[Federal Register Volume 80, Number 33 (Thursday, February 19, 2015)]
[Proposed Rules]
[Pages 9151-9187]
[FR Doc No: 2015-02714]

Vol. 80

Thursday,

No. 33

February 19, 2015

Part V

 Department of Homeland Security

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 Coast Guard

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46 CFR Parts 8 and 197

Commercial Diving Operations; Proposed Rule

Federal Register / Vol. 80 , No. 33 / Thursday, February 19, 2015 /
Proposed Rules

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

46 CFR Parts 8 and 197

[Docket No. USCG-1998-3786]
RIN 1625-AA21

Commercial Diving Operations

AGENCY: Coast Guard, DHS.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Coast Guard proposes to amend its regulations for
commercial diving that is conducted from deepwater ports or deepwater
port safety zones, or in connection with Outer Continental Shelf (OCS)
activities, or from vessels that are required to have a Coast Guard
certificate of inspection. The regulations would be revised and updated
to improve safety and to reflect current industry best practices. The
proposed regulations would also allow the Coast Guard to approve
independent third-party organizations to assist with ensuring
regulatory compliance of commercial diving regulations. The proposed
amendments promote the Coast Guard's maritime safety mission.

DATES: Comments and related material must either be submitted to our
online docket via http://www.regulations.gov on or before May 20, 2015
or reach the Docket Management Facility by that date. Comments sent to
the Office of Management and Budget (OMB) on collection of information
must reach OMB on or before May 20, 2015.

ADDRESSES: Submit comments using one of the listed methods, and see
SUPPLEMENTARY INFORMATION for more information on public comments.
     Online--http://www.regulations.gov following Web site
instructions.
     Fax--202-493-2251.
     Mail--Docket Management Facility (M-30), U.S. Department
of Transportation, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590-0001.
     Hand deliver--mail address, 9 a.m. to 5 p.m., Monday
through Friday, except Federal holidays (telephone<PHONE_NUMBER>).
    Collection of information. You must submit comments on the
collection of information discussed in section IX.D of this preamble
both to the Coast Guard's docket and to the Office of Information and
Regulatory Affairs (OIRA) in the White House Office of Management and
Budget. OIRA submissions can use one of the listed methods.
     Email<EMAIL_ADDRESS>(include
the docket number and ``Attention: Desk Officer for Coast Guard, DHS''
in the subject line of the email).
     Fax--202-395-6566.
     Mail--Office of Information and Regulatory Affairs, Office
of Management and Budget, 725 17th Street NW., Washington, DC 20503,
ATTN: Desk Officer, U.S. Coast Guard.
    Viewing material proposed for incorporation by reference. Make
arrangements to view this material by calling the Coast Guard's Office
of Regulations and Administrative Law at<PHONE_NUMBER> or by emailing
<EMAIL_ADDRESS>
FOR FURTHER INFORMATION CONTACT: If you have questions on this proposed
rule, call or email Mr. Ken Smith, Project Manager, U.S. Coast Guard,
Headquarters, Vessel and Facility Operating Standards Division,
Commandant (CG-OES-2); telephone<PHONE_NUMBER>, email
<EMAIL_ADDRESS>If you have questions on viewing or submitting
material to the docket, call Cheryl Collins, Program Manager, Docket
Operations, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Table of Contents for Preamble

I. Public Participation and Comments
II. Abbreviations
III. Basis and Purpose
IV. Background
V. Discussion of Comments on 2009 ANPRM
VI. Discussion of Proposed Rule
VII. Requests for Specific Comments
VIII. Incorporation by Reference
IX. Regulatory Analyses
    A. Regulatory Planning and Review
    B. Small Entities
    C. Assistance for Small Entities
    D. Collection of Information
    E. Federalism
    F. Unfunded Mandates Reform Act
    G. Taking of Private Property
    H. Civil Justice Reform
    I. Protection of Children
    J. Indian Tribal Governments
    K. Energy Effects
    L. Technical Standards
    M. Environment

I. Public Participation and Comments

    We encourage you to submit comments (or related material) on this
rulemaking. We will consider all submissions and may adjust our final
action based on your comments. Comments should be marked with docket
number USCG-1998-3786, and should provide a reason for each suggestion
or recommendation. You should provide personal contact information so
that we can contact you if we have questions regarding your comments;
but please note that all comments will be posted to the online docket
without change and that any personal information you include can be
searchable online (see the Federal Register Privacy Act notice
regarding our public dockets, 73 FR 3316, Jan. 17, 2008).
    Mailed or hand-delivered comments should be in an unbound 8\1/2\ x
11 inch format suitable for reproduction. The Docket Management
Facility will acknowledge receipt of mailed comments if you enclose a
stamped, self-addressed postcard or envelope with your submission.
Documents mentioned in this notice, and all public comments, are in our
online docket at http://www.regulations.gov and can be viewed by
following the Web site's instructions. You can also view the docket at
the Docket Management Facility (see the mailing address under
ADDRESSES) between 9 a.m. and 5 p.m., Monday through Friday, except
Federal holidays.
    We are not planning to hold a public meeting but will consider
doing so if public comments indicate a meeting would be helpful. We
would issue a separate Federal Register notice to announce the date,
time, and location of such a meeting.

II. Abbreviations

ACDE Association of Commercial Diving Educators
ADCI Association of Diving Contractors International
ANPRM Advance notice of proposed rulemaking
ANSI American National Standards Institute
ASME American Society of Mechanical Engineers
CDO Commercial Diving Operator
CFR Code of Federal Regulations
CG Coast Guard
DHS Department of Homeland Security
DMT Diving medical technician
FR Federal Register
IMO International Maritime Organization
MISLE Marine Information for Safety and Law Enforcement
NAICS North American Industry Classification System
NOSAC National Offshore Safety Advisory Committee
NPRM Notice of proposed rulemaking
OCMI Officer in Charge, Marine Inspection
OCS Outer Continental Shelf
OMB Office of Management and Budget
OSHA Occupational Safety and Health Administration
Psi (g) Pounds per square inch (gauge)
RA Regulatory Analysis
SCUBA Self-contained underwater breathing apparatus
Sec.  Section symbol
TPO Third-party organization
U.S.C. United States Code

III. Basis and Purpose

    The legal basis for this notice of proposed rulemaking (NPRM) is 33
U.S.C. 1509(b), which requires safety regulations for deepwater ports;
43 U.S.C. 1333(d)(1), which permits safety regulations for Outer
Continental Shelf (OCS) facilities and their equipment; 46 U.S.C. 3306,
which requires regulations to implement subtitle II of Title 46 of the
U.S. Code with respect to inspected vessels, including offshore supply
vessels and their equipment; 46 U.S.C. 3703, which requires safety and
environmental protection regulations for liquid bulk dangerous cargo
carriers and their equipment, to be issued after consultation with
Federal, State, and local governments and with private sector entities
(we specifically request interested government agencies and private
sector entities to comment on this NPRM); and 46 U.S.C. 6101, which
requires regulations for reporting and investigating marine casualties.
The Secretary of Homeland Security's authority under all of these
statutes has been delegated to the Commandant of the Coast Guard by
Department of Homeland Security Delegation No. 0170.1, para. II (75),
(90), and (92).
    The purpose of the NPRM is to propose revisions and updates to our
existing commercial diving regulations, to improve safety, to reflect
current industry best practices, and to facilitate the use of approved
third-party organizations to ensure regulatory compliance.

IV. Background

    History. The Coast Guard issued commercial diving operation
regulations (found at 46 CFR part 197, subpart B), in 1978. Generally,
the regulations apply to commercial operations conducted from deepwater
ports (such as offshore liquefied natural gas facilities), or as a part
of OCS activities, or from vessels that are required to have a Coast
Guard certificate of inspection.\1\ Commercial diving operations
conducted near shore or in U.S. internal waters from a vessel not
required to have a Coast Guard certificate of inspection are not
covered by Coast Guard regulations, but are regulated by the
Occupational Safety and Health Administration (OSHA).\2\
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    \1\ 46 CFR 197.202.
    \2\ 29 CFR 1910.401-1910.441, 1915.6.
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    We began this rulemaking in 1994 at the request of an industry
group now known as the Association of Diving Contractors International
(ADCI). Among other recommendations for updating our 1978 regulations,
ADCI suggested the Coast Guard incorporate its consensus standards into
regulation. We issued our first advance notice of proposed rulemaking
(ANPRM) in 1998 \3\ and noted that our regulations were then already 20
years old and did not reflect the latest safety and technology
standards and industry best practices. In 2009, a second ANPRM \4\
discussed in detail the public comments we received for the 1998 ANPRM,
recounted the early history of the rulemaking, and summarized
developments between 1998 and 2009. The public comments received on the
1998 ANPRM revealed a deep split of opinion as to which industry
group's standards should be incorporated in our regulations. Our
position in the 2009 ANPRM was to encourage continued industry interest
in this rulemaking and to solicit a new round of public comments.
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    \3\ 63 FR 34840 (Jun. 26, 1998).
    \4\ 74 FR 414 (Jan. 6, 2009).
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    Recommendations to the Coast Guard. We are aware of continuing
issues such as proper dive manning, drill, medical and audit practices/
requirements among others, that have continued to be evident in the
industry. Consequently, in this NPRM, we propose a complete revision of
the commercial diving operation regulations in 46 CFR part 197, subpart
B. In doing so, we are mindful of the recommendations made in the Coast
Guard's 1996 formal investigation report into a commercial diving
fatality involving Cliff's Drilling Rig No. 12 (``the Rig 12 report''),
and of recommendations made in 2008 and 2012 by the Diving Subcommittee
of the National Offshore Safety Advisory Committee (``the NOSAC
report''). (NOSAC is a Federal advisory committee that advises the
Coast Guard on matters related to operations and safety on the OCS.)
All recommendations in the reports discussed above are available in the
online docket at http://www.regulations.gov.
    The Rig 12 report recommended new requirements for additional
safety equipment, standby divers, equipment maintenance records, and
pre-dive planning. This NPRM proposes many of these measures. The Rig
12 report also recommended against delegating Coast Guard dive safety
enforcement duties to third-parties. Although this NPRM proposes the
use of independent third-party auditors, their proposed use is intended
to leverage industry expertise and capabilities, and provide a
framework for Coast Guard enforcement, not to relieve us of our
regulatory responsibilities. Therefore, we do not regard the use of
third-party organizations as being contrary to the Rig 12 report
recommendation.
    The 2008 NOSAC report to the Coast Guard \5\ noted that two
industry groups, ADCI and the International Marine Contractors
Association, had published standards that were more up to date than our
regulations. The 2008 NOSAC report's major recommendations included
avoiding overly-prescriptive requirements that might stifle innovation
in diving safety, developing specific requirements for each diving
mode, and setting training requirements that balance practical
experience with classroom instruction. To implement those major
recommendations, we concluded that it would be better to completely
revise our regulations instead of making the section-by-section changes
NOSAC suggested.
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    \5\ ``NOSAC Diving Subcommittee 46 CFR 197 Sub Part B General
Revision Recommendations,'' Apr. 18, 2008.
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    The 2008 NOSAC report found that audits would be ``of great
benefit'' but ``should be developed, implemented, and performed by
industry in order to ensure full consideration of the operation in that
geographical area.'' We encourage industry to conduct its own audits,
this NPRM proposes the use of Coast Guard-approved third-party
organizations subject to Coast Guard approval and oversight. In
determining whether to approve a third-party organization, we would
take into account the organization's ability to understand operating
conditions within specific geographical areas.
    NOSAC also recommended in 2008 against recognizing self-contained
underwater breathing apparatus (SCUBA) diving as an offshore commercial
diving application. However, our discussions with members of the
commercial diving industry and knowledge of known commercial diving
activities indicates that this mode of diving continues to be used in
some commercial diving operations, especially in shallow water. Since
we are aware that SCUBA continues to be used in commercial diving
activities regulated by the Coast Guard, we believe SCUBA diving should
continue to be addressed in our commercial diving regulations in order
to maintain established minimum safety standards for that mode of
diving.
    In November 2009, NOSAC issued a report to the Coast Guard voicing
concerns about the evacuation and medical treatment of injured workers
from remote OCS facilities. Recognizing the importance of this matter,
we asked NOSAC to reestablish the subcommittee

on commercial diving operations to review and assess the various issues
and challenges associated with providing timely medical attention and
treatment to divers who become ill or are injured while working subsea/
under pressures at remote OCS facilities or from the vessels servicing
them. We asked the subcommittee to review and assess present
capabilities, practices, and procedures for medical treatments and
evacuations for injured divers to shore treatment facilities from
offshore facilities, including industry and government agency resources
and capabilities. We also asked the subcommittee to prepare a final
report for NOSAC's review and approval, recommending how to alleviate
the issues and problems associated with medical treatment or evacuation
of injured divers from remote OCS facilities. On May 8, 2012, NOSAC
made their final report to us, containing the following recommendations
concerning commercial diving operations:
    1. Require a certified diver medical technician on each surface-
supplied and saturation diving operation taking place on the Outer
Continental Shelf in the Gulf of Mexico;
    2. Ensure that the certified diver medical technician in a
saturation diving operation shall have saturation diving certification
and experience;
    3. Ensure that the certified diver medical technician in a surface
diving operation shall have surface diving certification and
experience; and
    4. Ensure a detailed emergency action plan is in place for medical
trauma or barotrauma related injuries for each diving operation.
Environmental parameters, equipment, personnel, onboard medical
supplies for remote operations and logistics should also be considered.
    Our NPRM addresses these recommendations, except that we believe
that certified diver medical technicians may only be necessary for
saturated diving operations, which would be in keeping with current
U.S. industry practices. Presently, the commercial diving industry is
required to have at least one diver medical technician on all
saturation diving projects, in accordance with the 6th edition of the
Association of Diving Contractors, ``International Standards for
Commercial Diving and Underwater Operations.'' Additionally, as part of
adopting this industry standard for saturated diving operations, we
would require an emergency evacuation system to help ensure that divers
undergoing hyperbaric treatment can be safely removed in the event of
an emergency.

V. Discussion of Comments on 2009 ANPRM

    Comments received during the public comment period. The 2009 ANPRM
specifically requested comment on six topics: (1) the possible
regulatory adoption of industry standards, (2) the use of third-party
organizations (TPOs) to conduct regulatory compliance audits, (3)
compliance documentation, (4) recommendations made by the Rig 12
report, (5) regulatory priorities, and (6) regulatory costs and
benefits. We received comments from seven individuals or associations
during the public comment period and, for the most part, the seven did
not explicitly address the six topics we requested.
    One commenter asked if certain other organizations had posted
comments and, if so, how to view their comments. Only one of the
organizations mentioned by this commenter submitted a comment and it
had already been posted online at http://www.regulations.gov. A second
commenter asked the Coast Guard to regulate SCUBA diving for the
commercial harvesting of coral in Hawaii. Coral harvesting is a form of
commercial fishing and, as such, it is not covered by either our
current or our proposed regulations, except when conducted from a Coast
Guard-inspected vessel (most commercial fishing vessels are
uninspected). Another commenter asked us to extend our commercial
diving regulations to all marine assistance towing and salvage industry
vessels. Proposals to extend the applicability of the commercial diving
regulations to vessels or operations that are not now covered by those
regulations are beyond the scope of this rulemaking.
    The fourth commenter expressed support for the use of TPOs to help
provide a consistent level of compliance auditing. We agree with this
comment, and third-party auditing is a central concept of this NPRM.
    The fifth commenter said that visual inspection of diver helmets is
sufficient and that a requirement for annual helmet inspection only
imposes unnecessary cost. Our review of commercial diving casualty data
indicates that visual inspections are not enough to ensure that a
helmet can be used safely in the hazardous conditions for which it is
designed. We propose that helmets, as well as all other essential
diving equipment, be inspected, maintained, and serviced in accordance
with the manufacturer's instructions.
    The sixth commenter, an association, noted its participation in
developing NOSAC's 2008 recommendations for improving our commercial
diving regulations, and confirmed its ongoing interest in improving
safety and efficiency. This comment requires no substantive response.
    The final commenter made 15 specific recommendations. In general,
the recommendations dealt with safety equipment maintenance and repair
guidelines and documentation, and with training requirements for safety
equipment technicians and users. We believe our proposals align with
the intent of those recommendations. The commenter also recommended
specific reporting and chain of custody requirements for equipment
involved in diving fatalities. In the event of a marine casualty or a
serious marine incident, this NPRM proposes requiring the commercial
diving operator (CDO) to suspend the commercial diving operation, take
action to protect the safety of life and the environment, and resume
the operation only after all commercial diving employees have fully
complied with the reporting requirements of 46 CFR part 4.
Additionally, the CDO would be required to analyze the event and take
all reasonable action required to prevent further events from
occurring, arrange for a timely post-casualty audit, and ensure that
any equipment that may have contributed to the event is immediately
removed from service and secured against unauthorized access and any
change in its material condition. This NPRM also proposes requiring
most diving equipment to carry a serial number or other unique
identifier to aid in recording equipment maintenance and to facilitate
casualty investigations. Finally, the commenter recommended
standardizing training for Coast Guard regulatory compliance personnel.
In lieu of standardizing training for Coast Guard regulatory compliance
personnel, this NPRM would augment Coast Guard enforcement activities
through the use of TPOs to provide another method for improving
regulatory compliance. We invite the commenter to consider whether our
NPRM proposals adequately address the concerns and to comment on those
proposals.
    Late comments. We also received six comments after the close of the
public comment period.
    The first late commenter said we should license all dive
supervisors and life support technicians, that licensed supervisors and
technicians should not be removed during diving operations except at
their own request or for cause, and that we should make unannounced
dive site inspections. We do not have authority to license commercial
divers

or dive support personnel at this time. However, in this NPRM, we
propose requiring commercial diving personnel to have the knowledge,
skills, experience, and certification necessary to perform their
assigned duties. Many of the desirable outcomes of a Coast Guard
licensing program would be provided for by completing the training and
experience requirements defined in this NPRM. We would enforce
compliance through documentation requirements, inspections, and third-
party audits. This commenter also recommended United States and British
coordination of dive personnel requirements. We believe our
incorporation of the international dive standards of ADCI and of
International Maritime Organization (IMO) Assembly Resolution
A.831(19), the International Code of Safety for Diving Systems, meets
the intent of the commenter.
    The other late commenters all suggested minimum dive team size and
composition requirements. This NPRM reflects many of those suggestions
and we are interested in hearing from the public as to whether our
proposed minimum requirements are appropriate.

VI. Discussion of Proposed Rule

    We propose revising the 1978 commercial diving regulations in
subpart B of 46 CFR part 197 (Marine Occupational Safety and Health
Standards, General Provisions). The scope of diving operations affected
by these regulations would not change, and affected diving operators
would still be able to substitute alternative measures, standards, or
equipment if those can be shown to provide an equivalent level of
safety. However, we would replace most of the regulations that impose
specific operational, personnel, and equipment requirements with new
regulations that draw on industry's best practices incorporated in
ADCI's current consensus standards. We would also incorporate ADCI's
commercial diver training requirements which are based in part on the
consensus standards of the Association of Commercial Diving Educators
(ACDE). Our proposed regulatory language does not duplicate all the
provisions of either the ADCI or ACDE standards, but instead adapts
them to create a new regulatory baseline. Affected diving operations
would have to comply with that baseline, but where they can use
practices that provide greater safety than our baseline, we encourage
them to voluntarily do so.
    The 2009 ANPRM \6\ discussed our preference for using ``regulations
as a tool to encourage compliance, before injuries or deaths occur,
rather than as a way of punishing violators in the wake of a tragedy.''
Currently, the enforcement of commercial diving regulations is governed
by the general civil and criminal penalty procedures found in 33 CFR
subpart 1.07, and on the authority to initiate personnel actions
against licensed mariners authorized under 46 CFR subchapter A
(Procedures Applicable to the Public). We will retain these tools but
believe they, alone, are inadequate to prevent accidents from
happening. Therefore, this NPRM focuses on proactively promoting and
supporting appropriate administrative, operational, and auditing
environments to ensure or improve safety. Under our proposals,
commercial diving operators would have to provide additional compliance
documentation. Coast Guard personnel or approved TPOs would be
authorized to inspect operator records, observe diving operations, and
interview an operator's employees.
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    \6\ 74 FR 414, 415.
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    In some diving accidents, the dive team has been so small that it
was unable to respond to the emergency or retrieve a disabled diver in
time to avoid a serious injury or death. Often, a single dive team
member holds multiple duties (for example serving as both the dive
supervisor and as a standby diver). This NPRM proposes new minimum
standards for the size and composition of dive teams. We also propose
prohibiting standby divers from having multiple duties that could
interfere with their ability to focus on their primary role or respond
adequately to an emergency. These proposals are based on manning levels
adopted by the ADCI and the International Association of Oil and Gas
Producers. They are minimum levels for safe team operation in the
emergency conditions that can readily arise in a dynamic operating
environment.
    We propose requiring U.S. inspected vessels conducting commercial
diving operations in any waters and foreign vessels conducting diving
operations on the U.S. Outer Continental Shelf to meet the IMO's
International Code of Safety for Diving Systems.\7\ This will help
ensure that diving systems are designed, constructed, and surveyed in
accordance with an accepted international standard. A diving system
safety certificate would provide evidence of compliance. This
certificate would be issued to a U.S. vessel by a recognized
classification society; a foreign vessel's certificate would be issued
by its flag state or their delegated authority.
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    \7\ IMO Assembly Resolution A.831(19).
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    Finally, we propose using TPOs to audit CDOs and determine, on our
behalf, whether or not those CDOs are in compliance with our
regulations. Our proposed use of TPOs to perform delegated regulatory
oversight functions is similar to our longstanding use of recognized
classification societies to perform delegated Coast Guard vessel
inspection and certification functions, as described in 46 CFR part 8
subpart B. These arrangements enable the Coast Guard to make use of a
commercial organization's trained personnel and resources. However, the
Coast Guard specifically seeks public input on the following question:
What merits and drawbacks can be associated with the proposed use of
third parties acting on behalf of the Coast Guard to conduct audits of
commercial diving operations?
    Table 1 shows how the content of the current commercial diving
regulations would be affected by this NPRM. Table 2 provides details
about specific sections in the proposed regulations.

         Table 1--Treatment of Current 46 CFR Part 197 Subpart B Subject Matter in Proposed Regulations
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                                            Proposed 46 CFR part 197
    Current 46 CFR part 197 subpart B              subpart B                           Discussion
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General, 197.201-197.210................  General, 197.201-197.205...  General provisions would be revised and
                                                                        reorganized with no change in substance,
                                                                        except for the addition of new
                                                                        definitions. Current 197.200 (Purpose of
                                                                        subpart) would be removed as
                                                                        unnecessary. Current 197.203 (Right of
                                                                        appeal) would be removed as
                                                                        unnecessarily duplicative of 46 CFR
                                                                        subpart 1.03. Current 197.208
                                                                        (designation of person in charge) and
                                                                        197.210 (designation of diving
                                                                        supervisor) would be replaced by new
                                                                        197.220.
Equipment, 197.300-197.346..............  Equipment, 197.270-197.286.  Equipment provisions would be
                                                                        substantively revised.

Operations, 197.400-197.420.............  Specific Operations,         Operations provisions would be
                                           197.260-197.267.             substantively revised.
Specific Diving Mode Procedures, 197.430- Specific Operations,         New provisions would be added for
 197.436.                                  197.260-197.267.             specific diving modes.
Periodic Tests and Inspections of Diving  Equipment, 197.270-197.286.  Testing and inspection requirements for a
 Equipment, 197.450-197.462.                                            specific item of equipment would appear
                                                                        in the section providing overall
                                                                        equipment requirements for that item.
                                                                        General testing and inspection
                                                                        requirements would appear under
                                                                        ``Operational Duties'' (197.220-197.225)
                                                                        and ``Specific Operations (197.260-
                                                                        197.267).''
Records, 197.480-197.488................  See Discussion column......  Logbook requirements would appear in
                                                                        197.221. Casualty record requirements
                                                                        would appear in 197.224.
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                              Table 2--Proposed New or Amended Regulations, 46 CFR
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           46 CFR section                  Proposed version                 Comment on proposed version
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                     46 CFR Part 8, Subpart C--International Convention Certificate Issuance
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8.320..............................  Classification society       Amend this section to add IMO diving system
                                      authorization to issue       safety certificate to the list of
                                      international certificates.  certificates.
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                            46 CFR Part 197, Subpart B--Commercial Diving Operations
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                                             197.200-197.205 General
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197.200............................  Applicability..............  Add paragraph (d) concerning foreign vessels;
                                                                   otherwise, rewrite current 197.202 for
                                                                   improved clarity but without changing scope.
197.201............................  Definitions................  Current 197.204 definitions with some revision
                                                                   and supplementing to reflect other proposed
                                                                   changes.
197.202............................  Incorporation by reference.  Current 197.205 updated to conform to Office
                                                                   of Federal Register requirements and to
                                                                   reflect other proposed changes.
197.203............................  Equivalents................  Current 197.206 dealing with acceptable
                                                                   regulatory substitutes, revised for clarity
                                                                   without changing the public's ability to use
                                                                   approved substitutes (equivalents) for
                                                                   regulatory standards.
197.204............................  Commercial diving            New provisions requiring certain operations to
                                      operations conducted in      comply with the International Code of Safety
                                      foreign waters.              for Diving Systems and to possess valid
                                                                   diving system safety certificates.
197.205............................  Enforcement................  New provisions giving the Coast Guard
                                                                   additional enforcement authority and
                                                                   requiring certain vessels to document
                                                                   compliance with the International Code of
                                                                   Safety for Diving Systems.
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                                             197.209-197.213 Audits
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197.209............................  Third-party audits.........  New provisions for the internal and external
197.210............................  Internal audits............   auditing of diving-related operations.
197.211............................  External audits............
197.212............................  Pre-audit notification.....
197.213............................  Audit reporting............
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                                       197.220-197.225 Operational Duties
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197.220............................  Commercial diving operators  Places specific regulatory responsibilities on
                                                                   CDOs to ensure full organizational
                                                                   accountability. Current regulations provide
                                                                   specific responsibilities only for the person
                                                                   in charge and dive supervisor.
197.221............................  Persons in charge..........  Largely retains the person in charge's
                                                                   responsibilities listed in current 197.402,
                                                                   while adding new provisions relating to dive
                                                                   planning and dynamic positioning.
197.222............................  Dive supervisors...........  Retains several responsibilities that dive
                                                                   supervisors have under current 197.404, but
                                                                   adds new safety requirements, for example,
                                                                   explicitly giving the dive supervisor final
                                                                   authority over the dive, and requiring the
                                                                   dive supervisor to communicate with dive team
                                                                   members in a language they understand.
197.223............................  Operations manual..........  Largely unchanged from current 197.420, but
                                                                   revised for clarity.
197.224............................  Operational duties in the    Substantively identical to requirements in
                                      event of marine casualty     current 197.484-197.488; revised for clarity.
                                      or serious marine incident.
197.225............................  Safety management system...  New provisions establishing operations under a
                                                                   safety management system.
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                              197.240-197.247 Personnel Training and Qualifications
----------------------------------------------------------------------------------------------------------------
197.240............................  General requirement........  New provisions to set minimum standards,
                                                                   generally and for each dive team position.
197.241............................  Standby divers.............
197.242............................  Dive supervisors...........
197.243............................  Divers and dive tenders....
197.244............................  Life-support technicians...
197.245............................  Saturation technicians.....
197.246............................  Individuals conducting
                                      underwater burning,
                                      welding, or exothermic
                                      cutting.
197.247............................  Diver medical technicians..
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                                 197.250-197.253 Health and Medical Requirements
----------------------------------------------------------------------------------------------------------------
197.250............................  Medical examinations.......  New minimum health and medical standards.
197.251............................  Pre-operational
                                      verification.
197.252............................  Work hours.................
197.253............................  Ascent to altitude after
                                      diving or flying after
                                      diving.
----------------------------------------------------------------------------------------------------------------
                                       197.260-197.267 Specific Operations
----------------------------------------------------------------------------------------------------------------
197.260............................  Operations with potential    New minimum standards for specific operations.
                                      for differential pressures
                                      in adjacent areas.
197.261............................  Operations conducted from a
                                      dynamic positioning vessel.
197.262............................  Operations conducted from a
                                      vessel that is liveboating.
197.263............................  Operations involving SCUBA.
197.264............................  Operations involving
                                      multiple dives by a diver.
197.265............................  Operations in which a
                                      diver's decompression is
                                      required, but has been
                                      omitted.
197.266............................  Operations in contaminated
                                      water.
197.267............................  Operations involving
                                      underwater welding and
                                      burning.
----------------------------------------------------------------------------------------------------------------
                                            197.270-197.286 Equipment
----------------------------------------------------------------------------------------------------------------
197.270............................  General requirements.......  New minimum equipment standards.
197.271............................  Commercial diving
                                      operator's general
                                      equipment duties.
197.272............................  Person in charge's
                                      equipment duties.
197.273............................  Dive supervisor's equipment
                                      maintenance logbook duties.
197.274............................  Diver's equipment duties...
197.275............................  Volume tanks...............
197.276............................  Compressed gas cylinders...  Covers same topic as current 197.338, but adds
                                                                   new industry standard requirement.
197.277............................  Pressure vessels for human   Covers same topic as current 197.328-197.332,
                                      occupancy.                   but adds new industry standard requirement.
197.278............................  Pressure piping............  Similar to current 197.336, but proposes
                                                                   updated industry standard.
197.279............................  First aid and treatment      Covers same topic as current 197.454, but adds
                                      equipment.                   new industry standard requirement and greater
                                                                   detail.
197.280............................  Diving ladders and stages..  Covers same topic as current 197.320, but adds
                                                                   new industry standard requirement.
197.281............................  Surface-supplied helmets     Covers same topic as current 197.322, but adds
                                      and masks.                   new industry standard requirement.
197.282............................  Diver's safety harness.....  Covers same topic as current 197.324, but adds
                                                                   new industry standard requirement.
197.283............................  Buoyancy-changing devices..  Identical to current 197.342.
197.284............................  Inflatable flotation         Identical to current 197.344.
                                      devices.
197.285............................  Oxygen safety..............  Substantively identical to current 197.326 and
                                                                   197.452.
197.286............................  Miscellaneous equipment      See discussion for specific items.
                                      requirements.
                                     --Breathing gas supply,      Similar to current 197.340(e), but adds detail
                                      diver-carried reserve.       for unused ports.
                                     --Breathing gas supply,      Substantively identical to current 197.340(a).
                                      primary.
                                     --Breathing gas supply,      Substantively identical to current 197.340(b).
                                      secondary.
                                     --Oxygen...................  Substantively identical to current 197.340(f).

                                     --Nitrogen.................  Substantively identical to current 197.340(g).
                                     --Helium...................  Substantively identical to current 197.340(h).
                                     --Compressed air...........  Substantively identical to current 197.340(i).
                                     --Diving system power......  New minimum equipment standards.
                                     --Equipment to which a
                                      manufacturer's service
                                      life specification applies.
                                     --Equipment used with
                                      oxygen mixture greater
                                      than 23.5 percent by
                                      volume.
                                     --Gauges and timekeeping     Substantively identical to current 197.318,
                                      devices.                     but adds readability requirement for devices
                                                                   for monitoring diver exposure time under
                                                                   pressure.
                                     --Oxygen system, pressure    Substantively identical to current 197.326.
                                      greater than 125 psi(g).
                                     --Pressure piping repairs..  Covers same topic as current 197.462, but adds
                                                                   new industry standards requirement.
                                     --Pressure vessel repairs..  Covers same topic as current 197.462, but adds
                                                                   new industry standards requirement.
----------------------------------------------------------------------------------------------------------------
                                           197.290 Dive Team Staffing
----------------------------------------------------------------------------------------------------------------
197.290............................  Dive team staffing           New minimum team size and composition
                                      requirements.                standards.
----------------------------------------------------------------------------------------------------------------

VII. Requests for Specific Comments

    We would like more information about the SCUBA dive teams, whether
all dive teams should include medical technicians, and whether or not
we should consider alternative approaches to our proposed regulations.
The following questions relate to these three issues. In response to
these questions we ask for public comments with supporting data and
references if possible.
    SCUBA dive teams. Our first issue is the minimum size of a SCUBA
dive team. Our NPRM proposes setting the minimum at four members, the
same as required by the Army Corps of Engineers, but one more than
OSHA's minimum.
    QUESTION 1: The Coast Guard proposes a SCUBA dive team consisting
of four members, based on the assumption that prudent commercial diving
operators use SCUBA only when conditions are favorable to the diver and
risk is minimal: That is, underwater visibility is greater than 3 feet,
currents are less than 1 knot, and dive depth is no more than 100 fsw
with no decompression. Is that assumption valid? Should a SCUBA dive
team consist of more or fewer than four members? Why? What costs would
be incurred and what benefits would be gained by setting the minimum
higher or lower than four members?
    Medical technicians. The second issue involves certified diving
medical technicians (DMTs). Commercial diving exposes divers to unique
risks and physical challenges, such as barotrauma, that may require
specialized and readily available medical care.
    QUESTION 2: Should a DMT always be available, either as part of the
dive team or at the dive site during a dive? Why or why not? What costs
would be incurred and what benefits would be gained by requiring this
level of availability?
    Alternative approaches. Our third issue involves alternative
approaches.
    QUESTION 3: Under one alternative to our proposals, the Coast Guard
would not directly oversee TPO audits of commercial diving operations
and would allow TPOs to self-certify that their audits comply with
Coast Guard standards. However, we would indirectly oversee audits by
investigating reported marine casualties and associated civil penalty
proceedings. Under a second alternative, neither the Coast Guard nor a
TPO would conduct inspections or audits of commercial diving
operations. The only compliance oversight would come through casualty
investigations and civil penalty proceedings.
    The Coast Guard requests input on what merits and drawbacks may be
associated with these two alternative approaches?

VIII. Incorporation by Reference

    Material for incorporation by reference appears in proposed 46 CFR
197.202. See ADDRESSES for information on viewing this material. Copies
of the material are available from the sources listed in Sec.  197.202.
Before publishing a binding rule, we will submit this material to the
Director of the Federal Register for approval of the incorporation by
reference.
    The following are proposed for incorporation by reference:
International Consensus Standards for Commercial Diving and Underwater
Operations, 6th Edition, 2010 (``ADCI Standards''): Industry consensus
standards for commercial diving and underwater operations for
commercial divers, tenders, deck support personnel and supervisors
including requirements and guidelines for training, qualification, and
certification of commercial divers and conducting various types of
diving operations.
    IMO Resolution A.831(19), International Code of Safety for Diving
Systems, 1995: Internationally accepted minimum standards for design,
construction and survey of diving systems on ships and floating
structures engaged in commercial diving operations. IMO Resolution
A.692(17), Guidelines and Specifications for Hyperbaric Evacuation
Systems: International guidelines and specifications developed for
design and operation of hyperbaric evacuation systems.
    ASME PVHO-1-2012, Safety Standard for Pressure Vessels for Human
Occupancy, 2012 (``ASME PVHO-1''): American standard for design,
materials, fabrication, tests, inspection and marking of pressure
vessels used for human occupancy.
    ASME B31.1-2010, ASME Code for Pressure Piping, Power Piping, 2010
(``ASME B31.1''): American standard for design, materials, fabrication,
tests, inspection, operation and maintenance of pressurized piping
systems.
    ASME National Board Inspection Code, NBBPVI, NB23-2011 (``ASME
NBBPVI''): American standard for inspection, repair and alteration of
boilers, pressure vessels, and pressure relief devices.

    ANSI/ISO 15618-1:2001, Qualification testing of welders for
underwater welding--Part 1: Diver-welders for hyperbaric wet welding
(``ANSI/ISO 15618''): American standard specifying essential
requirements, ranges of approval, acceptance requirements and
certification for approval testing of diver-welder performance for
welding steels underwater in hyperbaric wet environments.
    ANSI/ACDE-01-2009, Divers--Commercial Diver Training--Minimum
Standards, (``ANSI/ACDE-01-2009''): American standard specifying
minimum standards for commercial diver training including what is to be
taught, minimum length of training required, minimum qualifications of
instructors, and minimum facilities and equipment required to support
commercial diver training.
    Publication G-4.1, Cleaning Equipment for Oxygen Service, 2009
(``Compressed Gas Association Publication G-4.1''): Cleaning methods
for cleaning equipment used in production, storage, distribution, and
use of liquid and gaseous oxygen.
    Publication G-7, Compressed Air for Human Respiration, 6th Edition,
2008, (Compressed Gas Association Publication G-7''): Information
relative to preparation, transportation, handling, storage, and use of
compressed air used for human respiration. Publication G-7.1, Commodity
Specification for Air, 6th Edition, 2011, (Compressed Gas Association
Publication G-7.1): Specification requirements for air and data
concerning quality, verification systems, sampling, analytical
procedures, and typical uses for various grades and supplemental
specification tables.
    Federal Specification, BB-N-411C, Nitrogen Technical, 2000
(``Federal Specification BB-N-411C''): U.S. Federal specification
outlining requirements for properties, purity, types, grades, classes,
handling and storage of gaseous and liquid nitrogen.
    Federal Specification, Oxygen, Technical, Gas and Liquid, BB-O-
925a, 1961 (``Federal Specification BB-O-925a''): U.S. Federal
specification outlining specification and standards for purity,
sampling, inspection, testing, handling, storage and delivery of
gaseous and liquid oxygen.
    ISO 9001--2008, Quality Management Systems--Requirements:
International standard specifying requirements for establishing,
documenting, implementing, and maintaining a quality management system.
    ISO 15618--2001, Qualification testing of welders for underwater
welding--Part 1: Diver-welders for hyperbaric wet welding:
International standard specifying essential requirements, ranges of
approval, test conditions, acceptance requirements and certification
for approval testing of diver-welder performance for welding steels
underwater in hyperbaric wet environments.
    U.S. Navy Diving Manual, 6th Edition, April 2008: Specifications
for diving principles and policies, air diving, mixed-gas surface
supplied diving, closed-circuit and semiclosed-circuit diving, and
diving medicine and recompression chamber operations .

IX. Regulatory Analyses

    We developed this proposed rule after considering numerous statutes
and Executive Orders (E.O.s) related to rulemaking. Below we summarize
our analyses based on these statutes or E.O.s.

A. Regulatory Planning and Review

    E.O.s 12866 (``Regulatory Planning and Review'') and 13563
(``Improving Regulation and Regulatory Review'') direct agencies to
assess the costs and benefits of available regulatory alternatives and,
if regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety effects, distributive impacts, and equity).
Executive Order 13563 emphasizes the importance of quantifying both
costs and benefits, of reducing costs, of harmonizing rules, and of
promoting flexibility.
    This proposed rule is not a significant regulatory action under
section 3(f) of Executive Order 12866, Regulatory Planning and Review,
as supplemented by Executive Order 13563, Improving Regulation and
Regulatory Review. The Office of Management and Budget (OMB) has not
reviewed it under that Order. Nonetheless, we developed an analysis of
the costs and benefits of the proposed rule to ascertain its probable
impacts on industry. We consider all estimates and analysis in this
Regulatory Analysis (RA) to be preliminary and subject to change in
consideration of public comments. A draft Regulatory Analysis including
a draft preliminary Initial Regulatory Flexibility Analysis (IRFA) is
available in the docket where indicated under the ``Public
Participation and Request for Comments'' section of this preamble. A
summary of the preliminary Regulatory Analysis and Initial Regulatory
Flexibility Analysis follows. Our preliminary RA provides an evaluation
of the impacts associated with this proposed rule. Table 3 below
provides a summary of the affected population, costs, and benefits of
the proposed rule.

 Table 3--Summary of the Affected Population, Costs and Benefits of the
                                  NPRM
------------------------------------------------------------------------
             Category                              Summary
------------------------------------------------------------------------
Applicability.....................  Diving undertaken in connection with
                                     commercial operations conducted
                                     from deepwater ports (such as
                                     offshore liquefied natural gas
                                     facilities), or OCS activities, or
                                     from vessels that are required to
                                     have a Coast Guard certificate of
                                     inspection; 46 CFR 197.200.
Affected Population...............  87 owners or operators of commercial
                                     diving operations (mainly heavy
                                     offshore marine construction or
                                     working from USCG-certificated
                                     vessels). 12 TPOs.
Costs ($, 7 percent discount rate)  Annualized:
                                    Manning: $1,460,500.
                                    Non-Manning: $350,000.
                                    Total: $1,811,000.
                                    10-Year:
                                    Manning: $14,606,000.
                                    Non-Manning: $3,501,000.
                                    Total: $18,107,000.
Benefits ($, 7 percent discount     Monetized Benefits from Manning
 rate).                              Requirement
                                    Annualized:
                                    Fatalities: $2,366,000.
                                    Injuries: $116, 935.
                                    Total: $2,482,935.

                                    10-Year:
                                    Fatalities: $23,660,000.
                                    Injuries: $1,169,350.
                                    Total: $24,635,350.
                                    Annualized Net Benefits: $1,056,000.
                                    Benefits attributable to other
                                     requirements cannot be quantified
                                     easily since they intersect with
                                     all improvements.
                                    Breakeven analysis on other rule
                                     items yields anywhere from 1
                                     fatality per 44 years to 1 fatality
                                     every 3,056 years to breakeven.\8\
                                    Sets one industry standard, and
                                     provides Coast Guard with
                                     additional inspection options to
                                     implement commercial diving
                                     operations.
------------------------------------------------------------------------

    The purpose of this proposed rule is to save lives by revising and
updating our existing commercial diving regulations to reflect current
industry best practices.
---------------------------------------------------------------------------

    \8\ See RA's Appendix D for Breakeven Calculations.
---------------------------------------------------------------------------

    Agencies take regulatory action for several reasons, one being the
failure of markets to reach the socially optimal outcome. This can
occur when there are economic incentives lacking for industry to pursue
that outcome and such market failures are the impetus for this proposed
rule. A negative externality is the by-product of a transaction between
two parties that is not accounted for in the transaction. Vessels that
operate with lower safety standards may cause harm or increased risk of
harm without accounting for the consequences to third parties, who do
not directly participate in the business transactions of the business
entities such as merchant seaman. These costs are not borne by the
responsible entities and are therefore external to the business
decisions of the responsible entity.
    The casualties resulting from commercial diving accidents are an
example. The cost of the higher safety standards is typically borne by
the vessel owner while the cost of an accident could be distributed
across various entities, including the vessel owner, other vessel
owners, related maritime businesses and commercial diver teams. These
costs can be in the form of injuries and death.
    The material failure of the private market increases the risk to
other parties. There exists an uncompensated increase in risk due to
potentially inconsistent safety practices in the commercial diving
industry. Consequently, regulatory action is required to spur the
industry to take action to reduce risk industry-wide and therefore
attain the socially optimal outcome.
    The functional benefits of this proposed rule are to reduce the
number of accidents in all commercial diving operations that the Coast
Guard has responsibility for (especially the offshore diving industry),
as well as to minimize the adverse impacts in the event that an
accident occurs.
Affected Population
    Based on a review of current Association of Diving Contractors
International industry information and Bureau of Labor Statistics
diving population data, there are almost 200 domestic firms involved in
commercial diving operations, of which 87 are subject to Coast Guard
jurisdiction. Approximately 75 of these firms are registered with ADCI
and, as such, are required to comply with the ADCI consensus standards.
We estimate there are 12 firms covered by Coast Guard jurisdiction that
are not members of ADCI. Table 4 demonstrates generally how Coast Guard
went from the commercial diving population to a distribution of dive
types and firms both within the ADCI framework and without.

                                         Table 4--USCG Regulated Commercial Diving by Type and Firm Composition
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Population of USCG regulated commercial divers by type
                                                         --------------------------------------------------------------------------------
                                                                                Surface supplied air ***
                          Item                                                           --------------------------------                      Total
                                                           Saturation *      SCUBA **       100 fsw/no                       Mixed gas
                                                                                decompression       Other
--------------------------------------------------------------------------------------------------------------------------------------------------------
ADCI Divers.............................................             336              40              93             191              96             756
Non-ADCI Divers.........................................               0               0              20              35  ..............              55
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................             336              40             113             226              96             811
--------------------------------------------------------------------------------------------------------------------------------------------------------
ADCI Dive teams.........................................              24              10              23              38              19             114
Non-ADCI Dive Teams.....................................               0               0               5               7               0              12
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................              24              10              28              45              19             126
--------------------------------------------------------------------------------------------------------------------------------------------------------
ADCI Marine Firms ****..................................              12              10              13              21              19              75
Non-ADCI Marine Firms *****.............................               0               0               5               7               0              12
                                                         -----------------------------------------------------------------------------------------------

    Total...............................................              12              10              18              28              19              87
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Number of Saturation Vessels * 14 crewman * 2 crews.
** USCG estimate of 5% of total diver population.
*** USCG estimates based upon ADCI member distribution.
**** Known number of ADCI firms.
***** Inferred Number of Firms based upon ``excess'' (not accounted for in ADCI) Diver population.

[GRAPHIC] [TIFF OMITTED] TP19FE15.032

    The key population subset affected by the manning additional costs
is the Surface Supplied Air 100fsw/no decompression mode. As shown in
Table 5, both ADCI and no-ADCI firm groups are affected given the CG
decision to increase the number of dive team members by one number.
Most of the remaining costs impact the non-ADCI members, since we
cannot confirm they are following ADCI protocols. Also, one
qualification for saturation diving, that of taking a medical course
every two years for saturation diving technicians, is an additional
requirement for ADCI divers in that mode. Since we assume that non-ADCI
commercial diving is composed of small firms and simpler diving modes
than the complex saturation diving mode, this requirement does not
affect them.
    In addition, total TPO (auditor) population is expected to be 12.
The TPO population includes current 10 auditors and the two estimated
to be required by the non-ADCI firms.
Regulatory Alternatives
    We considered four alternatives before settling on the approach
proposed in this notice of proposed rulemaking (NPRM).
    1. Take no action. We would leave the existing regulations in place
without updating them. Voluntary compliance with commercial diving
industry consensus standards and the possibility of civil liability
would continue to be the primary drivers of improvements in commercial
diver safety. We think this is inconsistent with our regulatory

responsibility to promote safety, and it also ignores the fact that
some members of industry and the general public have criticized our
existing regulations for being out of date.
    2. Develop an international code. We would work with the
International Maritime Organization to update its Code of Safety for
Diving Systems, and adopt it as being applicable to all U.S. commercial
diving operations wherever they were occurring. This could promote
diver safety, and we do not rule out continued involvement in assisting
in development of the standard. However, it would take years to develop
and would not be effective without additional requirements necessary to
further define the vague language that often accompanies international
codes. Furthermore, we believe the existing IMO Code, coupled with the
U.S. regulations we propose in this NPRM, should be applicable for U.S.
vessels on an international voyage, but do not believe the
international requirements should necessarily be imposed on U.S.
vessels that are not engaged on international voyages.
    3. Development of unique Coast Guard regulations: Under this
alternative, the Coast Guard would develop its own updated regulations
without reference to existing industry standards. This would involve
additional regulatory time and effort for the Coast Guard, and
ultimately might produce regulations that are similar to existing
industry standards. However, this alternative would be contrary to the
National Technology Transfer and Advancement Act, 15 U.S.C. 272 note,
which requires agencies to use voluntary private sector consensus
standards in their regulatory activities unless the agency provides
Congress, through OMB, with an explanation of why using these standards
would be inconsistent with applicable law or otherwise impractical.
Additionally, Coast Guard developed standards would likely place diving
firms who are members of ADCI in the position of facing duplicative
enforcement costs, due to the fact that they are already complying with
the ADCI guidelines.
    4. Adopting Industry Standards without Manning Changes Alternative:
We considered and rejected this alternative, which entails proposing
regulations that incorporate accepted industry consensus standards
(e.g. ADCI International Consensus Standards for Commercial Diving and
Underwater Operations, 6th edition), but without an increase in manning
that CG might want. This would codify many current consensus industry
standards and provide enforcement capability. CG would incorporate all
or most of what is in the ADCI consensus standards. However, CG could
not incorporate it in total because some of the items in our existing
regulations are not included in the ADCI standard. Much of what is
written in the proposed regulations is written to augment the consensus
standards to ensure previous requirements are not lost. CG ultimately
rejected this approach, although less expensive, because of the lack of
direct manning benefits in reducing fatalities and injuries.
    5. Accepted alternative: Adaptation of industry standards: We
considered and accepted this alternative, which entails proposing
regulations that incorporate accepted industry consensus standards
(e.g. ADCI International Consensus Standards for Commercial Diving and
Underwater Operations, 6th edition). This will codify many current
consensus industry standards and provide enforcement capability. CG
incorporated most of what is in the ADCI consensus standards. CG could
not incorporate it in total because some of the items in our existing
regulations are not included in the ADCI standard. Much of what is
written in the proposed regulations is written to augment the consensus
standards to ensure previous requirements are not lost. CG used our
existing regulations as a baseline and incorporated ADCI mostly based
on that and the recommendations we got from industry on certain topics.
These requirements also include an increase in manning (by one person)
for the Surface Supplied Air no decompression mode.
    Table 6 summarizes these alternatives.

                                      Table 6--Description of Alternatives
----------------------------------------------------------------------------------------------------------------
            Alternative                       Costs                 Benefits                  Evaluation
----------------------------------------------------------------------------------------------------------------
Take No Action.....................  None..................  None..................  Not preferred because of
                                                                                risks that appear to still
                                                                                exist within the industry
                                                                                in spite of ADCI
                                                                                protocols.
Develop an International Code......  Likely Costlier and     Reduce Remaining Risk.  Not preferred because of
                                      less Timely than best                           timely expense of having
                                      approach due to                                 many parties involved that
                                      Increased No of                                 would have slowed progress
                                      Parties Involved.                               in getting a rule out
                                                                                expeditiously.
Develop Unique Coast Guard           Might be Costlier due   Reduce Remaining Risk.  Not preferred because of
 Regulations.                         to Duplication with                             high risk of duplication
                                      ADCI rules.                                     of many of ADCI protocols
                                                                                that already exist.
Proposed ADCI Duplicative Rule in    $400,000..............  Reduce Remaining Risk.  Marginal Approach
 NPRM without Manning.                                                                especially given ADCI
                                                                                standards that still would
                                                                                not cover all CG desired
                                                                                requirements.
Proposed Rule in NPRM with Manning.  $1.81 million.........  $2.4 million..........  Best Approach consistent
                                                                                with comprehensive,
                                                                                extensive and timely
                                                                                approach that gives the
                                                                                best bang for the buck.
----------------------------------------------------------------------------------------------------------------
Source: USCG.

Costs
    This proposed rule calls for CDOs and commercial divers to comply
with a new regulatory baseline that is based on the industry-developed
consensus standards of ADCI plus certain CG additions (in manning and
medical area). We believe the majority (75 out of 87 identified
commercial diving firms) of the affected population is in compliance
with the proposed baseline. We know that the 75 ADCI firms are in
general (except for manning and medical upgrades from CG) in compliance
or else they would not qualify for ADCI membership. Members of ADCI
must meet the Association's standard or face a suspension of their
membership and potential loss of contracts. For example, ADCI members
who fail an ADCI audit inspired by a complaint or a random audit
exercise, are given time to correct the deficiency. If the deficiency
is not corrected in a reasonable time, ADCI will (and has in the past)
dis-enroll the offending member. Members generally know this

is a dangerous route to take as the re-enrollment process is very
expensive, requiring complete audits of every facet of their operation.
In general, not having the ADCI certification will likely result in
fewer work opportunities particularly with the oil and natural gas
industries.\9\
---------------------------------------------------------------------------

    \9\ Conclusions based upon various USCG conversations with
industry participants.
---------------------------------------------------------------------------

    We have no gauge of any compliance for the inferred non-ADCI firms.
However, we anticipate that some CDOs and divers will need to take
steps to ensure compliance with the proposed audit system, drills and
exercises, medical examination requirements, personal operational
requirements, and reporting/recordkeeping requirements. We assess the
costs for these CDOs and divers not already in compliance with ADCI
(based upon the twelve Non-ADCI firms), as well as for all CDOs and
divers to meet the other requirements added by the Coast Guard.
    The costs impacting this rule are from changes in requirements in
Dive manning, Drills, Audits, Med Issues, Records and Documentation.
Total dive manning industry requirements are based upon 28 (23 ADCI and
5 non-ADCI) incremental divers in that SSA mode. Audits are required
both internally and by external means (TPO) and range from $176-$2,096
depending on the cycle or vessel/firm. Drills can cost from $3300-
$14000 per drill/firm depending on type (Standard Operations Review,
Diver Recovery, or Emergency Rescue) for an annual total cost of
$18000-26000. Medical costs comprise two items: The first item is an
annual medical exam for the 55 non-ADCI divers while the second is a
biennial training session on cardiopulmonary resuscitation (CPR) and
first aid for Saturation Technicians that were not ADCI required (an
oversight expected to be corrected in the near future) training. The
costs of the first medical item are the 55 non-ADCI divers times the
annual medical examination costs plus the records storage costs for a
total $23,375 or ($1948 per firm). The second cost is the $60 cost of
the training every other year times the Saturation Technicians (96) for
a total of $5,760.
    Costs for CDOs are shown in Table 7.

         Table 7--Average Cost per Firm: Commercial Diving NPRM
------------------------------------------------------------------------
                                                          Cost per CDO
                   Rule requirements                        (2012 $)
------------------------------------------------------------------------
Dive Manning..........................................            52,163
Drills................................................     18,220-25,508
Audits................................................             3,549
Recordkeeping & Documentation.........................             2,331
Medical I: Exams......................................             1,948
Medical II: Training..................................               240
Total.................................................     78,211-85,499
------------------------------------------------------------------------
Source: USCG Calculations.

    The majority of the costs are the result of new dive manning
requirements, particularly for surface-supplied air. The proposed costs
are the minimum required as, for example, adding more than one diver
for all of the other modes would not be cost effective and in some
cases. likely counter-productive. The dive manning levels now comport
with industry practices.
    Requirements for dive manning were calculated by first identifying
the marine commercial diving population (BLS, ADCI sources) and
developing the mode (Saturation, SCUBA, 3 types of Surface Supplied
Air, and Mixed Gas) teams as explained in the population development
description. CG subject matter experts considered the ADCI requirements
and then decided another team member (Dive Tender) was necessary for
Surface Supplied Air (100fsw/No decompression mode) (SSAn). The
decision was based upon the notion that all divers in the water had to
have a dive tender taking care of all the umbilical related lines for
the in-the-water diver. That increment was then multiplied times the
number of SSA teams found earlier. The per man cost was from BLS 2012
Commercial Diving Apprentice level and loaded with a 1.42 factor again
based upon BLS information. All labor costs are generally based upon
either an apprentice or a median experienced diver (loaded wages of
$52,000-69,000).
    For TPOs, the total costs estimated are $14.9 thousands of dollars
over ten years due to the NPRM. The majority of costs accrue to labor
requirements for various activities (developing the TPO auditor
application, change of TPO auditor, and storage of audit records).
    We estimate the total 10-year cost of the proposed rule to the
commercial diving industry and third party organizations to be $17.8
million undiscounted, or $12.5 million at a 7-percent discount rate. We
estimate the annualized cost of the proposed rule to be $1.78 million
at a 7-percent discount rate. In addition to the private sector costs,
we estimate the government will incur ($27,874) in annual reporting and
record keeping review costs. This increases the total 10-year cost of
the proposed rule to $18.1 million ($1.81 million annualized, 7-percent
discount rate) (Table 8).

[GRAPHIC] [TIFF OMITTED] TP19FE15.033

Benefits
    The primary benefits of this proposed rule are based on the
reduction in risk of fatalities as well as injuries related to
commercial diving incidents and are estimated from casualties foregone
or mitigated as shown in Table 9.

           Table 9--Rule Requirements and Associated Benefits
------------------------------------------------------------------------
          Rule requirements                         Benefit
------------------------------------------------------------------------
Dive Manning.........................  Requires non-decompression
                                        Surface Supplied Air dive teams
                                        to add a 5th member to handle
                                        lines as a novice member.
Drills...............................  Requires CDO operators to conduct
                                        a series of drills at least
                                        monthly to maintain skill levels
                                        in emergencies.
Audits...............................  Requires all CDOs and associated
                                        vessels to have timely audits to
                                        record existing conditions of
                                        all equipment and record
                                        procedures. Consistent with ADCI
                                        requirements.

Recordkeeping & Documentation........  Requires CDO s to develop and
                                        maintain for 5 years records of
                                        various aspects of CD operations
                                        from equipment maintenance to
                                        diving activities, to CG
                                        notifications, to logbooks.
                                        Maintaining records also assists
                                        the CDO by reminding him or her
                                        that actions are needed to
                                        remain in compliance with the
                                        rules.
Medical I: Exams.....................  Requires all CDs, especially non-
                                        ADCI CDs to obtain an annual
                                        medical exam complete with
                                        hyperbaric analysis emulating
                                        the current ADCI requirements.
Medical II: Training.................  Requires certain members of a
                                        Saturation Dive Team (life
                                        support technician and
                                        saturation technician) to have a
                                        CPR & first aid certification.
------------------------------------------------------------------------

    We reviewed the Marine Information for Safety and Law Enforcement
(MISLE) data set of the commercial diving fatalities from 2002-2011 (12
fatalities- an average 1.2 per year and 8 injuries an average of .8 per
year). Exhibit 1 shows the distribution of fatalities and injuries over
the ten year period.
[GRAPHIC] [TIFF OMITTED] TP19FE15.034

    The incident reports suggest deficiencies in commercial diving
operations, which would be addressed by the proposed provision, For
dive manning, we identified 4 incidents that could benefit from the
NPRM. Specific issues identified include lack of proper manning, lack
of proper medical examination protocols, lack of maintenance of
equipment, lack of drills lack of audits, etc. By identifying specific
issues within each incident that likely would be mitigated by the NPRM,
and applying an effectiveness factor, we were able to estimate a
mitigated value using the value of a statistical life (VSL) approach.

                                  Table 10--Incident Links to the Proposed Rule
----------------------------------------------------------------------------------------------------------------
             Activity ID                  Related provision                       Justification
----------------------------------------------------------------------------------------------------------------
                                                   Fatalities
----------------------------------------------------------------------------------------------------------------
1483715..............................  Personnel Operational    Report indicated a standby diver was not
                                        Requirements.            properly suited up and ready to deploy as
                                                                 required by proposed rule. Investigative
                                                                 officer as well as fellow divers (during
                                                                 interviews) identified this as a potential
                                                                 cause.
                                       Drills.................  Additional drills could have exposed diver to a
                                                                 hot suit, reminded to follow procedures when in
                                                                 trouble, and provided practice on removing
                                                                 equipment.
                                       Audits.................  Regular audit procedures would likely have
                                                                 uncovered issues with equipment maintenance as
                                                                 well as operational procedures and readiness.

1645241..............................  Records & Documentation  Problems were discovered with the helmet.
                                        Related to Equipment     However, diver-owned/-maintained helmet lacked
                                        Inspection.              a comprehensive record of repairs and
                                                                 maintenance. No records available to indicate
                                                                 when breathing hoses used by diver were last
                                                                 pressure tested or hydrostatic tested. Proposed
                                                                 regulation requires that log books be updated
                                                                 to track equipment tests. This could have
                                                                 ensured equipment was inspected periodically or
                                                                 a pre-dive inspection of equipment was
                                                                 conducted.
                                       Audits.................  Auditing requirement may have identified the
                                                                 marginal state of maintenance of the diver's
                                                                 helmet. Furthermore, audit would have likely
                                                                 discovered that the vessel did not have a
                                                                 supply of medical-use oxygen on board.
                                       Personnel Operational    Standby diver was not outfitted with any rescue
                                        Requirements.            related equipment to address the situation as
                                                                 required by proposed rule.
                                       Drills.................  Drills required by proposed rule would help
                                                                 ensure diver follows procedure in an emergency.
                                                                 Diver did not slide the pneumofathometer
                                                                 underneath his neoprene neck dam and into his
                                                                 helmet. This would have taken him several
                                                                 seconds to do, but it could have provided him
                                                                 with an alternate source of breathing air.
2270536..............................  Personnel Operational    Report indicated that company personnel
                                        Requirements.            displayed fatigue due to lack of sleep.
                                                                 Proposed rule would include 12 hour work hour
                                                                 limits in 24 hour period.
                                       Drills.................  Drills would have improved the probability
                                                                 divers followed written and established safety
                                                                 procedure. As indicated in interviews, ``there
                                                                 was no safety meeting for the dive crew prior
                                                                 to incident. Divers were unaware of any safety
                                                                 procedure or plan to follow in case an
                                                                 emergency to retrieve an injured diver out of
                                                                 the water.'' As stated under the observations
                                                                 by the inspecting officer, ``Training for dive
                                                                 team personnel seemed to be lacking.''
                                       Records and              Interviews indicated that the diver's umbilical
                                        Documentation Related    may have been fouled. Documentation of
                                        to Equipment             maintenance and inspection of equipment is
                                        Inspection.              required under the proposed regulation. This
                                                                 could have helped ensure equipment was
                                                                 periodically inspected.
2734747..............................  Medical Exams..........  Proper medical examination may have revealed
                                                                 tears or irregularities in the diver's lungs
                                                                 and kept him from diving.
                                       Audits.................  Audits would ensure compliance with the medical
                                                                 fitness requirement for divers.
                                       Records and              Documentation of medical examination is required
                                        Documentation Related    by the proposed rule and maintains a history of
                                        to Medical Records.      medical conditions that could be used to avoid
                                                                 putting a diver in danger.
2765094..............................  Personnel Operational    Standby diver was not ready to enter water as
                                        Requirements.            required by rule.
                                       Audits.................  Regular Audits may identify failures of
                                                                 sufficient manning/certification levels of the
                                                                 dive team.
                                       Drills.................  Rescue diver had trouble donning gear when
                                                                 preparing to enter water. Investigating officer
                                                                 recommendation is for monthly emergency rescue
                                                                 and recovery diving training for all commercial
                                                                 diving vessels. In addition to a fatality,
                                                                 multiple injuries resulted from incident.
3281272..............................  Personnel Operational    One of the supervisors was also the standby
                                        Requirements.            diver. Proposed rules would not allow multiple
                                                                 responsibilities.
                                       Audits.................  Regular Audits may identify failures of
                                                                 sufficient manning/certification levels of the
                                                                 dive team.
                                       Medical Exam...........  Diver had previously unknown cardiac condition.
                                                                 A medical exam focused on hyperbaric exposure
                                                                 would have led to a cardiac exam which could
                                                                 have identified the cardiac condition and not
                                                                 permitted the dive.
3100303..............................  Records and              Documentation of diver's medical fitness may
                                        Documentation Related    identify the diver's condition and medication
                                        to Medical Records.      risk.
2866598                                Drills.................  Delays were experience in recovering troubled
                                                                 diver. Drills would have identified the
                                                                 difficulty of one tender/diver conducting diver
                                                                 retrieval.
                                       Personnel Operational    Superintendent also was serving as dive
                                        Requirements.            supervisor. The proposed rules would not allow
                                                                 multiple responsibilities.
                                       Audits.................  Audits would ensure compliance with the medical
                                                                 fitness requirement for divers.
                                       Records and              Documentation serving as a guide and checklist
                                        Documentation.           during the JHA may have prevented the diver's
                                                                 entanglement and the uncontrolled ascent of the
                                                                 lift bags.
1970383..............................  Medical Exams..........  Lab test results indicated diver had
                                                                 hypertensive heart disease and drowned.
                                                                 Potential causal factor for this fatality was a
                                                                 pre-existing medical condition apparently
                                                                 aggravated by the individual performing
                                                                 strenuous activity while diving. Medical exams
                                                                 may have identified this precondition and
                                                                 prevented fatality.
----------------------------------------------------------------------------------------------------------------
                                                    Injuries
----------------------------------------------------------------------------------------------------------------
2762375..............................  Personnel Operation      The need for a diver to work for such extended
                                        Requirements.            periods indicates a lack of sufficient manning
                                                                 as required by rule.
                                       Audits.................  Regular audits would identify substandard
                                                                 practices and excessive work hours resulting in
                                                                 fatigue.
1600506..............................  Personnel Operational    Dive supervisor was acting as the diving tender.
                                        requirements.            The Diving Supervisor could not oversee the
                                                                 safety of the operation if he was performing
                                                                 dive tender duties. The proposed rules would
                                                                 not allow multiple responsibilities.
2765094..............................  (See Details Above)....  (See Details Above).
----------------------------------------------------------------------------------------------------------------

    For safety and security analysis, the VSL approach is used to
monetize the value of fatalities prevented. The VSL does not represent
the dollar value of a person's life, but the amount society would be
willing to pay to reduce the probability of death. The VSL value used
in this analysis to calculate an average annual cost of fatalities
mitigated is $9.1 million.\10\ The resulting benefit of the NPRM is
$2.4 million. Subtracting out the $1.46 million in manning costs yields
a marginal benefit of $940,000 for the manning provisions only. This
amount is also the marginal fatality benefit for the rule since
benefits from the other items could not be quantified even though they
provide benefits. For example, the summaries of the following two case
studies illustrate how complex and difficult it is to estimate benefits
for this rule let alone quantify them.
---------------------------------------------------------------------------

    \10\ U.S. Department of Transportation Memorandum, Guidance on
Treatment of the Economic Value of a Statistical Life in U.S.
Department of Transportation Analyses, available at http://www.dot.gov/sites/dot.dev/files/docs/VSL%20Guidance%202013.pdf
---------------------------------------------------------------------------

Case Review Example 1

Incident Report 2765094

Vessel: Rowan Halifax/Global Explorer
Date:8/29/06
Damages:0
Deaths:1
Injuries:2
Edited Brief from MISLE (see RA for complete text)

    Commercial divers using surface-supplied air were working on the
rigging of the legs of a sunken MODU. A diver was attempting to attach
a 2 and \3/4\ inch chain to a shackle for pre-rigging the MODU. Shortly
after diver 1entered the water, there was a loss of communication with
him, although a gurgling sound inside helmet was heard. The standby
diver was ordered to splash. Diver 1 visibly panics and begins ascent
towards diving bell Diver 2 dons gear, but has trouble with airflow to
helmet. Problem fixed and he enters the water. Somehow Diver 1's helmet
lands in worksite. Diver 2 descends, switching to 14% O2. He pulled his
way to Diver 1 via latter's hose. He notices Diver 1's helmet from 20
feet away. Diver 2 arrives at Diver 1, shakes him with no response.
Diver 2 notifies topside to pull up slack. Divers arrive at bell and
with standby diver, attempt to pull Diver 1 into bell. Diver 1 is
finally pulled up topside. Diver 2 becomes fouled on the bell, then
unfouls himself. He begins his ascent but switches to air ``on the
fly''. Vessel paramedic performs lifesaving procedures. Since the
paramedic is not hyperbaric qualified, backup is ordered into
hyperbaric chamber to continue lifesaving procedures. Shore side
physician finally orders halt to lifesaving procedures. Shortly
afterwards, Diver 2 shows signs of the bends, while backup, still
``dirty'', from an earlier dive that day, experiences decompression
sickness. Investigation concluded that there was inadequate supervision
and a good rule was misused.
    Location Lat 028[deg]04''4' N, Lon 092[deg]42''0' W Gulf of Mexico.

    Reviewer Notes: Supervisor did not have a standby diver ready on
a moment's notice to splash and assist another diver in the water.
The proposed NPRM rules provide for a very strict regime for the
supervisor to follow. From Section 290 (a), (b) and (c) clearly
require the supervisor to make sure ``. . . that minimum dive team
requirements are met . . .'' and ``ensure that the necessary levels
of personnel and equipment are available for all commercial diving
operations.'' Further, Section 197.222 of the NPRM requires ``Each
supervisor . . . must . . .: (a) Comply with this subpart and The
applicable requirements for dive supervisors and diving modes
outlined in sections 3.0 and 4.0 of the ADCI Standards (incorporated
by reference . . .) . . .
    Fatality at least partially resulted from inadequate supervision
according to the report's conclusions. From the facts of the report,
the standby diver was not ready to splash at a moment's notice and
subsequently had equipment issues. This delay contributed to
valuable time in getting the troubled diver out of the water. Also,
the vessel paramedic was not trained in hyperbaric ailments.
    Regular Audits may identify failures of sufficient manning/
certification levels of the dive team.
    Regular drills may have mitigated this incident. The rescue
diver had trouble donning gear when preparing to enter water.
Investigating officer recommendation is for monthly emergency rescue
and recovery diving training for all commercial diving vessels. In
addition to a fatality, multiple injuries resulted from incident.

Case Review Example 2

Incident Report 3929340

Vessel: NS Power
Date:1/26/2011
Damages:0
Deaths:1
Injuries:0
Edited Brief from MISLE (see RA for complete text)

    On January 8, 2011, a series of divers were engaged in bottom
cleaning, through solo dives, on the NS Power from a series of other
vessels including the King Arthur. Four divers used in sequence to
perform bottom cleaning work on the NS Power. During the course of the
work evolution, a diver's helmet neck seal failed flooding the helmet.
While the diver was able to leave the water, delay caused time
constraints on the activity.. Then another diver reported regulator
problems in his dive. Attempts to retrieve him are less than by the
book and result in his drowning. Some 13 hours after the beginning of
the dive evolution, Galveston receives word of an unresponsive diver on
the King Arthur.
15 NM SE Galveston Texas Galveston Bay

    Reviewer Notes: From the MISLE report: dive support team members
were negligent in their duties while a diver was in the water
resulting in the loss of life. Investigation concluded that there
was inadequate supervision and a good rule was misused as well as
active failures of equipment. Supervisor did not have a standby
diver ready on a moment's notice to splash and assist another diver
in the water. The proposed NPRM rules provide for a very strict
regime for the supervisor to follow. From Section 290 (a), (b) and
(c) clearly require the supervisor to make sure ``. . . that minimum
dive team requirements are met . . .'' and ``ensure that the
necessary levels of personnel and equipment are available for all
commercial diving operations.'' Further, Section 197.222 of the NPRM
requires ``Each supervisor . . . must . . .: (a) Comply with this
subpart and The applicable requirements for dive supervisors and
diving modes outlined in sections 3.0 and 4.0 of the ADCI Standards
(incorporated by reference . . .) . . .
    Regular Audits may identify failures of sufficient manning/
certification levels of the dive team.
    Regular drills may have mitigated this incident. The rescue
diver had trouble donning gear when preparing to enter water.
    In both cases, the addition of one more dive team member so that
responsibilities were adequately spread around might have made all
the difference in the world to the victims. In addition, other
requirements of the NPRM rule could have mitigated the incidents.
The rule's other benefits besides proper manning and manning
procedures, while very visible, are more difficult to quantify. They
are drills, audits, records and documentation, as well as medical
requirements.
    As seen in the first example case, regular drills likely would
have mitigated one of the problems in that incident. Drills provide
regular practice for situations that require immediate instinctive
response.
    Regular audits would have provided a paper trail to maintenance
needs and if recommendations were followed through on. Audit
procedures likely would have mitigated issues ion both incidents.
Records and documentation are parallel with audits in providing a
trail of responsibility for

maintaining equipment in proper working order.
    Finally, at least two incidents in our baseline and one in the
cases above might have been mitigated if the divers were undergoing
regular medical examinations. Also, one other medical requirement in
the NPRM rule has certain saturation dive team members taking CPR
and first aid training. This requirement, only for the saturation
dive team technicians (all other dive team members already satisfy
this requirement), is critical to the successful operation of that
dive mode.
    Injury mitigation also is a benefit of this rule. Almost
$117,000 per year in injury mitigation benefits are received from
this rule as well. These benefits result from improved protocols in
a wide variety of areas covered by the rule.
    The total net benefits from the rule are $1,056,000 combined
fatality mitigation and injury mitigation.
    We also used a breakeven analysis approach for benefit
estimation for the other rule items. In general, the typical CDO
incident involves the death or injury of 1 diver, therefore the
breakeven comparison against the VSL for 1 fatality is applicable,
rather than other breakeven scenarios.

                                                Table 11--Incremental Breakeven Analysis of Proposed Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Average annual cost *
                                                              -----------------------------------------   Net benefits (7%,  $     Fatalities reduced to
                Item                    Benefits description                              Annualized            millions)                breakeven
                                                                                (7%, millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed Rule Increment:
    Manning.........................  Increase 1 crewman/team  2.4....................          1.46    0.94....................  N/A.
                                       for SSA for both ADCI
                                       and non-ADCI firms.
    Documentation & Recordkeeping...  Assists CG with          Not Quantifiable.......          0.205   N/A.....................  1 every 44 years.
                                       enforcement.
    Drills..........................  Non-ADCI Firm Drills     Not Quantifiable.......          0.0437  N/A.....................  1 every 208 years.
                                       provides regular
                                       training.
    Audits..........................  Non-ADCI Firm Audits     Not Quantifiable.......           .0426  N/A.....................  1 every 214 years.
                                       assists CG with
                                       enforcement.
    Medical Exams...................  Medical Exams for Non-   Not Quantifiable.......          0.0238  N/A.....................  1 every 389 years.
                                       ADCI Firms provides
                                       safety measure.
    Medical Training................  Support Saturation       Not Quantifiable.......          0.003   N/A.....................  1 every 3,056 years.
                                       Diver Crewmen receive
                                       First Aid and CPR
                                       Training.
                                                              ------------------------------------------------------------------------------------------
        TOTAL.......................  .......................  >=2.4..................          1.755   >=0.645.................  ......................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: USCG Calculations
* Total may not sum due to rounding.

    We assume that this proposed rule would result in a constant
reduction in the risk of fatality due to a commercial diving fatal
accident every year following the rule's implementation and therefore
use annualized costs in the equation. For these other rule items, we
use annualized costs at a 7-percent discount rate over a 10-year
period, or $.3 million, for this proposed rule. We then take the $9.1
million,\11\ as the benefit that would be derived from the proposed
rule if one fatality per year is prevented and compare it to the
annualized individual item's cost that would be incurred (e.g. for
drills: $9.1 million/$43,729=218 years). At a 7-percent discount rate,
this proposed rule's other cost elements would need to prevent anywhere
from 1 fatality in 44 years to 1 in 3,056 years to breakeven.
---------------------------------------------------------------------------

    \11\ Op. cit.
---------------------------------------------------------------------------

B. Small Entities

    Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have
conducted an Initial Regulatory Flexibility Analysis and considered
whether this proposed rule would have a significant economic impact on
a substantial number of small entities. The analysis is as follows: The
U.S. Coast Guard (USCG) has performed this analysis of the impacts on
small businesses from the proposed rule. USCG performed this assessment
using the cost information discussed in cost chapter of this RA.
    Whenever an agency is required by section 553 of the Regulatory
Flexibility Act of 1980 \12\ (RFA) or any other law, to publish general
notice of proposed rulemaking for any proposed rule, or publishes a
notice of proposed rulemaking for an interpretative rule involving the
internal revenue laws of the United States, the Regulatory Flexibility
Act requires that the agency prepare and make available for public
comment an initial regulatory flexibility analysis. The RFA requires
that such analysis describe the impact of the proposed rule on small
entities and that the initial regulatory flexibility analysis or a
summary be published in the Federal Register at the time of the
publication of general notice of proposed rulemaking for the rule.
---------------------------------------------------------------------------

    \12\ Public Law 96-354 (5 U.S.C. 601-612).
---------------------------------------------------------------------------

    In addition, the RFA requires that the agency transmit a copy of an
initial regulatory flexibility analysis to the Chief Counsel for
Advocacy of the Small Business Administration. In the case of an
interpretative rule involving the internal revenue laws of the United
States, The RFA's requirements apply to interpretative rules published
in the Federal Register for codification in the Code of Federal
Regulations, but only to the extent that such interpretative rules
impose on small entities a collection of information requirement.
    Under the Regulatory Flexibility Act \13\ the Coast Guard must
consider whether the rule would have a significant economic impact on a
substantial number of small entities. Small entities \14\ include small

businesses,\15\ small not-for-profit organizations that are
independently owned and operated and are not dominant in their
fields,\16\ and small governmental jurisdictions with populations of
less than 50,000.\17\
---------------------------------------------------------------------------

    \13\ http://www.sba.gov/advo/laws/regflex.html
    \14\ The RFA considers ``small entity'' as having the same
meaning as the terms ``small business,'' ``small organization'' and
``small governmental jurisdiction.''
    \15\ The RFA defines ``small business'' has the same meaning as
the term ``small business concern'' under section 3 of the Small
Business Act, unless an agency, after consultation with the Office
of Advocacy of the Small Business Administration and after
opportunity for public comment, establishes one or more definitions
of such term which are appropriate to the activities of the agency
and publishes such definition(s) in the Federal Register.
    \16\ The RFA defines the term ``small organization'' means any
not-for-profit enterprise which is independently owned and operated
and is not dominant in its field, unless an agency establishes,
after opportunity for public comment, one or more definitions of
such term which are appropriate to the activities of the agency and
publishes such definition(s) in the Federal Register;
    \17\ The RFA defines small governmental jurisdiction ``means
governments of cities, counties, towns, townships, villages, school
districts, or special districts, with a population of less than
fifty thousand, unless an agency establishes, after opportunity for
public comment, one or more definitions of such term which are
appropriate to the activities of the agency and which are based on
such factors as location in rural or sparsely populated areas or
limited revenues due to the population of such jurisdiction, and
publishes such definition(s) in the Federal Register.''
---------------------------------------------------------------------------

    Based on the information from this analysis, we found that:
     There are no governments or not-for-profit organizations
which are anticipated to be affected by the proposed rule.
     There are 87 U.S. entities (all private firms) that would
potentially be impacted by the proposed rule. Of the 87, 75 are ADCI-
registered firms of which we have some information on, and 12 are non-
ADCI firms of which we have no information on but are assumed to be
small. Furthermore, of the 75 firms we can identify, we found ownership
and revenue data for only 45 firms. Of these 45 firms, 37 were
determined to be small entities based on available data.
     We assume firms without available ownership or revenue
data are small. Therefore, of the 87 firms considered only 8 can be
considered non-small given the evidence available for this analysis.
     Initial and annual recurring costs of the proposed rule
would result in less than 1 percent impact on revenue for 32 percent of
the small entities with available data;
     68 percent of small entities with available data will
incur costs greater than 1 percent of revenue.
    This chapter provides an Initial Regulatory Flexibility Analysis
for commercial diving operations.
Preliminary Initial Regulatory Flexibility Analysis
    The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) establishes
``as a principle of regulatory issuance that agencies shall endeavor,
consistent with the rule and of applicable statutes, to fit regulatory
and informational requirements to the scale of the businesses,
organizations, and governmental jurisdictions subject to regulation. To
achieve this principle, agencies are required to solicit and consider
flexible regulatory proposals and to explain the rationale for their
actions to assure that such proposals are given serious
consideration.''
    Under the RFA, we are required to consider if this rule will have a
significant economic impact on a substantial number of small entities.
Agencies must perform a review to determine whether a rule will have
such an impact. If the agency determines that it will, the agency must
prepare a regulatory flexibility analysis as described in the RFA.
Under Section 603(b) of the RFA, the Initial Regulatory Flexibility
Analysis (IRFA) must provide and address:
     A description of the reasons why action by the agency is
being considered;
     A succinct statement of the objectives of, and legal basis
for, the proposed rule;
     A description of and, where feasible, an estimate of the
number of small entities to which the proposed rule will apply;
     A description of the projected reporting, recordkeeping
and other compliance requirements of the proposed rule, including an
estimate of the classes of small entities which will be subject to the
requirement and the type of professional skills necessary for
preparation of the report or record;
     An identification, to the extent practicable, of all
relevant Federal rules which may duplicate, overlap or conflict with
the proposed rule;
     A description of any significant alternatives to the
proposed rule which accomplish the stated objectives of the applicable
statutes and which minimize any significant economic impact of the
proposed rule on small entities.
    The term ``small entities'' comprises small businesses, not-for-
profit organizations that are independently owned and operated and are
not dominant in their fields, and governmental jurisdictions with
populations of less than 50,000. The rule affects only small private
entities. The following describes the Initial Regulatory Flexibility
Act (TRFA) process for this rule.
    We determined that the rule affects a variety of small private
entities and therefore, based on the requirements mentioned above, we
have prepared the following IRFA assessing the impact on small entities
for this proposed rule. The analysis presented below addresses the
issues specific to small entities that we have not addressed elsewhere
in this RA
5.2 IRFA Requirements
5.2.1 Descriptions of Reasons Why Action of by the Agency Is Being
Considered
    Agencies take regulatory action for various reasons, one being the
failure of the market to reach the socially optimal outcome. This can
occur when there are economic incentives lacking for industry to pursue
that outcome and such market failures are the impetus for this proposed
rule. A negative externality is the byproduct of a transaction between
two parties that is not accounted for in the transaction. Vessels and
commercial diving operations that operate with lower safety standards
may cause harm or increased risk of harm without accounting for the
consequences to third parties, who do not directly participate in the
business transactions of the affected entities. These costs are not
borne by the responsible entities and are therefore external to the
business decisions of the responsible entity. Section 4.2 describes the
externality addressed by this rule.
Objectives of, and Legal Basis for, the Proposed Rule
    The purpose of this rulemaking is to clarify and update our
existing commercial diving regulations to reflect current industry best
practices and to facilitate the use of approved third-party
organizations (TPOs) in ensuring regulatory compliance. There has been
no update since the 1978 original diving rules.
    In addition, a series of reports on commercial diving safety
demonstrated a need for updating USCG commercial diving regulations.
These reports were developed in response to a series of commercial
diving accidents that gained major public attention starting with one
in 1996. The report titled ``Investigation into the Circumstances
Surrounding the Commercial Diving Accident Onboard the Mobile Offshore
Diving Unit Cliff's Drilling Rig No. 12 on March 4, 1996 with the Loss
of Life'' influenced the Coast Guard to improve its regulations for
commercial diving. That report, released in March, 2001, and also known
as the RIG 12 Report, started a

process that has slowly gained momentum these past few years. The most
recent findings, the 2008 National Offshore Safety Advisory Committee
(NOSAC) report, provided Coast Guard with additional appropriate
information regarding the industry and its safety efforts. The
objective of the proposed rule is to establish safety regulations
governing the inspection, standards, and operation of commercial diving
operations. The proposed rule would promote safer work practices and
reduce casualties in commercial diving operations by ensuring that
those operations adhere to recommended safety standards and operational
protocols.
    The statutory bases for the Coast Guard's rulemaking are located
in: 33 U.S.C. 1509(b), which requires safety regulations for deepwater
ports; 43 U.S.C. 1333(d)(1), which permits safety regulations for Outer
Continental Shelf (OCS) facilities and their equipment; 46 U.S.C. 3306,
which requires regulations to implement subtitle II of Title 46 of the
U.S. Code with respect to inspected vessels, including offshore supply
vessels (OSVs) and their equipment; 46 U.S.C. 3703, which requires
safety and environmental protection regulations for liquid bulk
dangerous cargo carriers and their equipment, to be issued after
consultation with Federal, State, and local governments and with
private sector entities; and 46 U.S.C. 6101, which requires regulations
for reporting and investigating marine casualties. These statutes
confer regulatory authority on the Secretary of Homeland Security, who
has delegated this authority to the Coast Guard; DHS Delegation No.
0170.1(75), (90), and (92). In addition, we are conducting this
rulemaking in accordance with a December 19, 1979, Memorandum of
Understanding between the Coast Guard and the Occupational Safety and
Health Administration (OSHA), which regulates commercial diving
operations conducted near shore or in U.S. internal waters.
Description and Estimate of the Number of Small Entities to Which the
Proposed Rule Will Apply
<IP_ADDRESS> Data Development
    We used MISLE owner and operator name and address information as
well as ADCI member information to research public databases (MANTA)