Cranes and Derricks in Construction: Operator Certification Extension, 41184-41193 [2017-18441]

Download as PDF 41184 Federal Register / Vol. 82, No. 167 / Wednesday, August 30, 2017 / Proposed Rules DEPARTMENT OF LABOR Occupational Safety and Health Administration 29 CFR Part 1926 [Docket ID–OSHA–2007–0066] RIN 1218–AC86 Cranes and Derricks in Construction: Operator Certification Extension Occupational Safety and Health Administration (OSHA), Labor. ACTION: Notice of proposed rulemaking. AGENCY: Under OSHA’s standard for cranes and derricks used in construction work, crane operators are to be certified by November 10, 2017. Until that date, employers also have duties under the standard to ensure that crane operators are trained and competent to operate the crane safely. The Agency delayed the deadline for operator certification by three years to November 10, 2017, and extended the existing employer duties for the same period. The Agency is proposing to delay the deadline and extend the existing employer duty to ensure that operators of equipment covered by this standard are competent to operate the equipment safely for one year to November 17, 2018. DATES: Submit comments to this proposed rule, including comments to the information collection (paperwork) determination (described under the section titled ‘‘Agency Determinations’’), hearing requests, and other information by September 29, 2017. All submissions must bear a postmark or provide other evidence of the submission date. ADDRESSES: Submit comments, hearing requests, and other material, identified by Docket No. OSHA–2007–0066, using any of the following methods: Electronically: Submit comments and attachments, as well as hearing requests and other information, electronically at http://www.regulations.gov, which is the Federal e-Rulemaking Portal. Follow the instructions online for submitting comments. Note that this docket may include several different Federal Register notices involving active rulemakings, so it is extremely important to select the correct notice or its ID number when submitting comments for this rulemaking. After accessing the docket (OSHA–2007– 0066), check the ‘‘proposed rule’’ box in the column headed ‘‘Document Type,’’ find the document posted on the date of publication of this document, and click the ‘‘Submit a Comment’’ link. Additional instructions for submitting mstockstill on DSK30JT082PROD with PROPOSALS SUMMARY: VerDate Sep<11>2014 18:16 Aug 29, 2017 Jkt 241001 comments are available from the regulations.gov homepage. Facsimile: OSHA allows facsimile transmission of comments that are 10 pages or fewer in length (including attachments). Fax these documents to the OSHA Docket Office at (202) 693– 1648. OSHA does not require hard copies of these documents. Instead of transmitting facsimile copies of attachments that supplement these documents (e.g., studies, journal articles), commenters must submit these attachments to the OSHA Docket Office, Technical Data Center, Room N–2625, OSHA, U.S. Department of Labor, 200 Constitution Ave. NW., Washington, DC 20210. These attachments must clearly identify the sender’s name, the date, subject, and the docket number (OSHA– 2007–0066) so that the Docket Office can attach them to the appropriate document. Regular mail, express delivery, hand delivery, and messenger (courier) service: Submit comments and any additional material to the OSHA Docket Office, RIN No. 1218–AC86, Technical Data Center, Room N–3508, OSHA, U.S. Department of Labor, 200 Constitution Ave. NW., Washington, DC 20210; telephone: (202) 693–2350. (OSHA’s TTY number is (877) 889–5627). Contact the OSHA Docket Office for information about security procedures concerning delivery of materials by express delivery, hand delivery, and messenger service. The Docket Office will accept deliveries (express delivery, hand delivery, messenger service) during the Docket Office’s normal business hours, 8:15 a.m. to 4:45 p.m., e.s.t. Instructions: All submissions must include the Agency’s name, the title of the rulemaking (Cranes and Derricks in Construction: Operator Certification Extension), and the docket number (i.e., OSHA Docket No. OSHA–2007–0066). OSHA will place comments and other material, including any personal information, in the public docket without revision, and the comments and other material will be available online at http://www.regulations.gov. Therefore, OSHA cautions commenters about submitting statements they do not want made available to the public, or submitting comments that contain personal information (either about themselves or others) such as Social Security numbers, birth dates, and medical data. Docket: To read or download comments or other material in the docket, go to http://www.regulations.gov or to the OSHA Docket Office at the above address. The electronic docket for this proposed rule established at http:// www.regulations.gov contains most of PO 00000 Frm 00006 Fmt 4702 Sfmt 4702 the documents in the docket. However, some information (e.g., copyrighted material) is not available publicly to read or download through this Web site. All submissions, including copyrighted material, are available for inspection at the OSHA Docket Office. Contact the OSHA Docket Office for assistance in locating docket submissions. FOR FURTHER INFORMATION CONTACT: General information and press inquiries: Mr. Frank Meilinger, OSHA Office of Communications; telephone: (202) 693–1999; email: Meilinger.Francis2@dol.gov. Technical inquiries: Mr. Vernon Preston; telephone: (202) 693–2020; fax: (202) 693–1689; email: Preston.Vernon@ dol.gov. Copies of this Federal Register notice and news releases: Electronic copies of these documents are available at OSHA’s Web page at http:// www.osha.gov. SUPPLEMENTARY INFORMATION: I. Summary and Explanation of the Proposed Amendments to the Standard A. Introduction OSHA is publishing this Notice of Proposed Rulemaking to extend for one year the employer duty to ensure crane operator competency for construction work, from November 10, 2017, to November 10, 2018. OSHA also is proposing to delay the enforcement date for crane operator certification for one year from November 10, 2017, to November 10, 2018. This would be the second delay of the enforcement date, which OSHA needs to address stakeholder concerns over the operator certification requirements in the 2010 cranes and derricks in construction standard. B. Summary of Economic Impact This proposed rule is not economically significant. OSHA proposes to revise 29 CFR 1926.1427(k) (competency assessment and training) to delay the deadline for compliance with the operator certification requirement in its construction standard for cranes and derricks, and to extend the existing employer duties for the same period. OSHA’s preliminary economic analysis shows that delaying the date for operator certification and employers’ assessment of crane operators, rather than allowing both provisions to expire on November 10, 2017, will result in a net cost savings for the affected industries. Delaying the compliance date for operator certification results in estimated cost savings that exceed the estimated new costs for employers to continue to assess crane operators to E:\FR\FM\30AUP1.SGM 30AUP1 Federal Register / Vol. 82, No. 167 / Wednesday, August 30, 2017 / Proposed Rules ensure their competent operation of the equipment in accordance with 1926.1427(k). The detailed preliminary economic analysis is in the ‘‘Agency Determinations’’ section of this preamble. C. Background mstockstill on DSK30JT082PROD with PROPOSALS 1. Operator Certification Options OSHA developed the final rule for cranes and derricks in construction (29 CFR subpart CC, referred to as ‘‘the crane standard’’ hereafter) through a negotiated rulemaking process. OSHA established a federal advisory committee, the Cranes and Derricks Negotiated Rulemaking Advisory Committee (C–DAC), to develop a draft proposed rule. C–DAC met in 2003 and 2004 and developed a draft proposed rule (which included the provisions concerning crane operator certification at issue in this rulemaking) that it provided to OSHA. The rule OSHA subsequently proposed closely followed C–DAC’s draft proposal (73 FR 59718). The Agency initiated a Small Business Advocacy Review Panel in 2006. The Agency published the proposed rule for cranes in construction in 2008, received public comment on the proposal, and conducted a public hearing. Among many other provisions, OSHA’s final rule incorporated, with minor changes, the four-option certification scheme that C–DAC had recommended and the Agency had proposed. Accordingly, in § 1926.1427, as originally promulgated, OSHA required employers to ensure that their crane operators are certified under at least one of four options by November 10, 2014: Option 1. Certification by an independent testing organization accredited by a nationally recognized accrediting organization; Option 2. Qualification by an employer’s independently audited program; Option 3. Qualification by the U.S. military; Option 4. Compliance with qualifying state or local licensing requirements (where mandatory). The third-party certification option in § 1926.1427(b)—Option 1—is the only certification option that is ‘‘portable,’’ meaning that any employer who employs an operator may rely on that operator’s certification as evidence of compliance with the crane standard’s operator certification requirement. This certification option also is the only one that is available to all employers; it is the option that OSHA, and the parties that participated in the rulemaking, believed would be the one most widely VerDate Sep<11>2014 18:16 Aug 29, 2017 Jkt 241001 used. In this regard, OSHA is not aware of an audited employer qualification program among construction industry employers (Option 2), and the crane standard limits the U.S. military crane operator certification programs (Option 3) to federal employees of the Department of Defense or the armed services. While state and local governments certify some crane operators (Option 4), the vast majority of operators who become certified do so through Option 1—by third-party testing organizations accredited by a nationally recognized accrediting organization. Under Option 1, a third party performs testing. Before a testing organization can issue operator certifications, paragraph 1427(b)(1) of the crane standard provides that a nationally recognized accrediting organization must accredit the testing organizations. To accredit a testing organization, the accrediting agency must determine that the testing organization meets industry-recognized criteria for written testing materials, practical examinations, test administration, grading, facilities and equipment, and personnel. The testing organization must administer written and practical tests that: • Assess the operator’s knowledge and skills regarding subjects specified in the crane standard; • provide different levels of certification based on equipment capacity and type; • have procedures to retest applicants who fail; and • have testing procedures for recertification. Paragraph 1427(b)(2) of the final crane standard also specifies that, for the purposes of compliance with the crane standard, an operator is deemed qualified to operate a particular piece of equipment only if the operator is certified for that type and capacity of equipment or for higher-capacity equipment of that type. It further provides that, if no testing organization offers certification examinations for a particular equipment type and/or capacity, the operator is deemed qualified to operate that equipment if the operator is certified for the type/ capacity of equipment that is most similar to that equipment, and for which a certification examination is available. 2. Overview of § 1926.1427(k) (Phase-in Provision) The final crane standard replaced provisions in 29 CFR 1926 subpart N— Cranes, Derricks, Hoists, Elevators, and Conveyors, of the construction safety standards. Provisions for employers to ensure that operators of equipment, PO 00000 Frm 00007 Fmt 4702 Sfmt 4702 41185 including cranes, are trained and qualified to safely operate that equipment are available elsewhere in the construction safety standards (see, for example, § 1926.20(b)(4) and (f)(2)). OSHA delayed the effective date of the operator certification requirement for four years, until November 10, 2014 (see § 1427(k)(1)). To make sure that crane operators knew how to operate equipment safely during this phase-in period, the Agency required employers to ‘‘ensure that operators of equipment covered by this standard are competent to operate the equipment safely’’ (§ 1926.1427(k)(2)(i)). When the operator ‘‘assigned to operate machinery does not have the required knowledge or ability to operate the equipment safely,’’ the standard requires employers to train and evaluate the operator (§ 1926.1427(k)(2)(ii)). 3. Post-Final Rule Developments After OSHA issued the final rule, it continued to receive feedback from members of the regulated community and conducted stakeholder meetings on April 2 and 3, 2013, to give interested members of the public the opportunity to express their views. Participants included construction contractors, labor unions, crane manufacturers, crane rental companies, accredited testing organizations, one of the accrediting bodies, insurance companies, crane operator trainers, and military employers. Detailed notes of participants’ comments are available at OSHA–2007–0066–0539. Various parties informed OSHA that, in their opinion, the operator certification option would not adequately ensure that crane operators could operate their equipment safely. They said a certified operator would need additional training, experience, and evaluation, beyond the training and evaluation required to obtain certification, to ensure that he or she could operate a crane safely. OSHA also received information that two (of a total of four) accredited testing organizations have been issuing certifications only by ‘‘type’’ of crane, rather than by the ‘‘type and capacity’’ of crane, as the crane standard requires. As a result, those certifications do not meet the standard’s requirements and operators who obtained certifications from only those organizations cannot, under OSHA’s crane standard, operate cranes on construction sites after the new requirements become effective. Some stakeholders in the crane industry requested that OSHA remove the capacity requirement. Most of the participants in the stakeholder meetings expressed the E:\FR\FM\30AUP1.SGM 30AUP1 41186 Federal Register / Vol. 82, No. 167 / Wednesday, August 30, 2017 / Proposed Rules opinion that an operator’s certification by an accredited testing organization did not mean that the operator was fully competent or experienced to operate a crane safely on a construction work site. The participants likened operator certification to a new driver’s license, or a learner’s permit, to drive a car. Most participants said that the operator’s employer should retain the responsibility to ensure that the operator was qualified for the particular crane work assigned. Some participants wanted certification to be, or viewed to be, sufficient to operate a crane safely. Stakeholders noted that operator certification was beneficial in establishing a minimum threshold of operator knowledge and familiarity with cranes. mstockstill on DSK30JT082PROD with PROPOSALS D. Three-Year Extension In order to address the issues raised by industry stakeholders after publication of the final rule, OSHA proposed a rule delaying the compliance date for the operator certification requirements of the crane standard, and extending the employer duty to ensure that the operator was qualified for the particular crane work assigned, by three years until November 10, 2014, (79 FR 7611). Subsequently, OSHA conducted a hearing on the rulemaking on May 19, 2014, gathering more comments on the proposed extension (OSHA–2007–0066–0521). On September 26, 2014, OSHA issued a final rule delaying the compliance date for operator certification for three years until November 10, 2017, (79 FR 57785). After publication of the final rule, OSHA began conducting site visits with a variety of stakeholders and the Agency drafted regulatory text with the purpose of addressing the capacity issue and the employer duty concerns. On March 31 and April 1, 2015, OSHA convened a special meeting of Advisory Committee on Construction Safety and Health in which both ACCSH members and non-member industry stakeholders provided feedback on the draft regulatory text.1 Prior to the meeting, OSHA made available the draft regulatory text,2 an overview of the draft regulatory text,3 and a summary of the site visits with stakeholders.4 OSHA received many comments and 1 Transcript for March 31: https://www.osha.gov/ doc/accsh/transcripts/accsh_20150331.pdf; transcript for April 1: https://www.osha.gov/doc/ accsh/transcripts/accsh_20150401.pdf. 2 https://www.osha.gov/doc/accsh/ accshcrane.pdf. 3 https://www.osha.gov/doc/accsh/proposed_ crane.html. 4 https://www.osha.gov/doc/accsh/summary_ crane.html. VerDate Sep<11>2014 18:16 Aug 29, 2017 Jkt 241001 suggestions for revising the regulatory text at the ACCSH meeting. Since that meeting, the Agency has worked to redraft the regulatory text and preamble for the proposed rule. To ensure the Agency has enough time to propose and finalize the rulemaking, OSHA is proposing this one-year extension of the certification requirement compliance date. Just as with the previous extension, OSHA is also proposing an extension of the existing employer assessment duty for the same time period. E. Explanation of Proposed Action and Request for Comment The effective dates of the operator certification requirement and the other ‘‘phase in’’ of employer duties are in 29 CFR 1926.1427(k)(1). The Agency is proposing to revise § 1427(k)(1) to delay the deadline for operator certification by one year from November 10, 2017, to November 10, 2018, to provide additional time for the Agency to propose and finalize a rulemaking that addresses stakeholders’ concerns. The Agency also is proposing to extend the current employer duties in § 1926.1427(k)(2)(i) and (ii) to ensure there is no reduction in worker protection during this three-year period. When OSHA included these employer duties in the final crane standard in 2010, these duties were to be a ‘‘phase in’’ to certification (75 FR 48027). By extending the date to November 10, 2018, as proposed in this notice, the requirements would continue to serve that purpose and preserve the status quo. Without an extension, the certification requirements from the crane standard will prevent operators without certification by crane capacity from operating cranes, potentially disrupting the construction industry by creating a large number of crane operators without compliant certifications. Without the extension, after November 10, 2017, there would not be any duty for employers to ensure that their operators are competent to operate the equipment safely. This could diminish the effectiveness of the final rule which OSHA previously estimated to prevent 22 fatalities per year (75 FR 47914). OSHA seeks comment on this approach, including the duration of the proposed extension of the operator certification deadline and the existing employer duties. OSHA encourages commenters to include a rationale for any alternatives that they propose. OSHA also requests comment on the ‘‘Agency Determinations’’ section that follows, including the preliminary PO 00000 Frm 00008 Fmt 4702 Sfmt 4702 economic analysis, paperwork requirements, and other regulatory impacts of this rule on the regulated community. II. Agency Determinations A. Preliminary Economic Analysis and Regulatory Flexibility Analysis When it issued the final crane rule in 2010, OSHA prepared a final economic analysis (2010 FEA) as required by the Occupational Safety and Health Act of 1970 (OSH Act; 29 U.S.C. 651 et seq.) and Executive Orders 12866 (58 FR 51735) (Sept. 30, 1993) and 13563 (76 FR 3821 (Jan. 21, 2011)). OSHA also published a Final Regulatory Flexibility Analysis as required by the Regulatory Flexibility Act (5 U.S.C. 601–612). On September 26, 2014, the Agency included a separate FEA (2014 FEA) when it published a final rule delaying until November 10, 2017, the deadline for all crane operators to become certified, and extending the employer duty to ensure operator competency for the same period (79 FR 57785). The preliminary economic analysis (PEA) for this rulemaking relies on the methodology of the 2014 FEA, which in turn is based on estimates from the 2010 FEA, along with public comments and testimony and other documents in the 2014 rulemaking record. In this document OSHA has summarized some of the information from the 2014 FEA and noted where the current analysis differs from the previous FEA. Additional background on the analysis in this PEA may be found in the 2014 FEA. Because OSHA estimates this rule will have a cost savings for employers of $4.4 million using a discount rate of 3 percent for the one year of the extension, this final rule is not economically significant within the meaning of Executive Order 12866, or a major rule under the Unfunded Mandates Reform Act or Section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et seq.). This PEA focuses solely on costs, and not on any changes in safety and benefits resulting from extending the certification deadline and the employer duties under § 1926.1427(k)(2). OSHA previously provided its assessment of the benefits of the crane standard in the 2014 FEA of that standard. As noted elsewhere in this preamble, the primary rationale for this proposal is to maintain the status quo—including preservation of the employer duty to ensure that crane operators are competent—while providing OSHA additional time to conduct rulemaking on the crane E:\FR\FM\30AUP1.SGM 30AUP1 Federal Register / Vol. 82, No. 167 / Wednesday, August 30, 2017 / Proposed Rules mstockstill on DSK30JT082PROD with PROPOSALS operator requirements in response to stakeholder concerns. Extending the employer’s requirement to ensure an operator’s competency during this period means taking the same approach of the previous extension: Continuing measures in existence since OSHA published the crane standard in 2010. As OSHA stated in the preamble to the 2010 final rule, the interim measures in paragraph (k) ‘‘are not significantly different from requirements that were effective under subpart N of this part at former § 1926.550, § 1926.20(b)(4) (‘the employer shall permit only those employees qualified by training or experience to operate equipment and machinery’), and § 1926.21(b)(2) (‘the employer shall instruct each employee in the recognition and avoidance of unsafe conditions . . .’)’’ (75 FR 48027). Delaying the operator certification requirement defers a regulatory requirement and produces cost savings for employers. There will, however, be continuing employer costs for extending the requirement to assess operators under existing § 1926.1427(k)(2); if OSHA does not extended these requirements, they will expire on November 10, 2017, and employers would not incur these costs after 2017. With the extension, these continuing employer costs will be offset by a reduction in expenses that employers would otherwise have been required to incur to ensure that their operators are certified before the existing November 2017 deadline. Overview In the following analysis, OSHA examines costs and savings to determine the net economic effect of the rule. By comparing the additional assessment costs to the certification cost savings across two scenarios—scenario 1 in which there is no extension of the 2017 deadline, and scenario 2 in which there is an extension until 2018—OSHA estimates that the extension will produce a net savings for employers of $4.4 million per year using a discount rate of 3 percent ($5.2 million per year using an interest rate of 7 percent).5 OSHA’s analysis follows the steps below to reach its estimate of an annual net $4.4 million in savings: (1) Estimate the annual assessment costs for employers; (2) Estimate the annual certification costs for employers; and 5 As explained in the following discussion, OSHA typically calculates the present value of future costs and benefits using two interest rate assumptions, 3% and 7%, as recommended by OMB Circular A– 4 of September 17, 2003. All dollar amounts unless otherwise stated are in 2016 dollars. VerDate Sep<11>2014 18:16 Aug 29, 2017 Jkt 241001 (3) Estimate the year-by-year cost differential for extending the certification deadline to 2018.6 The methodology used here is substantially the same as used in the 2014 extension FEA. Table 1 below summarizes these costs and the differentials across the two scenarios. The major differences are updated wages and a revised forecast of the composition of the operator pool across certification levels. The 2014 FEA analysis addressed a 3-year extension, so it gradually increased the number of operators without any certification during that period. The model in this PEA addresses an extension of just a single year, so it holds the number of operators with each certification level constant. The latter significantly simplifies the analysis versus that presented in the 2014 FEA extension. a. Annual Assessment Costs OSHA estimated the annual assessment costs using the following three steps: First, determine the unit costs of meeting this requirement; second, determine the number of assessments that employers will need to perform in any given year (this determination includes estimating the affected operator pool as a preliminary step); and finally, multiply the unit costs of meeting the requirement by the number of operators who must meet it in any given year. Unit assessment costs. OSHA’s unit cost estimates for assessments take into account the time needed for the assessment, along with the wages of both the operator and the personnel who will perform the assessment. OSHA based the time requirements on crane operator certification exams currently offered by nationally accredited testing organizations. OSHA determined the time needed for various certification tests from the 2014 extension, drawing primarily from the public stakeholder meetings. The Agency estimates separate assessment costs for three types of affected operators, which together comprise all affected operators: Those who have a certificate that is in compliance with the existing crane standard; those who have a certificate that is not in compliance with the existing crane standard; and those who 6 Though this is a single year extension, the analysis needs to extend over several future years. For convenience, OSHA refers to the annual time period as a ‘‘Certification Year’’ (CY) in this economic analysis, which OSHA defines as ending November 10 of the calendar year; e.g., CY 2017 runs from November 10, 2016, to November 9, 2017. PO 00000 Frm 00009 Fmt 4702 Sfmt 4702 41187 have no certificate.7 As it did in the previous extension, OSHA uses certification status as a proxy of competence in estimating the amount of assessment time needed for different operators. OSHA expects that an operator already certified to operate equipment of a particular type and capacity will require less assessment time than an operator certified by type but not capacity, who in turn will require less time than an operator who is not certified. In deriving these estimates, OSHA determined that operators who have a certificate that is compliant with the crane standard would have to complete a test that is the equivalent of the practical part of the standard crane operator test. The Agency estimates that it would take an operator one hour to complete this test. Operators who have a certificate that is not in compliance with the crane standard would have to complete a test that is equivalent to both a written general test and a practical test of the standard crane operator test. OSHA estimated that the written general test would take 1.5 hours to complete, for a total test time of 2.5 hours of testing for each operator (1.5 hours for the written general test and 1.0 hour for the practical test). Finally, operators with no certificate would have to complete a test that is equivalent to the standard written test for a specific crane type (also lasting 1.5 hours), as well as the written general test and the practical test, for a total test time of 4.0 hours (1.5 hours for the test on a specific crane type, 1.5 hours for the written general test, and 1.0 hour for the practical test). The wages used for the crane operator and assessor come from the BLS Occupational Employment Survey for May 2016 (BLS 2017a), which is an updated version of the same source used in the 2014 extension. From this survey a crane operator’s (Standard Occupational Classification (SOC) 53– 7021 Crane and Tower Operators) average hourly wage is $26.58. The full cost to the employer includes all benefits as well as the wage. From the BLS Employer Costs For Employee Compensation for December 2016 (BLS 2017b) the average percentage of benefits in total for the construction sector is 30.2%, giving a markup of the wage to the total compensation of 1.43 7 OSHA is not making any determination about whether a specific certification complies with the requirements of the crane standard. For the purposes of this analysis only, OSHA will treat certificates that do not include a multi-capacity component as not complying with the crane standard, and certificates that include both a type and multi-capacity component as complying with the crane standard. E:\FR\FM\30AUP1.SGM 30AUP1 mstockstill on DSK30JT082PROD with PROPOSALS 41188 Federal Register / Vol. 82, No. 167 / Wednesday, August 30, 2017 / Proposed Rules (1/(1–0.302)). Hence the ‘‘loaded’’ total hourly cost of an operator is $38.08 (1.43 × $26.58), including a markup for benefits.8 Relying on the same sources, the wage of the assessor is estimated to be the same as the average wage of a construction supervisor (53–1031 FirstLine Supervisors of Transportation and Material-Moving Machine and Vehicle Operators) of $28.75, while the total hourly cost is $41.19 (1.43 × $28.75). Below these total hourly costs will be referred to as the respective occupation’s ‘‘wage.’’ For assessments performed by an employer of a prospective employee (i.e., a candidate), OSHA uses these same operator and assessor wages and the above testing times to estimate the cost of assessing prospective employees. Multiplying the wages of operators, assessors, and candidates by the time taken for each type of assessment provides the cost for each type of assessment. Hence, the cost of assessing an operator already holding a certificate that complies with the standard (both type and capacity) is one hour of both the operator’s and assessor’s time: $79.27 ($38.08 + $41.19). For an operator with a certificate for crane type only (not crane capacity), the assessment time is 2.5 hours for a cost of $198.17 (2.5 × ($38.08 + $41.19)). Finally, for an operator with no certificate, the assessment time is 4.0 hours for a cost of $317.48 (4.0 × ($38.08 + $41.19)). Besides these assessment costs, OSHA notes that § 1427(k)(2)(ii) requires employers to provide training to employees if they are not already competent to operate their assigned equipment. To determine whether an operator is competent, the employer must first perform an assessment. Only if an operator fails the assessment must the employer provide additional operator training required by § 1427(k)(2)(ii). However, in determining this cost, OSHA made a distinction between a nonemployee candidate for an operator position and an operator who is currently an employee. For an employer assessing a nonemployee candidate, OSHA assumed, based on common industry practice, that the employer will not hire a nonemployee candidate who fails the assessment. In the second situation, an employee qualified to operate a crane fails a type and/or capacity assessment for a crane that differs from the crane the employee currently operates. In this situation, the 8 Calculations in the text may not exactly match due to rounding for presentation purposes. All final costs are exact, with no rounding. VerDate Sep<11>2014 18:16 Aug 29, 2017 Jkt 241001 cost-minimizing action for the employer is not to assign the employee to that type and/or capacity crane, thereby avoiding training costs. While the Agency acknowledges that there will be cases in which the employer will provide this training, it believes these costs to be minimal and, therefore, is not estimating costs for the training. OSHA made the same determinations in the 2014 PEA and did not receive public comment on them. Number of assessments and number of affected operators. The number of assessments is difficult to estimate due to the heterogeneity of the crane industry. Many operators work continuously for the same employer, already have had their assessment, and do not need reassessment, so the number of new assessments required by the crane standard for these operators will be zero. Some companies will rent both a crane and an operator employed by the crane rental company to perform crane work, in which case the rental crane company is the operator’s employer and responsible for operator assessment. In such cases there is no requirement for the contractor who is renting the crane service to conduct an additional operator assessment. Assuming that employers already comply with the assessment and training requirements of the existing § 1427(k)(2), employers only need to assess a subset of operators: New hires; employees who will operate equipment that differs by type and/or capacity from the equipment on which they received their current assessment; and operators who indicate they no longer possess the required knowledge or skill necessary to operate the equipment. To calculate the estimated annual number of assessments, OSHA first estimated the current number of crane operators affected by the crane standard. The 2014 FEA estimated 117,130 operators and this PEA also uses this estimate. The Agency solicits comment and additional data on this estimate. For the purpose of determining the number of assessments required each year under this proposal, OSHA is relying on the 23% turnover rate for operators originally identified in the 2008 PEA for the crane rule and used most recently in the extension 2014 FEA (79 FR 57793). This turnover rate includes all types of operators who would require assessment: Operators moving between employers; operators moving between different types and/or capacities of equipment; and operators newly entering the occupation. OSHA estimated that 26,940 assessments occur each year based on turnover (i.e., 117,130 operators × 0.23 turnover rate). PO 00000 Frm 00010 Fmt 4702 Sfmt 4702 In addition, just as it did with the previous extension, OSHA assumed that 15% of operators involved in assessments related to turnover would fail the first test administration and need reassessment (79 FR 57793). Therefore, OSHA added 4,041 reassessments (26,940 assessments × 0.15) to the number of reassessments resulting from turnover, for an annual total of 30,981 assessments resulting from turnover and test failure (26,940 + 4,041). Annual assessment costs. OSHA must determine the annual base amount for the two scenarios: (1) Retaining the original 2017 deadline (status quo); and (2) extending the deadline to 2018 (NPRM). The first part of the calculation is the same under both scenarios. Because the annual assessment costs vary by the different levels of assessment required (depending on the operator’s existing level of certification), OSHA grouped the 117,130 operators subject to the crane standard into three classifications: Operators with a certificate that complies with the standard; operators with a certificate only for crane type; and operators with no certification. In order to simplify the estimation for this one-year extension (the 2014 extension was for 3 years) and reflect the last hard data point the Agency has, the Agency is using a static crane operator pool and the composition of the base operator population used in the 2014 deadline extension: 15,000 Crane operators currently have a certificate that complies with the existing crane standard, 71,700 have a certificate for crane type only (but not capacity), leaving 30,430 crane operators with no crane certification (117,130 total operators—(15,000 operators with compliant certification + 71,700 operators with certification for type only)). Assuming the turnover rate of 23% and the failure rate of 15% for turnoverrelated assessments are distributed proportionally across the three types of operators, then the number of assessments for operators with compliant certification is 3,968 ((0.23 + (0.23 × 0.15)) × 15,000), the number of assessments for operators with typeonly certification is 18,965 ((0.23 + (0.23 × 0.15)) × 71,700), and the number of assessments for operators with no certification is 8,049 ((0.23 + (0.23 × 0.15)) × 30,430). Under scenario 2 there is an extension and employers would not certify all of their operators during CY 2017. OSHA estimated the CY 2017 assessment costs for scenario 2 by multiplying the assessment numbers for each type of E:\FR\FM\30AUP1.SGM 30AUP1 Federal Register / Vol. 82, No. 167 / Wednesday, August 30, 2017 / Proposed Rules operator by the unit costs, resulting in a cost of $6,624,861 (($79.27 × 3,968) + ($198.17 × 18,965) + ($317.08 × 8,049)). Under scenario 1, the employerassessment requirement will be in effect for all of CY 2017, while employers would be gradually certifying all of their operators during CY 2017. As a result, the CY 2017 assessment costs identified for scenario 2 would decrease to $4,540,348 from $6,624,861 in scenario 1. This is because, as compared to scenario 2, there will be more operators who will have a compliant certificate, and therefore under the approach described above the employer assessment will require less time. This reduction in the estimated time, and therefore unit cost, lowers the overall assessment cost (see discussion in the 2014 deadline extension FEA for more details about this methodology). Under both scenarios, once the 2010 rule comes into effect the employer duty to assess the crane operator no longer is in effect and so assessment costs are zero. Thus, in CY 2018, the assessment costs under scenario 1 would be zero. Under scenario 2, the assessment costs for CY 2018 would be the same as those under scenario 1 for CY 2017, because employers would be gradually certifying operators over the course of that year. b. Annual Certification Costs mstockstill on DSK30JT082PROD with PROPOSALS OSHA estimated the annual certification costs using the three steps: first, determine the unit costs of meeting this requirement; second, determine the number of affected operators; and, finally, multiply the unit costs of meeting the requirement by the number of operators who must meet them. In this PEA, following the same methodology as in the 2014 FEA, OSHA estimates that all certifications occur in the year prior to the deadline, hence in CY 2017 in scenario 1, while in CY2018 for the one-year extension in scenario 2. As in the annual assessment-cost analysis described above, OSHA provides the calculations for CY 2017 under the existing 2017 deadline (scenario 1), and then presents the certification costs for CY 2018 that would apply if OSHA extends the certification requirement to November 2018 (scenario 2). VerDate Sep<11>2014 18:16 Aug 29, 2017 Jkt 241001 Unit certification costs. Unit certification costs vary across the three different types of operators in the operator pool (operators with compliant certification; operators with type-only certification; and operators with no certification). Among operators without certification there is a further distinction with different unit certification costs: Experienced operators without certification and operators who have only limited experience. Therefore, there are different unit certification costs for four different types of operators. There also are ongoing certification costs due to the following two conditions: The requirement for re-certification every five years and the need for some certified operators to obtain additional certification to operate a crane that differs by type and/or capacity from the crane on which they received their current certification. OSHA estimated these different unit certification costs using substantially the same unit-cost assumptions used in the FEA for the 2010 crane standard (and exactly the same as the FEA of the 2014 deadline extension.) In those previous FEAs, OSHA estimated that training and certification costs for an operator with only limited experience would consist of $1,500 for a 2-day course (including tests) and 18 hours of the operator’s time, for a total cost of $2,185.44 ($1,500 + (18 hours × $38.08)) (see 75 FR 48096–48097). OSHA continues to use a cost of $250 for the tests taken without any training (a constant fixed fee irrespective of the number of tests (75 FR 48096)), and the same number of hours used for each test that it used in the assessment calculations provided above (which the Agency based on certification test times). Accordingly, OSHA estimates the cost of a certificate compliant with the standard for an operator who has a type-only certificate to be $345.20 (i.e., 1 type/capacity-specific written test at 1.5 hours and 1 practical test at 1.0 hours (2.5 hours total), plus the fixed $250 fee for the tests (2.5 hours × $38.08) + $250). For an experienced operator with no certificate, the cost is $402.32 (i.e., the same as the cost for an operator with a type-only certificate plus the cost of an added general PO 00000 Frm 00011 Fmt 4702 Sfmt 4702 41189 written test of 1.5 hours (4.0 hours × $38.08) + $250)).9 For Scenario 1, § 1926.1427(b)(4) specifies that a certificate is valid for five years. OSHA estimates the recertification unit cost would be the same as the assessment for an operator with compliant certification (i.e., $79.27). In the 2014 extension, OSHA assumed that employers would pay a reduced fee for the recertification testing as opposed to the cost of a full first-time examination. Because OSHA lacked data on exactly how much the fee would be reduced, it used the assessment cost as a proxy for the cost of recertification (79 FR 57794). OSHA did not receive any comment on that approach and is retaining it for this rulemaking. Finally, there will be certified operators who must obtain certification when assigned to a crane that differs by type and/or capacity from the crane on which they received their current certification. This situation requires additional training, but less training than required for a ‘‘new’’ operator with only limited experience. Accordingly, OSHA estimated the cost for these operators as one half of the cost of training and certifying a new operator, or $1,092.72 ($2,185.44/2). Number of certifications. After establishing the unit certification costs, OSHA had to determine how many certifications are necessary to ensure compliance with OSHA’s standard. In doing so, the Agency uses the 5% newhire estimate from the FEA discussed above to calculate the number of new operators; therefore, of the 117,130 operators affected by the standard, 5,857 (0.05 × 117,130) would be new operators who would require two days for training and certification each year. As discussed earlier, OSHA estimated that 71,700 operators have type-only certification, 15,000 operators have certification that complies with the existing crane standard, and the remaining 24,574 operators (117,130 ¥ (71,700 + 15,000 + 5,857)) are experienced operators without certification. 9 There are no certification costs for operators who already have a certificate that complies with the crane standard. E:\FR\FM\30AUP1.SGM 30AUP1 41190 Federal Register / Vol. 82, No. 167 / Wednesday, August 30, 2017 / Proposed Rules Under scenario 1 (no extension), after all operators attain certification by November 2017 there will still be ongoing certification costs each year. With a constant total number of operators, the same number of operators (5,857) will be leaving the profession each year and will not require recertification when their current 5-year certification ends. This leaves 111,274 operators (117,130 ¥ 5,857) who will need such periodic recertification. If we approximate the timing of requirements for recertification as distributed proportionally across years, then 20% of all operators with a 5-year certificate (22,255 operators (.20 × 111,274)) would require recertification each year. A final category of unit certification costs involves the continuing need for certified operators to obtain further certification when assigned to a crane that differs by type and/or capacity from the crane on which they received their current certification. This situation arises for both operators working for a single employer and operators switching employers. The operators who will not need multiple certifications in the postdeadline period are operators with certification who move to a new employer and operate a crane with the same type and capacity as the crane on which they received certification while with their previous employer. These operators will not need multiple certifications because operator certificates are portable across employers, as specified by the crane standard (see § 1427(b)(3)). For an employer looking to hire an operator for a specific crane, this option will minimize cost, and OSHA assumes employers will choose this option when possible. After the certification deadline, OSHA estimates that each year 23% of the 117,130 operators (26,940 = 0.23 × 117,130) will enter the workforce, change employers, or take on new positions that require one or more additional certifications to operate different types and/or capacities of cranes. Of these 26,940 operators, OSHA estimates 5 of the total 23%, or 5,857 (0.05 × 117,130), will result from new operators entering the occupation each year; 9%, or 10,542 (0.09 × 117,130), will result from operators switching employers but operating a crane of the same type and capacity as the crane they operated previously (i.e., no certification needed because certification is portable in this case); and the remaining 9%, or 10,542, changing jobs or positions and requiring one or more additional certification to operate a crane that differs by type and/ or capacity from the crane they operated previously. These percentages are identical to those in the 2014 FEA. Annualized certification costs. To estimate the annual base cost for the first scenario, OSHA calculates the certification costs for CY 2017 because that is the remaining period before the existing deadline. The total cost for certifying all operators in CY 2017 in accordance with the existing crane standard using the above unit-cost estimates and numbers of operators is $47,436,368 ((71,700 operators with type-only certification × $345.20) + (24,574 experienced operators without certification × $402.32) + (5,857 operators with no experience or certification × $2,185.44)). The Agency, following the previous FEAs (75 FR 48096 and 79 FR 57795), annualized this cost for the five-year period during which operator certification remains effective, resulting in an annualized cost of $7,563,216. In section c below, OSHA uses this amount in calculating the annual certification costs under scenario 1. To determine the annual amount used in calculations for the second scenario (the extension to 2018), OSHA examines the costs in CY 2017 because that is the first year with certification costs. All numbers are the same, just shifted forward a year, so the total cost for having all crane operators certified in CY 2018 is $47,436,368 (in 2018 dollars). c. Year-by-Year Cost Differential for Extending the Certification Deadline to 2018 and Preserving the Employer Assessment Duty Over That Same Period The ultimate goal of this analysis is to determine the annualized cost differential between scenario 1 (the status quo) and scenario 2 (the extensions of the certification date and the employer assessment duty), so the final part of this PEA compares the yearly assessment and certification costs employers will incur under the two scenarios. Because the assessment and certification costs change across years under each scenario, OSHA must compare the cost differential in each year separately to determine the annual cost savings for each year attributable to scenario 2. OSHA calculated the present value of each year’s differential, which provides a consistent basis for comparing the cost differentials over the extended compliance period. OSHA then annualized the present value of each differential to identify an annual amount that accounts for the discounted costs over this period. Table 1 below summarizes these calculations. Table 1 shows that assessment and certification costs are just shifted out another year. As noted earlier, OSHA estimated the overall cost differential between these two scenarios by calculating the difference in total (assessment and certification) costs each year across the two scenarios. The net employer cost savings in current dollars attributable to adopting the second scenario are, for each certification year: 2017, $18.2 million; 2018, $8.7 million; 2019–2021, $0; 2022, ¥ $7.5 million.10 TABLE 1—YEAR-BY-YEAR COST DIFFERENTIAL IF OSHA EXTENDS THE CERTIFICATION DEADLINE TO 2018 Certification Year 2017 2018 2019 2020 2021 2022 2023 Operator Pool mstockstill on DSK30JT082PROD with PROPOSALS Scenario 1 (no deadline extension) operators with non-compliant certification ................................................ operators with compliant certification .. operators with no certification .............. new operators ...................................... 71,700 15,000 24,574 5,857 10 A positive cost differential indicates cost savings and a negative cost differential indicates net costs. Savings in the first two years are due to the VerDate Sep<11>2014 18:16 Aug 29, 2017 Jkt 241001 0 111,274 0 5,857 0 111,274 0 5,857 0 111,274 0 5,857 lower cost of assessments versus certification. Then net costs in year 2022 are due to the last year of PO 00000 Frm 00012 Fmt 4702 Sfmt 4702 0 111,274 0 5,857 0 111,274 0 5,857 0 111,274 0 5,857 annualized certification costs for scenario 2, while this cost ends in year 2021 for scenario 1. E:\FR\FM\30AUP1.SGM 30AUP1 Federal Register / Vol. 82, No. 167 / Wednesday, August 30, 2017 / Proposed Rules 41191 TABLE 1—YEAR-BY-YEAR COST DIFFERENTIAL IF OSHA EXTENDS THE CERTIFICATION DEADLINE TO 2018—Continued Certification Year 2017 2018 2019 2020 2021 2022 2023 Scenario 2 (deadline extension) operators with non-compliant certification ................................................ operators with compliant certification .. operators with no certification .............. new operators ...................................... 71,700 15,000 24,574 5,857 71,700 15,000 24,574 5,857 0 111,274 0 5,857 0 111,274 0 5,857 0 111,274 0 5,857 0 111,274 0 5,857 0 111,274 0 5,857 0 33,645,533 33,645,533 0 33,645,533 33,645,533 0 26,082,317 26,082,317 0 26,082,317 26,082,317 Costs Scenario 1 (no deadline extension) Total assessment costs ....................... Total certification costs ........................ Total costs .................................... 4,540,348 20,362,269 24,902,617 0 33,645,533 33,645,533 0 33,645,533 33,645,533 Scenario 2 (deadline extension) Total assessment costs ....................... Total certification costs ........................ Total costs .................................... Cost Differential (Scenario 2 ¥ Scenario 1) .................... 6,624,861 0 6,624,861 4,540,348 20,362,269 24,902,617 0 33,645,533 33,645,533 0 33,645,533 33,645,533 0 33,645,533 33,645,533 0 33,645,533 33,645,533 0 26,082,317 26,082,317 (18,277,756) (8,742,916) .................... .................... .................... 7,563,216 .................... mstockstill on DSK30JT082PROD with PROPOSALS Source: OSHA, ORA Calculations. OSHA next determined the present value of these cost differentials between the two scenarios. OSHA calculated the present value of future costs using two interest rates assumptions, 3 percent and 7 percent, which follow the OMB guidelines specified by Circular A–4. At an interest rate of 3 percent, the present value of the cost differentials for CY 2017 onwards results in an estimated savings of $20.2 million ($21.3 million using the 7 percent rate). Finally, annualizing the present value over five years results in an annualized cost differential (i.e., net employer cost savings) of $4.4 million per year ($5.2 million per year using the 7 percent rate). The Agency notes that it did not include an overhead labor cost in the Preliminary Economic Analysis (PEA) for this rule. It is important to note that there is not one broadly accepted overhead rate and that the use of overhead to estimate the marginal costs of labor raises a number of issues that should be addressed before applying overhead costs to analyze the costs of any specific regulation. There are several approaches to look at the cost elements that fit the definition of overhead and there are a range of overhead estimates currently used within the federal government—for example, the Environmental Protection Agency has used 17 percent,11 and government contractors have been 11 U.S. Environmental Protection Agency, ‘‘Wage Rates for Economic Analyses of the Toxics Release Inventory Program,’’ June 10, 2002. VerDate Sep<11>2014 18:16 Aug 29, 2017 Jkt 241001 reported to use an average of 77 percent.12 13 Some overhead costs, such as advertising and marketing, may be more closely correlated with output rather than with labor. Other overhead costs vary with the number of new employees. For example, rent or payroll processing costs may change little with the addition of 1 employee in a 500employee firm, but those costs may change substantially with the addition of 100 employees. If an employer is able to rearrange current employees’ duties to implement a rule, then the marginal share of overhead costs such as rent, insurance, and major office equipment (e.g., computers, printers, copiers) would be very difficult to measure with accuracy (e.g., computer use costs associated with 2 hours for rule familiarization by an existing employee). If OSHA had included an overhead rate when estimating the marginal cost of labor, without further analyzing an appropriate quantitative adjustment, and adopted for these purposes an overhead rate of 17 percent on base wages, as was done in a sensitivity analysis in the FEA in support of OSHA’s 2016 final rule on Occupational 12 Grant Thornton LLP, 2015 Government Contractor Survey. (https://www.grantthornton. com/∼/media/content-page-files/public-sector/pdfs/ surveys/2015/Gov-Contractor-Survey.ashx.) 13 For a further example of overhead cost estimates, please see the Employee Benefits Security Administration’s guidance at https://www. dol.gov/sites/default/files/ebsa/laws-andregulations/rules-and-regulations/technicalappendices/labor-cost-inputs-used-in-ebsa-opr-riaand-pra-burden-calculations-august-2016.pdf. PO 00000 Frm 00013 Fmt 4702 Sfmt 4702 Exposure to Respirable Crystalline Silica, the overhead costs would increase cost savings from $4.4 million to $4.5 million at a discount rate of 3 percent, an increase of 1.8 percent, and would increase cost savings from $5.2 million to $5.3 million at a discount rate of 7 percent, an increase of 1.9 percent. d. Certification of No Significant Impact on a Substantial Number of Small Entities Most employers will have savings resulting from the one-year extension, particularly employers that planned to pay for operator certification in the year before the existing 2017 deadline. The only entities likely to see a net cost will be entities that planned to hire an operator with compliant certification after November 10, 2017. Without the one-year extension, these entities will have no separate assessment duty, but under the one-year extension they will have the expense involved in assessing operator competency. As noted above, however, OSHA estimated the maximum cost for such an assessment (for operators with no certification) to be $317.08 per certified operator. Small businesses will, by definition, have few operators, and OSHA believes the $317.08 cost will be well below 1% of revenues, and well below 5% of profits, in any industry sector using cranes. OSHA does not consider such small amounts to represent a significant impact on small businesses in any industry sector. Hence, OSHA certifies this final rule will not have a significant impact on a substantial number of small E:\FR\FM\30AUP1.SGM 30AUP1 41192 Federal Register / Vol. 82, No. 167 / Wednesday, August 30, 2017 / Proposed Rules entities. After providing relatively similar estimates in the 2014 FEA, OSHA made the same certification in the 2014 FEA and did not receive any adverse comment on either the certification or its underlying rationale. B. Paperwork Reduction Act When OSHA issued the final rule on August 9, 2010, it submitted an Information Collection Request (ICR) to the Office of Management and Budget (OMB) titled Cranes and Derricks in Construction (29 CFR part 1926, subpart CC).14 On November 1, 2010, OMB approved the ICR under OMB Control Number 1218–0261, with an expiration date of November 30, 2013. On April, 25, 2017, OMB’s approval of the ICR was extended to April 30, 2020. This proposed rule contains no collection of information needing OMB approval. OSHA welcomes commenters to submit their comments on this determination to the rulemaking docket (OSHA–2007–0066), along with their other comments on the proposed rule. For instructions on submitting these comments to the docket, see the sections of this Federal Register notice titled DATES and ADDRESSES. OSHA notes that a Federal agency cannot conduct or sponsor a collection of information unless OMB approves it under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), and the agency displays a currently valid OMB control number. The public need not respond to a collection of information requirement unless the agency displays a currently valid OMB control number, and, notwithstanding any other provision of law, no person shall be subject to a penalty for failing to comply with a collection of information requirement if the requirement does not display a currently valid OMB control number. mstockstill on DSK30JT082PROD with PROPOSALS C. Federalism OSHA reviewed this proposed rule in accordance with the Executive Order on Federalism (Executive Order 13132, 64 FR 43255, August 10, 1999), which requires that Federal agencies, to the extent possible, refrain from limiting state policy options, consult with states prior to taking any actions that would restrict state policy options, and take such actions only when clear constitutional authority exists and the problem is national in scope. Executive Order 13132 provides for preemption of state law only with the expressed consent of Congress. Federal agencies 14 The ICR is available at ID–0425 at www.regulations.gov and at www.reginfo.gov (OMB Control Number 1218–0261). VerDate Sep<11>2014 18:16 Aug 29, 2017 Jkt 241001 must limit any such preemption to the extent possible. Under Section 18 of the Occupational Safety and Health Act of 1970 (OSH Act; 29 U.S.C. 651 et seq.), Congress expressly provides that states and U.S. territories may adopt, with Federal approval, a plan for the development and enforcement of occupational safety and health standards. OSHA refers to such states and territories as ‘‘State Plan States.’’ Occupational safety and health standards developed by State Plan States must be at least as effective in providing safe and healthful employment and places of employment as the Federal standards. 29 U.S.C. 667. Subject to these requirements, State Plan States are free to develop and enforce under state law their own requirements for safety and health standards. OSHA previously concluded from its analysis that promulgation of subpart CC complies with Executive Order 13132 (75 FR 48128–29). In states without an OSHA-approved State Plan, any standard developed from this proposed rule would limit state policy options in the same manner as every standard promulgated by OSHA. For State Plan States, Section 18 of the OSH Act, as noted in the previous paragraph, permits State-Plan States to develop and enforce their own crane standards provided these requirements are at least as effective in providing safe and healthful employment and places of employment as the requirements specified in this proposal. D. State Plans When Federal OSHA promulgates a new standard or more stringent amendment to an existing standard, State Plans must amend their standards to reflect the new standard or amendment, or show OSHA why such action is unnecessary, e.g., because an existing state standard covering this area is ‘‘at least as effective’’ as the new Federal standard or amendment (29 CFR 1953.5(a)). The state standard must be at least as effective as the final Federal rule. State Plans must adopt the Federal standard or complete their own standard within six months of the promulgation date of the final Federal rule. When OSHA promulgates a new standard or amendment that does not impose additional or more stringent requirements than an existing standard, State Plans do not have to amend their standards, although OSHA may encourage them to do so. The 21 states and 1 U.S. territory with OSHAapproved occupational safety and health plans covering private sector and state and local government are: Alaska, PO 00000 Frm 00014 Fmt 4702 Sfmt 4702 Arizona, California, Hawaii, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Oregon, Puerto Rico, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, and Wyoming. Connecticut, Illinois, Maine, New Jersey, New York, and the Virgin Islands have OSHA-approved State Plans that apply to state and local government employees only. The proposed amendments to OSHA’s crane standard preserve the status quo and would not impose any new requirements on employers. Accordingly, State Plans would not have to amend their standards to delay the effective date of their operator certification requirements, but they may do so if they so choose. However, if they choose to delay the effective date of their certification requirements, they also would need to include a corresponding extension of the employer duty to assess and train operators that is equivalent to § 1427(k)(2). E. Unfunded Mandates Reform Act When OSHA issued the final rule for cranes and derricks in construction, it reviewed the rule according to the Unfunded Mandates Reform Act of 1995 (UMRA; 2 U.S.C. 1501 et seq.) and Executive Order 13132 (64 FR 43255 (Aug. 10, 1999). OSHA concluded that the final rule did not meet the definition of a ‘‘Federal intergovernmental mandate’’ under the UMRA because OSHA standards do not apply to state or local governments except in states that voluntarily adopt State Plans. OSHA further noted that the rule imposed costs of over $100 million per year on the private sector and, therefore, required review under the UMRA for those costs, but that its final economic analysis met that requirement. As discussed above in Section IV.A (Preliminary Economic Analysis and Regulatory Flexibility Analysis) of this preamble, this proposed extension does not impose any costs on private-sector employers beyond those costs already identified in the final rule for cranes and derricks in construction and the 2014 extension. Because OSHA reviewed the total costs of this final rule under the UMRA, no further review of those costs is necessary. Therefore, for the purposes of the UMRA, OSHA certifies that this proposed rule does not mandate that state, local, or tribal governments adopt new, unfunded regulatory obligations, or increase expenditures by the private sector of more than $100 million in any year. E:\FR\FM\30AUP1.SGM 30AUP1 Federal Register / Vol. 82, No. 167 / Wednesday, August 30, 2017 / Proposed Rules F. Consultation and Coordination With Indian Tribal Governments OSHA reviewed this proposed rule in accordance with Executive Order 13175 (65 FR 67249) and determined that it does not have ‘‘tribal implications’’ as defined in that order. As proposed, the rule does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes. mstockstill on DSK30JT082PROD with PROPOSALS G. Consultation With the Advisory Committee on Construction Safety and Health Under 29 CFR parts 1911 and 1912, OSHA must consult with the Advisory Committee on Construction Safety and Health (ACCSH or Committee), established pursuant to Section 107 of the Contract Work Hours and Safety Standards Act (40 U.S.C. 3701 et seq.), in setting standards for construction work. Specifically, § 1911.10(a) requires the Assistant Secretary to provide the ACCSH with a draft proposed rule (along with pertinent factual information) and give the Committee an opportunity to submit recommendations. See also § 1912.3(a) (‘‘[W]henever occupational safety or health standards for construction activities are proposed, the Assistant Secretary [for Occupational Safety and Health] shall consult the Advisory Committee’’). On June 20, 2017, ACCSH unanimously recommended that OSHA delay, for one additional year until November 10, 2018, the compliance date for the crane operator certification and extend the employer duty for the same period. [Include citation to ACCSH docket, OSHA–2017–0007– ####] H. Executive Order 13771: Reducing Regulation and Controlling Regulatory Costs Consistent with EO 13771 (82 FR 9339, February 3, 2017), OSHA has estimated the annualized cost savings over 10 years for this proposed rule to range from $4.4 million to $5.2 million, depending on the discount rate. This proposed rule is expected to be an EO 13771 deregulatory action. Details on the estimated cost savings of this proposed rule can be found in the rule’s economic analysis. I. Legal Considerations The purpose of the Occupational Safety and Health Act of 1970 (29 U.S.C. 651 et seq.) is ‘‘to assure so far as possible every working man and woman VerDate Sep<11>2014 18:16 Aug 29, 2017 Jkt 241001 in the nation safe and healthful working conditions and to preserve our human resources.’’ 29 U.S.C. 651(b). To achieve this goal, Congress authorized the Secretary of Labor to promulgate and enforce occupational safety and health standards. 29 U.S.C. 654(b), 655(b). A safety or health standard is a standard ‘‘which requires conditions, or the adoption or use of one or more practices, means, methods, operations, or processes, reasonably necessary or appropriate to provide safe or healthful employment or places of employment.’’ 29 U.S.C. 652(8). A standard is reasonably necessary or appropriate within the meaning of Section 652(8) when a significant risk of material harm exists in the workplace and the standard would substantially reduce or eliminate that workplace risk. See Industrial Union Department, AFL–CIO v. American Petroleum Institute, 448 U.S. 607 (1980). In the crane rulemaking, OSHA made such a determination with respect to the use of cranes and derricks in construction (75 FR 47913, 47920– 21). This proposed rule does not impose any new requirements on employers. Therefore, this proposal does not require an additional significant risk finding (see Edison Electric Institute v. OSHA, 849 F.2d 611, 620 (D.C. Cir. 1988)). In addition to materially reducing a significant risk, a safety standard must be technologically feasible. See UAW v. OSHA, 37 F.3d 665, 668 (D.C. Cir. 1994). A standard is technologically feasible when the protective measures it requires already exist, when available technology can bring the protective measures into existence, or when that technology is reasonably likely to develop (see American Textile Mfrs. Institute v. OSHA, 452 U.S. 490, 513 (1981); American Iron and Steel Institute v. OSHA, 939 F.2d 975, 980 (D.C. Cir. 1991)). In the 2010 Final Economic Analysis for the crane standard, OSHA found the standard to be technologically feasible (75 FR 48079). OSHA also found the previous extension to be technologically feasible (79 FR 57798). This proposed rule would, therefore, be technologically feasible as well because it would not require employers to implement any additional protective measures; it would simply extend the duration of existing requirements. Signed at Washington, DC, on August 25, 2017. Loren Sweatt, Deputy Assistant Secretary of Labor for Occupational Safety and Health. Amendments to Standards For the reasons stated in the preamble of this proposed rule, OSHA proposes to amend 29 CFR part 1926 as follows: PART 1926—[AMENDED] Subpart CC—Cranes and Derricks in Construction 1. The authority citation for subpart CC of 29 CFR part 1926 continues to read as follows: ■ Authority: 40 U.S.C. 3701 et seq.; 29 U.S.C. 653, 655, 657; and Secretary of Labor’s Orders 5–2007 (72 FR 31159) or 1–2012 (77 FR 3912), as applicable; and 29 CFR part 1911. 2. Amend § 1926.1427 by revising paragraph (k) to read as follows: ■ § 1926.1427 Operator qualification and certification. * * * * * (k) Phase-in. (1) The provisions of this section became applicable on November 8, 2010, except for paragraphs (a)(2) and (f), which are applicable November 10, 2018. (2) When § 1926.1427(a)(1) is not applicable, all of the requirements in paragraphs (k)(2)(i) and (ii) of this section apply until November 10, 2018. (i) The employer must ensure that operators of equipment covered by this standard are competent to operate the equipment safely. (ii) When an employee assigned to operate machinery does not have the required knowledge or ability to operate the equipment safely, the employer must train that employee prior to operating the equipment. The employer must ensure that each operator is evaluated to confirm that he/she understands the information provided in the training. [FR Doc. 2017–18441 Filed 8–29–17; 8:45 am] BILLING CODE 4510–26–P List of Subjects in 29 CFR Part 1926 Construction industry, Cranes, Derricks, Occupational safety and health, Safety. PO 00000 Frm 00015 Fmt 4702 Sfmt 9990 41193 E:\FR\FM\30AUP1.SGM 30AUP1

Agencies

[Federal Register Volume 82, Number 167 (Wednesday, August 30, 2017)]
[Proposed Rules]
[Pages 41184-41193]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-18441]



[[Page 41184]]

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DEPARTMENT OF LABOR

Occupational Safety and Health Administration

29 CFR Part 1926

[Docket ID-OSHA-2007-0066]
RIN 1218-AC86


Cranes and Derricks in Construction: Operator Certification 
Extension

AGENCY: Occupational Safety and Health Administration (OSHA), Labor.

ACTION: Notice of proposed rulemaking.

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SUMMARY: Under OSHA's standard for cranes and derricks used in 
construction work, crane operators are to be certified by November 10, 
2017. Until that date, employers also have duties under the standard to 
ensure that crane operators are trained and competent to operate the 
crane safely. The Agency delayed the deadline for operator 
certification by three years to November 10, 2017, and extended the 
existing employer duties for the same period. The Agency is proposing 
to delay the deadline and extend the existing employer duty to ensure 
that operators of equipment covered by this standard are competent to 
operate the equipment safely for one year to November 17, 2018.

DATES: Submit comments to this proposed rule, including comments to the 
information collection (paperwork) determination (described under the 
section titled ``Agency Determinations''), hearing requests, and other 
information by September 29, 2017. All submissions must bear a postmark 
or provide other evidence of the submission date.

ADDRESSES: Submit comments, hearing requests, and other material, 
identified by Docket No. OSHA-2007-0066, using any of the following 
methods:
    Electronically: Submit comments and attachments, as well as hearing 
requests and other information, electronically at http://www.regulations.gov, which is the Federal e-Rulemaking Portal. Follow 
the instructions online for submitting comments. Note that this docket 
may include several different Federal Register notices involving active 
rulemakings, so it is extremely important to select the correct notice 
or its ID number when submitting comments for this rulemaking. After 
accessing the docket (OSHA-2007-0066), check the ``proposed rule'' box 
in the column headed ``Document Type,'' find the document posted on the 
date of publication of this document, and click the ``Submit a 
Comment'' link. Additional instructions for submitting comments are 
available from the regulations.gov homepage.
    Facsimile: OSHA allows facsimile transmission of comments that are 
10 pages or fewer in length (including attachments). Fax these 
documents to the OSHA Docket Office at (202) 693-1648. OSHA does not 
require hard copies of these documents. Instead of transmitting 
facsimile copies of attachments that supplement these documents (e.g., 
studies, journal articles), commenters must submit these attachments to 
the OSHA Docket Office, Technical Data Center, Room N-2625, OSHA, U.S. 
Department of Labor, 200 Constitution Ave. NW., Washington, DC 20210. 
These attachments must clearly identify the sender's name, the date, 
subject, and the docket number (OSHA-2007-0066) so that the Docket 
Office can attach them to the appropriate document.
    Regular mail, express delivery, hand delivery, and messenger 
(courier) service: Submit comments and any additional material to the 
OSHA Docket Office, RIN No. 1218-AC86, Technical Data Center, Room N-
3508, OSHA, U.S. Department of Labor, 200 Constitution Ave. NW., 
Washington, DC 20210; telephone: (202) 693-2350. (OSHA's TTY number is 
(877) 889-5627). Contact the OSHA Docket Office for information about 
security procedures concerning delivery of materials by express 
delivery, hand delivery, and messenger service. The Docket Office will 
accept deliveries (express delivery, hand delivery, messenger service) 
during the Docket Office's normal business hours, 8:15 a.m. to 4:45 
p.m., e.s.t.
    Instructions: All submissions must include the Agency's name, the 
title of the rulemaking (Cranes and Derricks in Construction: Operator 
Certification Extension), and the docket number (i.e., OSHA Docket No. 
OSHA-2007-0066). OSHA will place comments and other material, including 
any personal information, in the public docket without revision, and 
the comments and other material will be available online at http://www.regulations.gov. Therefore, OSHA cautions commenters about 
submitting statements they do not want made available to the public, or 
submitting comments that contain personal information (either about 
themselves or others) such as Social Security numbers, birth dates, and 
medical data.
    Docket: To read or download comments or other material in the 
docket, go to http://www.regulations.gov or to the OSHA Docket Office 
at the above address. The electronic docket for this proposed rule 
established at http://www.regulations.gov contains most of the 
documents in the docket. However, some information (e.g., copyrighted 
material) is not available publicly to read or download through this 
Web site. All submissions, including copyrighted material, are 
available for inspection at the OSHA Docket Office. Contact the OSHA 
Docket Office for assistance in locating docket submissions.

FOR FURTHER INFORMATION CONTACT: 
    General information and press inquiries: Mr. Frank Meilinger, OSHA 
Office of Communications; telephone: (202) 693-1999; email: 
Meilinger.Francis2@dol.gov.
    Technical inquiries: Mr. Vernon Preston; telephone: (202) 693-2020; 
fax: (202) 693-1689; email: Preston.Vernon@dol.gov.
    Copies of this Federal Register notice and news releases: 
Electronic copies of these documents are available at OSHA's Web page 
at http://www.osha.gov.

SUPPLEMENTARY INFORMATION:

I. Summary and Explanation of the Proposed Amendments to the Standard

A. Introduction

    OSHA is publishing this Notice of Proposed Rulemaking to extend for 
one year the employer duty to ensure crane operator competency for 
construction work, from November 10, 2017, to November 10, 2018. OSHA 
also is proposing to delay the enforcement date for crane operator 
certification for one year from November 10, 2017, to November 10, 
2018. This would be the second delay of the enforcement date, which 
OSHA needs to address stakeholder concerns over the operator 
certification requirements in the 2010 cranes and derricks in 
construction standard.

B. Summary of Economic Impact

    This proposed rule is not economically significant. OSHA proposes 
to revise 29 CFR 1926.1427(k) (competency assessment and training) to 
delay the deadline for compliance with the operator certification 
requirement in its construction standard for cranes and derricks, and 
to extend the existing employer duties for the same period. OSHA's 
preliminary economic analysis shows that delaying the date for operator 
certification and employers' assessment of crane operators, rather than 
allowing both provisions to expire on November 10, 2017, will result in 
a net cost savings for the affected industries. Delaying the compliance 
date for operator certification results in estimated cost savings that 
exceed the estimated new costs for employers to continue to assess 
crane operators to

[[Page 41185]]

ensure their competent operation of the equipment in accordance with 
1926.1427(k). The detailed preliminary economic analysis is in the 
``Agency Determinations'' section of this preamble.

C. Background

1. Operator Certification Options
    OSHA developed the final rule for cranes and derricks in 
construction (29 CFR subpart CC, referred to as ``the crane standard'' 
hereafter) through a negotiated rulemaking process. OSHA established a 
federal advisory committee, the Cranes and Derricks Negotiated 
Rulemaking Advisory Committee (C-DAC), to develop a draft proposed 
rule. C-DAC met in 2003 and 2004 and developed a draft proposed rule 
(which included the provisions concerning crane operator certification 
at issue in this rulemaking) that it provided to OSHA. The rule OSHA 
subsequently proposed closely followed C-DAC's draft proposal (73 FR 
59718).
    The Agency initiated a Small Business Advocacy Review Panel in 
2006. The Agency published the proposed rule for cranes in construction 
in 2008, received public comment on the proposal, and conducted a 
public hearing. Among many other provisions, OSHA's final rule 
incorporated, with minor changes, the four-option certification scheme 
that C-DAC had recommended and the Agency had proposed. Accordingly, in 
Sec.  1926.1427, as originally promulgated, OSHA required employers to 
ensure that their crane operators are certified under at least one of 
four options by November 10, 2014:
    Option 1. Certification by an independent testing organization 
accredited by a nationally recognized accrediting organization;
    Option 2. Qualification by an employer's independently audited 
program;
    Option 3. Qualification by the U.S. military;
    Option 4. Compliance with qualifying state or local licensing 
requirements (where mandatory).
    The third-party certification option in Sec.  1926.1427(b)--Option 
1--is the only certification option that is ``portable,'' meaning that 
any employer who employs an operator may rely on that operator's 
certification as evidence of compliance with the crane standard's 
operator certification requirement. This certification option also is 
the only one that is available to all employers; it is the option that 
OSHA, and the parties that participated in the rulemaking, believed 
would be the one most widely used. In this regard, OSHA is not aware of 
an audited employer qualification program among construction industry 
employers (Option 2), and the crane standard limits the U.S. military 
crane operator certification programs (Option 3) to federal employees 
of the Department of Defense or the armed services. While state and 
local governments certify some crane operators (Option 4), the vast 
majority of operators who become certified do so through Option 1--by 
third-party testing organizations accredited by a nationally recognized 
accrediting organization.
    Under Option 1, a third party performs testing. Before a testing 
organization can issue operator certifications, paragraph 1427(b)(1) of 
the crane standard provides that a nationally recognized accrediting 
organization must accredit the testing organizations. To accredit a 
testing organization, the accrediting agency must determine that the 
testing organization meets industry-recognized criteria for written 
testing materials, practical examinations, test administration, 
grading, facilities and equipment, and personnel. The testing 
organization must administer written and practical tests that:
     Assess the operator's knowledge and skills regarding 
subjects specified in the crane standard;
     provide different levels of certification based on 
equipment capacity and type;
     have procedures to retest applicants who fail; and
     have testing procedures for recertification.
    Paragraph 1427(b)(2) of the final crane standard also specifies 
that, for the purposes of compliance with the crane standard, an 
operator is deemed qualified to operate a particular piece of equipment 
only if the operator is certified for that type and capacity of 
equipment or for higher-capacity equipment of that type. It further 
provides that, if no testing organization offers certification 
examinations for a particular equipment type and/or capacity, the 
operator is deemed qualified to operate that equipment if the operator 
is certified for the type/capacity of equipment that is most similar to 
that equipment, and for which a certification examination is available.
2. Overview of Sec.  1926.1427(k) (Phase-in Provision)
    The final crane standard replaced provisions in 29 CFR 1926 subpart 
N--Cranes, Derricks, Hoists, Elevators, and Conveyors, of the 
construction safety standards. Provisions for employers to ensure that 
operators of equipment, including cranes, are trained and qualified to 
safely operate that equipment are available elsewhere in the 
construction safety standards (see, for example, Sec.  1926.20(b)(4) 
and (f)(2)).
    OSHA delayed the effective date of the operator certification 
requirement for four years, until November 10, 2014 (see Sec.  
1427(k)(1)). To make sure that crane operators knew how to operate 
equipment safely during this phase-in period, the Agency required 
employers to ``ensure that operators of equipment covered by this 
standard are competent to operate the equipment safely'' (Sec.  
1926.1427(k)(2)(i)). When the operator ``assigned to operate machinery 
does not have the required knowledge or ability to operate the 
equipment safely,'' the standard requires employers to train and 
evaluate the operator (Sec.  1926.1427(k)(2)(ii)).
3. Post-Final Rule Developments
    After OSHA issued the final rule, it continued to receive feedback 
from members of the regulated community and conducted stakeholder 
meetings on April 2 and 3, 2013, to give interested members of the 
public the opportunity to express their views. Participants included 
construction contractors, labor unions, crane manufacturers, crane 
rental companies, accredited testing organizations, one of the 
accrediting bodies, insurance companies, crane operator trainers, and 
military employers. Detailed notes of participants' comments are 
available at OSHA-2007-0066-0539. Various parties informed OSHA that, 
in their opinion, the operator certification option would not 
adequately ensure that crane operators could operate their equipment 
safely. They said a certified operator would need additional training, 
experience, and evaluation, beyond the training and evaluation required 
to obtain certification, to ensure that he or she could operate a crane 
safely.
    OSHA also received information that two (of a total of four) 
accredited testing organizations have been issuing certifications only 
by ``type'' of crane, rather than by the ``type and capacity'' of 
crane, as the crane standard requires. As a result, those 
certifications do not meet the standard's requirements and operators 
who obtained certifications from only those organizations cannot, under 
OSHA's crane standard, operate cranes on construction sites after the 
new requirements become effective. Some stakeholders in the crane 
industry requested that OSHA remove the capacity requirement.
    Most of the participants in the stakeholder meetings expressed the

[[Page 41186]]

opinion that an operator's certification by an accredited testing 
organization did not mean that the operator was fully competent or 
experienced to operate a crane safely on a construction work site. The 
participants likened operator certification to a new driver's license, 
or a learner's permit, to drive a car. Most participants said that the 
operator's employer should retain the responsibility to ensure that the 
operator was qualified for the particular crane work assigned. Some 
participants wanted certification to be, or viewed to be, sufficient to 
operate a crane safely. Stakeholders noted that operator certification 
was beneficial in establishing a minimum threshold of operator 
knowledge and familiarity with cranes.

D. Three-Year Extension

    In order to address the issues raised by industry stakeholders 
after publication of the final rule, OSHA proposed a rule delaying the 
compliance date for the operator certification requirements of the 
crane standard, and extending the employer duty to ensure that the 
operator was qualified for the particular crane work assigned, by three 
years until November 10, 2014, (79 FR 7611). Subsequently, OSHA 
conducted a hearing on the rulemaking on May 19, 2014, gathering more 
comments on the proposed extension (OSHA-2007-0066-0521).
    On September 26, 2014, OSHA issued a final rule delaying the 
compliance date for operator certification for three years until 
November 10, 2017, (79 FR 57785). After publication of the final rule, 
OSHA began conducting site visits with a variety of stakeholders and 
the Agency drafted regulatory text with the purpose of addressing the 
capacity issue and the employer duty concerns.
    On March 31 and April 1, 2015, OSHA convened a special meeting of 
Advisory Committee on Construction Safety and Health in which both 
ACCSH members and non-member industry stakeholders provided feedback on 
the draft regulatory text.\1\ Prior to the meeting, OSHA made available 
the draft regulatory text,\2\ an overview of the draft regulatory 
text,\3\ and a summary of the site visits with stakeholders.\4\ OSHA 
received many comments and suggestions for revising the regulatory text 
at the ACCSH meeting. Since that meeting, the Agency has worked to re-
draft the regulatory text and preamble for the proposed rule. To ensure 
the Agency has enough time to propose and finalize the rulemaking, OSHA 
is proposing this one-year extension of the certification requirement 
compliance date. Just as with the previous extension, OSHA is also 
proposing an extension of the existing employer assessment duty for the 
same time period.
---------------------------------------------------------------------------

    \1\ Transcript for March 31: https://www.osha.gov/doc/accsh/transcripts/accsh_20150331.pdf; transcript for April 1: https://www.osha.gov/doc/accsh/transcripts/accsh_20150401.pdf.
    \2\ https://www.osha.gov/doc/accsh/accshcrane.pdf.
    \3\ https://www.osha.gov/doc/accsh/proposed_crane.html.
    \4\ https://www.osha.gov/doc/accsh/summary_crane.html.
---------------------------------------------------------------------------

E. Explanation of Proposed Action and Request for Comment

    The effective dates of the operator certification requirement and 
the other ``phase in'' of employer duties are in 29 CFR 
1926.1427(k)(1). The Agency is proposing to revise Sec.  1427(k)(1) to 
delay the deadline for operator certification by one year from November 
10, 2017, to November 10, 2018, to provide additional time for the 
Agency to propose and finalize a rulemaking that addresses 
stakeholders' concerns. The Agency also is proposing to extend the 
current employer duties in Sec.  1926.1427(k)(2)(i) and (ii) to ensure 
there is no reduction in worker protection during this three-year 
period. When OSHA included these employer duties in the final crane 
standard in 2010, these duties were to be a ``phase in'' to 
certification (75 FR 48027). By extending the date to November 10, 
2018, as proposed in this notice, the requirements would continue to 
serve that purpose and preserve the status quo.
    Without an extension, the certification requirements from the crane 
standard will prevent operators without certification by crane capacity 
from operating cranes, potentially disrupting the construction industry 
by creating a large number of crane operators without compliant 
certifications. Without the extension, after November 10, 2017, there 
would not be any duty for employers to ensure that their operators are 
competent to operate the equipment safely. This could diminish the 
effectiveness of the final rule which OSHA previously estimated to 
prevent 22 fatalities per year (75 FR 47914).
    OSHA seeks comment on this approach, including the duration of the 
proposed extension of the operator certification deadline and the 
existing employer duties. OSHA encourages commenters to include a 
rationale for any alternatives that they propose. OSHA also requests 
comment on the ``Agency Determinations'' section that follows, 
including the preliminary economic analysis, paperwork requirements, 
and other regulatory impacts of this rule on the regulated community.

II. Agency Determinations

A. Preliminary Economic Analysis and Regulatory Flexibility Analysis

    When it issued the final crane rule in 2010, OSHA prepared a final 
economic analysis (2010 FEA) as required by the Occupational Safety and 
Health Act of 1970 (OSH Act; 29 U.S.C. 651 et seq.) and Executive 
Orders 12866 (58 FR 51735) (Sept. 30, 1993) and 13563 (76 FR 3821 (Jan. 
21, 2011)). OSHA also published a Final Regulatory Flexibility Analysis 
as required by the Regulatory Flexibility Act (5 U.S.C. 601-612). On 
September 26, 2014, the Agency included a separate FEA (2014 FEA) when 
it published a final rule delaying until November 10, 2017, the 
deadline for all crane operators to become certified, and extending the 
employer duty to ensure operator competency for the same period (79 FR 
57785). The preliminary economic analysis (PEA) for this rulemaking 
relies on the methodology of the 2014 FEA, which in turn is based on 
estimates from the 2010 FEA, along with public comments and testimony 
and other documents in the 2014 rulemaking record. In this document 
OSHA has summarized some of the information from the 2014 FEA and noted 
where the current analysis differs from the previous FEA. Additional 
background on the analysis in this PEA may be found in the 2014 FEA.
    Because OSHA estimates this rule will have a cost savings for 
employers of $4.4 million using a discount rate of 3 percent for the 
one year of the extension, this final rule is not economically 
significant within the meaning of Executive Order 12866, or a major 
rule under the Unfunded Mandates Reform Act or Section 804 of the Small 
Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et 
seq.).
    This PEA focuses solely on costs, and not on any changes in safety 
and benefits resulting from extending the certification deadline and 
the employer duties under Sec.  1926.1427(k)(2). OSHA previously 
provided its assessment of the benefits of the crane standard in the 
2014 FEA of that standard. As noted elsewhere in this preamble, the 
primary rationale for this proposal is to maintain the status quo--
including preservation of the employer duty to ensure that crane 
operators are competent--while providing OSHA additional time to 
conduct rulemaking on the crane

[[Page 41187]]

operator requirements in response to stakeholder concerns.
    Extending the employer's requirement to ensure an operator's 
competency during this period means taking the same approach of the 
previous extension: Continuing measures in existence since OSHA 
published the crane standard in 2010. As OSHA stated in the preamble to 
the 2010 final rule, the interim measures in paragraph (k) ``are not 
significantly different from requirements that were effective under 
subpart N of this part at former Sec.  1926.550, Sec.  1926.20(b)(4) 
(`the employer shall permit only those employees qualified by training 
or experience to operate equipment and machinery'), and Sec.  
1926.21(b)(2) (`the employer shall instruct each employee in the 
recognition and avoidance of unsafe conditions . . .')'' (75 FR 48027).
    Delaying the operator certification requirement defers a regulatory 
requirement and produces cost savings for employers. There will, 
however, be continuing employer costs for extending the requirement to 
assess operators under existing Sec.  1926.1427(k)(2); if OSHA does not 
extended these requirements, they will expire on November 10, 2017, and 
employers would not incur these costs after 2017. With the extension, 
these continuing employer costs will be offset by a reduction in 
expenses that employers would otherwise have been required to incur to 
ensure that their operators are certified before the existing November 
2017 deadline.
Overview
    In the following analysis, OSHA examines costs and savings to 
determine the net economic effect of the rule. By comparing the 
additional assessment costs to the certification cost savings across 
two scenarios--scenario 1 in which there is no extension of the 2017 
deadline, and scenario 2 in which there is an extension until 2018--
OSHA estimates that the extension will produce a net savings for 
employers of $4.4 million per year using a discount rate of 3 percent 
($5.2 million per year using an interest rate of 7 percent).\5\
---------------------------------------------------------------------------

    \5\ As explained in the following discussion, OSHA typically 
calculates the present value of future costs and benefits using two 
interest rate assumptions, 3% and 7%, as recommended by OMB Circular 
A-4 of September 17, 2003. All dollar amounts unless otherwise 
stated are in 2016 dollars.
---------------------------------------------------------------------------

    OSHA's analysis follows the steps below to reach its estimate of an 
annual net $4.4 million in savings:
    (1) Estimate the annual assessment costs for employers;
    (2) Estimate the annual certification costs for employers; and
    (3) Estimate the year-by-year cost differential for extending the 
certification deadline to 2018.\6\
---------------------------------------------------------------------------

    \6\ Though this is a single year extension, the analysis needs 
to extend over several future years. For convenience, OSHA refers to 
the annual time period as a ``Certification Year'' (CY) in this 
economic analysis, which OSHA defines as ending November 10 of the 
calendar year; e.g., CY 2017 runs from November 10, 2016, to 
November 9, 2017.
---------------------------------------------------------------------------

    The methodology used here is substantially the same as used in the 
2014 extension FEA. Table 1 below summarizes these costs and the 
differentials across the two scenarios. The major differences are 
updated wages and a revised forecast of the composition of the operator 
pool across certification levels. The 2014 FEA analysis addressed a 3-
year extension, so it gradually increased the number of operators 
without any certification during that period. The model in this PEA 
addresses an extension of just a single year, so it holds the number of 
operators with each certification level constant. The latter 
significantly simplifies the analysis versus that presented in the 2014 
FEA extension.
a. Annual Assessment Costs
    OSHA estimated the annual assessment costs using the following 
three steps: First, determine the unit costs of meeting this 
requirement; second, determine the number of assessments that employers 
will need to perform in any given year (this determination includes 
estimating the affected operator pool as a preliminary step); and 
finally, multiply the unit costs of meeting the requirement by the 
number of operators who must meet it in any given year.
    Unit assessment costs. OSHA's unit cost estimates for assessments 
take into account the time needed for the assessment, along with the 
wages of both the operator and the personnel who will perform the 
assessment. OSHA based the time requirements on crane operator 
certification exams currently offered by nationally accredited testing 
organizations. OSHA determined the time needed for various 
certification tests from the 2014 extension, drawing primarily from the 
public stakeholder meetings.
    The Agency estimates separate assessment costs for three types of 
affected operators, which together comprise all affected operators: 
Those who have a certificate that is in compliance with the existing 
crane standard; those who have a certificate that is not in compliance 
with the existing crane standard; and those who have no certificate.\7\ 
As it did in the previous extension, OSHA uses certification status as 
a proxy of competence in estimating the amount of assessment time 
needed for different operators. OSHA expects that an operator already 
certified to operate equipment of a particular type and capacity will 
require less assessment time than an operator certified by type but not 
capacity, who in turn will require less time than an operator who is 
not certified. In deriving these estimates, OSHA determined that 
operators who have a certificate that is compliant with the crane 
standard would have to complete a test that is the equivalent of the 
practical part of the standard crane operator test. The Agency 
estimates that it would take an operator one hour to complete this 
test. Operators who have a certificate that is not in compliance with 
the crane standard would have to complete a test that is equivalent to 
both a written general test and a practical test of the standard crane 
operator test. OSHA estimated that the written general test would take 
1.5 hours to complete, for a total test time of 2.5 hours of testing 
for each operator (1.5 hours for the written general test and 1.0 hour 
for the practical test). Finally, operators with no certificate would 
have to complete a test that is equivalent to the standard written test 
for a specific crane type (also lasting 1.5 hours), as well as the 
written general test and the practical test, for a total test time of 
4.0 hours (1.5 hours for the test on a specific crane type, 1.5 hours 
for the written general test, and 1.0 hour for the practical test).
---------------------------------------------------------------------------

    \7\ OSHA is not making any determination about whether a 
specific certification complies with the requirements of the crane 
standard. For the purposes of this analysis only, OSHA will treat 
certificates that do not include a multi-capacity component as not 
complying with the crane standard, and certificates that include 
both a type and multi-capacity component as complying with the crane 
standard.
---------------------------------------------------------------------------

    The wages used for the crane operator and assessor come from the 
BLS Occupational Employment Survey for May 2016 (BLS 2017a), which is 
an updated version of the same source used in the 2014 extension. From 
this survey a crane operator's (Standard Occupational Classification 
(SOC) 53-7021 Crane and Tower Operators) average hourly wage is $26.58. 
The full cost to the employer includes all benefits as well as the 
wage. From the BLS Employer Costs For Employee Compensation for 
December 2016 (BLS 2017b) the average percentage of benefits in total 
for the construction sector is 30.2%, giving a markup of the wage to 
the total compensation of 1.43

[[Page 41188]]

(1/(1-0.302)). Hence the ``loaded'' total hourly cost of an operator is 
$38.08 (1.43 x $26.58), including a markup for benefits.\8\ Relying on 
the same sources, the wage of the assessor is estimated to be the same 
as the average wage of a construction supervisor (53-1031 First-Line 
Supervisors of Transportation and Material-Moving Machine and Vehicle 
Operators) of $28.75, while the total hourly cost is $41.19 (1.43 x 
$28.75). Below these total hourly costs will be referred to as the 
respective occupation's ``wage.'' For assessments performed by an 
employer of a prospective employee (i.e., a candidate), OSHA uses these 
same operator and assessor wages and the above testing times to 
estimate the cost of assessing prospective employees.
---------------------------------------------------------------------------

    \8\ Calculations in the text may not exactly match due to 
rounding for presentation purposes. All final costs are exact, with 
no rounding.
---------------------------------------------------------------------------

    Multiplying the wages of operators, assessors, and candidates by 
the time taken for each type of assessment provides the cost for each 
type of assessment. Hence, the cost of assessing an operator already 
holding a certificate that complies with the standard (both type and 
capacity) is one hour of both the operator's and assessor's time: 
$79.27 ($38.08 + $41.19). For an operator with a certificate for crane 
type only (not crane capacity), the assessment time is 2.5 hours for a 
cost of $198.17 (2.5 x ($38.08 + $41.19)). Finally, for an operator 
with no certificate, the assessment time is 4.0 hours for a cost of 
$317.48 (4.0 x ($38.08 + $41.19)).
    Besides these assessment costs, OSHA notes that Sec.  
1427(k)(2)(ii) requires employers to provide training to employees if 
they are not already competent to operate their assigned equipment. To 
determine whether an operator is competent, the employer must first 
perform an assessment. Only if an operator fails the assessment must 
the employer provide additional operator training required by Sec.  
1427(k)(2)(ii).
    However, in determining this cost, OSHA made a distinction between 
a nonemployee candidate for an operator position and an operator who is 
currently an employee. For an employer assessing a nonemployee 
candidate, OSHA assumed, based on common industry practice, that the 
employer will not hire a nonemployee candidate who fails the 
assessment. In the second situation, an employee qualified to operate a 
crane fails a type and/or capacity assessment for a crane that differs 
from the crane the employee currently operates. In this situation, the 
cost-minimizing action for the employer is not to assign the employee 
to that type and/or capacity crane, thereby avoiding training costs. 
While the Agency acknowledges that there will be cases in which the 
employer will provide this training, it believes these costs to be 
minimal and, therefore, is not estimating costs for the training. OSHA 
made the same determinations in the 2014 PEA and did not receive public 
comment on them.
    Number of assessments and number of affected operators. The number 
of assessments is difficult to estimate due to the heterogeneity of the 
crane industry. Many operators work continuously for the same employer, 
already have had their assessment, and do not need reassessment, so the 
number of new assessments required by the crane standard for these 
operators will be zero. Some companies will rent both a crane and an 
operator employed by the crane rental company to perform crane work, in 
which case the rental crane company is the operator's employer and 
responsible for operator assessment. In such cases there is no 
requirement for the contractor who is renting the crane service to 
conduct an additional operator assessment. Assuming that employers 
already comply with the assessment and training requirements of the 
existing Sec.  1427(k)(2), employers only need to assess a subset of 
operators: New hires; employees who will operate equipment that differs 
by type and/or capacity from the equipment on which they received their 
current assessment; and operators who indicate they no longer possess 
the required knowledge or skill necessary to operate the equipment.
    To calculate the estimated annual number of assessments, OSHA first 
estimated the current number of crane operators affected by the crane 
standard. The 2014 FEA estimated 117,130 operators and this PEA also 
uses this estimate. The Agency solicits comment and additional data on 
this estimate.
    For the purpose of determining the number of assessments required 
each year under this proposal, OSHA is relying on the 23% turnover rate 
for operators originally identified in the 2008 PEA for the crane rule 
and used most recently in the extension 2014 FEA (79 FR 57793). This 
turnover rate includes all types of operators who would require 
assessment: Operators moving between employers; operators moving 
between different types and/or capacities of equipment; and operators 
newly entering the occupation. OSHA estimated that 26,940 assessments 
occur each year based on turnover (i.e., 117,130 operators x 0.23 
turnover rate). In addition, just as it did with the previous 
extension, OSHA assumed that 15% of operators involved in assessments 
related to turnover would fail the first test administration and need 
reassessment (79 FR 57793). Therefore, OSHA added 4,041 reassessments 
(26,940 assessments x 0.15) to the number of reassessments resulting 
from turnover, for an annual total of 30,981 assessments resulting from 
turnover and test failure (26,940 + 4,041).
    Annual assessment costs. OSHA must determine the annual base amount 
for the two scenarios: (1) Retaining the original 2017 deadline (status 
quo); and (2) extending the deadline to 2018 (NPRM).
    The first part of the calculation is the same under both scenarios. 
Because the annual assessment costs vary by the different levels of 
assessment required (depending on the operator's existing level of 
certification), OSHA grouped the 117,130 operators subject to the crane 
standard into three classifications: Operators with a certificate that 
complies with the standard; operators with a certificate only for crane 
type; and operators with no certification. In order to simplify the 
estimation for this one-year extension (the 2014 extension was for 3 
years) and reflect the last hard data point the Agency has, the Agency 
is using a static crane operator pool and the composition of the base 
operator population used in the 2014 deadline extension: 15,000 Crane 
operators currently have a certificate that complies with the existing 
crane standard, 71,700 have a certificate for crane type only (but not 
capacity), leaving 30,430 crane operators with no crane certification 
(117,130 total operators--(15,000 operators with compliant 
certification + 71,700 operators with certification for type only)).
    Assuming the turnover rate of 23% and the failure rate of 15% for 
turnover-related assessments are distributed proportionally across the 
three types of operators, then the number of assessments for operators 
with compliant certification is 3,968 ((0.23 + (0.23 x 0.15)) x 
15,000), the number of assessments for operators with type-only 
certification is 18,965 ((0.23 + (0.23 x 0.15)) x 71,700), and the 
number of assessments for operators with no certification is 8,049 
((0.23 + (0.23 x 0.15)) x 30,430).
    Under scenario 2 there is an extension and employers would not 
certify all of their operators during CY 2017. OSHA estimated the CY 
2017 assessment costs for scenario 2 by multiplying the assessment 
numbers for each type of

[[Page 41189]]

operator by the unit costs, resulting in a cost of $6,624,861 (($79.27 
x 3,968) + ($198.17 x 18,965) + ($317.08 x 8,049)). Under scenario 1, 
the employer-assessment requirement will be in effect for all of CY 
2017, while employers would be gradually certifying all of their 
operators during CY 2017. As a result, the CY 2017 assessment costs 
identified for scenario 2 would decrease to $4,540,348 from $6,624,861 
in scenario 1. This is because, as compared to scenario 2, there will 
be more operators who will have a compliant certificate, and therefore 
under the approach described above the employer assessment will require 
less time. This reduction in the estimated time, and therefore unit 
cost, lowers the overall assessment cost (see discussion in the 2014 
deadline extension FEA for more details about this methodology).
    Under both scenarios, once the 2010 rule comes into effect the 
employer duty to assess the crane operator no longer is in effect and 
so assessment costs are zero. Thus, in CY 2018, the assessment costs 
under scenario 1 would be zero. Under scenario 2, the assessment costs 
for CY 2018 would be the same as those under scenario 1 for CY 2017, 
because employers would be gradually certifying operators over the 
course of that year.
b. Annual Certification Costs
    OSHA estimated the annual certification costs using the three 
steps: first, determine the unit costs of meeting this requirement; 
second, determine the number of affected operators; and, finally, 
multiply the unit costs of meeting the requirement by the number of 
operators who must meet them. In this PEA, following the same 
methodology as in the 2014 FEA, OSHA estimates that all certifications 
occur in the year prior to the deadline, hence in CY 2017 in scenario 
1, while in CY2018 for the one-year extension in scenario 2. As in the 
annual assessment-cost analysis described above, OSHA provides the 
calculations for CY 2017 under the existing 2017 deadline (scenario 1), 
and then presents the certification costs for CY 2018 that would apply 
if OSHA extends the certification requirement to November 2018 
(scenario 2).
    Unit certification costs. Unit certification costs vary across the 
three different types of operators in the operator pool (operators with 
compliant certification; operators with type-only certification; and 
operators with no certification). Among operators without certification 
there is a further distinction with different unit certification costs: 
Experienced operators without certification and operators who have only 
limited experience. Therefore, there are different unit certification 
costs for four different types of operators. There also are ongoing 
certification costs due to the following two conditions: The 
requirement for re-certification every five years and the need for some 
certified operators to obtain additional certification to operate a 
crane that differs by type and/or capacity from the crane on which they 
received their current certification.
    OSHA estimated these different unit certification costs using 
substantially the same unit-cost assumptions used in the FEA for the 
2010 crane standard (and exactly the same as the FEA of the 2014 
deadline extension.) In those previous FEAs, OSHA estimated that 
training and certification costs for an operator with only limited 
experience would consist of $1,500 for a 2-day course (including tests) 
and 18 hours of the operator's time, for a total cost of $2,185.44 
($1,500 + (18 hours x $38.08)) (see 75 FR 48096-48097). OSHA continues 
to use a cost of $250 for the tests taken without any training (a 
constant fixed fee irrespective of the number of tests (75 FR 48096)), 
and the same number of hours used for each test that it used in the 
assessment calculations provided above (which the Agency based on 
certification test times). Accordingly, OSHA estimates the cost of a 
certificate compliant with the standard for an operator who has a type-
only certificate to be $345.20 (i.e., 1 type/capacity-specific written 
test at 1.5 hours and 1 practical test at 1.0 hours (2.5 hours total), 
plus the fixed $250 fee for the tests (2.5 hours x $38.08) + $250). For 
an experienced operator with no certificate, the cost is $402.32 (i.e., 
the same as the cost for an operator with a type-only certificate plus 
the cost of an added general written test of 1.5 hours (4.0 hours x 
$38.08) + $250)).\9\
---------------------------------------------------------------------------

    \9\ There are no certification costs for operators who already 
have a certificate that complies with the crane standard.
---------------------------------------------------------------------------

    For Scenario 1, Sec.  1926.1427(b)(4) specifies that a certificate 
is valid for five years. OSHA estimates the recertification unit cost 
would be the same as the assessment for an operator with compliant 
certification (i.e., $79.27). In the 2014 extension, OSHA assumed that 
employers would pay a reduced fee for the recertification testing as 
opposed to the cost of a full first-time examination. Because OSHA 
lacked data on exactly how much the fee would be reduced, it used the 
assessment cost as a proxy for the cost of recertification (79 FR 
57794). OSHA did not receive any comment on that approach and is 
retaining it for this rulemaking.
    Finally, there will be certified operators who must obtain 
certification when assigned to a crane that differs by type and/or 
capacity from the crane on which they received their current 
certification. This situation requires additional training, but less 
training than required for a ``new'' operator with only limited 
experience. Accordingly, OSHA estimated the cost for these operators as 
one half of the cost of training and certifying a new operator, or 
$1,092.72 ($2,185.44/2).
    Number of certifications. After establishing the unit certification 
costs, OSHA had to determine how many certifications are necessary to 
ensure compliance with OSHA's standard. In doing so, the Agency uses 
the 5% new-hire estimate from the FEA discussed above to calculate the 
number of new operators; therefore, of the 117,130 operators affected 
by the standard, 5,857 (0.05 x 117,130) would be new operators who 
would require two days for training and certification each year. As 
discussed earlier, OSHA estimated that 71,700 operators have type-only 
certification, 15,000 operators have certification that complies with 
the existing crane standard, and the remaining 24,574 operators 
(117,130 - (71,700 + 15,000 + 5,857)) are experienced operators without 
certification.

[[Page 41190]]

    Under scenario 1 (no extension), after all operators attain 
certification by November 2017 there will still be ongoing 
certification costs each year. With a constant total number of 
operators, the same number of operators (5,857) will be leaving the 
profession each year and will not require recertification when their 
current 5-year certification ends. This leaves 111,274 operators 
(117,130 - 5,857) who will need such periodic recertification. If we 
approximate the timing of requirements for recertification as 
distributed proportionally across years, then 20% of all operators with 
a 5-year certificate (22,255 operators (.20 x 111,274)) would require 
recertification each year.
    A final category of unit certification costs involves the 
continuing need for certified operators to obtain further certification 
when assigned to a crane that differs by type and/or capacity from the 
crane on which they received their current certification. This 
situation arises for both operators working for a single employer and 
operators switching employers.
    The operators who will not need multiple certifications in the 
post-deadline period are operators with certification who move to a new 
employer and operate a crane with the same type and capacity as the 
crane on which they received certification while with their previous 
employer. These operators will not need multiple certifications because 
operator certificates are portable across employers, as specified by 
the crane standard (see Sec.  1427(b)(3)). For an employer looking to 
hire an operator for a specific crane, this option will minimize cost, 
and OSHA assumes employers will choose this option when possible.
    After the certification deadline, OSHA estimates that each year 23% 
of the 117,130 operators (26,940 = 0.23 x 117,130) will enter the 
workforce, change employers, or take on new positions that require one 
or more additional certifications to operate different types and/or 
capacities of cranes. Of these 26,940 operators, OSHA estimates 5 of 
the total 23%, or 5,857 (0.05 x 117,130), will result from new 
operators entering the occupation each year; 9%, or 10,542 (0.09 x 
117,130), will result from operators switching employers but operating 
a crane of the same type and capacity as the crane they operated 
previously (i.e., no certification needed because certification is 
portable in this case); and the remaining 9%, or 10,542, changing jobs 
or positions and requiring one or more additional certification to 
operate a crane that differs by type and/or capacity from the crane 
they operated previously. These percentages are identical to those in 
the 2014 FEA.
    Annualized certification costs. To estimate the annual base cost 
for the first scenario, OSHA calculates the certification costs for CY 
2017 because that is the remaining period before the existing deadline. 
The total cost for certifying all operators in CY 2017 in accordance 
with the existing crane standard using the above unit-cost estimates 
and numbers of operators is $47,436,368 ((71,700 operators with type-
only certification x $345.20) + (24,574 experienced operators without 
certification x $402.32) + (5,857 operators with no experience or 
certification x $2,185.44)). The Agency, following the previous FEAs 
(75 FR 48096 and 79 FR 57795), annualized this cost for the five-year 
period during which operator certification remains effective, resulting 
in an annualized cost of $7,563,216. In section c below, OSHA uses this 
amount in calculating the annual certification costs under scenario 1.
    To determine the annual amount used in calculations for the second 
scenario (the extension to 2018), OSHA examines the costs in CY 2017 
because that is the first year with certification costs. All numbers 
are the same, just shifted forward a year, so the total cost for having 
all crane operators certified in CY 2018 is $47,436,368 (in 2018 
dollars).
c. Year-by-Year Cost Differential for Extending the Certification 
Deadline to 2018 and Preserving the Employer Assessment Duty Over That 
Same Period
    The ultimate goal of this analysis is to determine the annualized 
cost differential between scenario 1 (the status quo) and scenario 2 
(the extensions of the certification date and the employer assessment 
duty), so the final part of this PEA compares the yearly assessment and 
certification costs employers will incur under the two scenarios. 
Because the assessment and certification costs change across years 
under each scenario, OSHA must compare the cost differential in each 
year separately to determine the annual cost savings for each year 
attributable to scenario 2. OSHA calculated the present value of each 
year's differential, which provides a consistent basis for comparing 
the cost differentials over the extended compliance period. OSHA then 
annualized the present value of each differential to identify an annual 
amount that accounts for the discounted costs over this period. Table 1 
below summarizes these calculations.
    Table 1 shows that assessment and certification costs are just 
shifted out another year. As noted earlier, OSHA estimated the overall 
cost differential between these two scenarios by calculating the 
difference in total (assessment and certification) costs each year 
across the two scenarios. The net employer cost savings in current 
dollars attributable to adopting the second scenario are, for each 
certification year: 2017, $18.2 million; 2018, $8.7 million; 2019-2021, 
$0; 2022, - $7.5 million.\10\
---------------------------------------------------------------------------

    \10\ A positive cost differential indicates cost savings and a 
negative cost differential indicates net costs. Savings in the first 
two years are due to the lower cost of assessments versus 
certification. Then net costs in year 2022 are due to the last year 
of annualized certification costs for scenario 2, while this cost 
ends in year 2021 for scenario 1.

                               Table 1--Year-by-Year Cost Differential if OSHA Extends the Certification Deadline to 2018
--------------------------------------------------------------------------------------------------------------------------------------------------------
                    Certification Year                           2017           2018         2019         2020         2021         2022         2023
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Operator Pool
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Scenario 1 (no deadline extension)
--------------------------------------------------------------------------------------------------------------------------------------------------------
operators with non-compliant certification................          71,700            0            0            0            0            0            0
operators with compliant certification....................          15,000      111,274      111,274      111,274      111,274      111,274      111,274
operators with no certification...........................          24,574            0            0            0            0            0            0
new operators.............................................           5,857        5,857        5,857        5,857        5,857        5,857        5,857
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 41191]]

 
                                                             Scenario 2 (deadline extension)
--------------------------------------------------------------------------------------------------------------------------------------------------------
operators with non-compliant certification................          71,700       71,700            0            0            0            0            0
operators with compliant certification....................          15,000       15,000      111,274      111,274      111,274      111,274      111,274
operators with no certification...........................          24,574       24,574            0            0            0            0            0
new operators.............................................           5,857        5,857        5,857        5,857        5,857        5,857        5,857
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Scenario 1 (no deadline extension)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total assessment costs....................................       4,540,348            0            0            0            0            0            0
Total certification costs.................................      20,362,269   33,645,533   33,645,533   33,645,533   33,645,533   26,082,317   26,082,317
    Total costs...........................................      24,902,617   33,645,533   33,645,533   33,645,533   33,645,533   26,082,317   26,082,317
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Scenario 2 (deadline extension)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total assessment costs....................................       6,624,861    4,540,348            0            0            0            0            0
Total certification costs.................................               0   20,362,269   33,645,533   33,645,533   33,645,533   33,645,533   26,082,317
    Total costs...........................................       6,624,861   24,902,617   33,645,533   33,645,533   33,645,533   33,645,533   26,082,317
        Cost Differential (Scenario 2 - Scenario 1).......    (18,277,756)  (8,742,916)  ...........  ...........  ...........    7,563,216  ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: OSHA, ORA Calculations.

    OSHA next determined the present value of these cost differentials 
between the two scenarios. OSHA calculated the present value of future 
costs using two interest rates assumptions, 3 percent and 7 percent, 
which follow the OMB guidelines specified by Circular A-4. At an 
interest rate of 3 percent, the present value of the cost differentials 
for CY 2017 onwards results in an estimated savings of $20.2 million 
($21.3 million using the 7 percent rate). Finally, annualizing the 
present value over five years results in an annualized cost 
differential (i.e., net employer cost savings) of $4.4 million per year 
($5.2 million per year using the 7 percent rate).
    The Agency notes that it did not include an overhead labor cost in 
the Preliminary Economic Analysis (PEA) for this rule. It is important 
to note that there is not one broadly accepted overhead rate and that 
the use of overhead to estimate the marginal costs of labor raises a 
number of issues that should be addressed before applying overhead 
costs to analyze the costs of any specific regulation. There are 
several approaches to look at the cost elements that fit the definition 
of overhead and there are a range of overhead estimates currently used 
within the federal government--for example, the Environmental 
Protection Agency has used 17 percent,\11\ and government contractors 
have been reported to use an average of 77 percent.12 13 
Some overhead costs, such as advertising and marketing, may be more 
closely correlated with output rather than with labor. Other overhead 
costs vary with the number of new employees. For example, rent or 
payroll processing costs may change little with the addition of 1 
employee in a 500-employee firm, but those costs may change 
substantially with the addition of 100 employees. If an employer is 
able to rearrange current employees' duties to implement a rule, then 
the marginal share of overhead costs such as rent, insurance, and major 
office equipment (e.g., computers, printers, copiers) would be very 
difficult to measure with accuracy (e.g., computer use costs associated 
with 2 hours for rule familiarization by an existing employee).
---------------------------------------------------------------------------

    \11\ U.S. Environmental Protection Agency, ``Wage Rates for 
Economic Analyses of the Toxics Release Inventory Program,'' June 
10, 2002.
    \12\ Grant Thornton LLP, 2015 Government Contractor Survey. 
(https://www.grantthornton.com/~/media/content-page-files/public-
sector/pdfs/surveys/2015/Gov-Contractor-Survey.ashx.)
    \13\ For a further example of overhead cost estimates, please 
see the Employee Benefits Security Administration's guidance at 
https://www.dol.gov/sites/default/files/ebsa/laws-and-regulations/rules-and-regulations/technical-appendices/labor-cost-inputs-used-in-ebsa-opr-ria-and-pra-burden-calculations-august-2016.pdf.
---------------------------------------------------------------------------

    If OSHA had included an overhead rate when estimating the marginal 
cost of labor, without further analyzing an appropriate quantitative 
adjustment, and adopted for these purposes an overhead rate of 17 
percent on base wages, as was done in a sensitivity analysis in the FEA 
in support of OSHA's 2016 final rule on Occupational Exposure to 
Respirable Crystalline Silica, the overhead costs would increase cost 
savings from $4.4 million to $4.5 million at a discount rate of 3 
percent, an increase of 1.8 percent, and would increase cost savings 
from $5.2 million to $5.3 million at a discount rate of 7 percent, an 
increase of 1.9 percent.
d. Certification of No Significant Impact on a Substantial Number of 
Small Entities
    Most employers will have savings resulting from the one-year 
extension, particularly employers that planned to pay for operator 
certification in the year before the existing 2017 deadline. The only 
entities likely to see a net cost will be entities that planned to hire 
an operator with compliant certification after November 10, 2017. 
Without the one-year extension, these entities will have no separate 
assessment duty, but under the one-year extension they will have the 
expense involved in assessing operator competency. As noted above, 
however, OSHA estimated the maximum cost for such an assessment (for 
operators with no certification) to be $317.08 per certified operator.
    Small businesses will, by definition, have few operators, and OSHA 
believes the $317.08 cost will be well below 1% of revenues, and well 
below 5% of profits, in any industry sector using cranes. OSHA does not 
consider such small amounts to represent a significant impact on small 
businesses in any industry sector. Hence, OSHA certifies this final 
rule will not have a significant impact on a substantial number of 
small

[[Page 41192]]

entities. After providing relatively similar estimates in the 2014 FEA, 
OSHA made the same certification in the 2014 FEA and did not receive 
any adverse comment on either the certification or its underlying 
rationale.

B. Paperwork Reduction Act

    When OSHA issued the final rule on August 9, 2010, it submitted an 
Information Collection Request (ICR) to the Office of Management and 
Budget (OMB) titled Cranes and Derricks in Construction (29 CFR part 
1926, subpart CC).\14\ On November 1, 2010, OMB approved the ICR under 
OMB Control Number 1218-0261, with an expiration date of November 30, 
2013. On April, 25, 2017, OMB's approval of the ICR was extended to 
April 30, 2020.
---------------------------------------------------------------------------

    \14\ The ICR is available at ID-0425 at www.regulations.gov and 
at www.reginfo.gov (OMB Control Number 1218-0261).
---------------------------------------------------------------------------

    This proposed rule contains no collection of information needing 
OMB approval. OSHA welcomes commenters to submit their comments on this 
determination to the rulemaking docket (OSHA-2007-0066), along with 
their other comments on the proposed rule. For instructions on 
submitting these comments to the docket, see the sections of this 
Federal Register notice titled DATES and ADDRESSES.
    OSHA notes that a Federal agency cannot conduct or sponsor a 
collection of information unless OMB approves it under the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3501 et seq.), and the agency displays 
a currently valid OMB control number. The public need not respond to a 
collection of information requirement unless the agency displays a 
currently valid OMB control number, and, notwithstanding any other 
provision of law, no person shall be subject to a penalty for failing 
to comply with a collection of information requirement if the 
requirement does not display a currently valid OMB control number.

C. Federalism

    OSHA reviewed this proposed rule in accordance with the Executive 
Order on Federalism (Executive Order 13132, 64 FR 43255, August 10, 
1999), which requires that Federal agencies, to the extent possible, 
refrain from limiting state policy options, consult with states prior 
to taking any actions that would restrict state policy options, and 
take such actions only when clear constitutional authority exists and 
the problem is national in scope. Executive Order 13132 provides for 
preemption of state law only with the expressed consent of Congress. 
Federal agencies must limit any such preemption to the extent possible.
    Under Section 18 of the Occupational Safety and Health Act of 1970 
(OSH Act; 29 U.S.C. 651 et seq.), Congress expressly provides that 
states and U.S. territories may adopt, with Federal approval, a plan 
for the development and enforcement of occupational safety and health 
standards. OSHA refers to such states and territories as ``State Plan 
States.'' Occupational safety and health standards developed by State 
Plan States must be at least as effective in providing safe and 
healthful employment and places of employment as the Federal standards. 
29 U.S.C. 667. Subject to these requirements, State Plan States are 
free to develop and enforce under state law their own requirements for 
safety and health standards.
    OSHA previously concluded from its analysis that promulgation of 
subpart CC complies with Executive Order 13132 (75 FR 48128-29). In 
states without an OSHA-approved State Plan, any standard developed from 
this proposed rule would limit state policy options in the same manner 
as every standard promulgated by OSHA. For State Plan States, Section 
18 of the OSH Act, as noted in the previous paragraph, permits State-
Plan States to develop and enforce their own crane standards provided 
these requirements are at least as effective in providing safe and 
healthful employment and places of employment as the requirements 
specified in this proposal.

D. State Plans

    When Federal OSHA promulgates a new standard or more stringent 
amendment to an existing standard, State Plans must amend their 
standards to reflect the new standard or amendment, or show OSHA why 
such action is unnecessary, e.g., because an existing state standard 
covering this area is ``at least as effective'' as the new Federal 
standard or amendment (29 CFR 1953.5(a)). The state standard must be at 
least as effective as the final Federal rule. State Plans must adopt 
the Federal standard or complete their own standard within six months 
of the promulgation date of the final Federal rule. When OSHA 
promulgates a new standard or amendment that does not impose additional 
or more stringent requirements than an existing standard, State Plans 
do not have to amend their standards, although OSHA may encourage them 
to do so. The 21 states and 1 U.S. territory with OSHA-approved 
occupational safety and health plans covering private sector and state 
and local government are: Alaska, Arizona, California, Hawaii, Indiana, 
Iowa, Kentucky, Maryland, Michigan, Minnesota, Nevada, New Mexico, 
North Carolina, Oregon, Puerto Rico, South Carolina, Tennessee, Utah, 
Vermont, Virginia, Washington, and Wyoming. Connecticut, Illinois, 
Maine, New Jersey, New York, and the Virgin Islands have OSHA-approved 
State Plans that apply to state and local government employees only.
    The proposed amendments to OSHA's crane standard preserve the 
status quo and would not impose any new requirements on employers. 
Accordingly, State Plans would not have to amend their standards to 
delay the effective date of their operator certification requirements, 
but they may do so if they so choose. However, if they choose to delay 
the effective date of their certification requirements, they also would 
need to include a corresponding extension of the employer duty to 
assess and train operators that is equivalent to Sec.  1427(k)(2).

E. Unfunded Mandates Reform Act

    When OSHA issued the final rule for cranes and derricks in 
construction, it reviewed the rule according to the Unfunded Mandates 
Reform Act of 1995 (UMRA; 2 U.S.C. 1501 et seq.) and Executive Order 
13132 (64 FR 43255 (Aug. 10, 1999). OSHA concluded that the final rule 
did not meet the definition of a ``Federal intergovernmental mandate'' 
under the UMRA because OSHA standards do not apply to state or local 
governments except in states that voluntarily adopt State Plans. OSHA 
further noted that the rule imposed costs of over $100 million per year 
on the private sector and, therefore, required review under the UMRA 
for those costs, but that its final economic analysis met that 
requirement.
    As discussed above in Section IV.A (Preliminary Economic Analysis 
and Regulatory Flexibility Analysis) of this preamble, this proposed 
extension does not impose any costs on private-sector employers beyond 
those costs already identified in the final rule for cranes and 
derricks in construction and the 2014 extension. Because OSHA reviewed 
the total costs of this final rule under the UMRA, no further review of 
those costs is necessary. Therefore, for the purposes of the UMRA, OSHA 
certifies that this proposed rule does not mandate that state, local, 
or tribal governments adopt new, unfunded regulatory obligations, or 
increase expenditures by the private sector of more than $100 million 
in any year.

[[Page 41193]]

F. Consultation and Coordination With Indian Tribal Governments

    OSHA reviewed this proposed rule in accordance with Executive Order 
13175 (65 FR 67249) and determined that it does not have ``tribal 
implications'' as defined in that order. As proposed, the rule does not 
have substantial direct effects on one or more Indian tribes, on the 
relationship between the Federal government and Indian tribes, or on 
the distribution of power and responsibilities between the Federal 
government and Indian tribes.

G. Consultation With the Advisory Committee on Construction Safety and 
Health

    Under 29 CFR parts 1911 and 1912, OSHA must consult with the 
Advisory Committee on Construction Safety and Health (ACCSH or 
Committee), established pursuant to Section 107 of the Contract Work 
Hours and Safety Standards Act (40 U.S.C. 3701 et seq.), in setting 
standards for construction work. Specifically, Sec.  1911.10(a) 
requires the Assistant Secretary to provide the ACCSH with a draft 
proposed rule (along with pertinent factual information) and give the 
Committee an opportunity to submit recommendations. See also Sec.  
1912.3(a) (``[W]henever occupational safety or health standards for 
construction activities are proposed, the Assistant Secretary [for 
Occupational Safety and Health] shall consult the Advisory 
Committee'').
    On June 20, 2017, ACCSH unanimously recommended that OSHA delay, 
for one additional year until November 10, 2018, the compliance date 
for the crane operator certification and extend the employer duty for 
the same period. [Include citation to ACCSH docket, OSHA-2017-0007-
####]

H. Executive Order 13771: Reducing Regulation and Controlling 
Regulatory Costs

    Consistent with EO 13771 (82 FR 9339, February 3, 2017), OSHA has 
estimated the annualized cost savings over 10 years for this proposed 
rule to range from $4.4 million to $5.2 million, depending on the 
discount rate. This proposed rule is expected to be an EO 13771 
deregulatory action. Details on the estimated cost savings of this 
proposed rule can be found in the rule's economic analysis.

I. Legal Considerations

    The purpose of the Occupational Safety and Health Act of 1970 (29 
U.S.C. 651 et seq.) is ``to assure so far as possible every working man 
and woman in the nation safe and healthful working conditions and to 
preserve our human resources.'' 29 U.S.C. 651(b). To achieve this goal, 
Congress authorized the Secretary of Labor to promulgate and enforce 
occupational safety and health standards. 29 U.S.C. 654(b), 655(b). A 
safety or health standard is a standard ``which requires conditions, or 
the adoption or use of one or more practices, means, methods, 
operations, or processes, reasonably necessary or appropriate to 
provide safe or healthful employment or places of employment.'' 29 
U.S.C. 652(8). A standard is reasonably necessary or appropriate within 
the meaning of Section 652(8) when a significant risk of material harm 
exists in the workplace and the standard would substantially reduce or 
eliminate that workplace risk. See Industrial Union Department, AFL-CIO 
v. American Petroleum Institute, 448 U.S. 607 (1980). In the crane 
rulemaking, OSHA made such a determination with respect to the use of 
cranes and derricks in construction (75 FR 47913, 47920-21). This 
proposed rule does not impose any new requirements on employers. 
Therefore, this proposal does not require an additional significant 
risk finding (see Edison Electric Institute v. OSHA, 849 F.2d 611, 620 
(D.C. Cir. 1988)).
    In addition to materially reducing a significant risk, a safety 
standard must be technologically feasible. See UAW v. OSHA, 37 F.3d 
665, 668 (D.C. Cir. 1994). A standard is technologically feasible when 
the protective measures it requires already exist, when available 
technology can bring the protective measures into existence, or when 
that technology is reasonably likely to develop (see American Textile 
Mfrs. Institute v. OSHA, 452 U.S. 490, 513 (1981); American Iron and 
Steel Institute v. OSHA, 939 F.2d 975, 980 (D.C. Cir. 1991)). In the 
2010 Final Economic Analysis for the crane standard, OSHA found the 
standard to be technologically feasible (75 FR 48079). OSHA also found 
the previous extension to be technologically feasible (79 FR 57798). 
This proposed rule would, therefore, be technologically feasible as 
well because it would not require employers to implement any additional 
protective measures; it would simply extend the duration of existing 
requirements.

List of Subjects in 29 CFR Part 1926

    Construction industry, Cranes, Derricks, Occupational safety and 
health, Safety.

    Signed at Washington, DC, on August 25, 2017.
Loren Sweatt,
Deputy Assistant Secretary of Labor for Occupational Safety and Health.

Amendments to Standards

    For the reasons stated in the preamble of this proposed rule, OSHA 
proposes to amend 29 CFR part 1926 as follows:

PART 1926--[AMENDED]

Subpart CC--Cranes and Derricks in Construction

0
1. The authority citation for subpart CC of 29 CFR part 1926 continues 
to read as follows:

    Authority:  40 U.S.C. 3701 et seq.; 29 U.S.C. 653, 655, 657; and 
Secretary of Labor's Orders 5-2007 (72 FR 31159) or 1-2012 (77 FR 
3912), as applicable; and 29 CFR part 1911.

0
2. Amend Sec.  1926.1427 by revising paragraph (k) to read as follows:


Sec.  1926.1427  Operator qualification and certification.

* * * * *
    (k) Phase-in. (1) The provisions of this section became applicable 
on November 8, 2010, except for paragraphs (a)(2) and (f), which are 
applicable November 10, 2018.
    (2) When Sec.  1926.1427(a)(1) is not applicable, all of the 
requirements in paragraphs (k)(2)(i) and (ii) of this section apply 
until November 10, 2018.
    (i) The employer must ensure that operators of equipment covered by 
this standard are competent to operate the equipment safely.
    (ii) When an employee assigned to operate machinery does not have 
the required knowledge or ability to operate the equipment safely, the 
employer must train that employee prior to operating the equipment. The 
employer must ensure that each operator is evaluated to confirm that 
he/she understands the information provided in the training.

[FR Doc. 2017-18441 Filed 8-29-17; 8:45 am]
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