.
The IRFA includes a discussion of the Small Business Advocacy Review
Panel (SBARP) process that has been completed for this proposed
standard. The SBARP process provided small businesses the opportunity
to comment on a draft of the proposed standard and on the corresponding
economic analysis. The SBARP subsequently submitted a report to OSHA
which summarized these comments and made specific findings and
recommendations regarding the draft proposed standard. The Panel's
recommendations are presented in section 8 of this PEA. Table B-15
presents the impacts on small entities. Costs as a percent of revenues
range from 0.01 to 0.26 percent (less than 1 percent); costs as a
percent of profit range from 0.03 to 6.6 percent.
1. Introduction
    The Occupational Safety and Health Act of 1970 (OSH Act) requires
OSHA to demonstrate the technological and economic feasibility of its
rules. Executive Order (E.O.) 12866 and the Regulatory Flexibility Act
(RFA), as amended in 1996, require federal agencies to analyze the
costs, benefits, and other consequences and impacts, including small
business impacts, of their rules. Consistent with these requirements,
OSHA has prepared a Preliminary Economic Analysis (PEA) and an Initial
Regulatory Flexibility Analysis to accompany this proposal. The
proposal on cranes and derricks in construction will increase the
protection of construction workers from hazardous working conditions in
and around cranes.
    It has been determined that this is an economically significant
action under E.O. 12866 and a major rule under the Small Business
Regulatory Enforcement Fairness Act (SBREFA). In addition, as required
by the RFA, the Agency has assessed the potential impacts of this
proposal on small entities and has prepared an Initial Regulatory
Flexibility Analysis. This rule is not a significant federal
intergovernmental mandate, and the Agency has no obligations to conduct
analyses of this rule under the Unfunded Mandates Reform Act of 1995.
Because this proposed rule would have costs of over $100 million in any
given year, this proposed rule would establish a federal mandate for
the private sector. The analysis presented for compliance under E. O.
12866 also serves as the UMRA analysis.
    The purpose of this analysis is to identify the establishments and

industries affected by the rule; evaluate its costs, benefits, and
economic impacts; assess the technological and economic feasibility of
the proposal for affected industries; and evaluate the appropriateness
of regulatory non-regulatory alternatives to the rule.
    This PEA has been developed according to the requirements of the
E.O. 12866 and the OSH Act. In addition, in accordance with the RFA as
amended by the SBREFA, this analysis identifies and estimates the
impacts of the proposal on small businesses, using the Small Business
Administration's (SBA's) industry-specific definitions of small
businesses. In addition, OSHA assessed the impacts of the rule on very
small businesses, i.e., those with fewer than 20 employees.
Methodology
    The Agency's occupational safety and health standards are required
to be ``reasonably necessary or appropriate'':

    (8) The term ``occupational safety and health standard'' means a
standard which requires conditions, or the adoption or use of one or
more practices, means, methods, operations, or processes, reasonably
necessary or appropriate to provide safe or healthful employment and
places of employment.

    E.O. 12866 further defines appropriate regulatory goals and how
regulations should be analyzed, and pursuant to the E.O. OSHA develops
an economic analysis to estimate benefits and costs. A comparison of
estimated benefits and costs from the economic analysis further
addresses whether an occupational standard is reasonably necessary.
Since 2002, under the direction of the Office and Management and
Budget, the Agency has also provided a ``monetized'' value of benefits
for avoided injuries, illnesses, and fatalities from its standards,
which permits comparison of benefits and costs where required.
    For all significant occupational safety and health standards, OSHA
derives estimates of benefits and costs as annualized values, as the
Agency believes these are the simplest and most understandable ways to
weigh and assess the impact of its standards. Computing annualized
estimates focuses Agency analysis on information from current
conditions and recent years which the Agency deems the best
information--most accurate and reliable--to analyze a standard's impact
on employers and employees. OSHA typically uses a time period of ten
years for its analysis, unless there are significant long-term effects
not captured within a ten-year time frame. In this case, adding
additional years to the time frame of the analysis would not change any
major conclusions.
    To isolate and describe only the effects of a new standard, the
Agency carefully distinguishes, for both benefits and costs, the change
induced by the new standard without regard to compliance with existing
standards. So, when injuries or fatalities have occurred because
existing standards were not adhered to, the Agency neither counts such
avoidable accidents as a benefit of the proposed new standard nor
includes as an additional cost meeting existing occupational standards.
This analysis assumes that all costs are incurred in the first year
following the promulgation of the final standard and that benefits
result immediately, although some costs will actually likely be
incurred over a longer horizon since the standard has phase-in periods
for some provisions.
    The Agency employs a ``willingness to pay'' (WTP) approach in
estimating benefits. This is a two-step process in which, for the
cranes and derricks' proposal, the past 10 years of accident reports
were studied to estimate the number of fatalities and injuries, and
also the number that would be avoided by full compliance with the
proposed standard. Secondly, the Agency uses values from the WTP
approach to produce a monetary value of benefits. The WTP approach
applied by many economic studies estimates the ``value of a statistical
life'' (VSL) based on data collected about job risks and the ``risk
premium'' in wages that is paid to employees in riskier jobs. The VSL
is used as a metric by many government regulatory authorities, such as
National Highway Traffic Safety Administration and the Environmental
Protection Agency, but is particularly appropriate for occupational
standards since it is derived from occupational risks and wages.
    The Agency's calculation of estimates for benefits and costs,
summarized and compared in the tables on net benefits, is implicitly
one that looks at society as a whole. Estimated costs are borne by all
affected employers while benefits from the WTP approach are market-
derived estimates of employees' valuation of job risk and reward
(economic feasibility, discussed in section 7 below focuses on employer
and industry economic impacts without regard to benefits). The VSL
represents to some extent the employees' value of taking on additional
job risks and describes the value to employees of avoiding fatality and
injury. The monetary value of an (avoided) injury from the WTP approach
is based on survey results. Summing together estimates of costs and
benefits that impact different parts of society is an approach that is
considered (by economists) to represent the welfare of society as a
whole.
    The primary alternative to a WTP approach is a cost of injury (COI)
approach. A COI approach estimates such factors as medical costs for
injuries, the costs of work disruption from accidents and accident
investigations, indirect costs to employers (absenteeism and hiring
costs, for example), lost wages or job opportunities to employees,
rehabilitation, and many other potential sources of costs to all
parties. The COI approach results in ascribing costs and benefits to
many involved entities: The employer, the employee, workers'
compensation programs, medical insurance, federal disability programs,
and government/taxpayers, for example. A COI approach does not capture
a value for loss of life, pain and suffering, impacts on families, and
similar parameters, and for that reason the Agency believes that the
VSL better represents a monetary value that is consistent with the
purposes of the OSH Act, placing great value on workers' health and
lives.
    The remainder of this part of the preamble is organized as follows:
2. Identification of Market Failure and Need for Regulation
3. Industry Profile
4. Benefits and Net Benefits
5. Technological Feasibility
6. Costs of Compliance
7. Economic Feasibility and Impacts
8. Initial Regulatory Flexibility Analysis
9. References
2. Identification of Market Failure and Need for Regulation
    The justification for imposing appropriate occupational safety and
health standards generally, and for adopting this change to the cranes
and derricks standard in particular, is that without these
requirements, fatality and injury risks to employees would remain
unacceptably high. Workplace risks and resulting injuries and costs
would be too high from a moral- and social-preference perspective, as
determined by Congress through the passage of the Occupational Safety
and Health Act. In addition, risks would be too high in terms of
imposing large net costs (both pecuniary and non-pecuniary) on society,
producing an inefficient allocation of resources, and reducing overall
social welfare.
    ``Market failure'' is a term used by economists to describe when
the allocation of goods and services by a market is not efficient, in
the sense that it is possible for at least one person to be made better
off without making anyone else worse off (termed ``Pareto

efficiency''). One common cause of market failure is that the person
responsible for a decision does not bear the full costs or consequences
of that decision. When this occurs, the person responsible for the
decision will not fully consider all of the costs involved, and, as a
result, may arrive at an inappropriate decision. In the case of
occupational injuries, the employer has the primary decision-making
responsibility, and does not, in fact, bear the full costs of
occupational injuries. As a result, employers will tend to allocate
less to occupational safety than would be efficient if all costs of
occupational injuries were considered.
    Who bears the costs of an employee injury, which include loss of
income, medical care costs, the non-monetary burdens the injury
imposes, and other outcomes? Some of these costs, particularly medical
costs and a portion of income loss, are paid for through workers'
compensation. While some employers self insure, and pay the workers'
compensation costs directly, the overwhelming majority of employers
purchase (and are required to purchase) workers' compensation
insurance. Thus, in most cases, employers do not directly pay for
workers' compensation to the injured worker. The remainder of the costs
of the injury is normally borne by the employee, though some of the
costs may be borne by the government in the form of welfare. (In almost
all states, workers' compensation is an exclusive remedy, meaning that
an employee may not sue his employer for a work-related injury.)
    In principle, both employees and insurers could contract with
employers for payment in advance for the risks incurred. Insurers
charge premiums for their insurance. Workers could, in theory, demand
increased pay for increased risk, and there is evidence that workers do
demand increased pay for more dangerous occupations, work in more
dangerous industries, and exposure to well known hazardous substances.
In this situation, there is not an externality, where an externality is
defined as damage to an outside party who is not party to a market
agreement. There are, however, several informational and institutional
problems that prevent an ideal set of payments for risks incurred.
    The first requirement for reasonable valuation of risk in transfers
of risk between parties is that the risk be known. Further, for the
estimate of risk to affect the behavior of employers, it is necessary
that employees and insurers be able to differentiate the risk among
different employers, not just be able to assess the risk across all
employers in an industry. In the case of relatively rare accidents such
as serious crane accidents, this is quite difficult to do. As a result,
simply looking at the past record will not provide much useful
information concerning relative risk among employers. The employers
themselves may be equally uncertain about the risks associated with
their practices.
    Even if such information on past performance were available, there
is no guarantee that future performance will be identical to past
performance. Different management or even the same management (with
different objectives, financial performance or schedule) may do things
differently than they have in past. Further, once the risk has been
transferred by contract to employees and insurers, the employer has
reduced incentives to maintain a low level of risk. This phenomenon is
a constant problem in insurance, where it is known as a moral hazard--
the tendency of the insured to act with less care as a result of having
insurance. As a result, the only way for an insurance company to
estimate the risk of crane accidents for a specific employer is through
monitoring actual employer practices that affect crane safety--an
expensive method of obtaining information and one that insurance
companies do not perform, the Agency concludes. In addition, workers'
compensation insurance uses, and, in most states is required by law to
use, an experience rating system. Experience rating ties the quoted
premium closely to a combination of all similar occupations in all
firms and the individual firm's actual record over the previous three
years. For very small firms, this means that, in practice, the
individual firm's record has no impact on their insurance premium. Even
quite large firms pay, through insurance premium increases, less than
the full costs of accidents. Further, the use of experience rating
makes it difficult for insurers to make use of information from
monitoring and inspection of safety practices, even if they had such
information.
    Employees also have problems obtaining and using this information.
First, employees may simply be unacquainted with safe practices--as
these are commonly taught by employers. (One effect of the proposed
standard's requirement for crane operator certification is to assure
that crane operators will be acquainted with rules for crane safety,
and have the appropriate skills to apply them.) Second, information on
safety is commonly not available before taking a job. Third, wages are
sometimes determined by industry contracts, with no room for added risk
premiums for individual employers. Finally, there are significant costs
in many cases to leaving a job, which means that even if the employee
realizes a job is less safe than some other available jobs, the
employee may be reluctant to leave the job.
    In summary, the market failure in job safety is that employers
commonly transfer the costs of job safety to other parties, and a
combination of informational and institutional constraints prevents the
costs of the transfer from actually reflecting the risk to the
individual employer--instead employers pay to transfer the risk at a
cost closer to the average costs for the occupation rather than their
own costs reflecting their own risks. As result, employers do not pay
the full costs if they have above average risks or poor safety
practices. Under these circumstances, the need for regulation is
established by the significant risk presented by crane and derrick
operations (see section 4).
3. Industrial Profile
    The proposed standard would affect establishments across a variety
of different construction industries with work involving cranes and
derricks. Table B-2 presents data on the numbers of affected firms,
establishments, employees, and average establishment revenues and
profits. The Agency sorted establishments, by industry, into five
sectors according to their crane or equipment activities, as follows:
     Crane Rental with Operators,
     Crane Rental without Operators,
     Own and Rent Cranes with Operators,
     Own but Do Not Rent, and
     Crane Lessees in the Construction Industry (or just
``Crane Lessees'').

          Table B-2--Industrial Profile of Affected Firms and Establishments for the Proposed Standard
----------------------------------------------------------------------------------------------------------------
                                                            Affected                         Average per estab.
                                               ---------------------------------   Profit  ---------------------
                 NAIC/Industry                                                      rate     Revenues   Profits
                                                  Firms     Estabs.   Employees  (percent)   ($1,000)   ($1,000)
----------------------------------------------------------------------------------------------------------------
Crane Rental with Operators:
    238990 All Other Specialty Trade Cont.....      1,183      1,240     16,244       4.10     $1,918        $79
Crane Rental without Operators (Bare Rentals):
    532412 Const./Min./For. Machine & Equip...      2,137      4,631     50,409       4.00      3,289        132
Own and Rent Cranes with Operators:
    236115 New Single-Family Housing Const....        168        168        261       4.41        233         10
    236118 Residential Remodelers.............         21         21         45       4.41        528         23
    236210 Industrial Building Construction...          8         10      1,067       4.41     14,656        646
    236220 Commercial and Institutional                21         28        757       4.41      4,603        203
     Building.................................
    237110 Water and Sewer Line and Related            47         62      1,432       4.65      4,570        213
     Struct...................................
    237120 Oil and Gas Pipeline and Related            16         21      1,457       4.65      6,822        317
     Struct...................................
    237130 Power and Communication Line and            36         36        666       4.65      2,720        126
     Rel......................................
    237310 Highway, Street, and Bridge                 76        101      6,456       4.65     12,483        580
     Construction.............................
    237990 Other Heavy and Civil Engineering          143        191      5,857       4.65      5,394        251
     Const....................................
    238110 Poured Concrete Foundation and             263        263      4,328       4.65      2,256        105
     Struct...................................
    238120 Structural Steel and Precast               239        319      7,389       4.65      2,868        133
     Concrete.................................
    238130 Framing Contractors................         20         20        120       3.90        200          8
    238150 Glass and Glazing Contractors......         41         41        328       3.90        631         25
    238170 Siding Contractors.................          3          3         18       3.90        827         32
    238190 Other Foundation, Structure, and            26         35      1,145       3.90      2,802        109
     Building.................................
    238210 Electrical Contractors.............         12         12        176       3.90      1,629         63
    238220 Plumbing, Heating, and Air-                  2          3        196       3.90      5,835        227
     Conditioning.............................
    238290 Other Building Equipment                   104        138      4,076       3.90      3,801        148
     Contractors..............................
    238320 Painting and Wall Covering Contract         20         20        159       3.90        962         37
    238910 Site Preparation Contractors.......        311        311      4,706       3.90      2,146         84
                                               -----------------------------------------------------------------
        Subtotal..............................      1,576      1,803     40,639
Own but Do Not Rent:
    236115 New Single family housing                2,915      2,915     13,621       4.41      1,057         47
     construction.............................
    236116 New Multifamily housing                    220        220      2,219       4.41      3,792        167
     construction.............................
    236117 New housing operative builders.....      1,302      1,302     12,015       4.41      5,338        235
    236118 Residential Remodelers.............        827        827      3,201       4.41        544         24
    236210 Industrial building construction...        235        277      9,359       4.41      6,132        270
    236220 Commercial and Institutional Bldg.       3,718      3,718     71,536       4.41      6,479        286
     Const....................................
    237110 Water and Sewer Line Const.........        922      1,230     20,306       4.65      2,630        122
    237120 Oil and gas pipeline construction..        104        138      9,277       4.65      8,167        380
    237130 Power and communication line const.        225        300     12,600       4.65      5,769        268
    237210 Land subdivision...................          0          0          0       4.65        289         13
    237310 Highway, street and bridge const...         84        111      4,308       4.65      7,266        338
    237990 Other heavy and civil eng..........        516        516      7,563       4.65      2,076         97
    238110 Poured Concrete foundation and             269        269      3,070       4.65      1,252         58
     struct...................................
    238120 Structural steel and precast               400        400      7,249       4.65      2,018         94
     concrete.................................
    238130 Framing Contractors................      1,083      1,083     11,834       3.90        998         39
    238140 Masonry Contractors................        129        129      1,303       3.90        788         31
    238150 Glass & Glazing Contractors........         53         53        504       3.90      1,187         46
    238160 Roofing Contractors................        232        232      2,262       3.90        991         39
    238170 Siding Contractors.................         33         33        215       3.90        641         25
    238190 Other foundation, structure,                14         14        158       3.90      1,254         49
     building, ext............................
    238210 Electrical Contractors.............         63         63        771       3.90      1,312         51
    238220 Plumbing, Heating and                       87         87        974       3.90      1,346         52
     Airconditioning Cont.....................
    238290 Other building equipment cont......         45         59      1,237       3.90      2,383         93
    238310 Drywall and insulation contractors.          0          0          0       3.90      1,573         61
    238320 Painting and wall covering                  39         39        234       3.90        433         17
     contractors..............................
    238330 Flooring Contractors...............          0          0          0       3.90        760         30
    238340 Tile and Terrazzo contractors......          0          0          0       3.90        655         26
    238350 Finish Carpentry contractors.......          0          0          0       3.90        517         20
    238390 Other building finishing                     0          0          0       3.90      1,304         51
     contractors..............................
    238910 Site Preparation...................        302        302      2,825       3.90      1,228         48
                                               -----------------------------------------------------------------
        Subtotal..............................     13,815     14,316    198,641
Crane Lessees in the Construction Industry:
    236115 New Single family housing               29,236     29,236    136,601       4.41      2,116         93
     construction.............................
    236116 New Multifamily housing                  2,199      2,199     22,192       4.41      7,606        335
     construction.............................
    236117 New housing operative builders.....     13,022     13,022    120,146       4.41     10,692        472
    236118 Residential Remodelers.............      8,275      8,275     32,021       4.41      5,442        240
    236210 Industrial building construction...      2,777      2,777     93,931       4.41      6,307        278
    236220 Commercial and Institutional Bldg.      37,208     37,208    715,896       4.41      6,490        286
     Construction.............................
    237110 Water and Sewer Line Const.........     12,357     12,357    204,085       4.65      2,629        122
    237120 Oil and gas pipeline construction..      1,052      1,403     94,176       4.65      8,254        384

    237130 Power and communication line const.      2,263      3,017    126,753       4.65     11,295        525
    237210 Land subdivision...................          0          0          0       4.65          0          0
    237310 Highway, street and bridge const...        843      1,124     43,471       4.65     72,437      3,367
    237990 Other heavy and civil eng..........      5,251      5,251     77,036       4.65      3,950        184
    238110 Poured Concrete foundation and           1,358      1,358     15,498       4.65     24,877      1,157
     struct...................................
    238120 Structural steel and precast             4,321      4,321     78,266       4.65      2,019         94
     concrete.................................
    238130 Framing Contractors................     10,841     10,841    118,502       3.90      1,331         52
    238140 Masonry Contractors................      1,286      1,286     13,035       3.90     15,762        614
    238150 Glass & Glazing Contractors........        529        529      5,080       3.90     12,086        471
    238160 Roofing Contractors................      2,319      2,319     22,620       3.90      9,923        387
    238170 Siding Contractors.................        332        332      2,152       3.90     12,932        504
    238190 Other foundation, structure,               139        139      1,599       3.90     26,387      1,028
     building, ext............................
    238210 Electrical Contractors.............        626        626      7,712       3.90    132,080      5,147
    238220 Plumbing, Heating and                      875        875      9,744       3.90    135,367      5,275
     Airconditioning Cont.....................
    238290 Other building equipment cont......        457        609     12,662       3.90     23,770        926
    238310 Drywall and insulation contractors.          0          0          0       3.90          0          0
    238320 Painting and wall covering                 389        389      2,346       3.90     43,317      1,688
     contractors..............................
    238330 Flooring Contractors...............          0          0          0       3.90          0          0
    238340 Tile and Terrazzo contractors......          0          0          0       3.90          0          0
    238350 Finish Carpentry contractors.......          0          0          0       3.90          0          0
    238390 Other building finishing                     0          0          0       3.90          0          0
     contractors..............................
    238910 Site Preparation...................      3,050      3,050     28,543       3.90     12,380        482
                                               -----------------------------------------------------------------
        Subtotal..............................    141,004    142,542  1,984,066
                                               =================================================================
            Total.............................    159,715    164,532  2,289,999

----------------------------------------------------------------------------------------------------------------
Source: U.S. Census Bureau, Economic Census, 2002 for establishments, employees, revenues, except Crane Rental w/
  o Operators group; Dunn and Bradstreet, Market Profiles, 2002 for data for Crane Rental w/o Operators group;
  Profit rates from Internal Revenue Service, Statistics of Income 2002 Corporation Source Book, 2002; Affected
  establish estimates from OSHA/Office of Regulatory Analysis (ORA).

    These sectors have an estimated total of about 164,500 affected
establishments. Crane Lessees in the Construction Industry (just
``Crane Lessees'' hereafter) have almost 90 percent of the firms and
employees affected by the proposed standard. The profile was
constructed by combining two kinds of sources: (1) General data on
numbers of establishments, firms, revenues, employees, and profits for
affected individual industries, and (2) data on the number or
percentage of establishments in the industries that use cranes.
General Data Sources
    Data from the U.S. Bureau of the Census (CB) was used to develop
the industry profile estimates (which include establishments,
employees, and revenues) for the five sectors, except the Crane Rental
without Operators sector, which was developed using 2002 Dunn and
Bradstreet (D&B) data, except for estimates of the number of firms
which was based on CB data. The Agency used 2002 D&B data for the Crane
Rental without Operators sector because these data matched best with
SBA data for estimating the characteristics of small firms in that
sector.
    Profit rates were taken from the Sec.  2002 Source Book Statistics
of Income'' published by the Internal Revenue Service. The profit rates
were calculated by dividing the reported net income by total receipts
for each 3-digit NAIC, and were applied to each industry falling within
that 3-digit NAIC. For example, for NAIC 236 Building Construction,
OSHA used the calculated profit rate of 4.41 percent for all industries
performing building construction (residential and non-residential).
Adjustments for Use of Cranes
    OSHA used the ``2002 Economic Census'' of the Census Bureau (CB)
for data on numbers of firms, establishments, and employees, by size,
for establishments that rent cranes (Crane Rental with Operators, Crane
Rental without Operators). To estimate the number of establishments
that Own but Do Not Rent Cranes and those that only lease cranes (see
Table B-3), the Agency applied several adjustments to the CB ``2002
Economic Census'' data. First, adjustments were made so that estimates
of establishments would be consistent with the data from CB which
identified establishments that report crane rental revenue. OSHA
reviewed the construction industry sub-sectors in the ``NAICS Manual
2007'' to determine the type of work activities that would require the
use of a crane. Some of the industries affected by the proposal consist
entirely of contractors and general contractors--either of whom might
be the lessee of a crane. In some cases, OSHA determined that general
contractors in residential construction would lease cranes instead of
the trade contractor. Secondly, during the SBAR panel process some
small entity representatives stated that some establishments that were
categorized as Crain Lessees (in the construction industry) do in fact
own their own cranes, and that some who were categorized as owning
cranes typically lease them, or do both. Table B-3 shows the
adjustments the Agency made to estimate the number of establishments
renting cranes in each industry (which are reflected in Table B-2) and
the Agency's rationale.

               Table B-3--Industrial Profile Adjustments for Crane Lessees for All Establishments
----------------------------------------------------------------------------------------------------------------
                                                             Establishments
               NAIC                  Industry description    (2002 economic      OSHA assumption       Revised
                                                                census)                                estimate
----------------------------------------------------------------------------------------------------------------
236115............................  New Single-Family                 58,472  Estimated that 50           29,236
                                     Housing Const.                            percent would
                                                                               contract out instead
                                                                               of leasing the crane
                                                                               themselves.
236116............................  New Multifamily                    4,397  Estimated that 50            2,199
                                     Housing Const.                            percent would
                                                                               contract out instead
                                                                               of leasing the crane
                                                                               themselves.
236117............................  New Housing Operative             26,043  Estimated that 50           13,022
                                     Builders.                                 percent would
                                                                               contract out instead
                                                                               of leasing the crane
                                                                               themselves.
236118............................  Residential                       82,750  Estimated that only          8,275
                                     Remodelers.                               10 percent of the
                                                                               establishments
                                                                               perform work that
                                                                               requires a crane.
                                                                               Only new buildings
                                                                               may require them.
236210............................  Industrial Building                2,777  All estimated to be          2,777
                                     Construction.                             affected.
236220............................  Commercial and                    37,208  All estimated to be         37,208
                                     Institutional Bldg.                       affected.
                                     Const.
237110............................  Water and Sewer Line              12,357  All estimated to be         12,357
                                     Const.                                    affected.
237120............................  Oil and Gas Pipeline               1,403  All estimated to be          1,403
                                     Const.                                    affected.
237130............................  Power and                          6,034  Estimated that 50            3,017
                                     Communication Line                        percent (only in
                                     Const.                                    Power Line
                                                                               Construction) would
                                                                               involve work that
                                                                               requires a crane.
237210............................  Land Subdivision.....              8,403  Work performed does              0
                                                                               not require crane.
237310............................  Highway, Street, and              11,239  Estimate only 10             1,124
                                     Bridge Const.                             percent (larger
                                                                               employers) would use
                                                                               cranes. Street and
                                                                               highway construction
                                                                               would typically not
                                                                               require them.
237990............................  Other Heavy and Civil             10,502  Estimated that only          5,251
                                     Eng.                                      50 percent would
                                                                               need a crane.
238110............................  Poured Concrete                   27,151  Estimated that only 5        1,358
                                     Foundation and                            percent would
                                     Struct.                                   perform tasks that
                                                                               require a crane. In
                                                                               many cases a site
                                                                               crane performs
                                                                               lifting.
238120............................  Structural Steel and               4,321  All estimated to be          4,321
                                     Precast Concrete.                         affected.
238130............................  Framing Contractors..             14,455  Estimated that 75           10,841
                                                                               percent would need a
                                                                               crane that would
                                                                               typically not be
                                                                               leased by the
                                                                               residential general
                                                                               contractor.
238140............................  Masonry Contractors..             25,720  Estimated that only 5        1,286
                                                                               percent would
                                                                               perform work that
                                                                               requires a crane.
                                                                               For new multi-story
                                                                               structures, the site
                                                                               crane lifts
                                                                               materials.
238150............................  Glass and Glazing                  5,294  Estimated that only            529
                                     Contractors.                              10 percent would
                                                                               perform work that
                                                                               requires a crane.
                                                                               Typically only use
                                                                               powered personnel
                                                                               platforms.
238160............................  Roofing Contractors..             23,192  Estimated only 10            2,319
                                                                               percent would need a
                                                                               crane. Typically use
                                                                               site crane for any
                                                                               high rise building
                                                                               projects.
238170............................  Siding Contractors...              6,632  Estimated that only 5          332
                                                                               percent would need a
                                                                               crane. Most of the
                                                                               work is done on
                                                                               scaffolds, ladders,
                                                                               platforms.
238190............................  Other Foundation,                  2,786  Estimated that only 5          139
                                     Structure, Bldg. Ext.                     percent would need a
                                                                               crane.
238210............................  Electrical                        62,586  Estimated that only 1          626
                                     Contractors.                              percent would need a
                                                                               crane.
238220............................  Plumbing, Heating,                87,501  Estimated that only 1          875
                                     Air Conditioning                          percent would need a
                                     Cont.                                     crane.
238290............................  Other Building                     6,087  Estimated that only            609
                                     Equipment Const.                          10 percent would
                                                                               need a crane.
238310............................  Drywall and                       19,598  Work performed does              0
                                     Insulation                                not require crane.
                                     Contractors.                              Site crane used on
                                                                               multi-story
                                                                               structures.
238320............................  Painting and Wall                 38,943  Estimated that only 1          389
                                     Coverings                                 percent would need a
                                     Contractors.                              crane.
238330............................  Flooring Contractors.             12,865  Work performed does              0
                                                                               not require crane.
238340............................  Tile and Terrazzo                  8,950  Work performed does              0
                                     Contractors.                              not require crane.
238350............................  Finish Carpentry                  35,087  Work performed does              0
                                     Contractors.                              not require crane.
238390............................  Other Building                     3,729  Work performed does              0
                                     Finishing                                 not require crane.
                                     Contractors.
238910............................  Site Preparation.....             30,496  Estimated that only          3,050
                                                                               10 percent of
                                                                               establishments
                                                                               (large employers
                                                                               that work on high
                                                                               rises) would require
                                                                               cranes.
----------------------------------------------------------------------------------------------------------------

Affected Establishments and Employees
    This section describes OSHA's method for estimating the number of
affected establishments and employees in construction for each of the
five affected construction industry sectors. The Agency derived
estimates of the number of affected employees and establishments
primarily from CB data on establishments, employees, annual payroll,
and revenues (see Table B-2).
    The CB also collects data on establishments that have reported
revenue from renting cranes with operators (``cranes,'' which are more
numerous than derricks, will be used throughout this section as
shorthand for

``cranes and derricks''). This data was acquired via special data runs
by CB for OSHA. This data includes crane-rental revenue percentages
which OSHA used to determine separate estimates for those
establishments that (1) rent cranes with operators as their main
revenue source, and (2) rent their cranes to other firms when they are
not using them. Thus, the Agency was able to compile profile estimates
for employers who (1) provide crane rental with operators (which are
only found in NAIC 238990), and (2) own and rent cranes with operators
(which are found across several NAICS codes). The Crane Rental without
Operators category consists of establishments in NAICS 532412 that rent
cranes without operators (also known as bare rentals) that fall within
the scope of this proposal. Estimates for the Own but Do Not Rent
category are based on the assumption that ten percent of all
establishments in the construction industry own their own cranes, but
do not rent them when they are not using them. The last category, Crane
Lessees, consists of all of the other construction establishments that
do not own their own cranes, but only lease cranes from crane-rental
companies or other companies that own cranes. In preparing this profile
of industries affected by the proposal, OSHA assumed that the proposed
rule would affect all establishments that either rent or use cranes in
construction activities.
    Among the affected crane-rental industries, the largest is the
Crane Rental without Operators (bare rentals) (NAICS 532412
Construction/Mining/Forestry Machine and Equipment Rental), with an
estimated 4,631 affected establishments and 50,409 employees. The
largest crane-use industry is Commercial and Institutional Building
Construction (NAICS 236220), with an estimated 37,208 affected
establishments and 715,896 employees.
Crane Rental with Operators
    This sector consists of 1,240 affected establishments (part of
NAICS 238990 All Other Specialty Trade Contractors) that rent cranes
with operators. These establishments employ 16,244 employees and have
total revenues of $1.9 billion. The profit rate for this NAIC is 4.1
percent. The CB data did not report estimates of the number of firms.
The Agency estimated the number of firms by assuming a 1:1 ratio of
establishments to firms in the less-than-20-employee size class. For
all other size classes, the Agency multiplied the number of
establishments by 75 percent to estimate the number of firms. These
ratios of establishments to firms are typical for the size classes in
the construction industry. Based on revenues for this sector and an
estimate of the total number of cranes in use, the Agency estimated
that each crane generates about $400,000 in average annual revenue, and
so estimated the average number of cranes per establishment, by size
class, by dividing the average revenues per establishment by $400,000.
The Agency estimated that there is, on average, one crane operator for
each crane in this sector since this category rents cranes with
operators.
Crane Rental without Operators (bare rentals)
    Establishments that rent cranes without operators (bare rentals)
are incorporated into NAICS 532412 Construction, Mining, and Forestry
Machinery and Equipment Rental and Leasing. The Agency estimated that
there are 4,631 affected establishments in this NAIC engaged in
construction activity, with over 50,000 employees and revenues of $3.2
billion. The profit rate for this industry is 4.0 percent. Since the
D&B data did not report estimates of the number of firms, OSHA used
2002 Small Business Administration (SBA) data for firms in the less-
than-20-employee size class (the only size class in this category
considered to be small by SBA). An estimate of the number of cranes was
derived by dividing the revenues per establishment by the estimated
$250,000 that each crane generates in average annual revenue (less than
the average revenue per crane rented with operators). The Agency
estimated that the ratio of cranes-to-operators is 4:1 for this
category since establishments in this category rent cranes without
operators.
Own and Rent Cranes with Operators
    The CB identified establishments that own cranes and rent them when
they are not being used. These 1,803 establishments employ 40,639
employees with total annual revenues of $6 billion. The profit rate for
the firms in these sectors ranged from 3.9 to 4.7 percent. The Agency
assumed a 1:1 ratio of establishments to firms, in most cases, for
those establishments with less than 20 employees. For all others, the
Agency multiplied the number of establishments by 75 percent to
estimate the number of firms. To derive an estimate of the number of
cranes, OSHA divided the per establishment revenues by the $400,000
which each crane generates in average annual revenue. The Agency used a
1:1 ratio of cranes-to-operators to estimate the number of crane
Operators.
Own but Do Not Rent
    To estimate the number of establishments that Own but Do Not Rent,
the Agency subtracted those establishments that own and rent cranes
from the total number of construction firms per NAICS sector. This
difference was then multiplied by 10 percent to estimate the number of
establishments that own cranes but do not rent them. Since most cranes
in construction are leased, 10 percent seemed a reasonable estimate of
establishments that own cranes but do not rent them. The CB provided
estimates of establishments, employees, and revenues per NAICS sector.
To estimate the number of firms, the Agency used employment data from
the CB to estimate the average number of employees per establishment.
The Agency assumed a 1:1 ratio of establishments to firms for those
establishments that averaged less than 20 employees. For all others,
the Agency multiplied the number of establishments by 75 percent to
estimate the number of firms. The profit rate for these firms is the
same as for firms in the Own and Rent Cranes with Operators category.
An estimate of the number of cranes was derived by assuming that each
establishment would own, on average, one crane. The Agency assumed a
1:1 ratio of cranes-to-operators for this sector. (Data on the number
of cranes and crane jobs is also presented in section 6 Costs of
Compliance.)
Crane Lessees (in the construction industry)
    The Agency assumed that any NAICS identified from the CB data that
could rent a crane would likely do so, and included all establishments
in those NAICS industries as possible leasees of cranes. The
corresponding estimate of the number of firms was derived using the
same procedure described above for the Own but Do Not Rent category.
Using the estimates from three sectors (Crane Rental with Operators,
Crane Rental without Operators, and Own and Rent Cranes with
Operators), OSHA concluded that, among the cranes that are rented, 74
percent are rented without operators and 26 percent with operators.
Estimates of Number of Cranes and Crane Jobs
    The Agency estimates that there are 96,206 cranes that would fall
under the scope of the proposal. The Preliminary Initial Regulatory
Flexibility Analysis (PIRFA) estimated the number of cranes

at 91,997. Based on comments from small entity representatives (SERs)
during the SBREFA panel meetings, OSHA increased its estimate of the
number of cranes in the Own but Do Not Rent category by increasing to
10 percent the fraction of all construction establishments that may own
cranes but not rent them. OSHA also expanded the Crane Lessees category
to include light and heavy construction entities. This expansion
accounts for the difference in estimates of establishments, firms, and
employees between the PIRFA and in this PEA.
    In the PIRFA, the Agency estimated the number of crane jobs at
368,000 annually, or four jobs per crane. For the purposes of this
analysis, a crane job is defined as beginning when the crane is put
into use and ending when the crane is either moved (which triggers an
assessment of ground conditions and power lines) or when an
increasingly hazardous situation occurs (e.g., excess rain which
affects ground conditions) which triggers other requirements of the
standard. While no SER provided an alternative estimate, some stated
that the Agency's estimate of crane jobs was extremely low. As a result
of these comments, the Agency increased its estimate of the number of
crane jobs to almost 860,000 for all establishments and increased the
average number of annual jobs per crane to 9. OSHA requests comment on
these estimates. (Estimates of the number of cranes and crane jobs can
be found in section 5 Costs of Compliance.)
Estimates of Small Entities
    The Small Business Administration (SBA) publishes industry-specific
size criteria that classify businesses as small entities. The SBA
criteria for small entities in the construction industry are based on
revenue, rather than the number of employees. OSHA used 2002 CB
``Economic Census'' data to associate these revenue criteria with
employment size classes. For each industry sector, the Agency used CB
data to calculate average revenues for entities of each employment size
class and then matched the SBA revenue criterion for that industry with
the size class that had the largest average revenues not exceeding the
SBA criterion.
    Table B-4 shows the estimated number of construction small entities
that meet the SBA criteria for each sector. As shown, the SBA revenue
criteria are so large, given the size of typical construction entities,
that virtually all entities in the industries fall within the SBA
definition of small entities. Almost 99 percent of all construction
establishments are small entities, following the SBA criteria. In
addition to the SBA-defined small entities, the Agency estimated the
number of establishments that are very small (having less than 20
employees). Table B-5 shows the industrial profile for this size class.

              Table B-4--Industrial Profile of SBA Defined Small Entities for the Proposed Standard
----------------------------------------------------------------------------------------------------------------
                                      SBA Size              Affected                           Avg.       Avg.
                                      Standard ---------------------------------   Profit    revenues   profits
       Category/NAIC/Industry          (Less                                        rate       per        per
                                       Than)      Firms     Estabs.   Employees    (pct.)     estab.     estab.
                                       (mil.)                                                ($1,000)   ($1,000)
----------------------------------------------------------------------------------------------------------------
Crane Rental with Operators:
    238990 All Other Specialty           $13.0      1,171      1,223     13,473       4.10     $1,551        $64
     Trade Cont....................
Crane Rental without Operators
 (Bare Rentals):
    532412 Const./Min./For. Machine        6.5      1,782      3,927     20,459       4.00        935         37
     & Equip.......................
Own and Rent Cranes with Operators:
    236115 New Single-Family              31.0        168        168        261       4.41        233         10
     Housing Const.................
    236118 Residential Remodelers..       31.0         21         21         45       4.41        528         23
    236210 Industrial Building            31.0          8         10      1,067       4.41     14,656        646
     Construction..................
    236220 Commercial and                 31.0         21         28        757       4.41      4,603        203
     Institutional Building........
    237110 Water and Sewer Line and       31.0         47         62      1,432       4.65      4,570        213
     Related Struct................
    237120 Oil and Gas Pipeline and       31.0         16         21      1,457       4.65      6,822        317
     Related Struct................
    237130 Power and Communication        31.0         36         36        666       4.65      2,720        126
     Line and Rel..................
    237310 Highway, Street, and           31.0         76        101      6,456       4.65     12,483        580
     Bridge Construction...........
    237990 Other Heavy and Civil          31.0        143        191      5,857       4.65      5,394        251
     Engineering Const.............
    238110 Poured Concrete                13.0        263        263      4,328       4.65      2,256        105
     Foundation and Struct.........
    238120 Structural Steel and           13.0        239        319      7,389       4.65      2,868        133
     Precast Concrete..............
    238130 Framing Contractors.....       13.0         20         20        120       3.90        200          8
    238150 Glass and Glazing              13.0         41         41        328       3.90        631         25
     Contractors...................
    238170 Siding Contractors......       13.0          3          3         18       3.90        827         32
    238190 Other Foundation,              13.0         26         35      1,145       3.90      2,802        109
     Structure, and Building.......
    238210 Electrical Contractors..       13.0         12         12        176       3.90      1,629         63
    238220 Plumbing, Heating, and         13.0          2          3        196       3.90      5,835        227
     Air-Conditioning..............
    238290 Other Building Equipment       13.0        104        138      4,076       3.90      3,801        148
     Contractors...................
    238320 Painting and Wall              13.0         20         20        159       3.90        962         37
     Covering Contract.............
    238910 Site Preparation               13.0        311        311      4,706       3.90      2,146         84
     Contractors...................
                                    ----------------------------------------------------------------------------
         Subtotal..................  .........      1,576      1,803     40,639
Own but Do Not Rent:
    236115 New Single family              31.0      2,906      2,906     11,578       4.41      1,000         44
     housing construction..........
    236116 New Multifamily housing        31.0        213        213      1,886       4.41      3,400        150
     construction..................
    236117 New housing operative          31.0      1,263      1,263     10,212       4.41      5,104        225
     builders......................
    236118 Residential Remodelers..       31.0        825        825      2,721       4.41        543         24
    236210 Industrial building            31.0        223        262      7,955       4.41      2,570        113
     construction..................
    236220 Commercial and                 31.0      3,615      3,615     60,805       4.41      3,661        161
     Institutional Bldg. Const.....
    237110 Water and Sewer Line           31.0        918      1,223     17,260       4.65      2,324        108
     Const.........................
    237120 Oil and gas pipeline           31.0         98        131      7,885       4.65      3,743        174
     construction..................
    237130 Power and communication        31.0        218        291     10,710       4.65      4,656        216
     line const....................
    237210 Land subdivision........        6.0          0          0          0       4.65          0          0
    237310 Highway, street and            31.0         70         93      3,662       4.65      3,225        150
     bridge const..................

    237990 Other heavy and civil          31.0        502        502      6,429       4.65      1,500         70
     eng...........................
    238110 Poured Concrete                13.0        108        108      2,609       4.65      1,000         47
     foundation and struct.........
    238120 Structural steel and           13.0        388        388      6,161       4.65      1,425         66
     precast concrete..............
    238130 Framing Contractors.....       13.0      1,061      1,061     10,059       3.90        798         31
    238140 Masonry Contractors.....       13.0        128        128      1,108       3.90        675         26
    238150 Glass & Glazing                13.0         49         49        428       3.90        900         35
     Contractors...................
    238160 Roofing Contractors.....       13.0        230        230      1,922       3.90        801         31
    238170 Siding Contractors......       13.0         33         33        183       3.90        600         23
    238190 Other foundation,              13.0         10         10        134       3.90        900         35
     structure, building, ext......
    238210 Electrical Contractors..       13.0         60         60        655       3.90      1,100         43
    238220 Plumbing, Heating and          13.0         86         86        828       3.90      1,100         43
     Airconditioning Cont..........
    238290 Other building equipment       13.0         34         45      1,051       3.90      1,664         65
     cont..........................
    238310 Drywall and insulation         13.0          0          0          0       3.90          0          0
     contractors...................
    238320 Painting and wall              13.0         37         37        199       3.90        419         16
     covering contractors..........
    238330 Flooring Contractors....       13.0          0          0          0       3.90          0          0
    238340 Tile and Terrazzo              13.0          0          0          0       3.90          0          0
     contractors...................
    238350 Finish Carpentry               13.0          0          0          0       3.90          0          0
     contractors...................
    238390 Other building finishing       13.0          0          0          0       3.90          0          0
     contractors...................
    238910 Site Preparation........       13.0        271        271      2,401       3.90        962         37
                                    ----------------------------------------------------------------------------
        Subtotal...................  .........     13,346     13,831    168,845
Crane Lessees in the Construction
 Industry:
    236115 New Single family              31.0     29,229     29,229    136,566       4.41      2,116         93
     housing construction..........
    236116 New Multifamily housing        31.0      2,130      2,130     21,496       4.41      7,606        335
     construction..................
    236117 New housing operative          31.0     12,634     12,634    116,566       4.41     10,692        472
     builders......................
    236118 Residential Remodelers..       31.0      8,274      8,274     32,018       4.41      5,442        240
    236210 Industrial building            31.0      2,633      2,633     75,701       4.41      6,307        278
     construction Commercial and
     Institutional.................