and working surfaces where the       rulemaking on PPE payment already
 employer has eliminated slippery     has figured those costs.
 conditions; or
(ii) Provide slip-resistant
 footwear in accordance with 29 CFR
 part 1915, subpart I.
Sec.   1915.82 Lighting              The standard adopts and adapts the
Sec.   1915.82(a)(1), (a)(2), and     illumination intensities in Table
 (a)(3)                               F-1 from the Hazardous Waste
(a)(1) The employer must ensure       Operations (Sec.   1910.120) and
 that each work area and walkway is   construction (Sec.   1926.56)
 adequately lighted whenever an       standards, as well as national
 employee is present.                 consensus standards that have been
(a)(2) For landside areas, the        in effect for more than 40 years.
 employer must provide illumination   The lighting levels in Table F-1
 that meets the levels set forth in   are minimum requirements, and OSHA
 Table F-1.                           believes that lighting levels in
(a)(3) For vessels and vessel         shipyards already meets or exceeds
 sections, the employer must          these levels. The final rule
 provide illumination that meets      differs in paragraph (a)(3) from
 the levels set forth in Table F-1    the proposal by allowing employers
 or meet ANSI/IESNA RP-7-01           to either meet the illumination
 (incorporated by reference, see      levels in Table F-1 or ANSI/IESNA
 1915.5).                             RP-7-01 for vessels and vessel
                                      sections. Therefore, with the
                                      flexibility OSHA provided to
                                      employers, the Agency estimates
                                      the rule should not impose new
                                      costs.
Sec.   1915.82(b)(1)                 The provision is similar to
The employer must ensure that         existing Sec.   1915.92(b)(1),
 temporary lights with bulbs that     which requires guarding if bulbs
 are not ``completely'' recessed      in temporary lights are not
 are equipped with guards to          ``deeply'' recessed. OSHA assumes
 prevent accidental contact with      that shipyards already equip
 the bulb.                            lights with guards when the bulb
                                      is not fully recessed; therefore,
                                      the rule should not impose new
                                      costs.
Sec.   1915.82(b)(2)                 The standard is similar to the
Temporary lights must be equipped     existing requirement to use
 with electric cords designed with    ``heavy duty'' electric cords with
 sufficient capacity to carry the     temporary lights (Sec.
 electric load.                       1915.92(b)(2)). The rule simply
                                      provides employers with greater
                                      flexibility in meeting the
                                      existing requirement. Thus, the
                                      standard should not impose new
                                      costs.
Sec.   1915.82(b)(7)                 The existing provision requires
Splices on temporary lights must      that splices on temporary lights
 have insulation with a capacity      have insulation that is ``equal''
 that ``exceeds'' that of the         to that of the cable (Sec.
 original insulation of the cord.     1915.92(b)(2)). Although OSHA is
                                      requiring that the insulation
                                      capacity ``exceed'' that of the
                                      original insulation of the cord,
                                      in this final rule, there should
                                      be no new costs associated with
                                      this change.
Sec.   1915.82(c)(1)                 The existing provision prohibits
In any dark area that does not have   employees from entering dark
 permanent or temporary lights,       spaces without a portable light
 where lights are not working, or     (Sec.   1915.92(e)). Due to
 where lights are not readily         comments received and testimony
 accessible, the employer shall       heard, OSHA modified the final
 provide portable or emergency        provision to allow employers to
 lights and ensure that employees     provide portable or emergency
 do not enter those areas without     lights in any dark area that
 such lights.                         doesn't have permanent or
                                      temporary lighting. OSHA believes
                                      that employers already provide, at
                                      a minimum, portable lights to
                                      employees in such instances. In
                                      addition, allowing emergency
                                      lights, such as a generator linked
                                      with a lighting system, affords
                                      employers the option to determine
                                      which type of backup lighting is
                                      best. Therefore, the standard
                                      should not impose new costs.
Sec.   1915.82(c)(2)                 The standard clarifies the existing
When the only means of illumination   requirement to provide portable
 on a vessel or vessel section are    lighting and adds the use of
 from lighting sources that are not   emergency lights for ``safe
 part of the vessel or vessel         movement of employees'' to ensure
 section, the employer must provide   that work areas have adequate
 portable or emergency lights for     lighting. OSHA estimates that
 the safe movement of each            employers provide work areas with
 employee. If natural sunlight        portable or emergency lighting
 provides sufficient illumination,    while employees are working or
 portable or emergency lights are     moving in areas where there is no
 not required.                        onboard lighting source.
                                      Therefore, the rule should not
                                      impose new costs.
Sec.   1915.83 Utilities             The provision deletes the existing
Sec.   1915.83(a)                     requirement to have the pressure
The employer must ensure that the     check performed by a ``responsible
 vessel's steam piping system,        vessel's representative'' (Sec.
 including hoses, is designed to      1915.93(a)(1)). Instead, the
 safely handle the working pressure   employer may determine this
 prior to supplying steam from an     information from a responsible
 outside source.                      vessel's representative, a
                                      contractor, or any other person
                                      who is qualified by training,
                                      knowledge, or experience to make
                                      such determination. Thus, the rule
                                      does not impose additional costs,
                                      but rather provides employers with
                                      greater flexibility in meeting the
                                      existing requirement.
Sec.   1915.83(a)(2)(iv)             The provision adds to existing Sec.
The employer must ensure that each      1915.93(a)(1) a requirement that
 pressure gauge and relief valve is   pressure gauges and relief valves
 legible and located so it is         be easily readable (e.g., writing
 visible and readily accessible.      is large enough to read). Since
                                      OSHA estimates that employers
                                      currently use gauges and valves
                                      that are legible, this requirement
                                      should add no new costs.
Sec.   1915.83(b)(4)                 The standard expands coverage of
The employer must ensure that each    existing Sec.   1915.93(a)(4) from
 steam hose or temporary steam        ``normal work areas'' to include
 piping system, including metal       areas where employees may walk or
 fittings and couplings that pass     pass through to get to work areas.
 through a ``walking or working       OSHA estimates that shipyard
 area,'' is shielded to protect       employers shield hoses and piping
 employees from contact.              wherever employees may be present;
                                      therefore, the rule should not
                                      impose new costs.

Sec.   1915.83(c)(3)                 The provision deletes the existing
When a vessel is supplied with        requirement to have circuits
 electric shore power, the employer   checked by a ``responsible
 must ensure that vessel circuits     vessel's representative'' (Sec.
 to be energized are in a safe        1915.93(b)(1)(ii)). The rule does
 condition prior to energizing        not impose new costs, but rather
 them. This information must be       provides employers with greater
 determined by a ``responsible        flexibility in meeting the
 vessel's representative,'' a         existing requirement.
 contractor, or any other person
 who is qualified by training,
 knowledge, or experience.
Sec.   1915.83(d)                    The standard expands the existing
The employer must ensure that heat    Sec.   1915.93(c) to include all
 lamps, including the face, are       heat lamps, not just infrared
 equipped with surround-type guards   electric lamps, and requires that
 to prevent contact with the lamp     the lamp face also be guarded to
 and bulb.                            prevent contact. Existing Sec.
                                      1915. 93(c) also provides an
                                      exception for the lamp face. OSHA
                                      believes that all heat lamps
                                      currently in use in shipyards have
                                      guarding that completely surrounds
                                      the lamp, including the face;
                                      therefore, the rule should not
                                      impose new costs.
Sec.   1915.84 Working alone         The standard adds a requirement to
Sec.   1915.84(a)(1) and (a)(2),      account for employees employees,
 and (b)                              either by sight or verbal
(a)Whenever an employee is working    communication, at regular
 alone, such as in a confined space   intervals appropriate to the job
 or isolated location, the employer   assignment and at the end of each
 must account for each employee:      job assignment or workshift if
(1) Throughout each workshift at      they are working alone, such as in
 regular intervals appropriate to     confined space or isolated
 the job assignment to ensure the     location. This provision expands
 employee's safety and health; and    on the current requirement (Sec.
(2) At the end of the job             1915.94) to frequently check on
 assignment or at the end of the      these employees. OSHA estimates
 workshift, whichever occurs first.   that shipyard employers already
(b) The employer must account for     account for employees who work
 each employee by sight or verbal     alone. Therefore, the rule should
 communication.                       not impose new costs.
Sec.   1915.85 Vessel radar and      The standard expands existing Sec.
 communication systems                 1915.95(a), which cover workers
Sec.   1915.85(b)                     repairing the radar or radio
The employer must secure each         systems. OSHA believes that the
 vessel's radar and communication     revision should not impose new
 system so it is incapable of         costs since employers already are
 energizing or emitting radiation     required to have procedures in
 before any employee begins work:     place for protecting workers,
(1) On or in the vicinity of the      other than radar or radio repair
 system;                              technicians.
(2) On or in the vicinity of a
 system equipped with a dummy load;
 or
(3) Aloft, such as on a mast or
 king post.
Sec.   1915.86 Lifeboats             The standard expands the existing
Sec.   1915.86(b)                     prohibition (Sec.   1915.96(b))
The employer must not permit any      against employees riding in
 employee to be in a lifeboat while   lifeboats being hoisted into final
 it is being hoisted or lowered,      stowed position by prohibiting
 except when necessary to conduct     employees from riding in lifeboats
 operational tests or drills over     while being hoisted or lowered,
 water, or in the event of an         unless it is deemed necessary to
 emergency.                           conduct operational tests or
                                      drills over water, or in the event
                                      of an emergency. OSHA believes
                                      that expanding this work practice
                                      requirement to a more flexible
                                      provision should not impose any
                                      additional costs to employers.
Sec.   1915.87 Medical services and  The standard combines existing Sec.
 first aid                              1910.151(b) and Sec.
Sec.   1915.87(d)(1)                  1915.98(a) and clarifies that
In the absence of an on-site          first aid supplies must be
 infirmary or clinic that maintains   provided and maintained, and be
 first aid supplies, the employer     readily accessible to each
 must provide and maintain adequate   worksite when needed. The standard
 first aid supplies that are          also revises existing Sec.
 readily accessible to each           1915.98(b), which contains a list
 worksite.                            of items that first aid kits must
                                      contain. The standard replaces
                                      that list with factors that
                                      employers must consider in
                                      determining the content, amount,
                                      and location of first aid kits and
                                      supplies they must provide. The
                                      standard provides employers with
                                      greater flexibility in meeting the
                                      requirement; therefore, the
                                      standard should not impose
                                      additional costs.
Sec.   1915.87(e)                    The standard expands existing Sec.
Where the potential exists for an      1910.151(c), which requires quick
 employee to be splashed with a       drenching or flushing facilities
 substance that may result in an      where employees may be injured by
 acute or serious injury, the         ``corrosive materials.'' The
 employer must provide facilities     standard requires such facilities
 for quick-drenching or flushing      when employees may be exposed to
 the eyes and body. The employer      receiving an acute or serious
 must ensure that such a facility     injury, as defined in the
 is located for immediate emergency   standard. The standard should not
 use within close proximity to        impose additional costs since
 operations where such substances     employers already are required to
 are being used.                      provide quick drench/flushing
                                      facilities in the work area for
                                      immediate use.
Sec.   1915.87(f)(1)                 1915.87(f)(1) modifies existing
The employer must provide an          Sec.   1915.98(d), which requires
 adequate number of basket            that a minimum of 2 stretchers be
 stretchers, or the equivalent,       located at any shipyard work
 readily accessible to where work     location. The final provision
 is being performed on a vessel or    gives employers more flexibility
 vessel section. The employer is      by allowing basket stretchers, or
 not required to provide basket       the equivalent, provided by
 stretchers or the equivalent where   emergency-response services to
 emergency response services have     meet the ``adequate number''
 basket stretchers or the             requirement for work performed on
 equivalent that meet the             vessels and vessel sections. OSHA
 requirements of this paragraph.      estimates that the standard should
                                      not impose additional costs
                                      because the existing standard
                                      already requires employers to
                                      provide a minimum of 2 stretchers
                                      at any shipyard work location. In
                                      addition, the standard gives
                                      employers greater flexibility in
                                      meeting the ``adequate number''
                                      requirement because it allows them
                                      to rely on any readily accessible
                                      emergency-response services (i.e.,
                                      offsite rescue) that have basket
                                      stretchers.

Sec.   1915.87(f)(2)(i)              The standard adds to existing Sec.
The employer must ensure that each     1915.98(d) specifications for
 stretcher is equipped with           lifting bridles. OSHA estimates
 permanent lifting bridles that       that shipyards already have
 enable the basket stretcher to be    stretchers that meet the
 attached to hoisting gear that are   specifications; therefore, the
 capable of lifting at least 5,000    standard should not impose new
 pounds.                              costs.
Sec.   1915.88 Sanitation            The standard expands existing Sec.
Sec.   1915.88(b)(3)                   1910.141(b)(1)(iii) to also allow
The employer must dispense drinking   employers to provide potable water
 water from a fountain, a covered     in single-use bottles. The
 container with single-use drinking   standard should not impose
 cups stored in a sanitary            additional costs; rather, it
 receptacle, or single-use bottles.   provides employers with greater
 The employer must prohibit the use   flexibility in meeting the
 of shared drinking cups, dippers,    existing requirement.
 and water bottles.
Sec.   1915.88(d)(3)                 The standard does not change the
The employer must provide portable    number of sewered toilet
 toilets, pursuant to paragraph       facilities shipyard employers must
 (d)(2)(i) of this section, only      provide. The standard allows, but
 when the employer demonstrates       does not require, employers to
 that it is not feasible to provide   provide portable toilets to
 sewered toilets, or when there is    supplement the required number of
 a temporary increase in the number   sewered toilets. Therefore, the
 of employees.                        standard should not impose new
                                      costs.
Sec.   1915.88(g)                    The standard expands existing Sec.
When an employer provides              1910.141(e), which requires
 protective clothing to prevent       changing rooms whenever another
 employee exposure to hazardous or    OSHA standard requires that the
 toxic substances, the employer       employer provide protective
 must provide changing rooms that     clothing, to require that
 provide privacy for each sex; and    employers provide change rooms
 storage facilities for street        whenever they provide protective
 clothes, as well as separate         clothing. OSHA estimates the
 storage facilities for protective    standard should not impose any
 clothing.                            costs because shipyards already
                                      have changing rooms.
Sec.   1915.88(h)                    The standard expands the existing
The employer must ensure that food,   prohibitions (Sec.   1910.141(g)
 beverages, and tobacco products      and Sec.   1915.97(c)) on eating
 are not consumed or stored in any    and drinking to include
 area where employees may be          prohibitions on eating, drinking,
 exposed to hazardous or toxic        and smoking in areas where
 substances.                          hazardous or toxic substances may
                                      be present. ``Hazardous and toxic
                                      substances'' is defined in the
                                      final rule as any corrosive
                                      substance, or any environmental
                                      contaminant that may expose
                                      employees to injury, illness, or
                                      disease. OSHA estimates that
                                      prohibiting these activities in
                                      such areas should not impose
                                      additional costs on employers.
Sec.   1915.88(j)(1)                 The standard expands the existing
To the extent reasonably              Sec.   1910.141(a)(5) to cover
 practicable, the employer must       outdoor shipyard areas. OSHA
 clean and maintain the workplace     estimates that employers currently
 in a manner that prevents vermin     control vermin in all shipyard
 infestation.                         areas to ensure that vermin do not
Sec.   1915.88(j)(2)                  get into enclosed spaces;
Where vermin are detected, the        therefore, the standard should not
 employer shall implement and         impose new costs.
 maintain an effective control
 program.
Sec.   1915.90 safety color code     The standard simply incorporates by
 for marking physical hazards         reference a general industry
                                      standard (Sec.   1910.144) that
                                      already is applicable to
                                      shipyards; therefore, the standard
                                      does not impose new costs.
Sec.   1915.91 Accident prevention   The standard simply incorporates by
 signs and tags                       reference the existing general
All new and replacement danger,       industry standard (Sec.
 caution, and safety instruction      1910.145) on signs and tags that
 signs shall meet design and          is already applicable to
 wording specifications.              shipyards; therefore, the standard
Injury/illness prevention tags        does not impose new costs.
 shall be used where employees are
 exposed to hazardous conditions,
 equipment, operations that are
 unexpected, out of the ordinary or
 not readily apparent and remain in
 place until the hazard is
 eliminated or the hazardous
 operation is completed. Tags shall
 meet general criteria
 requirements.
Sec.   1915.92 Retention of DOT      OSHA is retaining the existing Sec.
 markings, placards, and labels         1915.100 requirements, with
                                      minor editorial changes, on the
                                      retention of DOT markings,
                                      placards, and labels on hazardous
                                      materials the shipyard receives.
                                      Therefore, this section should not
                                      impose any new costs.
Sec.   1915.93 Motor vehicle safety  The standard adds a new safety belt
 equipment, operation, and            requirement; however, the
 maintenance                          requirement should not impose
Sec.   1915.93(b)(1)                  costs on existing facilities
The employer must ensure that each    because it applies only
 motor vehicle acquired or            prospectively.
 initially used after 180 days       (The economic analysis includes
 after the final rule is published    costs for Sec.   1915.93(b)(3),
 is equipped with a safety belt for   which requires employers to
 each employee operating or riding    replace safety equipment (e.g.,
 in a motor vehicle. This             safety belts) that have been
 requirement does not apply to any    removed from employer-provided
 motor vehicle that was not           vehicles.)
 equipped with safety belts at the   The standard adds a requirement
 time of manufacture.                 that all employees being
Sec.   1915.93(b)(4)                  transported in a vehicle be seated
The employer must ensure that each    in firmly secured seats. This will
 motor vehicle used to transport an   require some employers to change
 employee has firmly secured seats    their methods of transporting
 for each employee being              workers which may involve costs to
 transported and that all employees   the employer. OSHA does not
 being transported are using such     believe that this will be a
 seats.                               significant cost and therefore has
                                      not included the costs that may be
                                      associated with this requirement
                                      in this analysis.
Sec.   1915.93(c)(1)                 The standard adds a new
The employer must ensure that each    requirement; however, OSHA
 motor vehicle is maintained in a     estimates that shipyard employers
 serviceable and safe operating       already maintain motor vehicles
 condition and removed from service   that employers provide. Therefore,
 if it is not in such condition.      the standard should not impose new
                                      costs.
Sec.   1915.93(c)(2)                 The standard adds a new
The employer must ensure that         requirement. OSHA estimates that
 before a motor vehicle is            tools and materials are secured if
 operated, any tools and materials    their movement could pose a hazard
 being transported are secured if     for employees; therefore, the
 their movement may create a hazard   standard should not impose new
 for employees.                       costs.

Sec.   1915.93(c)(3)                 The standard adds a new
The employer must implement           requirement. OSHA estimates that
 measures to ensure that motor        shipyard employers already have
 vehicle operators are able to see    implemented bike and pedestrian
 and avoid injuring pedestrians and   safety measures as a good practice
 bicyclists at shipyards.             in shipyards; therefore, the
                                      standard should not impose new
                                      costs.
Sec.   1915.94 Servicing multi-      The standard adds general industry
 piece and single-piece rim wheels    requirements on servicing rim
The employer shall furnish a          wheels, including requirements to
 restraining device for inflating     furnish tire servicing equipment
 tires on multi-piece and single-     (Sec.   1910.177(d)). OSHA
 piece rim wheels. The requirements   estimates that shipyards that
 applicable to shipyard employment    currently service rim wheels on
 under this section are identical     large vehicles already have
 to the requirements set forth at     servicing equipment; therefore,
 29 CFR 1910.177.                     the standard should not impose
                                      additional costs. (However, this
                                      FEA includes costs for training
                                      employees to service rim wheels.)
------------------------------------------------------------------------
Source: OSHA Office of Regulatory Analysis.

    Some stakeholders said that several of the requirements discussed
above would impose significant costs. For example, Doug Dixon, of
Pacific Fisherman Shipyard and Electric, LLC, said the revisions to the
current lighting requirements would increase costs (Ex. 131.1). The
lighting requirements have been in existence since OSHA adopted them
pursuant to Section 6(a) of the OSH Act, and OSHA believes that all
affected employers are in compliance with them. The clarifications and
updates to those lighting requirements that OSHA incorporated in the
final rule do not substantially change the existing requirements;
therefore, OSHA believes that they will not impose major costs. Some
requirements may result in minor costs to some establishments; for
example, the final rule has a provision requiring that temporary lights
have insulation capacity that exceeds that of the original insulation
of the cord while the current provision requires that the insulation
capacity is ``equal'' to that of the cable. In this analysis, OSHA took
explicit costs only for provisions that could impose sizable costs on
establishments and evaluated explicit benefits for provisions that
would result in a measurable reduction in injuries or fatalities. It is
not always possible, nor is it necessary in terms of establishing
feasibility, to account for extremely small changes in costs or
benefits.
    Northrop Grumman--Newport News said that the sanitation provisions
would require a 25 percent increase in the number of toilets they
provide, at a cost of $7.5 million for the Newport News, VA, shipyard
alone (Ex. 120.1). However, Northrop Grumman did not provide any
information explaining how they derived the costs; therefore, OSHA
cannot ascertain the basis for the costs or analyze whether they are
representative of affected establishments.

Provisions in the Standard With Major Cost Impacts

Section 1915.8 Medical Services and First Aid
    The final rule requires that employers ensure that there are an
adequate number of qualified employees at each work location during
each workshift to render first aid, including cardiopulmonary
resuscitation (CPR). The Agency estimates that some shipyards will need
to train additional first aid providers for this purpose. Commercial
vessels have long-standing first aid standards established by the U.S.
Coast Guard (USCG), and OSHA believes that employees on commercial
vessels--even those that are not USCG inspected and certified--are
currently complying with the OSHA standard. However, the Agency
estimated that some commercial vessels would need additional employees
trained to administer first aid, including CPR. Employees properly
trained to administer first aid and CPR could reduce the number of
deaths that occur in the workplace.
Section 1910.88 Sanitation
    Paragraph (e)(1) requires that employers provide handwashing
facilities adjacent to each toilet facility. Paragraph (e)(2) requires
that employers ensure that each handwashing facility is equipped with
either hot and cold or lukewarm running water and soap, or with
waterless skin cleansing agents that are capable of disinfecting the
skin or neutralizing the contaminants to which the employee may be
exposed. The Agency estimates that employers in the shipbuilding, ship
repair, and shipbreaking industry (hereafter referred to as shipyards)
already have handwashing facilities at sewered toilets, but not at all
portable toilets. To comply with this provision, OSHA assumed that
employers will provide waterless skin cleansing agents at portable
toilet facilities as the simplest and least expensive way to comply
with this requirement. This provision applies only to shipyards and
will not impose any additional requirements on commercial vessels,
which OSHA concludes have adequate sanitation facilities onboard.
Section 1915.89 Control of Hazardous Energy (Lockout/Tags-Plus).
    The final rule adds requirements for the control of hazardous
energy in servicing operations in shipyard employment, including
servicing operations in landside facilities, as well as on vessels and
vessel sections. The lockout/tags-plus requirements comprise the major
portion of the costs of the final rule.
Section 1915.89(b) Lockout/Tags-Plus Program
    The standard requires that employers establish a program to protect
employees from energization or startup, or release of hazardous energy,
during the servicing of machinery, equipment, and systems in shipyard
employment. This program would have to include: (1) Procedures for
lockout/tags-plus systems, including a lockout/tags-plus coordination
process (Sec.  1915.89(b)-(c)); (2) procedures for protecting employees
involved in servicing (Sec.  1915.89(d)-(m)); (3) specification for
locks and tags-plus hardware (Sec.  1915.89(n)); (4) employee training
(Sec.  1915.89(o)); (5) incident investigations (Sec.  1915.89(p)); and
(6) program audits (Sec.  1915.89(q)). Only the time and costs to
actually develop the program (the written lockout/tags-plus procedures)
and the lockout/tags-plus coordination process are considered in this
section.
    The final lockout/tags-plus rule adds a requirement that employers
establish and implement lockout/tags-plus coordination (1) when
employees on vessels and in vessel sections are servicing multiple
machinery, equipment, or systems at the same time; and (2) when
employees on vessels, in

vessel sections, and at landside facilities are performing multiple
servicing operations on the same machinery, equipment, or system at the
same time.
    The lockout/tags-plus coordination process requires that employers
have a lockout/tags-plus coordinator and a lockout/tags-plus log. The
coordinator is responsible for overseeing and approving the application
of each lockout/tags-plus system, verification of isolation of
hazardous energy before servicing is started, and removal of each
lockout/tags-plus system. The coordinator will also maintain and
administer the lockout/tags-plus log.
    The lockout/tags-plus log must contain the following information on
each lockout/tags-plus system: (1) Location of machinery, equipment, or
system to be serviced; (2) type of machinery, equipment, or system to
be serviced; (3) name of the authorized employee applying lockout/tags-
plus system; (4) date the lockout/tags-plus system is applied; (5) name
of the authorized employee removing the lockout/tags-plus system; and
(6) date the lockout/tags-plus system is removed.
Section 1915.89 (c)-(m) Procedures for Securing Energy Sources
    The final rule requires that, before any servicing is performed,
all energy sources are identified and isolated, and the machinery,
equipment, or system is rendered inoperative (Sec.  1915.89(c)(1)). It
also requires that employers implement measures to prevent hazards by
following certain procedures for shutting down equipment, isolating
power sources, verifying deenergization, and applying lockout or tags-
plus devices (Sec.  1915.89(d)-(m)).
    The final rule requires that, when energy-isolating devices are
capable of being locked, the employer must use a lock to prevent
energization or startup, or the release of hazardous energy, before
beginning servicing, unless the employer can demonstrate that the
utilization of a tags-plus system will provide full employee protection
(Sec.  1915.89(c)(2)). When energy-isolating devices are not capable of
being locked, the final rule requires that the employer apply a tags-
plus system to prevent energization or startup, or the release of
hazardous energy, before starting servicing (Sec.  1915.89(c)(3)). The
tags-plus system shall consist of at least one energy-isolating device
with a tag affixed to it; and at least one additional safety measure
that will provide the equivalent safety available from the use of a
lock (Sec.  1915.89(c)(4)). Additional safety measures include, but are
not limited to, the removal of an isolating circuit element, the
blocking of a controlling switch, the opening of an extra disconnecting
device, the removal or wiring in place of a valve handle (Sec.
1915.80(b)(1)).
    These provisions include as costs the time necessary to implement
the lockout/tags-plus procedures, apply locks or tags-plus systems,
implement additional safety measures, and notify affected employees of
the lockout/tags-plus application. These costs do not include the time
to find the circuit, as OSHA considers this a part of existing duties.
Section 1915.89(n) Specifications for Locks and Tags-Plus Materials and
Hardware
    The rule requires employers to provide locks and tags-plus system
hardware used for isolating, securing, or blocking any machinery,
equipment, or system that is to be serviced. The final rule addresses
the specific characteristics of these devices with regard to
durability, color, shape, and size uniformity throughout the
establishment. Also, the rule states that locks and tags-plus devices
must be singularly identified, must be the only devices used for
controlling energy, and must not be used for other purposes. OSHA
attributed to this paragraph the costs for the time to choose and
purchase the appropriate locks and tags-plus materials and hardware and
the costs of that material and hardware.
Section 1915.89(o) Information and Training
    The final rule requires employers to provide training to ensure
that the purpose and function of the lockout/tags-plus program are
understood by employees, and that the knowledge and skills required for
the safe application, usage, and removal of lockout/tags-plus systems
are acquired by employees. The rule requires training for employees who
are, or may be, in an area where the lockout/tags-plus systems are
being used so they know the (1) Purpose and function of the employer's
lockout/tags-plus program and procedures; (2) unique identity and
standardization of locks and tags used in the lockout/tags-plus system;
(3) three basic components of the tags-plus system; (4) prohibition
against removing or tampering with any lockout/tags-plus system; and
(5) prohibition against reenergizing or restarting any machinery,
equipment, or system that is being serviced under a lockout/tags-plus
system.
    Affected employees also must be trained in the following: (1) The
use of the employer's lockout/tags-plus program and procedures; (2) the
prohibition against affected employees applying or removing any
lockout/tags-plus system; and (3) the prohibition against them
bypassing, ignoring, or defeating a lockout/tags-plus system.
    In addition to the training requirements for general employees and
affected employees, authorized employees must be trained so they know:
(1) The steps necessary for the safe application, use, and removal of
lockout/tags-plus systems; (2) the types and magnitudes of energy
sources at the worksite; (3) the means and methods for isolating and
controlling hazardous energy; (4) the means for determining exposure
status of employees in a servicing group for which the authorized
employee is in charge; (5) the requirement that tags be legible and
understandable; (6) the requirement that tags and their means of
attachment be made of materials that will withstand environmental
conditions; (7) the requirements that tags be securely attached so they
cannot be accidentally removed; (8) the knowledge that tags are simply
warning devices, and alone do not provide a physical barrier against
energization; and (9) that tags must be used in conjunction with
energy-isolating devices and measures.
    Finally, lockout/tags-plus coordinators, in addition to receiving
the general employee, affected employee, and authorized employee
training, must be trained in the following: (1) How to identify and
isolate any machinery, equipment, or system that is being serviced; and
(2) how to accurately document lockout/tags-plus systems and maintain
the lockout/tags-plus log.
    In addition to the required initial training, the final rule
requires employers to provide retraining when: (1) There is a change in
the employee's job that presents new hazards or requires a greater
degree of knowledge about the lockout/tags-plus program or procedures;
(2) there is a change in machinery, equipment, or systems that presents
a new hazard; (3) there is a change in the employer's lockout/tags-plus
program or procedures; (4) it is necessary to maintain the employee's
proficiency; and (5) an incident investigation or program audit reveals
deficiencies in the lockout/tags-plus program or procedures or in the
employee's knowledge of it.
    The rule also requires employers to maintain records that employee
training has been accomplished and is being kept up to date. The
training records would have to contain each employee's name, dates of
the training, and subject of training. OSHA attributed to this

paragraph all costs associated with training.
Section 1915.89(p) Incident Investigations
    The final rule requires employers to promptly investigate each
incident that resulted in, or could have resulted in, energization or
startup, or the release of hazardous energy. The incident investigation
must be conducted by at least one employee who has knowledge and
experience in the employer's lockout/tags-plus program and procedures,
as well as in investigating and analyzing incidents involving the
release of hazardous energy.
    The rule requires that a written incident report be prepared that
includes: (1) The date and time of the incident; (2) date and time the
investigation began; (3) incident location; (4) description of the
incident; (5) factors contributing to the incident; (6) a copy of the
current lockout/tags-plus log; and (7) corrective actions needed. The
incident investigation, the written report, and corrective actions must
be completed with 30 days following the incident. If corrective actions
cannot be implemented within 30 days, the employer must prepare a
written abatement plan that includes an explanation for the delay, an
abatement timetable, and a summary of interim steps the employer is
taking to protect employees from hazardous energy while servicing
machinery, equipment, or systems.
Section 1915.89(q) Program Audits
    The final rule requires that employers conduct a program audit of
the current lockout/tags-plus program and procedures at least annually
to ensure that the procedures and the requirements of the rule are
being followed, and to correct any deficiencies. The program audit must
be performed by an authorized employee other than the one(s) using the
energy-control procedure being reviewed, or other persons knowledgeable
about the employer's lockout/tags-plus program and procedures and the
machinery, equipment, or systems being reviewed. The program audit
shall include a review of the lockout/tags-plus program and procedures,
the current lockout/tags-plus log, and the incident reports since the
last audit; and verification of the accuracy of the lockout/tags-plus
log.
    The final rule requires that the written audit report be delivered
to the employer within 15 days after completion of the audit and
include: (1) The audit date; (2) the persons performing the audit; (3)
the procedure and machinery, equipment, or system being audited; (4)
the audit findings and recommendations; (5) previous incident
investigation report; and (6) description of corrective actions taken
in response to incident investigation finding. Finally, the final rule
also requires that the employer promptly communicate audit findings and
recommendations to each employee whose jobs tasks may be affected. OSHA
assumed that all employers would incur the costs necessary to implement
this provision.
Section 1915.93 Motor Vehicle Safety Equipment, Operation, and
Maintenance
    The final rule requires employers to ensure that motor vehicle
safety equipment is not removed from any employer-provided vehicle. The
employer would have to replace safety equipment that is removed. The
Agency believes that employers engaged in shipyard employment are
generally in compliance with the rule as it applies to safety equipment
on new motor vehicles, and that motor vehicle equipment is not being
used onboard commercial vessels. The Agency estimated that employers
may sometimes remove safety equipment from older vehicles. Thus,
employers would need to reinstall this safety equipment.
Section 1915.94 Servicing Multi-Piece and Single-Piece Rim Wheels
    The standard incorporates by reference the requirement set forth in
29 CFR 1910.177. This section applies to the servicing of multi-piece
and single-piece rim wheels used on large vehicles such as trucks,
tractors, trailers, buses, and off-road machines, and requires that
employers train employees who will perform the servicing. It does not
apply to servicing rim wheels used on automobiles, or on pickup trucks
and vans using automobile tires or trucks tires designated ``LT.'' The
Agency believes that servicing rim wheels in shipyards is similar to
such servicing in general industry. OSHA estimates that the costs
associated with this servicing are limited to training time for initial
training and additional training as necessary.

B. Industrial Profile

    OSHA's final rule affects those establishments within OSHA's
authority that are engaged in shipyard employment operations onboard
vessels, on vessel sections, and at landside operations, regardless of
geographic location. This category of establishments includes employers
engaged in shipyard-employment operations onboard commercial vessels
not inspected by the U.S. Coast Guard (USCG).
    Some stakeholders commented that OSHA's preliminary economic
analysis (PEA) underestimated the number of vessels the rule would
affect. For example, Gerry Mulligan of Prowler LLC and Ocean Prowler
LLC said:

    OSHA's [preliminary] estimate of a total of 639 establishments
effected by the rule significantly underestimates the economic
impacts of the rule. * * * [T]his rule will impact the more than
2500 uninspected vessels working in Washington and Alaska on which
the ship's crews performs repairs. * * * Clearly the rule affects
many more entities than just shipyards, most of which do not seem to
be addressed in the economic impact statements (Ex. 100.1; see also
Ex. 123).

    Based on stakeholder comments and other information in the record,
OSHA added to the FEA industries with commercial vessels not inspected
by the USCG. The final rule applies to the extent that these
establishments are performing shipyard-employment operations, such as
servicing machinery, equipment, or systems, onboard vessels. The PEA
did not include these industries; however, OSHA determined that these
employers are within OSHA's authority and perform shipyard-employment
operations. Thus, the FEA is including these industries in the
analysis.
Affected Establishments and Employees
    This section describes OSHA's method for estimating the number of
affected establishments and employees engaged in shipyard employment,
which includes shipbuilding, ship repair and shipbreaking
establishments (NAICS 336611), and establishments in industries
involving commercial vessels, including commercial fishing (NAICS
11411), fish processing onboard vessels (included in NAICS 311712), tug
and towing boats (included in NAICS 488330), coastal and Great Lakes
passenger transportation (NAICS 483114), and inland water passenger
transportation (NAICS 483212).
    The Agency derived estimates of the number of affected
establishments and employees primarily from 2006 Small Business
Administration (SBA) data on establishments, employees, and annual
payroll, and from 2007 U.S. Bureau of the Census (Census Bureau) data
on value of shipments (revenues). The Agency used the SBA data because
they contain a detailed breakdown by establishment and employment size
classes. The PEA used Census Bureau data, but inadequate detail on size
class for transportation industries and a lack

of available 2007 Economic Census data for some industries led OSHA to
update and expand estimates in the FEA using 2006 SBA data, which
provided adequate size class detail and which are the most current data
available.
    OSHA assumed that the final rule would affect all establishments
engaged in shipbuilding, ship repair, and shipbreaking, and those
establishments engaged in shipyard-employment operations in commercial
fishing establishments, on processing vessels in the fish-processing
and -packaging industry, in establishments with tug and towing boats
(other than seagoing tugs and towboats), and in establishments with
some very small non-seagoing passenger vessels (those vessels carrying
fewer than 6 passengers). The Agency estimated that 90 percent of tow
and tugboat establishments employ non-seagoing vessels and non-Great
Lakes barges. The Agency also estimated that 33 percent of passenger
vessels operating on the Great Lakes and inland waterways carry fewer
than 6 passengers for hire; thus, they are not USCG-inspected.
    The final rule does not affect establishments with USCG-inspected
vessels, including freight vessels, nautical-school vessels, offshore-
supply vessels, ferries and other passenger vessels, sailing-school
vessels, seagoing barges, seagoing motor vessels, small passenger
vessels, steam vessels, tank vessels, fish-processing vessels (more
than 5,000 gross tons), fish-tender vessels (more than 500 gross tons),
Great Lakes barges, and oil-spill response vessels.
    For the purposes of illustrating a clear industrial profile, OSHA
used the following employment size classes: 1-19, 20-99, 100-199, 200-
499, 500-999, and 1,000 and more employees (Table 5). In NAICS 336611,
which includes shipbuilding, ship repair, and shipbreaking, OSHA
estimated that all establishments with 100 or more employees are
shipyards; that about 73 percent of establishments with 20-99 employees
are contractors who work at shipyards or off-site establishments that
perform shipyard employment operations; and that all very small
establishments with fewer than 20 employees are contractors or off-site
establishments.
[GRAPHIC] [TIFF OMITTED] TR02MY11.002

    Comment in the record questioned OSHA's estimated affected
establishments saying ``[t]he U.S. Coast Guard lists 79,565 commercial
fishing vessels and acknowledges that number is not complete'' (Ex.
199, p. 257) and questioned whether OSHA's estimate of 2,090 commercial
vessels establishments underestimated the industry being regulated.
OSHA develops an industrial profile on an establishment basis and, in
some cases, one establishment in a commercial vessel industry will have
more than one vessel, which means there is not a one-to-one translation
from USCG-reported vessels and Census Bureau-reported establishments.
There are also approximately 65,000 nonemployer establishments (those
with no employees and taxable revenue) in the commercial fishing
industry according to data from the Census Bureau's Economic Census.
Establishments with

no employees do not fall within OSHA jurisdiction and therefore are not
included in the profile of affected industries.
    For this analysis, OSHA assumes that most small and all very small
establishments in NAICS 336611 are contractors working at shipyards,
and are not shipyards. These contract employers, in most cases, will
not incur the full cost of compliance due to either their adherence to
the host employer's programs or the type of work they perform at
shipyards. For example, if a contractor provides electrical services to
shipyards, the contractor likely would have its employees follow the
host employer's program for the control of hazardous energy, and may
not incur the full cost to develop a program. Moreover, to the extent
that these contractors also perform services for companies in general
industry, they already may have implemented a lockout/tagout program
and incurred some startup costs. In the PEA, the Agency estimated that
contractors primarily exist in two size classifications: 1-19 employees
and 20-99 employees. OSHA did not receive any comments indicating that
its estimate of the number of contractors and off-site employers was
inaccurate, or that some of these establishments should be considered
shipyards. The record also does not indicate that contractors and off-
site employers will incur greater costs to develop and implement a
lockout/tags-plus program than was estimated in the PEA.
    The estimates presented in Table 5 are derived from 2006 SBA data.
Shipyards and off-site shipyards are classified as NAICS 336611,
commercial fishing as NAICS 11411, fish-processing onboard vessels as
part of NAICS 311712, tug and towing vessels as part of NAICS 488330,
and passenger vessels as NAICS 483114 and NAICS 483212. Complete firm
and establishment data were largely available from SBA, but OSHA had to
make some estimates for shipyards; establishments with fish-processing
factories aboard ships; and establishments with tug and towing boats.
OSHA estimates that there are 200 floating fish factories currently in
operation. The Agency assumes that those factories are distributed
across employment size classes in a manner identical to the
establishment size distribution in the industry (NAICS 311712) as a
whole. Allen Rainsberger, of the Puget Sound Shipbuilder's Association,
commented that OSHA's preliminary estimate of 2,500 employees working
on fish processing vessels was not accurate. Quoting OSHA, he wrote:

    ``OSHA estimates there are about 200 fish processing vessels
operating in * * * US territorial waters. * * * OSHA estimates that
each vessel employs about 100-120 processing employees * * * for a
total of 2,500 employees.'' There is an error in this equation as
200 x 100 = 20,000 employees. In the North Pacific there are about
85-90 vessels that process fish, with crews anywhere from 10 to 200
employees each (Ex. 124).

    By estimating employment and size class distribution based on the
characteristics of the fish processing industry as a whole, the Agency
eliminated this error. OSHA made similar assumptions for tug and
towboat industries, distributing the 722 tug and towing boat
establishments reported in the 2007 Economic Census across employment-
size classes using the same ratios reported for the industry under
which they were classified in the 2006 SBA data.
    The firm estimates for shipyards presented in Table 6 are derived
by using a firm-to-establishment ratio from 1997 SBA data. To maintain
consistency in the data from the preliminary to the final analysis,
OSHA used the estimation method employed in the PEA with updated data
for establishments from the 2006 SBA. In the PEA, OSHA applied a
``firms-per-establishment'' ratio (developed using 1997 SBA data) to
the Census Bureau establishment estimates to develop the estimated
number of firms. This process is illustrated in Table 6. For example,
2002 SBA data reported that there are 27 firms in NAICS 336611 with 500
or more employees. However, Census Bureau data report that there are
only 21 establishments with 500 or more employees for the same year.
OSHA used a ratio of firms-to-establishments to reconcile the two data
sets.
[GRAPHIC] [TIFF OMITTED] TR02MY11.003

    Table 7 presents the total number of affected establishments and
employees. In this table, OSHA used a 32.5 percent turnover rate
estimated by the Bureau of Labor Statistics (BLS, 2006) to estimate the
number of new employees and new production employees affected by the
final rule in any given year. Production employees were estimated to be
84 percent of total employees, based on Census Bureau data. Since the
large firms in these industries employ most of the employees, the
Agency assumed that most large firms (using the alternate definition of
200 or more employees) have full-time safety and health professionals;
thus, they have in-house expertise to help the establishment to comply
with the final rule. OSHA did not receive any comments indicating that
large firms do not have full-time safety and health professionals, or
that OSHA was incorrect in reaching this conclusion.

[GRAPHIC] [TIFF OMITTED] TR02MY11.004

Employment
    OSHA used SBA data to estimate total employment in the affected
industries. SBA reported employment for most, but not all, size classes
and industries. When SBA data did not disclose employment, the Agency
estimated employment by assuming firm employment averaged to the
midpoint of each size class, and multiplying that estimated employment
per firm by the SBA-reported number of firms for each size class. For
example, if there were 2 firms in the 30-34 employees size class, the
Agency assumed an average of 32 employees at each firm, for a total of
64 employees in the 30-34 employees size class. When employment
estimated in this manner exceeded the reported total industry
employment, OSHA reduced assumed average employment to the lowest value
in a given size class.
    OSHA acknowledges that not every employee in the affected
industries will be affected by this rule. Many employees in affected
industries do not perform shipyard-employment operations, and,
therefore, the industries in which they are employed will incur
compliance costs for only a fraction of these employees. However, to
develop a complete representation of the affected industries, the
Agency presents the total employment in the affected industries in this
profile, and addresses the scope of affected employees in the Costs of
Compliance section of this FEA.
    In 2006, employment in NAICS 336611 was estimated at 88,121. About
75 percent of these employees work in the largest shipyards--those with
1,000 or more employees. Another 6 percent work in shipyards with 500-
999 employees. Establishments with fewer than 200 employees account for
only 20 percent of total employment, and shipyard contractors account
for less than one-half (about 45 percent) of the 20 percent.
    Among the 9,161 commercial fishing employees and 17,470 fish-
processing employees, 55 percent and 57 percent of these employees,
respectively, work for employers with 1,000 or more employees, while 11
percent and 6 percent, respectively, work for employers with 500-999
employees. Establishments with fewer than 200 employees account for 31
percent of commercial fishing employees, and 24 percent of employees
are involved in fish-processing onboard commercial vessels.
    The total employment for passenger vessel industries is 13,280, but
many of these employees work onboard USCG-inspected vessels; therefore,
they are not affected by this rule. OSHA estimates that 969 employees
working on passenger vessels will be affected by this rule, all of whom
work at establishments with fewer than 100 employees. Thirty-one
percent of employees working aboard tug or towing boats work for
employers with 1,000 or more employees, with an additional 25 percent
working for employers having between 500-999 employees. Establishments
with fewer than 200 employees account for 44

percent of employment in the tug and towboat industry.
Payroll
    Based on the 2006 SBA data, annual payroll for all industries
affected by this final rule was about $5.3 billion. Of this amount,
commercial fishing had an annual payroll of $225 million, or an average
of $24,562 per employee. Fish processing vessels had an annual payroll
of $384 million or an average of $21,975 per employee. The affected
commercial passenger transportation industries had an annual payroll of
$38.8 million, or an average of $40,090 per employee. The payroll for
shipyards was an average of $46,071 per employee for a total payroll of
$4.1 billion. Tug and towboat industries had annual payroll expenses of
$567 million, or an average of $34,715 per employee.
    Overall, the payroll of the affected industries averaged $39,943
per employee. For a full year, this is equivalent to an hourly wage of
$19.20. The payroll per employee did not show any consistent pattern
across employment size classes.
Wages
    Taking the ratio of total payroll (from SBA) to total employment,
OSHA calculated an average annual salary of $39,943 per employee for
all affected industries combined. The average annual salary estimate
includes both production and non-production employees.
    The average employee in the shipyard industry earned $46,071. The
average salary for water-transportation employees, which includes tug
and towing services and passenger vessels, was $40,090, while the
average tug and towing-boat employee earned $34,715. The average salary
for commercial fishing and fish processing was $35,550. These estimates
of average salaries include both production and non-production
employees.
    OSHA compared the $39,943 annual salary estimate, which was based
on payroll data, with a salary estimate based on weekly earnings
reported by BLS (Employment, Hours, and Earnings from the Current
Employment Survey, 2006). In 2006, BLS reported weekly earnings of
$862.46 for a production or non-supervisory water-transportation
employee, and $800.61 for an employee working in the shipyard industry.
The annual salaries for employees in these two industries, calculated
from BLS, reported weekly earnings of $44,848 and $41,632 (fringe
benefits not included), respectively. The salary estimates based on the
BLS data differ from the salary estimates based on payroll data. The
Agency chose to rely on the BLS data for this analysis because it
includes breakdowns of different employment categories and wage and
salary information for industries such as commercial fishing. OSHA
estimated, for the PEA, that the supervisors' wage rate is 25 percent
higher than the average wage rate for production employees. OSHA did
not receive any objections.
    The wage estimates for employees in the affected industries include
base rate, cost-of-living allowances, guaranteed pay, hazardous-duty
pay, incentive pay (including commissions and production bonuses), on-
call pay, and tips. The estimates exclude back pay, jury-duty pay,
overtime pay, severance pay, shift differentials, non-production
bonuses, and tuition reimbursements (BLS, 2000). To produce a total
wage that realistically reflects total compensation for employees in
affected industries, OSHA adjusted the average base wage to include
fringe benefits. The BLS reports total employee compensation, based on
survey data for aggregate worker categories (BLS, 2002). In this
analysis, OSHA used an average fringe benefits rate of 38 percent based
on data from the BLS Employer Costs for Employee Compensation survey.

C. Technological Feasibility

    The OSH Act mandates that OSHA, when promulgating standards for
protecting workers, consider the feasibility of the new workplace
rules. Court decisions have subsequently clarified ``feasibility'' in
economic and technological terms. Consistent with the legal framework
established by the OSH Act and court decisions, OSHA assessed the
technological feasibility of the final rule. The rule addresses various
workplace hazards in shipyard employment, including control of
hazardous energy and motor vehicle safety. The final rule does not
require technology that is not already in use in many affected
establishments. For example, OSHA received comments stating that many
employers engaged in shipyard employment already have implemented
effective programs for the control of hazardous energy (Exs. 108.1;
114.1; 116.1; 121.1; 123; 132.2; 168, pp.70, 192, 322-24). Similarly,
several stakeholders offered examples of practices they currently use
to protect workers, including pedestrians, from motor-vehicle accidents
at their worksites (Exs. 116.1; 119.1; 121.1; 168, pp. 71-73, 247-48).
Many of the requirements involve implementing work-practice controls
that can be communicated to employees through training, which some
stakeholders said they currently provide (Exs. 116.1; 120.1). In
addition, some stakeholders said they already provide CPR training for
their on-site first aid providers (Exs. 116.1; 120.1; 168, pp. 87-89,
259, 260, 299). Based on current industry practice and OSHA's findings,
the Agency determined that the rule is technologically feasible.

D. Benefits

    E.O. 12866 requires that Federal agencies assess both the costs and
benefits of any regulation and make a ``reasoned determination that the
benefits * * * justify its costs'' (E.O. 12866, Section 1(b)(6)).
Agencies are to base regulatory decisions on ``the best reasonably
obtainable scientific, technical, economic, and other information
concerning the need for, and consequences of, the intended regulation''
(E.O. 12866 Section 1(b)(7)).
    This chapter reviews the population at risk of occupational injury,
illness, or death in affected establishments and industries, and
assesses the potential benefits associated with the final rule. OSHA
believes that compliance with the rule will yield substantial benefits
in terms of lives saved, injuries avoided, and accident-related cost
savings. In assessing the benefits of the final rule, OSHA focused on
the rule's primary and substantial new requirements: (1) CPR training
for first aid providers; (2) the control of hazardous energy during
servicing operations (lockout/tags-plus); (3) motor vehicle safety,
including pedestrian safety at shipyards; and (4) servicing multi-piece
and single-piece rim wheels. Although the final rule also includes
other provisions, they primarily update, consolidate, and clarify
existing requirements. Although OSHA believes that all provisions in
the final rule will help to increase safety and health in shipyard
employment, the Agency is only estimating quantitative benefits for the
new provisions listed above (refer to the Non-quantified Benefits
section below for a further discussion of the non-monetized benefits).
OSHA believes that compliance with these new provisions will decrease
the number of injuries and fatalities which, in turn, will reduce
expenditures for medical care, rehabilitation, death benefits, lost-
work time, and repairs to damaged facilities and equipment.
    To assess the benefits, the Agency used OSHA and BLS data to
conduct a historical analysis of the frequency of fatalities and
injuries among employees engaged in shipyard employment landside and
onboard commercial vessels. These data were used to calculate the
frequency of accidents

caused by improperly controlling hazardous energy during maintenance
operations, and while operating motor vehicles. The Agency did not
identify any injuries or fatalities relating to servicing rim wheels,
and did not receive any reports of such injuries or fatalities from
industry in the docket. The following sections estimate the number of
fatalities and injuries OSHA expects the rule to prevent, and describes
the methodology used to develop these estimates.
Fatality Benefits
    OSHA's analysis of the number of fatalities estimated to be averted
by the final rule proceeds in two steps: (1) Determine the number of
fatalities currently occurring and the types and causes of these
fatalities; and (2) determine the rule's effectiveness in averting
various types of fatalities (assuming full compliance). Only those
fatalities that would have been prevented through compliance with the
new provisions noted above were estimated in this benefits analysis.
    In 1995, OSHA analyzed fatalities in shipbuilding and repair (SIC
3731) that occurred from 1974 to 1995. OSHA concluded that, of the
total number of fatalities (314), electrocutions accounted for 8.6
percent (or 27). More recently, OSHA reviewed 248 abstracts of fatal
accidents from the OSHA Integrated Management Information System (IMIS)
database from 1987 to 2002, to determine if any shipyard-employment
accidents were the result of, or caused by, hazardous energy, motor
vehicles, lack of medical services and first aid, and servicing rim
wheels. Review of these 248 fatal accidents led OSHA to conclude that
38 (15.3 percent) were related to hazards the final rule addresses.
Included in the 38 deaths were 10 fatalities that resulted from heart
attacks for which the abstract did not note a history of cardiovascular
disease. Of the 38 fatalities, 13 (34 percent) were deaths that the
final rule could have prevented. Of the 10 heart-attack deaths, OSHA
believes that 2 deaths (20 percent) could have been averted by the
final rule. While OSHA's analysis of heart-attack deaths focused on
those deaths that were work related, the Agency notes that the
requirements for CPR-trained first aid providers may also reduce
mortality due to non-work-related heart attacks that occur in the work
environment. As a result, OSHA believes that the benefits of this
provision may be greatly underestimated.
    To determine an annual estimate of the number of fatalities in
shipyard employment that the final rule would prevent, OSHA used 11
years (1992-2002) of BLS Census of Fatal Occupational Injury (CFOI)
data. That data showed, on average, 14.6 worker deaths occurred in SIC
3731 (shipbuilding and repair industry, which includes shipbreaking)
per year. OSHA multiplied that average by 15.3 percent (the percentage
of IMIS deaths related to hazards covered by the rule) to reach a total
of 2.2 deaths per year related to hazards covered by the rule. Then,
OSHA multiplied the 2.2 deaths by 39.5 percent (percentage of IMIS
fatalities estimated to be prevented by the rule) to reach 0.9 deaths
in shipyards (SIC 3731/NAICS 336611) that could be prevented by the
rule (avoidable deaths).
    To determine the annual estimate of the number of fatalities aboard
covered commercial vessels that the rule would prevent, OSHA used 17
years (2002-2008) of BLS CFOI data. That data showed, on average, 47
worker deaths per year in the commercial vessels industries, a majority
of those deaths being in the commercial fishing industry. OSHA
multiplied that average by 0.9 percent, which was the percentage of
IMIS deaths related to hazards covered by the rule, multiplied by the
ratio of fish-processing vessels to total fish processing
establishments. This calculation accounted for, and removed from the
estimate, those fatalities that occurred at land-based fish-processing
facilities. Based on this calculation, OSHA reached an estimate of 0.4
deaths per year onboard commercial vessels that were related to hazards
covered by the final rule. OSHA estimated that 66 percent of the deaths
related to hazards covered by the rule could have been prevented for a
total of 0.3 avoidable deaths per year onboard commercial vessels. OSHA
estimates that, in total, 1.2 deaths (0.9 deaths in shipyards plus 0.3
onboard commercial vessels covered by the rule) per year could be
prevented by the final rule (see Table 8).
[GRAPHIC] [TIFF OMITTED] TR02MY11.005

Injury Benefits
    The numbers and characteristics of injuries in SIC 3731 (NAICS
336611), SIC 0910 (NAICS 11411), SIC 2092 (NAICS 311712), SIC 4499
(NAICS 488330), and SIC 4489 (NAICS 483114 and NAICS 483212) are
outlined in the BLS Annual Survey of Occupational Injuries and
Illnesses. This survey is based on employer injury and illness reports
(OSHA Form 200 or 300) collected by state agencies and BLS

from roughly 250,000 private establishments. The survey compiles
demographic information, data on employee occupation, length-of-service
statistics, employee hours worked, the employer's principal products or
services, selected injury or illness characteristics, and the severity
of the accident (in terms of lost workdays). Thus, data from the BLS
injury and illness survey can be used to develop a profile of the risks
facing employee groups, such as those engaged in shipyard-employment
activities. Unfortunately, this BLS database does not characterize
injuries that do not involve days away from work in a way that would
permit OSHA to determine causality. OSHA notes that, in most sectors,
the number of injuries and illnesses that do not involve days away from
work equals or exceeds the number of cases involving days away from
work.
    According to BLS data from 1992 to 2001, in SIC 3731 there were an
average of 6,088 injuries per year involving days away from work. BLS
publishes certain broad categories of injuries and illnesses by source
for all SICs, and now for NAICS.
    To estimate the number of injuries due to the absence or inadequacy
of procedures for the control of hazardous energy, OSHA multiplied the
number of total cases involving days away from work by the percentage
of cases estimated to be caused by the absence or inadequacy of
protection against hazardous energy. In the general industry lockout/
tagout standard, OSHA determined that 2 percent of all injuries were
related to hazardous energy (OSHA, 1989). OSHA multiplied the product
by 39.5 percent (the percentage of IMIS fatalities estimated to be
prevented by the final rule). The results are presented in Table 9.
OSHA then used the 2 percent figure to estimate the non-lost workday
injuries resulting from the lockout/tagout activities. This product was
also multiplied by 39.5 percent (the percentage of IMIS fatalities
estimated to be prevented by the final rule). This calculation results
in 48.1 lost workday and 89.1 non-lost workday lockout/tagout injury
cases.
    According to the BLS data from 1992-2001, there were an average of
1,800 injuries per year in the fish-processing industry involving days
away from work. Based on IMIS accident reports, the Agency estimated
that 28 percent of injuries in the fish-processing industry were
related to inadequacy or absence of controls to protect employees from
hazardous energy. These injuries were generally serious (often
amputations). OSHA estimated lost workdays related to hazardous-energy
injuries for the fish-processing industry by multiplying the injury
cases involving days away from work by the percent of injuries related
to lockout/tagout (28 percent). OSHA concluded that injuries onboard
floating fish-processing factories were occurring in the same
proportion to injuries at land-based fish-processing factories. To
estimate the number of hazardous-energy injuries onboard fish-
processing vessels, OSHA multiplied the number of hazardous energy
injury cases involving days away by 36 percent (the ratio of fish-
processing vessels (200) to total fish-processing establishments
(552)). The Agency concluded that the final rule would prevent all of
those injuries, resulting in an estimated 184.3 avoidable lockout/tags-
plus injury cases per year involving days away from work.
    The injuries related to motor vehicle operation and maintenance
were calculated by applying the 15.3 percent (the percentage of IMIS
deaths related to the rule used in the fatality estimates) to the BLS
estimates for motor vehicle-related injuries (lost workday and non-lost
workday estimates), and then multiplying this product by 39.5 percent
(the percentage of IMIS fatalities estimated to be prevented by the
rule); this calculation results in 9.5 lost workday and 17.4 non-lost
workday injuries related to motor vehicles. This injury category
includes injuries while operating or riding in motor vehicles, as well
as being struck by motor vehicles in the workplace. This estimate,
combined with the hazardous-energy injury reductions, totals of 348.4
avoidable injury cases (which includes both cases involving days away
from work and non-lost workday cases) that the final rule would prevent
(see Table 9). The available data did not allow OSHA to identify
injuries related to the absence, or inadequate training, of CPR
providers, nor injuries that occurred while servicing rim wheels.

[GRAPHIC] [TIFF OMITTED] TR02MY11.006

Monetized Benefits
    For informational purposes, the Agency monetized both avoidable
fatalities and injuries based on willingness-to-pay (WTP) values of
$8.7 million per death and $67,000 per injury. In estimating the value
of preventing a fatality, OSHA followed the approach established by the
U.S. Environmental Protection Agency (EPA). EPA's Guidelines for
Preparing Economic Analyses provides a detailed review of the methods
for estimating mortality risk values, and summarizes the values
obtained in the literature (EPA, 2000). Synthesizing the results from
26 relevant studies, EPA arrived at a mean value of a statistical life
(VSL) of $4.8 million (in 1990 dollars). EPA recommends this central
estimate, updated for inflation (the value is $8.7 million in 2010
dollars), for application in regulatory analyses. This VSL estimate
also is within the range of the substantial majority of such estimates
in the literature ($1 million to $10 million per statistical life), as
discussed in OMB Circular A-4 (OMB, 2003). Applying a VSL of $8.7
million to the estimated number of prevented fatalities, OSHA estimates
that the dollar value of the prevented deaths resulting from compliance
with the final rule will be $10.4 million annually.
    OSHA also reviewed the available research literature regarding the
dollar value of preventing an injury. Kip Viscusi and Joseph Aldy
conducted a critical review of 39 studies estimating the value of a
statistical injury (Viscusi and Aldy, 2003, Ex. 9). In their published
article, Viscusi and Aldy reviewed the available WTP literature to
identify a suitable range of estimates. Using WTP to value non-fatal
injuries is the approach OMB recommends in OMB Circular A-4.
    Viscusi and Aldy found that most studies resulted in estimates in
the range of $20,000 to $70,000 per injury, although several studies
resulted in even higher estimates. This range of values is partly
explained by the fact that some studies used an overall injury rate,
and others used only injuries resulting in lost workdays. The injuries
that would be prevented by this final rule often involve
hospitalization and, therefore, are likely to be more severe than the
majority of injuries involving days away from work.
    Thus, it is reasonable to believe that the value of a statistical
injury for this rulemaking will be in the upper part of the reported
range of estimates. Nevertheless, OSHA used an estimate of $67,000 in
2010 dollars to assess monetized benefits for this analysis. Thus, with
348.4 injuries (injuries involving days away from work and non-lost
workday injuries) a year potentially prevented by the final rule, OSHA
estimates that the dollar value of prevented injuries through
compliance with the rule will total $23.4 million annually.
    The total monetized benefits for prevented deaths and injuries are
estimated to be $33.8 million in total monetized benefits.
Non-Quantified Benefits
    OSHA believes that non-quantified benefits also are likely to
result from the final rule; therefore, the 1.2 prevented fatalities and
348.4 avoided injuries each year should be considered

minimum estimates. For example, the provisions for accounting for
employees at the end of the workshift, lifeboat safety, housekeeping,
rim-wheel repair, lighting, and utilities are expected to result in
safer working conditions that will reduce fatalities and injuries. The
revision of the sanitation and vermin-control standard also are
expected to result in fewer heat-, hydration-, and sanitation-related
deaths and illnesses. However, these cases are difficult to quantify as
they are commonly unreported or not recognized as work-related cases.
    The provisions for improved first aid and medical treatment, along
with the requirement to account for working-alone employees at the end
of the job assignment or workshift (whichever occurs first), are
expected to result in benefits due to improved survivability from an
injury, and fewer medical complications resulting from delayed or
ineffective treatment. Also, OSHA believes that employers and employees
will benefit from the reorganization and plain-language features of the
final rule, which will make it easier for employers to comply with the
rule and, thus, improve safety and health in general working conditions
in shipyard employment.
Appendix
    In estimating the preventable fatalities under the final rule, the
Agency reviewed accident abstracts from OSHA's IMIS database from the
years 1992-2008 (16 years). The table of accidents (by accident
numbers) below gives a brief description of the accidents and provides
OSHA's determination on the provisions that could have prevented the
accident. The table does not include examples of the 20 percent of
heart-attack deaths that are estimated to be preventable if the
requirements of this rule are followed.

------------------------------------------------------------------------
   Accident number         Brief description          OSHA's findings
------------------------------------------------------------------------
014337851...........  While attempting to repair   Control of Hazardous
                       a hoist, the employee did    Energy.
                       not check the brake to
                       ensure that it was locked
                       in. He had removed all but
                       one bolt when the drum and
                       gear started freewheeling.
                       The paw and spring broke
                       off. The two large gears
                       on the opposite side
                       jammed and the motor shaft
                       started turning. The hub
                       flew off the shaft and
                       stuck the employee in the
                       chest, killing him.
101350262...........  Employees were working in    Control of Hazardous
                       an aerial lift basket on     Energy.
                       an elevator platform
                       (hanger deck level) with
                       the boom extended to the
                       underside of the flight
                       deck. The employees had
                       finished their work and
                       were lowering themselves
                       to hanger deck level, when
                       the elevator unexpectedly
                       ascended towards the
                       flight deck. Both
                       employees were crushed
                       under the lip of the
                       flight deck, while in the
                       basket.
200840650...........  Employees were working on a  Control of Hazardous
                       steering mechanism           Energy.
                       belonging to a tow boat.
                       The electricity was turned
                       off and secured, but the
                       residual energy belonging
                       to the hydraulics was not.
                       A component of this
                       steering mechanism shifted
                       without warning killing
                       one employee.
170611206...........  Employee was electrocuted    Control of Hazardous
                       while working alone on a     Energy.
                       transformer. He seemed to
                       be manually cleaning the
                       ceramic terminals and
                       checking them for cracks.
                       The oil switch to the
                       mound was purportedly in
                       the open position;
                       however, the panel lights
                       indicated that the circuit
                       breaking controlling
                       electric power to the
                       mound was closed. No
                       signs, tags, or locks had
                       been used.
014534143...........  While an electrician was     Control of Hazardous
                       working on a switchboard,    Energy.
                       which was de-energized and
                       tagged, a ship's crew
                       member inadvertently
                       energized the circuit. He
                       was electrocuted.
014509350...........  Employees, conducting valve  Control of Hazardous
                       repair operations on a       Energy.
                       steam piping system, were
                       burned when scalded by
                       stored steam.
302101134...........  Employees came in contact    Control of Hazardous
                       with 4160 volts coming       Energy.
                       from a secondary switch
                       which had not been locked
                       open to de-energize the
                       high voltage going to the
                       load side of panel ZZ4020
                       and ZZ4025.
014436075...........  Accidental energization      Control of Hazardous
                       occurred when an employee    Energy.
                       was standing in the
                       conveyor when one of the
                       ship's crew turned the
                       conveyor on. The ship's
                       crewman was unaware of the
                       other employees' presence.
                       There was no lockout
                       procedure in effect.
200552248...........  A pickup truck with          Motor Vehicle Safety.
                       automatic transmission
                       began to roll back and
                       apparently the victim
                       tried to reach through the
                       driver's side window to
                       put the truck gear in park
                       when he fell and the front
                       driver's side tire rolled
                       over him.
201580073...........  The driver of a straddle     Motor Vehicle Safety.
                       lift truck struck and
                       killed an employee who had
                       been walking on the pier.
000603621...........  An employee was riding a     Motor Vehicle Safety.
                       bicycle while performing
                       regularly assigned tasks
                       when he was hit by a bus.
200550820...........  While standing near the      Control of Hazardous
                       right rear tire, employee    Energy.
                       was operating a battery
                       charger and pushing the
                       loader's button when he
                       apparently contacted a
                       control that caused the
                       machine to suddenly move
                       forward. He was run over
                       by the large rear tire and
                       was killed.
000648550...........  While an employee was        Motor Vehicle Safety.
                       hammering wood wedges in
                       the seal where the floor
                       meets the wall, a bobcat
                       operator backed over him
                       pinning him between the
                       bobcat and the dry dock
                       wall. The employee later
                       died at the hospital after
                       this accident.
------------------------------------------------------------------------
Source: Occupational Safety and Health Administration Integrated
  Management Information System Database.

E. Costs of Compliance

    This chapter presents OSHA's estimate of the rule's costs of
compliance for affected establishments and industries. OSHA based the
costs on the profile of affected employers and workers presented in the
Industrial Profile section of this FEA, on estimates based on data
provided by the ``General Industry Lockout/Tagout Regulatory Impact
Analysis'' (OSHA, 1989), and on the ``Supporting Statement for the
Information Collection Requirements in the Control of Hazardous Energy

(Lockout/Tagout) rule'' \13\ (29 CFR 1910.147, OMB Control Number 1218-
0150 (June 2004)).
---------------------------------------------------------------------------

    \13\ The purpose of the Supporting Statement is to analyze and
describe burden hours and cost associated with provisions of this
standard that contain paperwork requirements. The Supporting
Statement does not provide information or guidance on how to comply
with, or how to enforce, these provisions.
---------------------------------------------------------------------------

    This chapter is organized into three sections. The first section
reviews the methodology and describes the type of costs. The second
section presents OSHA's baseline data and analytical assumptions used
to estimate costs. The final section summarizes the costs of compliance
by establishment and provision.
Methodology
    To estimate the compliance costs that the final rule would impose
on employers, it was necessary to assess the extent to which current
industry practice already meets the rule's requirements. Based on that
assessment, the Agency identified five areas in the final rule that
would generate new costs: sanitation, medical services and first aid,
control of hazardous energy, motor-vehicle safety, and servicing multi-
piece and single-piece rim wheels. For the purposes of this FEA, OSHA
assumed that affected firms will seek to minimize their compliance
costs and, thus, calculated the least-cost option to comply with the
provisions of the rule. All cost estimates assume employers will fully
comply with the final rule. Costs are reported as annualized costs,
with capital or one-time costs based on a 7 percent discount rate (as
recommended by OMB) for costs in future years. All one-time costs are
assumed to have a 10-year life.
    This cost analysis does not account for any changes in production
methods, investment effects, or macroeconomic effects of the rule.
Taking into account all of these effects could increase or decrease the
cost estimate presented, although the macroeconomic effects of any rule
with costs as low as these are likely to be minimal. OSHA believes that
this approach, determining the benefits and costs of the final rule for
industry as it is today, is the most reliable and least speculative way
of presenting them.
Baseline Data and Analytical Assumptions
    This section presents the technical specifications, unit costs, and
analytical assumptions underlying OSHA's cost analysis. For those
provisions in the final rule that simply update, consolidate, or
clarify existing requirements, OSHA assumes that no new costs will be
imposed. The Agency did not receive any comments indicating that the
provisions that update, consolidate, or clarify existing requirements
would impose new costs.
    The Agency solicited comment in the record on whether these
provisions imposed new additional costs, and received comments that the
sanitation standard would require a 25 percent increase in toilets at a
cost of $7.5 million for the Newport News, VA, shipyard (James
Thornton, Northrop Grumman, Ex. 120.1), and that the lighting
requirements and housekeeping requirements would increase costs without
increasing safety (Doug Dixon, Pacific Fisherman Shipyard and Electric,
LLC, Ex. 131.1). The Agency considered these comments and concluded
that firms would not incur costs to comply with these provisions if
they were currently complying with the existing shipyard standards.
Section 1915.87 Medical Services and First Aid
    Paragraph (c)(1) requires employers to ensure that there is an
adequate number of employees trained as first aid providers at each
worksite during each work shift to render first aid, including CPR. The
Agency estimates that 2 percent of employees will serve as first aid
providers, and that 50 percent of those employees will need to be
trained or retrained to provide adequate care. According to American
Red Cross data, the cost per person for first aid (including CPR)
training ranges from $35 to $80 plus 4 hours of employee time to
receive the training (ARC, 2010). The Agency is using the median cost
of $55 for this analysis. The per-employee time cost to receive this
training is 4 hours multiplied by the employee's hourly wage rate of
$26.51 for shipyard employees; $28.61 for tug and towing-boat and
passenger-vessel employees; $31.62 for fish-processing vessel
employees; and $16.30 for commercial fishing employees. The total
training cost is $55 times the number of employees needing training.
    First aid equipment and first aid and CPR training on certain
uninspected commercial fishing vessels are regulated by the USCG (46
CFR 28.210). The Agency was unable to obtain data to adequately
estimate the number of commercial fishing vessels subject to USCG first
aid and CPR requirements. Therefore, OSHA estimated costs as if they
would apply to all commercial fishing vessels. This approach likely
will overstate costs for first aid training including CPR training in
the commercial fishing industry. Due to the presence of USCG first aid
training regulations, OSHA believes that commercial vessels already
have an adequate number of first aid providers onboard. The Agency
estimated the total cost related to this provision at $418,349. Table
10 outlines the total annual costs for first aid training including CPR
training.

[GRAPHIC] [TIFF OMITTED] TR02MY11.007

Section 1915.88 Sanitation
    Paragraph (e)(1) requires that employers provide handwashing
facilities at, or adjacent to, each toilet facility. Paragraph
(e)(2)(i) requires employers to ensure that each handwashing facility
is equipped with either hot and cold or lukewarm running water and
soap, or, when it is impracticable to provide running water, with
waterless skin cleansing agents that are capable of disinfecting the
skin and neutralizing the contaminants to which the employee may be
exposed.
    For shipbuilding and repair establishments, OSHA concluded that
they already have handwashing facilities at sewered toilets, but not at
all portable toilets. Thus, they would incur costs for providing
additional handwashing facilities. The Agency also concluded that
commercial vessels have adequate toilet and handwashing facilities
onboard vessels. As such, commercial vessel employers would not have to
provide portable toilet facilities or additional handwashing facilities
to meet employee health and personal needs.
    To comply with the requirement to provide handwashing facilities at
portable toilets, OSHA calculated the least-cost option, which is to
supply each portable toilet with waterless skin cleansing agents. OSHA
assumes that employers in the shipyard industry already are providing
lockable, unisex portable toilets, especially when work is being
performed onboard vessels. OSHA estimates that about one-third of
employees at each shipyard establishment might need to use portable
toilets. OSHA also estimates that employers will provide portable
toilets using the same formula they would use in determining the
adequate number of sewered toilets (Table F-2 in Sec.  1915.88(d)(2)).
    OSHA estimates that waterless cleaning agents for each portable
toilet will be refilled each time the toilet is serviced, which OSHA
assumes will be at least weekly. Further, the Agency estimates that
each bottle of cleanser costs $5 and that the annual cost of cleanser
for each portable toilet is $260 ($5 per bottle times 52 weeks). This
is the annual unit cost. The total annual cost to comply is the unit
cost multiplied by the total number of portable toilets that employers
on each size class will provide, multiplied by the number of
establishments in that size class. Table 11 outlines the costs
associated with this requirement which are estimated to be $748,709.
Note that for this analysis, the Agency assumed for the baseline that
establishments in the shipyard industry currently do not provide
handwashing products at portable toilets. To the extent that employers
are providing such services or products, the final cost estimates may
be lower. Moreover, if an establishment operates on only a seasonal
basis or is shutdown at any time during the year, the costs also may be
lower. OSHA did not receive any comments indicating that the costs the
Agency estimated for providing waterless cleansing agents were
understated.

[GRAPHIC] [TIFF OMITTED] TR02MY11.008

Section 1915.89 Control of Hazardous Energy (Lockout/Tags-plus)
    These provisions apply to the servicing of machinery, equipment,
and systems, including servicing machinery, equipment, and systems
onboard vessels and vessel sections. This also applies to the extent
that other sections in subpart F and part 1915 either involve servicing
operations or require the use of lockout/tags-plus applications. There
are several areas in which employers will incur costs, which are
discussed below.
    The standard requires that employers establish a program to protect
employees from energization, startup, or release of hazardous energy
during the servicing of machinery, equipment and systems in shipyard
employment. This program would have to include: (1) Procedures for
lockout/tags-plus systems, including a lockout/tags-plus coordination
process; (2) procedures for protecting employees involved in servicing;
(3) specification for locks and tags-plus hardware; (4) employee
training; (5) incident investigations; and (6) program audits.
    In estimating the costs for complying with various lockout/tags-
plus applications, OSHA used the following parameters:
     Affected employers were categorized as large (500
employees or more), medium (100-499 employees), small (20-99
employees); and very small (fewer than 20 employees);
     Employment categories and wages used were:
    [cir] Supervisors ($32.98 per hour for shipyard establishments,
$44.13 per hour for water transportation, $33.53 per hour for fish-
processing vessels, $20.37 per hour for commercial fishing)--to develop
the lockout/tags-plus program and procedures, coordinate lockout/tags-
plus applications, and perform training and retraining;
    [cir] Authorized employees ($23.72 per hour for shipyard
establishments, $46.46 per hour for water transportation, $31.78 per
hour for fish-processing vessels, $16.30 for commercial fishing)--to
perform operations involving locking, tagging, and isolation of
hazardous energy sources; to perform servicing; and to conduct incident
investigations and program audits; and
    [cir] Affected employees ($19.51 per hour for shipbuilding and
repair establishments, $30.58 per hour for water transportation, $18.09
per hour for fish-processing vessels, and $16.30 per hour for
commercial fishing)--to adapt their work routine because of lockout/
tags-plus applications.
     Lockout/Tags-plus Program Costs:
    [cir] Time to develop and maintain lockout/tags-plus program and
procedures by employer size;

0
 Large--the Agency concluded, based on comment in the record, that all
large employers already have a written lockout/tags-plus program and
will not incur costs related to the development of a program. However,
OSHA estimates that large employers will require 20 hours initially to
update their programs to comply with the final rule, and 20 hours each
year thereafter to update the program;
0
 Medium--40 hours initially to develop a lockout/tags-plus program, and
12 hours annually thereafter to update the program;
0
 Small--12 hours initially, and 4 hours thereafter; and
0
 Very Small--2 hours initially, and 30 minutes thereafter.
    Based on the supervisor's wage rate, the Agency estimated the
annualized costs to develop the lockout/tags-plus program and
procedures at $91,890, as shown in Table 12, with recurring annual
costs of $275,116 shown in Table 12a. The Agency concluded that
employers will have to update their lockout/tags-plus programs and
procedures at least annually due to the changes at the workplace or in
machinery, equipment, or systems being serviced. OSHA received no
comment in the docket indicating that the estimated number of hours
required to develop and maintain a lockout/tags-plus program were
understated.
    In addition to the costs for shipyard establishments, many other
establishments or contractors engaged in shipyard-employment operations
also would have to develop lockout/tags-plus programs. In the PEA, the
Agency estimated that there are four types of these establishments: (1)
Establishments that do not perform the type of activities requiring
them to develop and implement a lockout/tags-plus program (10%); (2)
establishments using a shipyard's program (15%); (3) establishments
developing their own program (50%); and (4) establishments developing a
joint program with a shipyard (25%). While the final rule requires
contractors working for a host employer to follow that host employer's
lockout/tags-plus program, OSHA maintained some costs for contractors
and other establishments because the Agency believes that they will
spend some time on program development, familiarization, or
implementation.

[GRAPHIC] [TIFF OMITTED] TR02MY11.009

[GRAPHIC] [TIFF OMITTED] TR02MY11.010

    Numerous stakeholders asserted that OSHA understated the costs
associated with developing and implementing a lockout/tags-plus
program. Cynthia Brown of the American Shipbuilding Association (ASA)
said that ASA conservatively estimated that the lockout/tagout
provisions would cost ``well over $200 million.'' She also said that
the first-year costs for the Newport News shipyard to implement the
lockout/tagout requirements were $85 million, with recurring annual
costs of $79 million (Ex. 204.1). John H. James, Jr., Executive
Director of Logistics, Maintenance, and Industrial Operations for the
Navy, said that it would cost each shipyard over $30 million to
implement a lockout/tagout program (Ex. 132.2). Stacy Ballow, of ASA,
testified at the hearing in Washington, DC, regarding the cost of the
proposed hazardous-energy requirements:

    [T]he proposed [lockout/tagout] rule will result in a cost to
the American taxpayers well over $200 million. This figure is based
on an estimated cost of approximately [$]100 million for the six ASA
member shipyards in addition to the Navy's [$]120 million cost
estimate for its four nuclear shipyards. The largest contributor to
this estimate is the proposal's required individual employee
involvement in group lockout/tagout (Ex. 168, p. 238).

    James Thornton, Director of Environmental Health and Safety for
Northrop Grumman (Ex. 120.1), concurred that the proposed group
lockout/tagout provisions would pose the greatest costs, which he
estimated would be at least $19 million annually for the Newport News
shipyard. None of these commenters provided the Agency with specific or
background information on their cost models. Thus, OSHA cannot fully
address their cost concerns. The record for this rule includes evidence
that individual shipyards have successfully implemented lockout/tags-
plus programs similar to the general industry lockout/tagout standard.
This indicates that it is feasible and not overly burdensome for
shipyards to comply with a hazardous energy control program.
    The rule requires that employers follow certain procedures to:
shutdown machinery, equipment or systems; deenergize machinery,
equipment or systems; isolate and secure power sources; verify
isolation; and apply locks or tags-plus systems. The costs for this
subsection include: (1) The time to implement the required procedures;
(2) the time to apply lockout/tags-plus applications to power sources
or energy-

isolating devices; (3) the time to implement additional safety
measures; (4) the time to apply tags to the energy-isolating device;
and (5) the time to complete the required lockout/tags-plus log.
    The power sources considered in this analysis include electrical
(primary), air, hydraulic, and steam (primary); electrical (secondary);
air, hydraulic, and steam (secondary); and all non-vessel sources (for
example, electrical panel boxes in buildings and in off-site
establishments) to which locks or tags-plus systems are applied. The
unit costs are presented in Table 13, and are based on the following
estimates:
     Large shipyards and commercial vessels industries (those
with 500 or more employees) are already employing some form of energy
control when performing work on electrical systems or equipment. OSHA
estimates that those shipyards and commercial-vessel industries will
not incur any additional costs associated with applying a lockout or
tags-plus system. This estimate is consistent with evidence presented
in the rulemaking record.
     OSHA estimates that medium, small, and very small
shipyards and commercial-vessel industries (those with fewer than 500
employees) do not currently employ any form of lockout or tags-plus
system when performing electrical work other than as required by 29 CFR
1915, subpart J (Ship's Machinery and Piping Systems), and subpart L
(Electrical Machinery). Additional costs will include the time to go to
the system, tag it, and attach a clip. Also included is the cost of the
required hardware. The labor-time estimate includes the time to notify
the affected employees of the application and removal of lockout or
tags-plus devices.
    [cir] OSHA estimates that the cost of the tag is $1.00 \14\ and the
cost of a tie is $0.03. Tags can be used an estimated 7 times, so that
the cost per use is $0.14. There may be some additional hardware costs,
but the unit cost per use is very low, and additional hardware costs
will not affect the feasibility of compliance with the final rule. The
labor cost is 2 minutes of time at an authorized employee's wage rate.
The total unit cost of securing a primary electric power source is
$1.07 for shipyards, $0.53 for commercial fishing, $1.20 for fish-
processing vessels, and $1.69 for water transportation. The unit cost
for securing hydraulic or air-powered power sources is estimated at
$24.69 for shipyards, $12.77 for commercial fishing, $32.74 for fish-
processing vessels, and $47.42 for water transportation. OSHA estimates
that 1 hour of authorized employee time is needed to secure air and
hydraulic power sources.
---------------------------------------------------------------------------

    \14\ This estimate is taken from the General Industry Regulatory
Impact and Regulatory Flexibility Analysis of 29 CFR 1910.147
``Control of Hazardous Energy Sources (Lockout/Tagout)'' standard.
In reviewing the cost of a tag, the Agency found that tags average
from $0.88 to $1.24 each. Thus, the estimate of $1.00 per tag seems
reasonable.
---------------------------------------------------------------------------

     The Agency is retaining the estimates from the PEA of the
cost to provide full employee protection which includes implementing an
additional safety measures to reduce the likelihood of inadvertent
energization so that a tags-plus system provides the equivalent safety
available from the use of a lock. OSHA estimated 6 lockouts or tags-
plus systems applied per authorized employee per year to secure backup
electrical systems, and 1 lockout or tags-plus system applied per year
per authorized employee to secure air or hydraulic secondary systems,
except for contract employees and off-site employees, who will perform
20 such lockout or tags-plus activities per year of backup electrical
systems. Current regulations do not cover back-up power systems, nor
are they generally isolated and/or locked or tagged under current
practice. OSHA believes that all establishments will incur costs to
comply with this requirement, and that the same procedure will be used
for securing back-up systems as for primary systems with the same type
of power. The additional costs to comply with this requirement will
include the time to go to the system and implement the additional
safety measure which OSHA estimates will take 2 minutes for electrical
back-up power sources and 1 hour for air and hydraulic power sources.
Estimates of the number of secondary or multiple-source lockouts or
tags-plus applications are presented in Table 14.
     OSHA estimated that small and very small contractors and
off-site establishments in the shipyards industry will install, on
average, one lockout or tags-plus system per week, that medium
shipyards will install five lockout or tags-plus systems per day, and
that commercial vessels will install five lockout or tags-plus systems
per year.
     OSHA estimated that half of the activities that require
lockout or tags-plus systems are already covered under 29 CFR 1915,
subparts L and J, and that subpart F will only require lockout or tags-
plus systems to be applied in half of the cases estimated above.
     The Agency also estimates that one out of every twenty
lockout or tags-plus applications will be installed on air or hydraulic
systems, and that the rest of the applications will be on electrical
systems.
    OSHA estimated that 10 percent of production workers would be
considered authorized employees. The Agency presented this estimate in
the PEA, and did not receive any comments in the record indicating that
the estimate of authorized employees was understated. The number of
affected employees was estimated in the PEA to be 20 percent of
production workers. Comment in the record from Cynthia Brown of the ASA
(Ex. 204.1) expressed concern that estimates of affected employees may
not be capturing all employees affected by lockout/tags-plus
applications. Ms. Brown reported that an estimate of affected employees
used in a project to assess the costs of implementing lockout/tags-plus
for Northrop Grumman Shipbuilding-Newport News may have excluded
personnel in trades other than primary trades and, therefore,
underestimated costs. OSHA concludes that personnel, other than those
servicing machinery, equipment, or systems, may be affected by lockout/
tags-plus applications by their proximity to those machines, equipment,
or systems, but believes that employers can reduce the number of
affected employees by removing nonessential personnel from the area
where servicing in lockout/tags-plus is being performed. The Agency
also believes that all employees currently receive an introduction to
lockout/tags-plus procedures during the general workplace orientation
which provides adequate training for employees affected only by their
proximity to work being performed on electrical equipment or systems.
OSHA estimated the total costs of securing energy sources to be
$513,406.

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[GRAPHIC] [TIFF OMITTED] TR02MY11.012

    The final rule requires a lockout/tags-plus coordinator to complete
a lockout/tags-plus log that contains the location and type of
machinery, equipment, or system to be serviced, the name of the
authorized employee who is applying the lockout/tags-plus system, the
date the system is applied, the name of the authorized employee
removing the lock or tags-plus system, and the date the system is
removed. The Agency estimated that it would take 5 minutes of the
lockout/tags-plus coordinator's time (at the authorized employee's wage
rate) to complete the lockout/tags-plus log per lockout/tags-plus
application. The number of lockout/tags-plus activities per year is
based on the estimates presented above. Table 15 outlines the total
costs related to creating the lockout/tags-plus log which OSHA
estimates to be $264,763.

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Lockout/Tags-Plus Material and Hardware Sec.  1915.89(n)
    OSHA anticipates that clips, tags, ties, and any other necessary
equipment will be procured and maintained by a supervisor ($32.98 per
hour for shipyards, $44.13 per hour for water transportation, $33.53
per hour for fish-processing vessels, $20.37 per hour for commercial
fishing). The Agency estimates that an initial procurement of this
equipment will occur per establishment, and that it will take longer
initially due to time needed for employers to research the unique
characteristics of the devices outlined in the rule. The Agency
concluded that less time is needed to reorder these items. These costs
are outlined in Table 16. For example, the initial cost for a large
shipyard is $263.84 ($32.98 times 8 hours). When this cost is
annualized, the unit cost is $37.57. The Agency estimates that
employers would spend some time annually to reorder protective
materials and hardware. For large establishments (having more than
1,000 employees), OSHA estimates that, annually, establishments will
spend 4 hours each of a supervisor's time to reorder materials and
hardware. The estimated times required for selection, purchase, and
distribution of lockout and tags-plus equipment in different sized
establishments are:
     Large--8 hours initially, and 4 hours annually thereafter;
     Medium--5 hours initially, and 2 hours annually
thereafter; and
     Small--3 hours initially, and 1 hour annually thereafter.

The cost of the materials themselves are accounted for as part of the
unit cost of performing a lockout or tags-plus application and are not
considered in this section.
Off-Site Establishments
    OSHA estimates that off-site establishments will incur much smaller
costs of procuring equipment than shipyards. In particular, OSHA
estimates that it will take 20 minutes for a supervisor initially to
select the lock and chain, and five minutes annually to reorder these
items. Based on the estimated wage rate for a supervisor, off-site
establishments will incur unit costs of $1.55 (initially), and unit
costs of $2.64 thereafter. The Agency estimated these costs as if
employers are not currently performing this function, thus assigning a
baseline of zero. Final costs may be lower if employers already are
ordering and storing this equipment.
    OSHA estimated the total costs associated with procuring lockout/
tags-plus hardware and materials to be $135,503.

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Incident Investigations Sec.  1915.89(p)
    The final rule requires employers to investigate each incident that
resulted in, or could reasonably have resulted in, energization or
startup, or the release of hazardous energy. The employee conducting
the investigation is required to complete a written report of the
findings from the investigation that includes the date and time of the
incident, and when the incident investigation began; the location,
description, and factors that contributed to the event; a copy of any
lockout/tags-plus log that was current at the time of the incident; and
any corrective actions that need to be taken as a result of the
incident. OSHA estimates that incident investigations will be required
in one percent of all lockout/tags-plus events, which are estimated
based on figures presented in the Cost of Compliance section above. It
is estimated that the incident investigation and written report will
take five workdays (40 hours) of authorized employee time to complete.
These costs, which are estimated to be $1,056,202, are presented in
Table 17.

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Program Audits [se`ct] 1915.89(q)(1)
    The rule requires employers to conduct an audit of the lockout/
tags-plus program and procedures at least annually to ensure that the
procedures and the requirements of this standard are being followed,
and to correct any deficiencies. OSHA estimates that the audit itself
will take 30 minutes each of a supervisor's and authorized employee's
time. An additional 20 minutes of supervisor time is needed to prepare
the certification record. Also, each inspection will consist of follow-
up training of an estimated five authorized employees and five affected
employees for 15 minutes each performed by the supervisor. OSHA
presented these estimates in the PEA and did not receive any comments
in the record indicating that the estimated time requirements for
program audits (referred to as periodic inspections in the proposal)
were understated.
    For off-site establishments and shipyard contractors, OSHA believes
that the costs of program audits will be minimal, as most of these
activities will be incorporated into routine supervision. However,
because of the paperwork involved, OSHA estimates that twenty
additional minutes of supervisor time will be required annually for
each establishment. Table 18 presents the total annual cost of $254,191
relating to program audits.

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Information and Training Sec.  1915.89(o)
    OSHA estimates that employers will incur training costs under the
rule. The rule requires that employers train authorized employees,
affected employees, and employees who will serve as the lockout/tags-
plus coordinator.
Training Authorized Employees
    Under the rule, the number of authorized employees who must be
trained (Table 19) is estimated as those who engage in lockout/tags-
plus applications. The unit-cost estimate for training authorized
employees consists of one hour of preparation time plus two hours of
delivery time for a supervisor, and two hours per employee to attend
the training, except for very small employers who OSHA estimates will
only require one hour of authorized employee time to complete the
training. This time estimate also includes the time needed to develop
the training record, estimated at three minutes of administrative time
per employee. The Agency estimates that each training class will have
10 employees. The cost of training is then annualized. Using a turnover
rate of 32.5 percent for the shipyard industry and fish-processing
vessels, and 43 percent for water transportation and commercial
fishing, 3 shipyard and fish-processing vessel employees and 4 water-
transportation and commercial fishing employees must be trained each
year for every class of 10 that was initially trained. Thus, the cost
for retraining these employees annually is the total cost of the class
divided by 10, then multiplied by the number of employees being trained
(3 or 4). Two hours of supervisory time cost is added to get the
recurring unit cost. An estimate of the number of off-site authorized
employees who need training also is included. OSHA estimates the total
cost to train authorized employees to be $147,275.

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Training Affected Employees
    The number of affected employees in Table 20 represents a
proportion of total employees that are impacted by lockout/tags-plus.
In the PEA, this number was estimated to be twice the number of
authorized employees. The Agency received no comment suggesting this
number was incorrect. OSHA estimates that training consists of thirty
minutes of preparation time plus one hour of delivery time for a
supervisor, and one hour per affected employee to attend the training;
and that each training class will have 10 employees. The cost is then
annualized and estimated on a per-employee basis. An additional three
minutes of secretarial time per employee is included to prepare and
maintain the training record. Using a turnover rate of 32.5 percent for
the shipyard industry and fish-processing vessels, and 43 percent for
water transportation and commercial fishing, three or four employees
must be re-trained each year for every class of ten that was initially
trained. Thus, the cost for re-training these employees is the total
cost per class divided by 10, then multiplied by the number of
employees being trained (3 or 4). The supervisory time cost is added to
get the recurring unit cost. An estimate of the number of off-site
affected employees working in shipyards that need training is also
included. The total cost associated with training affected employees is
$117,756.

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Training Lockout/Tags-Plus Coordinators
    The number of lockout/tags-plus coordinators who will need to be
trained as a result of this final rule, and the costs that will be
incurred due to that training, are presented in Table 21. OSHA
estimates that half of those employees trained as authorized employees
will also be trained as lockout/tags-plus coordinators. The Agency
estimates that it will take two hours of supervisor time to prepare the
training, four hours to deliver the training, and four hours of
authorized employee time to receive the training. It is estimated that
10 employees will attend each session. The cost is then annualized and
estimated on a per-employee basis. An additional three minutes of
secretarial time per trained employee is included to prepare and
maintain the training record. Using a turnover rate of 32.5 percent for
the shipyard industry and fish-processing vessels, and 43 percent for
water transportation and commercial fishing, three or four employees
must be re-trained each year for every class of ten that was initially
trained. Thus, the cost for re-training these employees is the total
cost per class divided by 10, then multiplied by the number of
employees being trained (3 or 4). The supervisory time cost is added to
get the recurring unit cost. OSHA estimates the total cost to train the
lockout/tags-plus coordinator to be $148,294.

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Section 1915.93 Motor-Vehicle Safety Equipment, Operation, and
Maintenance
    The motor-vehicle safety provisions apply to vehicles used to
transport employees, materials, or property at worksites engaged in
shipyard employment. OSHA estimates that employers in the shipyard
industry will incur costs in complying with the requirement to
reinstall safety equipment that has been removed from motor vehicles.
This provision only applies to employer-provided vehicles. OSHA
believes that shipyards are generally in compliance with the
requirement that new motor vehicles must be equipped with seat belts,
and the Agency did not receive any comments indicating that this is not
the case. The final rule requires that safety equipment not be removed
from motor vehicles; however, if safety equipment is removed, it must
be re-installed. OSHA estimates that it will take an hour of
transportation maintenance and repair technician time, at $21.61 per
hour (including benefits), to replace vehicle safety equipment. This is
a one-time cost. In the PEA, the Agency used an estimate of 5 percent
of the number of employees (per size class) to determine the number of
instances per size class when a maintenance and repair technician would
need to reinstall previously removed safety equipment. OSHA did not
receive any comment indicating that the estimate of the cost of
reinstalling safety equipment was misstated. Table 22 presents
estimates of these costs which total $13,557.
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Section 1915.94 Servicing Multi-Piece and Single-Piece Rim Wheels
    The provisions for servicing multi-piece and single-piece rim
wheels are identical to those in the general industry standard (29 CFR
1910.177). The rule applies to servicing multi-piece and single-piece
rim wheels used on large motor vehicles such as trucks, tractors,
trailers, buses, and off-road vehicles. It does not apply to servicing
rim wheels used on automobiles or on pickup trucks and vans equipped
with automobile tires or truck tires designated ``LT.'' OSHA assumed
that no servicing of rim wheels takes place on commercial vessels.
    OSHA believes affected employers already are using the servicing
practices that Sec.  1910.77 requires, or could adopt them with no real
change in cost; therefore, the only new cost the provision would impose
is employee training. OSHA estimates that training time is limited to
startup training for existing employees and, thereafter, retraining as
needed if an evaluation indicates than an employee is not retaining
proficiency, as well as initial training for new employees who perform
this servicing.
    The Agency believes that only large shipyards perform this type of
rim-wheel maintenance, and that other establishments engaged in
shipyard employment contract out this task. OSHA estimates that each
transportation maintenance and repair technician will receive a 30-
minute training class (\1/2\ hour of employee time at $21.61 per hour =
$10.80). The supervisor who teaches the class is estimated to spend 15
minutes preparing for the class (\1/4\ hour of supervisor time at
$32.98 per hour = $8.24), and 30 minutes delivering the training (\1/2\
hour of supervisor time at $32.98 per hour = $16.49). OSHA presented
these cost estimates in the PEA, and solicited comment regarding these
estimates for servicing rim wheels. The Agency did not receive any
comments indicating that the estimates of costs were understated, or
suggesting improvements to the cost estimates for this provision. The
costs for training employees in servicing multi-piece and single-piece
rim wheels which the Agency estimates to total $330 are presented in
Table 23.
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Estimated Total Industry Compliance Costs
    Estimated costs of the final rule are both directly and indirectly
functions of type, size, and number of affected establishments. In
addition, they are a function of the number of first aid providers who
require CPR training, the number of authorized and affected employees
for lockout/tags-plus, the number of motor vehicles requiring re-
installation of motor-vehicle safety equipment, and the amount of rim-
wheel servicing performed. Table 24 shows the estimated cost of the
final rule by provision. The Agency estimates that compliance with the
rule will cost $4,185,342 (total annualized) annually for the affected
establishments and industries combined. The lockout/tags-plus
provisions account for the largest portion (about 75 percent) of these
costs.

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    Table 25 outlines the estimated total annualized compliance costs
per establishment. Larger establishments have greater annualized
compliance costs. The economic impacts of these costs are presented in
section F of this FEA.

[GRAPHIC] [TIFF OMITTED] TR02MY11.023

Net Benefits
    In accordance with EO 12866 and OMB policy, and for informational
purposes, the Agency compared the estimated costs of compliance to the
monetized benefits of the final rule. The Agency estimates monetized
death benefits of $10.4 million and monetized injury benefits of $23.4
million annually (see the Benefits section of this FEA), for total
monetized benefits of $33.8 million. When the total annualized
compliance costs are compared to these estimates (total monetized
benefits), the Agency concludes that the net benefits of the final rule
will total about $29.6 million.

F. Economic Impacts, Feasibility, and Regulatory Flexibility Screening
Analysis

    OSHA determined that the costs of complying with the final rule