Regulations (Preambles to Final Rules) - Table of Contents|
| Record Type:||Lead Exposure in Construction|
| Title:||Section 4 - IV. Regulatory Impact and Regulatory Flexibility Analysis|
IV. Regulatory Impact and Regulatory Flexibility Analysis
A. Executive Summary
Construction projects involving lead or lead-containing materials occur throughout the entire construction industry as well as in several non-construction industries. Eighteen construction industry SICs and five non-construction industry SICs (involving construction activity) are expected to be affected by the Interim Final Standard. OSHA estimates that approximately 936,000 employees in 147,000 establishments are exposed to at least some level of lead during construction work.
Compliance with the PEL and ancillary provisions of the Interim Final Standard is technologically feasible for all affected industries. Existing engineering control types, including mechanical ventilation, local exhaust ventilation, shrouded tools, HEPA vacuums, and wetting agents are already in use in the construction industry. Due to the nature of the activities in which high exposures to lead are generated, OSHA assumes that supplemental respirator use will be necessary for most activities in which engineering controls will be used.
Benefits of the Interim Final Standard include decreases in the annual number of expected cases of: reduced nerve conduction velocity; reduced blood ALA-D levels; increased urinary ALA; gastrointestinal disturbances; and blood-lead levels above the medical removal trigger level. Long-term effects avoided over a ten-year period include cases of fatal/non-fatal infarction; fatal/non-fatal stroke; and renal disease.
Costs of Compliance
The annual recurring cost of the Interim Final Standard is expected to range between $365 million to $445 million. Additional start-up costs will be incurred during the first year for worker training, biological monitoring, medical examinations, and medical removal protection benefits.
The most impacted SICs, as measured by compliance costs per worker and compliance costs per establishment, are expected to include: SIC 1611, Highway and Street Construction Contractors; SIC 1622, Bridge, Tunnel and Elevated Highway Contractors; SIC 1721, Painting Contractors; SIC 1791, Structural Steel Erection Contractors; SIC 1795, Wrecking and Demolition Contractors; and SIC 3231, Glass Products Manufacturers. OSHA has concluded that it will be economically feasible to achieve compliance for all affected sectors.
B. Industry Profile
This industry profile describes the industries identified as potentially affected by the Interim Final Standard for Lead in Construction. Information is also presented on the twenty-two types of construction projects expected to be affected by the standard. Project type is often a better indicator of the likelihood of lead exposure than the industry classification of the firm performing the work.
The definition of "construction" includes the categories of new construction (relatively little exposure to lead will be encountered in new construction); additions, alterations, and reconstruction (including remodeling and renovation); installation; demolition; repairs and maintenance. In this profile, the three major divisions of the construction industry are identified by two-digit Standard Industrial Classification (SIC) codes: SIC 15, General Building Contractors; SIC 16, Heavy Construction Contractors, Excluding Building Contractors; and SIC 17, Special Trade Contractors.
Subsectors of each industry division are identified by four-digit SIC codes. Because an establishment's SIC classification is based solely on the primary activities of the firm, contractors from different two-digit and four-digit SIC codes are often identified as working on the same project type. Construction projects involving contact with lead or lead- containing materials occur throughout the entire construction industry as well as in several non-construction SICs. Table 1 shows the eighteen construction industry SICs and five non-construction industry SICs (involving construction activity) expected to be affected by the Interim Final Standard and the affected construction project types associated with each SIC(1). Table 2 lists the industries affected and shows the estimated total number of affected establishments and estimated total number of workers exposed by industry sector.
__________ Footnote(1) Three of the 22 basic project types were split into two sub-categories for costing purposes. These project types are Housing Lead Abatement (Public and Private Housing), In-Place Management (Public and Private Housing) and Industrial Facility Maintenance and Renovation (Indoor and Outdoor Work). Table 1. -- SICs Affected by the Interim Final Standard and Associated Project Types
Lead exposure is most common among project types that involve the disturbance of lead or lead-containing materials during additions, alterations, reconstruction, demolition, repairs and maintenance. Some examples of potential sources of exposure in these project types include lead-based paint (LBP) and paint dust, lead pipes, leaded solder, the leaded support rods in stained glass windows, and some mineral wool insulation.
In contrast, project types involving exposure to lead during new construction are comparatively rare. This is in part due to government regulations that have banned specific uses of once common lead-containing construction materials. An example is the Consumer Product Safety Commission's 1977 ban on "lead containing paint" prohibiting the use of such paint on products to which consumers are exposed after sale (42 FR 44199). Another example is the Environmental Protection Agency's 1986 ban on further use of lead pipes and solder in residential plumbing. In most new construction projects involving lead use, lead and lead-containing materials are used in limited quantities for specialized applications. Examples include terne (leaded-steel) roofing and the use of lead foil sheet in the walls of hospital x-ray suites.
Table 3 shows preliminary estimates of the number of lead-exposed projects occurring each year, the estimated total number of workers exposed, and the primary sources of lead exposure by project type. The estimated number of employees differs from those originally reported in the draft CONSAD report of July, 1991; this earlier draft did not include workers involved in commercial and residential remodeling project types. For these and other reasons, the draft CONSAD report of July, 1991 is superseded by CONSAD's final report of April, 1993, which contains more complete and accurate information. The final CONSAD report is consistent with the scope and provisions of OSHA's Interim Final Rule.
Table 3. -- Estimated Total Number of Construction Projects Involving Lead Per year, Estimated Total Number of Workers Exposed, and Primary Source(s) of Lead Exposure By Project Type
C. Technological Feasibility
Compliance with the Interim Final Standard is considered technologically feasible for each of the affected industries. OSHA has identified several categories of engineering controls that are technologically feasible and appropriate for use in the construction industry. Due to the nature of the activities in which high exposures to lead are generated, OSHA assumes that supplemental respirator use will be necessary for most activities in which engineering controls will be used. Based on the currently available evidence in the record, OSHA has not been able to conclude that the PEL is achievable in most of the operations most of the time by engineering and work practice controls alone in the construction industry. Currently available respirators are capable of providing the supplemental protection necessary to achieve the PEL all of the time in all construction activities with the exception of abrasive blasting as described below.
In order to analyze the technological feasibility of the standard, data on lead exposures were examined by the type of activity generating the potential for exposure to lead. The exposure data reviewed by OSHA were obtained from the following sources: OSHA IMIS; various NIOSH Health Hazard Evaluation reports; various Department of Housing and Urban Development (HUD) Lead Abatement Demonstration Projects; Maryland's Department of Occupational Safety and Health; site visits conducted by CONSAD Research for OSHA and other published reports and studies. The exposure data obtained from each of these sources are believed to be representative and reliable exposure estimates for the construction activities being examined.
Table 4 summarizes exposure data by construction activity. The table shows personal TWA(8) exposure levels (in micrograms per cubic meter of air), in the absence of reduction factors from engineering controls and respirators. For several of the activities presented, statistics were calculated for small groups of data. Despite the potential weaknesses of these small samples, the data were used as the best available evidence about exposure levels in these activities.
The wide variations in the exposure data for certain construction activities accurately reflect the nature of construction work. Analogous construction work sites, even where the same types of activities are performed, can produce very different exposure levels. Sources of variability in exposure levels for the same activity include the concentration of lead in the paint or other materials being removed; the total quantity of lead-containing materials being removed; work practices used and weather conditions on outdoor projects.
Because OSHA was unable to allow the public the opportunity to comment on the data used in this analysis, OSHA is taking a very conservative approach in the use of this data. As shown in Table 4, OSHA calculated a 95 percent confidence level for the mean exposure level in each activity and used this value to assign appropriate engineering controls and respirators(2). (Where this statistic exceeded the maximum observed level for an activity, the maximum observed level was used to specify controls.) This methodology was used in order to ensure a consistent approach to control assignment across activities. The appropriateness of control assignments was then confirmed by examination of the actual exposure level distributions for each activity. Table 5 shows the controls assigned to each activity.
__________ Footnote(2) In no way does OSHA mean to imply that to prove feasibility, it must show that a PEL is capable of being achieved 95 percent of the time by engineering and work practice controls. Table 4. -- Representative TWA(8) Exposure Levels in ug/m(3) Absent Engineering Controls and Respiratory Protection by Construction Activity
The hierarchy of controls requires employers to first apply all feasible engineering controls. OSHA concluded that ventilation controls are an appropriate means of exposure reduction in lead-exposed construction activities. The two categories of ventilation controls considered especially appropriate were mechanical ventilation systems used in conjunction with enclosures or containments (MV) and local exhaust ventilation (LEV). Local exhaust ventilation includes both portable ventilation systems and shrouded tools with ventilation (ST).
CONSAD assigned a 30 percent reduction factor to mechanical ventilation systems and a 75 percent reduction factor for portable local exhaust ventilation and shrouded tools. Based upon OSHA's judgement and experience, the 30 percent exposure reduction factor is an underestimate and does not take into account technological advances in construction and design of containment systems. According to John Peart, Director of Research on Bridge Coatings for the Federal Highway Administration, the current state of industry use of mechanical ventilation controls is improving. Industry and establishment experience continues to develop as contractors steadily move towards more use of full containment with ventilation systems. Continuing research into proper containment and ventilation for activities involving steel structures painting is resulting in increased efficiency ratings being attained by these large mechanical ventilation systems. OSHA therefore believes that an exposure reduction factor of 50 percent will be achievable for mechanical ventilation systems.
Two other categories of engineering controls were assumed to be required, where appropriate, in accordance with the hierarchy of controls. These control categories were HEPA vacuums (HV) and wetting agents (WA). HEPA vacuums are used to prevent exposure before it occurs by reducing the amount of lead-contaminated debris in the work environment. HEPA vacuums are also used to clean personal protective equipment and work clothes to limit worker exposure to lead. Wetting agents prevent lead-based paint dust and lead-contaminated debris from becoming airborne. These controls are considered technologically feasible for all affected activities where their use is appropriate.
When all feasible engineering controls have been added and personal exposures have not been reduced below the PEL, respiratory protection, as specified in Table 1 of the Interim Final Standard, must be used. Currently available respirators provide sufficient levels of protection for all activities except for abrasive blasting. The loose-fitting, continuous-flow abrasive blasting helmet currently used in the construction industry has been assigned a protection factor of 25 x PEL (1,250 ug/m(3)). Because exposures during abrasive blasting inside pollution containment setups often exceed this level, this type of respirator is no longer considered adequate. At present, no manufacturer makes a Type CE abrasive blasting respirator with both a helmet and the tight-fitting facepiece needed to achieve an acceptable protection factor. However, the technology for producing such a respirator is already known to exist and a Type CE respirator with a hood is already available on the market.
OSHA assumes that a type CE abrasive blasting helmet can be designed and be certified for use in environments of up to 2,000 x PEL within one to two years following promulgation of the standard. Until such a respirator is developed, workers may have to wear a respirator type that provides an acceptable protection factor but lacks integral head protection.
OSHA has assumed for costing purposes that workers will be supplied with respirators providing at least the minimum protection sufficient to meet the requirements of the interim final standard. (These respirator selections are shown in Table 5.) For most construction activities, the supplied-air respirators were found to be more cost-effective than cartridge respirators because cartridge replacement would produce ongoing costs outweighing the "up-front" costs of purchasing supplied air respirators.
Other regulatory provisions requiring employer action under OSHA's Interim Final Lead Standard include (depending upon the construction activity):
- Initial determination of the presence of lead - Competent persons - Exposure monitoring and associated recordkeeping - Written compliance programs - Warning signs - Worker training - Notification of other employers - Protective work clothing and equipment - Hygiene facilities (hand washing, changing and decontamination facilities) - Eating areas and facilities - Biological monitoring, medical examinations, and medical removal protection (including associated recordkeeping)
All of these provisions were deemed technologically feasible for the affected construction activities. These requirements can be satisfied by work practice modifications and/or conventional, off-the-shelf items, most of which have already been implemented or introduced in well-maintained workplaces.
This section presents an analysis of the potential benefits associated with the reduction of the permissible exposure limit for lead to 50 ug/m(3). The avoidable adverse health effects of lead are described in detail in the Preamble and Supplements to OSHA's 1978 Lead Standard. In addition, OSHA relied upon the technical expertise of Meridian Research, Inc. in the development and formulation of the benefit model and estimates presented in this section.
Because exposure to lead causes a number of different adverse health effects, the potential benefits associated with this requirement of the Interim Final Standard are varied and include benefits that will accrue during the first year following the effective date, as well as benefits that accrue over longer time horizons (separately identified). Some of the near-term benefits that are expected to accrue include reductions in the incidence of acute lead poisoning and adverse neurologic and biochemical effects, and reductions in the incidence of blood lead levels above 50 ug/m(3). Benefits that accrue over longer time horizons include reductions in the incidence of lead-induced hypertension, which may increase the risk of myocardial infarction or stroke, and renal disease. Other potential benefits that are expected to accrue, but which are not specifically discussed below, are reductions in the incidence of lead-induced male and female reproductive effects.
This analysis estimates benefits associated with reducing exposures to airborne lead. Additional benefits are likely to be realized as a result of reductions in worker blood-lead levels due to improved hygiene practices. The general approach taken to evaluate the quantitative benefits was as follows:
- For each construction project and activity, available exposure data were used to develop a profile of worker exposures to airborne lead; - The exposure profiles were used as inputs for a compartmentalized kinetic lead model to generate a blood-lead profile for each group of workers engaged in a particular construction activity; - The resulting blood-lead profiles were used to predict the frequency with which blood-lead values were likely to exceed the medical removal trigger of 50 ug/dl, and to calculate an average blood-lead level for each group of workers; and - The average and peak blood-lead levels were used along with risk estimates contained in Meridian's Peer-Review Draft Risk Assessment report to estimate the number of lead-related illness cases that might potentially be avoided as a result of reducing the PEL to 50 ug/m(3) for construction.
For each construction activity, airborne exposures to lead were characterized using statistics to reflect that worker exposures to lead may vary considerably from one day to the next. For all of the construction activities shown in Table 4, exposure profiles were calculated using the full set of available exposure data. However, for the benefits analysis, additional exposure profiles were created by combining data from different activities to recognize that some construction workers may typically be engaged in more than one activity. For example, the abrasive blasting exposure data were combined with painting exposure data to create an exposure profile for workers performing both tasks on a regular basis. In addition, a supplementary baseline exposure profile was created for project types involving lead abatement, in-place management and remodeling activities, in order to obtain a blood-lead level profile for workers currently using poor work practices. This profile was generated to yield a blood-lead profile consistent with blood-lead levels reported in the state of Massachusetts. (One of the few states with useful construction industry data in their blood lead registry.) For each construction activity and operation, the exposure profile data were used to generate numerical sets that matched the parametric distributions of the exposure profiles. These figures were used to represent daily air-lead levels to which workers engaged in each activity are believed to be exposed during a one-year period. Blood-lead levels likely to result from these exposures were estimated using the compartmentalized kinetic lead distribution/excretion model contained in Meridian's Peer-Review Draft Risk Assessment Report. Table 6 presents the results of this analysis, and includes the average blood-lead levels expected to result over a year of performing each construction activity under baseline exposure conditions. These conditions are based upon the exposure levels shown in Table 4 and the wearing of respirators with the estimated protection factors specified in column one of Table 6.
A similar analysis was performed to evaluate likely blood-lead levels that would result from complying with the 50 ug/m(3) PEL. For this analysis, OSHA's consultant, Meridian, assumed that air lead exposures would be reduced in accordance with the same engineering and respiratory protection assumptions used in the cost analysis. Table 7 presents the blood-lead profiles associated with compliance with the 50 ug/m(3) PEL. Given the implementation of the control strategies required by the rule, blood-lead levels are not expected to exceed 25 ug/dl among construction workers.
Table 6. -- Baseline Blood-Lead Profile, by Construction Activity
Table 8 presents the analysis of the number of potential medical removal protection (MRP) cases expected to occur during the first year that the Interim Final Standard is in effect. The estimates shown are based on the assumptions that initial monitoring is administered to all workers in activities with exposures at or above the 30 ug/m(3) action level and that medical surveillance program monitoring is administered to all workers in activities with exposures at or above the 30 ug/m(3) action level for more than 30 days per year. These estimates were prepared to support the analysis of potential costs of medical removal protection benefits and increased medical surveillance for workers with detected and confirmed blood leads over 50 ug/dl. Because measurements of blood-lead levels are to be taken at fixed intervals under the Interim Final Standard, and because a worker's blood-lead level changes in response to variations in air lead exposures, there is a determinable probability that a blood-lead level above the 50 ug/dl medical removal trigger will be detected on any particular test. To estimate the number of MRP cases that would likely be identified, two alternative assumptions were made. First, it was assumed that blood-lead levels above the MRP trigger occur irregularly during the year. Under this assumption, the probability of detecting a blood-lead level above the MRP trigger can be described using binomial statistics, and the result represents a minimum estimate of the true probability. Alternatively, it was assumed that all blood-lead levels above the MRP trigger occur on consecutive days (i.e., blood-lead levels are highly autocorrelated), and that blood-lead measurements will be taken at 60-day intervals. Under this assumption, the probability of detecting a blood- lead level above the MRP trigger can be described by the ratio of the number of days that blood-lead levels are above the MRP trigger divided by 60. This approach was assumed to yield the maximum probability of detecting a blood-lead level above 50 ug/dl. Multiplying the minimum and maximum probabilities of detecting a blood-lead level above the MRP trigger by the estimated number of employees engaged in each construction activity yields estimates of the annual number of employees that will be detected with blood-lead levels above the MRP trigger under baseline exposure conditions.
Table 8. -- Prevalence of Medical Removal Cases Under Baseline Exposure Assumptions by Project Type
However, not all of these employees will be medically removed. The interim final standard mandates that employees be removed from exposure only after a follow-up blood-lead test taken two weeks after a periodic test confirms the blood-lead level to be above 50 ug/dl. Of the number of employees found to have a blood-lead level above the MRP trigger, Meridian assumed that two-thirds will require medical removal as a result of a confirming follow-up blood-lead test.
In addition, it can reasonably be expected that blood-lead levels will fall during the first year that the standard is in effect, due to the requirement to reduce employee exposures during that year. Therefore, the number of employees having blood-lead levels above 50 ug/dl will likely decline during the first year. For this analysis, it was assumed that the number of employees requiring medical removal will decline by half after the first four months following the effective date, and should approach zero at the end of the first year following the effective date of the standard. (The number of MRP cases expected to be identified during the first year was reduced, in accordance with this assumption, for purposes of the cost analysis.) Table 9 contains estimates of the number of illness and MRP cases expected to be avoided following promulgation of the 50-ug/m(3) PEL for construction. (About half of these benefits would have been achieved if there had been full compliance with the existing OSHA PEL of 200 ug/m(3).) Except for cases of gastrointestinal disturbances, detected blood-leads above the 50 ug/dl medical removal trigger, and medical removal, estimates of the numbers of cases avoided were derived using average baseline blood- lead levels predicted for each group of workers (see Table 6) and corresponding risk estimates contained in Meridian's Peer-Review Draft Risk Assessment. For gastrointestinal disturbances, a minimum estimate of cases avoided was derived by assuming that all workers predicted to have blood-lead levels exceeding 90 ug/dl at least five percent of the time (i.e., about three weeks) were at risk of acute lead poisoning. The maximum estimate was derived by assuming that all workers with blood-lead levels exceeding 70 ug/dl are at risk. The number of cases of detected blood-leads above the MRP trigger level and number of cases of medical removals comes from the analysis summarized in Table 8.
The number of illness and MRP cases avoided for near-term effects listed in Table 9 are expected to accrue during or shortly after the first year following promulgation of the Interim Final Standard. These near-term effects have generally been found to be reversible upon reduction or cessation of exposure to lead. The number of illness cases avoided for long-term effects are expected to accrue over at least a 10-year period of time.
Table 9. -- Summary of Potential Benefits Associated With A Reduction of The Lead PEL to 50 ug/m(3) for Construction __________________________________________________________________________ | Number of cases Effect avoided |______________________ | Minimum | Maximum ___________________________________________________|__________|___________ Near-Term Effects Avoided Annually: | | Reduced Nerve Conduction Velocity ............. | 16,199 | 22,831 Reduced Blood ALD-D Levels .................... | 130,056 | 164,044 Increased Urinary ALA.......................... | 60,389 | 78,676 Gastrointestinal Disturbances.................. | 1,135 | 4,413 Detected Blood-Lead Levels Above MRP Trigger**. | 24,262 | 35,163 Long-Term Effects Avoided Over A Ten-Year Period: | | Fatal/Nonfatal Infractions..................... | 2,164 | 2,322 Fatal/Nonfatal Stroke.......................... | 698 | 644 Renal Disease.................................. | 1,258 | 2,157 ___________________________________________________|__________|___________ **Note: The minimum estimate of expected medical removal cases is 16,256. The maximum estimate of expected medical removal cases is 23,559. Source: OSHA, Office of Regulatory Analysis
E. Costs of Compliance
This section describes the costs of compliance expected to be incurred by the industries affected by the Interim Final Standard for Lead in Construction. The cost estimates presented in this section are based on the preliminary findings of OSHA's research into current compliance, costs and economic impact issues related to lead exposure reduction efforts in the construction industry.
As described in the technological feasibility section above, there are several general approaches for controlling exposure to airborne lead. The existing OSHA lead standard, 29 CFR 1926.55, requires engineering controls, work practices, and respirators to be used to meet a PEL of 200 ug/m(3) for lead exposure in the construction industry(3). The Interim Final Standard reduces the lead PEL to 50 ug/m(3) and requires additional safeguards in the form of ancillary provisions intended to prevent overexposure to lead. These ancillary provisions include requirements for competent person supervision, exposure monitoring, protective clothing and equipment, biological monitoring, and recordkeeping. The costs of meeting these additional requirements are attributable to the Interim Final Standard. Table 10 summarizes information on the regulatory provisions of the existing standard, the Interim Final Standard, and the exposure levels at which required controls must be employed.
__________ Footnote(3) Thus the capital costs of mechanical ventilation, local exhaust ventilation, HEPA vacuums, wetting agents, and respiratory protection for projects with exposure over 200 ug/m(3) are already required under 29 CFR 1926.55.
Table 10. -- Summary of Control Practice Requirements Associated with OSHA's Existing and Interim Final Lead Standards __________________________________________________________________________ | Existing standard: | | 200 ug/m(3) PEL | Interim final standard |_____________________|_______________________________ | Exposure | Exposure | Exposure | Exposure | Exposure Control practice | below | above | below 30 | between | above 50 | PEL | PEL | ug/m(3) | AL and | ug/m(3) | | | AL | PEL | PEL ____________________|__________|__________|__________|__________|_________ Determination of the| | | | | Presence of | | | | | Lead(a)............| ........ | ........ | X ...... | X ...... | X Competent Person....| ........ | ........ | ........ | ........ | X Exposure Monitoring | | | | | and Assoc. | | | | | Recordkeeping(a)...| ........ | ........ | X ...... | X ...... | X Mechanical | | | | | Ventilation.......| ........ | X ...... | ........ | ........ | X Local exhaust | | | | | Ventilation.......| ........ | X....... | ........ | ........ | X Enclosures/ | | | | | Containment | | | | | Systems(b)........| ........ | X ...... | ........ | ........ | X HEPA Vacuums........| X(c).... | X(c).... | X ...... | X ...... | X Wetting Agents......| X ...... | X ...... | X ...... | X ...... | X Written Compliance | | | | | Program...........| ........ | ........ | ........ | ........ | X Warning Sings.......| ........ | ........ | ........ | ........ | X Working Training....| ........ | ........ | ........ | X ...... | X Notification of | | | | | Other Employers...| ........ | ........ | X....... | X ...... | X Respiratory | | | | | Protection........| ........ | X ...... | ........ | ........ | X Protective Clothing/| | | | | Gloves/Shoe | | | | | Covers............| ........ | ........ | ........ | ........ | X Handwashing | | | | | Facilities | | | | | Only(d)...........| ........ | ........ | X ...... | X ...... | X Change Areas with | | | | | Storage | | | | | Facilities........| ........ | ........ | ........ | ........ | X Decontamination | | | | | Facilities | | | | | Including Showers.| ........ | ........ | ........ | ........ | X Eating Areas and | | | | | Facilities........| ........ | ........ | ........ | ........ | X Biological | | | | | Monitoring and | | | | | Assoc. | | | | | Recordkeeping.....| ........ | ........ | ........ | X ...... | X Medical Examinations| | | | | and Assoc. | | | | | Recordkeeping.....| ........ | ........ | ........ | X ...... | X Medical Removal | | | | | Protection | | | | | Requirements(e)...| ........ | ........ | X ...... | X ...... | X ____________________|__________|__________|__________|__________|_________ Footnote(a) Exemption is possible if objective data shows that exposures are below the action level or if the employer has relevant data from the past 12 months. Footnote(b) Enclosures are only assumed to be needed in conjunction with indoor projects using mechanical ventilation. Outdoor enclosures are required by EPA regulations concerning environmental release of lead. Footnote(c) For this standard, vacuums are only needed for worksite clean-up. Footnote(d) Hand washing facilities for activities below the PEL are required by 29 CFR 1926.51(f). Footnote(e) Medical removal is dependent on worker blood-lead level. Source: OSHA, Office of Regulatory Analysis.
In order to develop the cost estimates associated with achieving full compliance with OSHA's Interim Final Standard, unit cost estimates were obtained for the control practices and ancillary measures required for each of the project types and activities covered by the rule. The appropriate control practices required to achieve compliance were identified for each project type and construction activity in accordance with the exposure data presented in the technological feasibility section above. The unit cost data used in this analysis were obtained from published price lists of equipment suppliers and from other information collected and developed by OSHA's consultant, CONSAD Research.
The control practices costed in the analysis of the Interim Final Standard included: Determination of the presence of lead; exposure monitoring; competent person labor time; written compliance programs; warning signs; worker training; respirators for activities with exposures below the old PEL of 200 ug/m(3) but above the new PEL of 50 ug/m(3) (including the respirator unit, accessories, fit testing, cleaning, and training); disposable and reusable protective clothing, shoe covers and gloves; handwashing facilities; decontamination facilities; clean change areas with storage facilities; eating facilities; biological monitoring (blood lead and ZPP testing); medical examinations; medical removal protection; recordkeeping; and employee notification of monitoring data, blood lead analysis, and medical exam results(4).
__________ Footnote(4) Costs of Complying with the requirement for handwashing facilities are attributed to the existing OSHA construction sanitation standard: 29 CFR 1926.51(f).
Estimates of the annual need for or use of each control practice were calculated using the following bases for costing purposes: Establishments, projects,(5) crews, workers, project-days, crew-days, or worker-days. Estimates for the other parameters in the cost analyses were calculated based upon estimates of the types and frequency of construction activities performed within each project type, project and activity durations, average number of crews per construction activity, crew size, hours of exposure per day, the percentage of projects performed per year involving lead, and the number of available work-days per year. These estimates were developed by OSHA's consultant, CONSAD Research, based on data obtained from industry and labor experts, site visits conducted to support this analysis, CONSAD's PELs in Construction Study, and the 1991 Steel Structures Painting Council (SSPC) Survey of Facility Owners.
__________ Footnote(5) Multiple pieces of equipment were costed where firms were assumed to perform more than one project at a time.
Annual compliance costs for each project type and associated activities were developed by combining the unit cost data with estimates of the number of units of each type of control practice needed per year to achieve compliance with the Interim Final Standard. Estimated costs for hygiene facilities, respirators and other capital goods were annualized based on assumptions about the expected useful life of the equipment. The resulting gross annual cost estimates were then adjusted to reflect existing use of specific control practices in order to develop net annual compliance cost estimates.
OSHA's preliminary estimates of current compliance with lead exposure control requirements were used to determine current expenditures on control practices for each project type. These compliance estimates were based upon information obtained from industry and labor experts, CONSAD site visits, CONSAD's PELs in Construction Study, and reports from various HUD Lead Abatement Demonstration Projects.
The cost estimates discussed in this section are the estimated incremental costs to the affected industries of achieving full compliance with the requirements of the Interim Final Standard. These incremental costs are those costs which must be expended to achieve full compliance with OSHA's new requirements in excess of amounts currently being spent by industry.
The annual recurring costs of achieving compliance with a 50 ug/m(3) PEL and the ancillary requirements of the Interim Final Standard are estimated to range between $365 million to $445 million dollars(6). During the first year following the standard's implementation, additional "one-time" start-up costs are expected to be incurred for worker training, biological monitoring, medical examinations, and medical removal protection benefits(7). These costs are estimated to range between $150 million and $183 million. Start-up costs for worker training and biological monitoring are based on the need to train and monitor all current employees exposed above the trigger levels for these provisions during the first year after the standard becomes effective. Costs for medical examinations and medical removal protection benefits should not persist beyond the first year; compliance with the 50 ug/m(3) PEL is expected to reduce worker blood leads below the trigger levels for these provisions.
__________ Footnote(6) Additional costs will be borne by those firms not currently in compliance with the existing 200 ug/m(3) PEL. Footnote(7) Cost estimates for medical removal benefits were based on an average removal duration of 100 work days and an average medical removal benefit per case of $74 per day. This estimate is based on OSHA's assumptions about the likelihood of removed workers: finding non-lead exposed jobs with a different employer; moving to a job with the same employer at the same wage rate; moving to a lower-paying job with the same employer; receiving worker compensation; or being removed for fewer than 100 work days.
Tables 11 and 12 present point estimates of the annual recurring cost of the Interim Final Standard to illustrate the relative magnitude of costs by project type and by provision. The figures shown in Tables 11 and 12 suggest the relative importance of each cost element.
Table 11. -- Point-Estimate Summary of Annual Recurring Compliance Costs for OSHA's Interim Final Lead Standard by Project Type ________________________________________________________________________ | Total annual recurring | Project cost as a Project type | compliance costs | percentage of total _________________________|________________________|_____________________ Highway and railroad | | bridge repainting...... | 56,742,000 | 13.99 Highway and railroad | | bridge rehabitation.... | 109,593,000 | 27.02 Water tank repainting... | 14,797,000 | 3.65 Petroleum tank | | repainting............. | 16,125,000 | 3.98 Underground storage | | tank demolition........ | 443,000 | 0.11 Housing lead abatement | | (public housing)....... | 5,473,000 | 1.35 Housing lead abatement | | (private housing)...... | 0(1) | 0.00 In-place management | | (public housing)....... | 0(1) | 0.00 In-place management | | (private housing)...... | 0(1) | 0.00 Commercial and | | Industrial demolition.. | 16,445,000 | 4.05 Indoor industrial | | facility maintenance/ | | renovation............. | 3,739,000 | 0.92 Outdoor industrial | | facility maintenance/ | | renovation............. | 10,152,000 | 2.50 Lead joint work on cast | | iron soil pipes........ | 0(1) | 0.00 Industrial process | | equipment manufacturing/| | maintenance/repair..... | 2,285,000 | 0.56 Industrial vacuuming.... | 394,000 | 0.10 Stained glass window | | removal................ | 1,046,000 | 0.26 Installation of | | radiation shielding.... | 0(1) | 0.00 Commercial and | | Institutional | | remodeling............. | 76,746,000 | 18.92 Residential remodeling.. | 59,163,000 | 14.59 Elevator cable | | babbitting............. | 0(1) | 0.00 Electrical cable | | splicing............... | 0(1) | 0.00 Reinsulation over | | existing mineral wool.. | 18,580,000 | 4.58 Repair/removal of water | | lines.................. | 0(1) | 0.00 Transmission and | | commercial tower | | maintenance............ | 13,827,000 | 3.41 Installation of terne | | roofing................ | 0(1) | 0.00 |________________________|___________________ Total for all | | project types | 405,550,000 | 100.000 _________________________|________________________|___________________ Footnote(1) Lead exposure levels on these projects are not expected to exceed the action level of 30 ug/m. Source: OSHA, Office of Regulatory Analysis. Table 12. -- Point-Estimate Summary of Annual Recurring Compliance Costs for OSHA's Interim Final Lead Standard by Control Practice ________________________________________________________________________ | Total annual recurring | Control practice Control practice | compliance costs | percentage of | | total __________________________|________________________|____________________ Determination of the | | presence of lead....... | 1,413,000 | 0.35 Competent person labor | | time................... | 18,610,000 | 4.59 Exposure monitoring and | | association | | recordkeeping.......... | 121,617,000 | 29.99 Written compliance | | program................ | 15,179,000 | 3.74 Warning signs............ | 7,036,000 | 1.73 Worker training.......... | 11,118,000 | 2.74 Respiratory protection... | 4,714,000 | 1.16 Protective work clothing. | 89,325,000 | 22.03 Hand washing facilities | | only................... | 0(1) | 0.00 Change areas with storage | | facilities............. | 2,108,000 | 0.52 Decontamination | | facilities and shower | | time labor costs....... | 111,510,000 | 27.50 Eating facilities........ | 419,000 | 0.10 Biological monitoring | | and association | | recordkeeping.......... | 22,500,000 | 5.55 |________________________|____________________ Total............ | 405,550,000 | 100.00 __________________________|________________________|____________________ Footnote(1) Costs of hand washing facilities were attributed to 29 CFR 1926.51(f). Source: OSHA, Office of Regulatory Analysis.
As shown in Table 11, the project types expected to account for the largest share of annual costs are Highway and Railroad Bridge Rehabilitation (27 percent); Commercial and Institutional Remodeling (19 percent); Residential Remodeling (15 percent); and Highway and Railroad Bridge Repainting (14 percent). It should be noted that although lead exposures associated with remodeling project types are generally low, and less than 20 percent of commercial and 5 percent of residential remodeling jobs involving lead exposure are expected to be exposed over the PEL, the large number of remodeling projects estimated to occur annually results in significant total costs for these project types. As shown above in Table 3, the annual numbers of lead-exposed projects for Commercial and Institutional Remodeling and Residential Remodeling are 546,000 and 2,698,000, respectively.
Table 12 shows the annual recurring costs by control practice in order to indicate the relative magnitude of costs associated with specific regulatory provisions. In descending order of importance, the most costly provisions are exposure monitoring and associated recordkeeping (30 percent); hygiene facilities, including change areas and decontamination facilities with associated showering labor time costs (28 percent); and protective work clothing and equipment, including both reusable and disposable protective clothing (22 percent).
F. Economic Impacts
This chapter examines the economic impacts associated with OSHA's Interim Final Standard for Lead in Construction. The economic impact analysis presented below is based on those costs attributable to the Interim Final Standard as described in the cost section above.
The economic impacts in this section are presented on both a "per worker" and a "per establishment" basis. The bases for estimating these impacts were derived from data on each SIC obtained from the 1987 Census of Construction Industries, the 1989 County Business Patterns, and the Dun & Bradstreet Insight Database. The following data were used to construct this analysis:
- The total number of establishments; - The total number of employees and the total number of construction workers; - The average number of employees and the average number of construction workers per establishment; - The annual payroll for all employees and for construction workers; - The net dollar value of construction work for construction SICs or sales for non-construction SICs; and - The pre-tax profit ratio.
These data were used to derive the annual payroll and net value of construction work per establishment and per construction worker. To obtain pre-tax profits per establishment, pre-tax profit ratios derived from Dun & Bradstreet data were multiplied by the net value of construction work or sales per establishment.
Across all the affected SICs, the annual payroll per establishment ranges from $48,000 for SIC 1521, Single Family Housing to $3.4 million for SIC 4911, Electric Utilities. The net value of construction work or sales per establishment ranges from $15,300 in sales for SIC 6514, Operators of Other Dwellings to $7 million in sales for SIC 4911, Electric Utilities. Across all the affected SICs, pre-tax profits per establishment range from $1,300 for SIC 6514, Operators of Other Dwellings to $676,000 for SIC 4911, Electric Utilities.
Several different cost-related impact measures were calculated for each of the 18 construction SICs and four of the five non-construction SICs identified as affected by OSHA's Interim Final Standard.(8) These impact measures are:
- The ratio of the average annual compliance costs per affected establishment (or per exposed construction worker) to an estimate of the annual payroll for an average establishment (or per construction worker)in the specific SIC. This measure compares the projected compliance costs to labor costs normally incurred by the establishment. It can be interpreted as the cost of providing a mandated occupational safety and health "benefit" relative to existing payroll expenses. - A comparison of the average annual compliance costs per affected establishment (or per exposed construction worker) to an estimate of the net dollar value of construction work or sales for an average establishment (or per construction worker) in the specific SIC. This ratio indicates the relationship of the compliance costs to an establishment's output. - The average annual compliance cost per affected establishment as a percentage of pre-tax profits for an average establishment in the specific SIC. This measure is particularly meaningful when establishments face highly competitive conditions which prevent the pass through of compliance costs to customers. __________ Footnote(8) Impact estimates were not made for SIC 9999, State and Municipal Governments since the relevant revenue and profit data are not applicable.
The impact measures described above were calculated for the annual recurring costs of the Interim Final Standard as shown in Table 11 above. Table 13 presents estimates of the annual recurring compliance costs per exposed worker and per establishment for each affected SIC. These estimates are an average of costs across the mix of different project types assumed to be performed by each construction or non-construction industry SIC.
Table 13 shows these average costs as a percentage of construction payroll and net value of construction work or sales, on both a per worker and per establishment basis for affected industries. The last column of Table 13 presents the compliance costs per establishment as a percentage of pre-tax profits per establishment. These average percentages are shown to illustrate the relative magnitude of impacts on specific SICs; they should not be interpreted as indicative of the cost impacts on specific project types or on firms within an SIC which specialize in only one of the associated project types.
As shown in Table 13, using annual compliance costs per worker as a measure of impact, the most impacted SICs are expected to include SIC 1791, Structural Steel Erection Contractors; SIC 1795, Wrecking and Demolition Contractors; SIC 1622, Bridge, Tunnel and Elevated Highway Contractors; SIC 1611, Highway and Street Construction Contractors; SIC 1721, Painting Contractors; and SIC 3231, Glass Products Manufacturers.
Table 13. -- Summary Economic Impact Measures for OSHA's Interim Final Standard Impact Measures Calculated Using Estimates of Annual Recurring Costs
If compliance costs per establishment are used as a measure of impact, the most impacted SICs during subsequent years are expected to include: SIC 1791, Structural Steel Erection Contractors; SIC 1795, Wrecking and Demolition Contractors; SIC 1622, Bridge, Tunnel and Elevated Highway Contractors; SIC 1611, Highway and Street Construction Contractors; SIC 1721, Painting Contractors; and SIC 3231, Glass Products Manufacturers.
Impact measures calculated on the basis of percent of net value of construction work and sales suggest the magnitude of cost increases that may potentially be passed through to consumers of construction. (The very high impact on pre-tax profits found in SICs 1791 and 1795 would only be realized if no costs were passed through to buyers of construction. Since cost pass through of most costs is likely, the impact shown in Table 13 represents a hypothetical extreme.) Existing federal, state and local regulations have already established some obligations for owners and contractors concerning abatement practices on construction projects that supplement and reinforce the requirements of OSHA's Interim Final Lead Standard. These regulations, in conjunction with forthcoming lead regulations from the Federal Highway Administration, the Environmental Protection Agency and the Department of Housing and Urban Development, are expected to ensure a level playing field for contractors bidding on work involving lead exposure.
For many project types involving high exposures to lead, and especially those involving abrasive blasting, small contractors have traditionally made up most of the industry. In recent years, construction industry compliance with environmental regulations has resulted in large capital expenditures and additional worker skill training requirements. These requirements are bringing about some restructuring in this industry with a progressively larger share of work involving lead exposure being performed by larger, better capitalized contractors. OSHA does not anticipate that these changes will result in massive dislocations, undue concentration or any threat to the competitive structure of the industry.
Where OSHA compliance costs significantly increase costs to the buyers of construction, some projects may be delayed in order to compensate for the increased cost of existing work. This may occur in the case of infrastructure projects such as bridge repainting and bridge rehabilitation. However, OSHA cannot state with certainty whether or not this will actually occur or whether new levels of infrastructure spending will more than compensate for new costs of the interim final rule.
G. Regulatory Flexibility Analysis
Pursuant to the Regulatory Flexibility Act of 1980 [Pub.L. 96-353, 94 Stat. 1164 (5 U.S.C. et seq.)], OSHA has assessed the impact of the Interim Final Standard on small businesses, defined as establishments with fewer than 20 employees. The impacts were evaluated for potential adverse impacts on small firms and their relative consequences compared with large firms. Of the estimated 147,000 affected establishments, approximately 132,000 (90 percent), are small businesses. Thus, the impacts shown above for all establishments are also illustrative of the expected impacts on small businesses.
In general, the costs of compliance for any firm will depend on the extent of worker exposures, the extent of current engineering control, work practice and respirator use, and the amount of lead-exposed work being done. For any given lead-exposed activity, work is likely to be done in a similar manner by both large and small firms, with costs proportional to the scale of the project. As noted above, in response to environmental regulations regarding lead removal, larger capital requirements are bringing about some industry rationalization and concentration. However, this development is not threatening the overall competitive structure of the industry. Estimated compliance costs are feasible for both large and small establishments in each affected industry sector.
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