[Federal Register Volume 59, Number 125 (Thursday, June 30, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15968]


[[Page Unknown]]

[Federal Register: June 30, 1994]


_______________________________________________________________________

Part III





Department of Transportation





_______________________________________________________________________



Federal Aviation Administration



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14 CFR Part 187




Fees for Certification Services and Approvals Performed Outside the 
United States; Proposed Rule
DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 187

[Docket No. 27809; Notice No. 94-24]
RIN 2120-AE72

 
Fees for Certification Services and Approvals Performed Outside 
the United States

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: This notice of proposed rulemaking would update existing fees 
for airmen and repair station certification services performed outside 
the United States (U.S.) to reflect current cost levels; establish a 
schedule of fees where no fee currently exists for: tests, 
authorizations, certificates, permits, or ratings relating to any 
airmen certification, and repair station certification performed 
outside the United States; establish the methodology for computing user 
fees and a timetable for periodic updates of fees; and establish 
additional methods of collecting those fees.
    This proposed rulemaking is necessary to allow the FAA to fully 
recover the costs it incurs in performing airmen certification, and 
repair station certification services outside the United States and to 
bring current airmen fees charges more nearly in line with 
nondiscrimination principles of multilateral trade agreements to which 
the U.S. is a signatory including the General Agreement on Tariffs and 
Trade (GATT) and the GATT Aircraft Code.
    The intended effect of this proposed action is to recover the costs 
of providing airmen, and repair station certification services outside 
the United States. Recovering these costs would allow the FAA to 
continue to provide airmen, and repair station certification services 
outside the United States, thereby facilitating the acceptance of U.S. 
aeronautical products overseas.

DATES: Comments must be received on or before August 1, 1994.

ADDRESSES: Comments on this notice should be mailed or delivered in 
triplicate to: Federal Aviation Administration, Office of the Chief 
Counsel, Attention: Rules Docket (AGC-10), Docket No. 27809, 800 
Independence Avenue SW., Washington, DC 20591. Comments may be examined 
in the Rules Docket, Room 915-G weekdays between 8:30 a.m. and 5 p.m., 
except on Federal holidays.

FOR FURTHER INFORMATION CONTACT:
Emily A. White, Flight Standards Service, AFS-50, Federal Aviation 
Administration, 800 Independence Avenue SW., Washington, DC 20591, 
telephone (202) 267-3301.

SUPPLEMENTARY INFORMATION: 

Comments Invited

    Interested persons are invited to participate in the making of the 
proposed rule by submitting such written data, views, or arguments as 
they may desire. Comments relating to the environmental, energy, 
federalism, or economic impact that might result from adopting the 
proposals in this notice are also invited. Substantive comments should 
be accompanied by cost estimates, if appropriate. Comments should 
identify the regulatory docket or notice number and should be submitted 
in triplicate to the Rules Docket address specified above. All comments 
received on or before the closing date for comments specified will be 
considered by the Administrator before taking action on this proposed 
rulemaking. The proposals contained in this notice may be changed in 
light of comments received. All comments received will be available, 
both before and after the closing date for comments, in the Rules 
Docket for examination by interested persons. A report summarizing each 
FAA-public contact, concerned with the substance of this rulemaking, 
will be filed in the docket. Commenters wishing the FAA to acknowledge 
receipt of their comments submitted in response to this notice must 
include a preaddressed, stamped postcard on which the following 
statement is made: ``Comments to Docket No. 27809.'' The postcard will 
be date/time stamped and mailed to the commenter.

Availability of NPRMs

    Any person may obtain a copy of this NPRM by submitting a request 
to the Federal Aviation Administration, Office of Public Affairs, 
Attention: Public Inquiry Center (APA-200), 800 Independence Avenue, 
SW., Washington, DC 20591, or by calling (202) 267-3484. Communications 
must identify the notice number of this NPRM.
    Persons interested in being placed on the mailing list for future 
NPRMs should request from the above office a copy of Advisory Circular 
11-2A, Notice of Proposed Rulemaking Distribution System, which 
describes the application procedures.

Background

Statement of the Problem

    The fee schedule that appears in 14 CFR part 187, appendix A, was 
established by rulemaking and became effective on October 18, 1982. It 
contains fees for certain certification services performed outside of 
the United States by the FAA. However, it does not contain fees for the 
full scope of activities for which fees may be charged under current 
statutory authority. Rather, the fee schedule lists only fees for 
services that were being rendered outside the United States at the time 
of that rulemaking. The fee schedule has not been updated since 1982, 
although the FAA's costs for performing these services has escalated 
since adoption of the present rule in 1982. The FAA incurs special 
costs to operate overseas that increase the costs for providing 
services outside the United States. These additional costs include 
cost-of-living allowances as well as allowances for housing and 
education. Due to these costs, employing an inspector outside the 
United States is approximately $85.4 thousand more costly than 
employing the same inspector within the United States.
    Further, since the methodology for computing fee schedules and time 
table for adjustment of fees was not established in 14 CFR part 187, 
appendix A, it is currently necessary to update this fee schedule by 
rulemaking.
    The changes set out in this NPRM make the FAA's fee practice more 
nearly consistent with the principles of nondiscrimination and most-
favored-nation treatment that are at the core of the international 
trade regime set up by the GATT, and which includes the Aircraft Code 
and the General Agreement on Trade in Services. Under these core trade 
principles, governments should not treat foreign nationals differently 
in the measures that they take that affect international trade. Airman 
certifications are not governed by any trade agreement to which the 
U.S. is a party, but the FAA has determined that bringing its fee 
practices into line with international trade practices is desirable, if 
not required by any specific obligation of the U.S. FAA measures with 
regard to certification of foreign repair stations, however, including 
fees charged, will be subject to U.S. obligations under the General 
Agreement on Trade in Service (GATS), recently concluded in the so-
called Uruguay Round of GATT negotiations. The U.S. signed the 
agreement, but has not ratified it, and it is not in force. 
Implementing legislation has not yet been submitted to Congress. 
Nevertheless, the GATS, which applies multilateral trade principles to 
trade in services for the first time, will cover some aspects of 
aircraft maintenance. This NPRM will be consistent with U.S. 
obligations under the GATS, once it goes into effect.

Statutory Authority

    Title VI of the Federal Aviation Act of 1958, as amended (the Act), 
gives the Administrator authority to issue certificates for airmen, 
instructors, schools, and repair stations.
    In addition, under Title V of the Independent Offices Appropriation 
Act of 1952 (31 U.S.C. 9701), the FAA has been charged with 
establishing a fair and equitable system for recovering full costs 
expended for any service, such as the issuance of the certificates 
discussed in this proposal, that provide a special benefit to an 
individual beyond those that accrue to the general public. Section 403a 
of that Act provides, in part, as follows:

    It is the sense of the Congress that any work service, 
publication, report, document, benefit, privilege, authority, use, 
franchise, license, permit, certificate, registration, or similar 
thing of value or utility performed, furnished, provided, granted, 
prepared or issued by any Federal Agency * * * to or for any person 
(including groups, associations, organizations, partnerships, 
corporations, or businesses), except those engaged in the 
transaction of official business of the Government, shall be self-
sustaining to the fullest extent possible * * *.

    Section 483a further provides, in part:

    The head of each Federal agency is authorized by regulation 
(which, in the case of agencies in the Executive Branch, shall be as 
uniform as practicable and subject to such policies as the President 
may prescribe) to prescribe therefore such fee, charge, or price, if 
any, as he shall determine, in case none exists, or redetermine, in 
case of any existing one, to be fair and equitable taking into 
consideration direct and indirect cost to the Government, value to 
the recipient, public policy or interest served, and other pertinent 
facts * * *.

    Finally, in 1980, Congress passed the International Air 
Transportation Competition Act of 1979 (hereinafter ``IATC Act'') 
giving the FAA authority to establish fee schedules for airmen and 
repair station certification services provided outside the U.S. Section 
28 of the IATC Act amended Section 45 of the Airline Deregulation Act 
to read as follows:

    Nothing in this section shall prohibit the Secretary of 
Transportation or the Administrator from collecting a fee, charge, 
or price for any test, authorization, certificate, permit, or 
rating, administered or issued outside the United States, relating 
to any airman or repair station. (49 U.S.C. 334, second sentence).

    The amounts collected shall be paid to the Federal Government.

Office of Management and Budget (OMB) Guidelines

    To aid in establishing fee schedules, OMB has prescribed in 
Circular No. A-25 the general guidelines to be used in developing an 
equitable and reasonable uniform system of charges for certain 
government services and property. The circular provides that ``where a 
service (or privilege) provides special benefits to an identifiable 
recipient above and beyond those that accrue to the public at large, a 
charge should be imposed to receive the full cost to the Federal 
Government of rendering that service.'' Circular No. A-25 specifies the 
following:
    A special benefit will be considered to accrue and a charge should 
be imposed when a Government-rendered service:
    (a) Enables the beneficiary to obtain more immediate or substantial 
gains or values (which may or may not be measurable in monetary terms) 
than those which accrue to the general public (for example, receiving a 
patent, crop insurance, or license to carry on a specific business), or
    (b) Provides business stability or assures public confidence in the 
business activity of the beneficiary (for example, certificates of 
necessity and convenience [sic: convenience and necessity] for airline 
routes, or safety inspections of craft); or
    (c) Is performed at the request of the recipient and is above and 
beyond the services regularly received by other members of the same 
industry or group, or of the general public (for example, receiving 
passport visa, airman's certificate, or an inspection after regular 
duty hours).

General Discussion of the Proposals

    This notice proposes that the fee schedule in 14 CFR part 187, 
Appendix A, be amended to provide the methodology for computing user 
fees that permit full recovery of the FAA costs incurred in performing 
these services authorized by legislation and to develop a timetable for 
updating fees. The method of payment of fees prescribed in 14 CFR 
187.15 would also be amended to take advantage of some additionally 
available banking services, that is, wire transfers and payment by 
credit card, that would expedite deposit of funds to the U.S. 
Government.
    In keeping with the authority granted under the IATC Act, this 
notice would establish the schedule of fees that would be published in 
an FAA Advisory Circular on inspector fees. Under this proposal, hourly 
rates for repair station certifications, and fixed fees for each airman 
certificate issued would be derived from total costs to the FAA of 
providing the services and have been computed using direct and indirect 
labor costs (excluding holiday, Sunday, and overtime costs), and 
overhead costs. Fees for transportation and subsistence expenses 
associated with the issuance of certificates have not been included in 
the computation of hourly fees and fixed fees. Fees covering those 
expenses would be charged to applicants in addition to the specified 
fee whenever such expenses are incurred by the FAA in providing the 
requested service. Consistent with OMB Circular A-25, under this NPRM 
the FAA would recover all costs incurred for performing the above-
described certification services outside the U.S.

Airman Certifications

    There are 55 categories of airman certification actions for which 
fees are prescribed under the Appendix A at the present time. These 
were the only categories of airman certification actions being 
administered by the FAA outside the United States at the time of the 
original fees rulemaking in 1982. Since that time, demand for airman 
certification services outside the U.S. has increased, and the FAA now 
administers airman tests, approvals, and ratings for which fees have 
not been established.
    There are 96 categories of FAA airman tests, approvals, or ratings 
that currently may be performed outside the U.S. This proposal would 
update existing fees for the 55 types of airman tests, approvals, and 
ratings listed in 14 CFR part 187, Appendix A, and would also establish 
fees for the 41 other types of airman tests, approvals and ratings that 
the FAA may administer outside the United States. Thus, the proposed 
rule would prescribe fees for all tests, renewals, authorizations, or 
approvals relating to airman certification outside the United States.
    This NPRM would also permit FAA recovery of transportation and 
subsistence expenses that may be incurred in the administering of 
airman tests, approvals, and ratings outside the United States. 
Generally, written airman tests are given at the FAA Flight Standards 
Office (FSO) and practical airman tests are conducted at a nearby 
airport where transportation and subsistence expenses are not incurred. 
When inspectors give airman tests at locations outside of the FAA duty 
station city, those tests are typically conducted in conjunction with a 
scheduled inspection. Since the fees charged for airman tests do not 
offset the costs associated with travel, the FAA currently does not 
send its inspectors to locations outside their duty stations solely for 
the purpose of conducting airman tests.
    An occasion may arise, however, where an individual or group of 
individuals, such as a flying club, may be willing to pay the 
transportation and subsistence expenses of an FAA inspector to permit 
him or her to travel in order to administer airman tests. In instances 
of this type, this notice of proposed rulemaking would permit the FAA 
to recover transportation and subsistence expenses in addition to the 
established airman fee.
    Under the current rule, the FAA may charge only foreign nationals 
when it administers airman tests or performs similar services outside 
the United States. This NPRM would remove that limitation by permitting 
the FAA to charge all applicants for these services, regardless of 
country of citizenship, as authorized by the IATC Act. The removal of 
this limitation will correct the current inequity of FAA charging U.S.-
owed foreign repair stations for certification actions but not charging 
other U.S. citizens for airman certification.
    The cost to the FAA of providing airman certification services 
outside the United States is the same for all applicants for the same 
type of test regardless of the citizenship of the applicant. Because 
Federal law prohibits charging anyone, a foreign national or a U.S. 
citizen, more than the cost of services provided, the application of 
fees only to foreign nationals effectively precludes full recovery of 
costs. Moreover, it is highly unlikely that costs of services provided 
abroad to U.S. citizens could be recovered through the indirect user 
taxes that provide most of the FAA's funding. These taxes--assessed on 
the value of domestic passenger tickets, domestic freight charges, 
passengers departing the United States, and aviation fuel sold in the 
United States--are not paid by airmen living abroad, whether U.S. 
citizens or foreign nationals.
    Most U.S. citizens already pay for airman testing services provided 
outside the United States by using FAA designated test examiners for 
obtaining airman certification services. Under this proposal, U.S. 
citizens would pay the same fee as anyone else for the certification 
services described in this NPRM, regardless of whether a service is 
provided by an FAA designated test examiner or by an FAA inspector.

Repair Stations

    This proposal would also revise the hourly billing rate paid to the 
FAA for the certification of repair stations. The current rate, found 
in 14 CFR part 187, Appendix A, would be increased from $47 per 
inspector hour to $80 per inspector hour to cover the FAA's current 
costs incurred while performing this service. In addition to the hourly 
fees for inspector services, this proposal would permit the FAA to 
recover transportation and subsistence expenses that may be incurred in 
connection with repair station and services. The transportation and 
subsistence expenses incurred by FAA inspectors represent a large 
portion of the costs incurred by the FAA when performing repair station 
certification work. Most of this work must be performed on-site and, 
therefore, requires that an FAA inspector travel to the repair station 
facility to be inspected. Repair stations facilities range from 20 
minutes to 30 hours in travel time from FAA FSO's and, in some 
instances, lack of funds to cover the FAA's transportation and 
subsistence costs may prevent the agency from sending inspectors to 
perform needed repair station certification evaluations.
    This proposal would delete the existing hourly fee of $14 for 
clerical time devoted to repair station certification activities listed 
in 14 CFR part 187, Appendix A. Instead of computing a direct fee for 
clerical time, clerical costs have been included in the hourly base 
rate that would be charged for the FAA inspector's time.

Fee Computation

    Proposed fixed fees and hourly rates have been derived based on the 
standard methodology used in FAA cost allocation studies. A single, 
average hourly billing rate for all Flight Standards Aviation Safety 
Inspectors (ASI'S), both domestic based ASI'S and foreign based ASI'S, 
was derived using the methodology discussed in this section. Domestic 
based ASI'S perform certification services, in addition to foreign 
based ASI'S. While domestic based ASI'S are employed at a much lower 
rate than foreign based ASI'S ($85.4 thousand annual difference) it is 
beneficial, and consistent with international treaties, to have one 
average hourly billing rate for ASI services, rather than have multiple 
rates based on ASI location.
    To determine the average hourly rate the FY94 Flight Standards 
operations budget of $270,515,400, excluding direct ASI travel, Sunday, 
holiday and overtime pay, was used as the base. The annual 
appropriations for facilities and equipment and research and 
development were also not used in the rate base. The operations budget 
contains the following items.
    (1) Personnel compensation and benefits, budget code series 1100 
(excluding codes 1151 and 1152--overtime, Sunday and holiday pay), 1200 
and 1300.
    (2) Travel and transportation of persons, budget code series 2100 
(excluding code 2100--site visit travel).
    (3) Transportation of things, budget code series 2200.
    (4) Rental, communications, utilities, budget code series 2300.
    (5) Printing and reproduction, budget code series 2400.
    (6) Contractual services, budget code series 2500.
    (7) Supplies and materials, budget code series 2600.
    (8) Equipment, budget code series 3100.
    (9) Lands and structures, budget code series 3200.
    10. Insurance claims and indemnities, budget code series 4200.
    In order to recover overhead costs attributable to providing safety 
services, all costs are assigned to the inspector. This is accomplished 
by dividing the operations budget of $270,515,400 by 2,694 ASI's on 
board at the beginning of FY94. The number 2,694 is taken from the 
Flight Standards monthly staffing report and is the total number of 
ASI'S in the OMB position series 1825. This division results in an 
annual ASI cost of $100,414.03. The annual ASI cost of $100,414,03 is 
divided by 2,087 hours, which is the annual paid hours of each federal 
government employee. This results in an hourly cost of $48.11 per 
``paid hour'' (the actual amount paid by the FAA for each hour of work 
performed by an inspector), based on 2,087 paid hours per inspector 
year.
    This cost of $48.11 per hour does not ensure full recovery of 
costs. Inspectors spend a significant amount of time in indirect work 
such as training and the preparation of administrative reports, to 
support their inspection activities, much of which cannot be allocated 
to any one client. In addition, not all 2,087 annual paid hours are 
available as work hours. Training, providing technical assistance, 
leave, and other factors reduce the work hours that may be directly 
billed. Consequently, it is necessary to increase the hourly ASI 
government paid amount of $48.11 by an indirect work factor of 1.66 to 
arrive at the full cost recovery hourly ASI billing rate.
    The indirect work factor of 1.66 is derived as follows. The Flight 
Standards Staffing Standard (FAA Order 1380.28B, dated January 15, 
1985) uses an indirect work rate of 0.43 to project the amount of time 
an ASI spends in indirect work activities, as opposed to certification 
and surveillance work, during the year. The indirect work activities 
are:

(a) Development of master minimum equipment lists on Flight Operations 
Evaluation Board
(b) Development of aircraft training documents on Flight 
Standardization Board
(c) Development of Maintenance program documents on Maintenance Review 
Board
(d) Providing technical assistance
(e) Assisting legal counsel
(f) Evaluation of technical documents
(g) Leave (all types)
(h) Training
(i) Administrative time
(j) travel for indirect work

    Further, OMB guidelines require agencies to use 1,800 average 
annual hours available for work and 280 average annual leave hours (all 
types of leave) for computing manpower requirements. From the OMB 
guidelines, the ratio of yearly leave hours to average annual hours 
available for work (280 divided by 1800) is computed at 0.16. Thus, the 
indirect work factor for billing purposes is computed using the 
following formula:

TP30JN94.000

where:
a=indirect work rate, and
b=leave usage (total leave hours divided by total hours available for 
work).

    This computation yields an indirect work factor of 1.66, which is 
computed from (1+0.43)(1+0.16). The indirect work factor shows that the 
FAA actually pays for 1.66 hours for each direct billable hour of ASI 
time.
    The hourly inspector billing rate is determined by multiplying the 
$48.11 hourly government paid rate by the indirect work factor of 1.66 
to arrive at the hourly ASI billing rate of $79.81, or $80 rounded to 
the nearest dollar. The proposed hourly billing rate of $80 per ASI 
hour is applied to airman and repair station certification actions as 
follows.
    The proposed fixed fees for airman certification were derived by 
multiplying the proposed ASI billing rate of $80 by the total time used 
in the Flight Standards Staffing Standard or airman test guidelines as 
necessary to complete each certification activity. The FAA is not 
proposing fixed fees for the certification of air agencies, such as 
airman schools and repair stations, because the time involved in 
certificating these facilities varies widely and therefore there is no 
average staffing standard time.
    For certification actions where there is no fixed fee, as air 
agency certifications, this notice proposes that applicants, at the 
time of application, submit a prepaid deposit at the hourly ASI billing 
rate of $80 per hour for the minimum estimated time required to 
complete the certification applied for, as determined by the certifying 
Flight Standards Office (FSO). When the certification effort is 
completed, the applicant would either receive a refund or submit the 
additional amount due, depending upon the time actually required for 
certification, plus transportation and subsistence expenses.
    The charges to applicants by the FAA for inspector transportation 
and subsistence expenses, are governed by Federal Travel Regulations, 
and would reflect the cost expended by the FAA on the requested 
certification action.

Proposed Future Revisions to the Fee Schedule

    The FAA plans to review actual costs incurred in the certification 
efforts every year, at the beginning of the fiscal year, using the same 
fee methodology described above, and, the FAA proposes to amend the fee 
schedule on an annual basis to either increase or decrease fees. Each 
amended fee schedule would be published in the Federal Register and 
published in an FAA Advisory Circular on the subject of Inspector Fees.
    The proposed fee schedule that would be established as a result of 
this rulemaking is contained in the attached Table to this NPRM.

Fee Collection

    For airman certification actions, the FAA would collect the fee at 
the time of application for a certification, rating or approval, after 
first ascertaining the applicant's eligibility. The FSO or designated 
examiner would determine whether the applicant meets the preliminary 
eligibility requirements, such as age and currency. If these 
requirements are met, the FSO would issue a receipt as evidence of 
payment, ensure the deposit of fees into a U.S. Treasury approved bank, 
and forward the fee deposit information to the regional accounting 
office serving the area.
    Under this NPRM, payments for services rendered by FAA inspectors 
would have to be in the form of a check, money order, draft, or wire 
transfer, and would have to be payable in U.S. currency to the FAA and 
drawn on a U.S. bank. Bank processing fees may also be added to the 
fees charged to applicants, where such processing fees are charged to 
U.S. Government accounts. No application would be acted upon until 
evidence of payment by the applicant has been presented.
    Generally, there would be no refund of any fee paid for FAA 
certification services, including fees paid for any airman test, 
approval, or authorization that an applicant fails to pass. However, if 
an applicant notifies the FAA of a test cancellation at least one week 
prior to a scheduled examination, the FAA would refund the fee after 
deducting a minimal service charge to cover the cost of processing the 
application.
    In the case of a request for airman certification and repair 
station facility certifications (air agency certification), applicants 
would submit as prepayment a deposit in the amount specified by the 
certifying FSO. This prepayment would be based on the estimated minimum 
number of hours that an ASI would need to certificate the facility, as 
determined by the FSO performing the service. The hourly rate to be 
paid for the inspector's time would be the rate specified in Appendix A 
of Part 187. If the cost to complete the certification is less than the 
amount prepaid by the applicant, the FAA would submit to the applicant 
a refund to cover the difference between the prepayment and the actual 
charges. Conversely, if the cost is greater, the applicant would be 
required to submit the additional charges. As in the case of airman 
certificates, applicants for air agency certification would have to pay 
the required fees, regardless of whether an FAA certificate is issued.

Comparison of FAA Proposal With International Civil Aviation 
Organization (ICAO) and European Joint Aviation Authority (JAA) 
Regulations

    ICAO does not perform airman or agency certification actions of the 
type proposed by the FAA in this NPRM.
    The JAA currently has not completed writing its operations 
regulations and, therefore, has no airman charges at this time. For 
foreign repair station certification, the JAA has announced a charge of 
$1,000 per non-European facility. The charge will be assessed 
irregardless of an inspection visit. Within Europe, JAA certificates 
are issued by the appropriate Civil Aviation Authority (CAA) of the JAA 
member country and applicants are charged according to the fees of that 
CAA. Two examples of fees for comparable services provided by the CAA's 
of JAA member countries follow.
    The United Kingdom CAA hourly inspector rate is 147, 
which is approximately $297 U.S. per inspector hour. Repair station 
certification charges range from 442 to 3,180 
($884 to $6,360 U.S.). Additional hourly charges may be assessed. 
Actual transportation and subsistence costs are added for facilities 
located outside the U.K. These charges include a 7.5% profit on 
certification actions.
    The German LBA repair station charges range from 800 to 7,000 
Deutsche Marks (DM), which is approximately $479 to $4,191 U.S. 
Transportation costs are also added.

Paperwork Reduction Act

    There are no reporting or recordkeeping requirements associated 
with this NPRM.

Regulatory Evaluation Summary

    Executive Order 12866 established the requirement that, within the 
extent permitted by law, a Federal regulatory action may be undertaken 
only if the potential benefits to society for the regulation outweigh 
the potential costs to society. In response to this requirement, and in 
accordance with Department of Transportation policies and procedures, 
the FAA has estimated the anticipated benefits and costs of this 
rulemaking action. The FAA has determined that this proposed rule is 
not a ``significant rulemaking action,'' as defined by Executive Order 
12866 (Regulatory Planning and Review). The results are summarized in 
this section.
    This proposed rule would not impose any additional costs on any 
members of society other than those requesting FAA certification 
services outside the United States. The proposed rules, if implemented 
as final rules, would reimburse the FAA for the cost of services 
currently being provided to the users. Thus, the beneficiaries, rather 
than the general taxpayers, would pay for the services provided by the 
FAA. The FAA has determined that the proposed fees are equitable and 
reflect the cost of providing these services. The benefits of this NPRM 
would therefore be the elimination of the need for general revenues by 
the FAA to cover the costs of these services provided by the FAA.

Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (RFA) was enacted by 
Congress to ensure that small entities are not unnecessarily burdened 
by government regulations. The RFA requires agencies to consider the 
impact of proposed rules on small entities, that is, small businesses, 
nonprofit organizations, and local governments. If there is a 
significant impact on a substantial number of small entities, the 
Agency must prepare a draft Regulatory Flexibility Analysis (RFA) for 
the NPRM and a final RFA for the final rule.
    The proposed rule would primarily affect general aviation pilots 
and foreign repair stations. The RFA applies neither to individuals nor 
foreign entities. Therefore, a RFA is not required.

International Trade Impact

    This proposed rule would affect primarily general aviation pilots 
and foreign repair stations. The proposal would have a favorable 
competitive impact on U.S. repair stations by removing the subsidy that 
the FAA has provided to foreign repair stations in the form of lower 
charges for certification services. The NPRM would enhance the 
competitiveness of domestic firms.

Federalism Implications

    The regulations proposed herein would not have substantial direct 
implications on the states, on the relationship between the national 
government and the states, or on the distribution of power and 
responsibilities among the various levels of government. Therefore, in 
accordance with Executive Order 12866, it is determined that this 
proposal would not have sufficient federalism implications to warrant 
the preparation of a Federalism Assessment.

Conclusion

    For the reasons discussed in the preamble, and based on the 
findings in the Regulatory Flexibility Determination and the 
International Trade Impact Analysis, the FAA has determined that this 
proposed regulation is nonsignificant under Executive Order 12866. In 
addition, the FAA certifies that this proposal, if adopted, will not 
have a significant economic impact, positive or negative, on a 
substantial number of small entities under the criteria of the 
Regulatory Flexibility Act. This proposal is not considered significant 
under Order DOT 2100.5, Policies and Procedures for Simplication, 
Analysis, and Review of Regulations. A draft regulatory evaluation of 
the proposal, including a Regulatory Flexibility Determination and 
International Trade Impact Analysis, has been placed in the docket. A 
copy may be obtained by contacting the person identified under FOR 
FURTHER INFORMATION CONTACT.

List of Subjects in 14 CFR Part 187

    Administrative practice and procedure, Air transportation, Federal 
Aviation Administration.

The Proposed Amendment

    In consideration of the foregoing, the Federal Aviation 
Administration proposes to amend part 187 of the Federal Aviation 
Regulations (14 CFR part 187) as follows:

PART 187--FEES

    1. The authority citation for part 187 continues to read as 
follows:

    Authority: Sec. 501, 65 Stat. 290; 31 U.S.C. 9701; secs. 301, 
302, 303, 305, 307, 313, 314; 72 Stat. 744, 747, 749, 752, 754; 49 
U.S.C. 341, 1343, 1344, 1346, 1348, 1354, 1355.

    2. Section 187.15 is amended by designating the current text as 
paragraph (a) and by adding paragraphs (b) and (c), to read as follows:


Sec. 187.15  Payment of fees.

    (a) * * *
    (b) The fees prescribed in Appendix A of this part may be paid by 
wire transfer.
    (c) Applicants for the FAA services described in Appendix A of part 
187 shall pay bank processing charges, when such charges are assessed 
by banks on U.S. Government deposits.

    3. Appendix A to part 187 is revised to read as follows:

Appendix A to Part 187--Methodology for Computation of Fees for 
Certification Services Performed Outside the United States

    (a) Fixed fees and hourly rates have been derived using the 
methodology described below to ensure full cost recovery for 
certification actions or approvals provided by the FAA for persons 
outside the United States.
    (b) These rates are based on aviation safety inspector time 
rather than calculating a separate rate for managerial or clerical 
time because the inspector is the individual performing the actual 
service. Charging for inspector time, while building in all costs 
into the rate base, provides for efficient cost recovery and time 
measurement.
    (c) The hourly billing rate has been determined by using the 
annual operations budget of the Flight Standards Service. The budget 
is comprised of the following:
    (1) Personnel compensation and benefits, budget code series 1100 
(excluding codes 1151 and 1152--overtime, Sunday and holiday pay), 
1200, and 1300.
    (2) Travel and transportation of persons, budget code series 
2100 (excluding code 2100--site visit travel).
    (3) Transportation of things, budget code series 2200.
    (4) Rental, communications, utilities, budget code series 2300.
    (5) Printing and reproduction, budget code series 2400.
    (6) Contractual services, budget code series 2500.
    (7) Supplies and materials, budget code series 2600.
    (8) Equipment, budget code series 3100.
    (9) Lands and structures, budget code series 3200.
    (10) Insurance claims and indemnities, budget code series 4200.
    (d) In order to recover overhead costs attributable to the 
budget, all costs other than direct inspector transportation and 
subsistence, overtime, and Sunday/holiday costs, are assigned to the 
number of inspector positions. An hourly cost per inspector is 
developed by dividing the annual Flight Standards Operations Budget, 
excluding the items enumerated above, by the number of aviation 
safety inspections (OMB position series 1825) on board at the 
beginning of the fiscal year, to determine the annual cost of an 
aviation safety inspector. This annual cost of an aviation safety 
inspector is divided by 2,087 hours, which is the annual paid hours 
of a U.S. Federal Government employee. This results in the hourly 
government paid cost of an aviation safety inspector.
    (e) To ensure that the hourly inspector cost represents a 
billing rate that ensures full recovery of costs, the hourly cost 
per inspector must be multiplied by an indirect work factor to 
determine the hourly inspector billing rate. This is necessary for 
the following reasons:
    (1) Inspectors spend a significant amount of time in indirect 
work to support their inspection activities, much of which cannot be 
allocated to any one client.
    (2) Not all 2,087 annual paid hours are available as work hours 
because training, providing technical assistance, leave, and other 
indirect work activities reduce the work time that may be directly 
billed. Consequently, the hourly cost per inspector must be adjusted 
upwards by an indirect work factor. The calculation of an indirect 
work factor is discussed below.
    (f) The indirect work factor is determined using the following 
formula:

TP30JN94.001

where:
a=indirect work rate, and
b=leave usage (total leave hours divided by total hours available 
for work).

    The components of the formula are derived as follows.
    (1) a=indirect work rate. Indirect work rate is taken from the 
Flight Standards Staffing Standard Order and is used to project the 
amount of time an aviation safety inspector spends in indirect 
activities, as opposed to certification and surveillance work. The 
indirect work activities are:
    (i) Development of master minimum equipment lists on Flight 
Operations Evaluation Board.
    (ii) Development of aircraft training documents on Flight 
Standardization Board.
    (iii) Development of Maintenance program documents on 
Maintenance Review Board.
    (iv) Providing technical assistance.
    (v) Assisting legal counsel.
    (vi) Evaluation of technical documents.
    (vii) Leave (all types).
    (viii) Training.
    (ix) Administrative time.
    (x) Travel for indirect work.
    (2) b = leave usage (total leave hours divided by total hours 
available for work). This is computed by using OMB guidelines of 280 
average annual hours leave hours and 1,800 average annual hours 
available for work for computer manpower requirements.
    (g) The hourly inspector cost, when multiplied by the indirect 
work factor, yields the hourly inspector billing rate and ensures 
full cost recovery by incorporating the total amount of FAA paid 
hours needed to produce one hour of direct billable inspector time.
    (h) Certifications and approvals for which there are fixed 
times, such as a airmen tests, are determined by multiplying the 
time used in the Flight Standards Staffing Standard or airman test 
guidelines by the inspector hourly billing rate.
    (i) Certifications and approvals for which there are no fixed 
work rates, such as airman, and repair station facilities (air 
agencies), are billed at the hourly inspector billing rate.
    (j) Actual transportation and subsistence expenses incurred in 
certification or approval actions will be billed in addition to the 
hourly inspector billing rate, where such expenses are incurred.
    (k) In no event will the fees exceed the actual costs of 
providing certification or approval services.
    (l) The methodology for computing user fees is published in 14 
CFR part 187, Appendix A. The User fee schedule will be published in 
an FAA Advisory Circular entitled ``Flight Standards Service 
Schedule of Charges Outside the United States.''
    (m) Fees will be reviewed every year, at the beginning of the 
fiscal year, and adjusted either upward or downward in order to 
reflect the current costs of performing tests authorizations, 
certifications, permits, or ratings.
    (1) Notice of any changes to the user fee schedule will be 
published in the Federal Register.
    (2) Notice of any changes to the methodology for computing the 
user fees will be published in the Federal Register.

    Issued in Washington, DC on June 24, 1994.
William J. White,
Acting Director, Flight Standards Service.

Appendix to the Proposed Rule

             Table.--Proposed Flight Standards Service Schedule of Charges Outside the United States            
    [Federal Aviation Administration Flight Standards Service Schedule of Charges Outside the United States]    
----------------------------------------------------------------------------------------------------------------
          Category of service               14 CFR reference            Charge             Rate          Time   
----------------------------------------------------------------------------------------------------------------
    1. Transportation and Subsistence                                                                           
   Charges, All Categories of Services                                                                          
                                                                                                                
Transportation and subsistence will be    .....................  Actual cost..........  ...........  ...........
 assessed to applicants in addition to                                                                          
 the charge published below for                                                                                 
 certification actions requiring travel                                                                         
 from the duty station city.                                                                                    
II. Airman Certification, All Categories                                                                        
                of Airmen                                                                                       
Authorizations for written or practical   Parts 61, 63 65......  $40                             80          0.5
 tests unless specified below.                                                                                  
Special medical check...................  Part 67..............  $160                            80            2
FA Act Section 609 re-exam..............  Parts 61, 63, 65.....  $208                            80          2.6
Inspector review for all tests,           Part 61, 63, 65......  $40                             80          0.5
 approvals, ratings given by designated                                                                         
 examiners and evaluators.                                                                                      
                                                                                                                
                 Pilots                                                                                         
                                                                                                                
Written tests, including: tests for                                                                             
 initial issue or renewal of a                                                                                  
 certificate of rating; restriction and                                                                         
 limitation removals, determination of                                                                          
 knowledge based on military experience                                                                         
 in the categories below:                                                                                       
    Private pilot.......................  Part 61.103..........  $40                             80          0.5
    Recreation pilot....................  Part 61.96...........  $40                             80          0.5
    Commercial pilot....................  Part 61.123..........  $40                             80          0.5
    Airline Transport pilot.............  Part 61.153 or Part    $40                             80          0.5
                                           61.159.                                                              
    Instrument Rating...................  Part 61.65 or Part     $40                             80          0.5
                                           6l.75.                                                               
    Flight Instructor:                    .....................  $40                             80          0.5
      (a) Fundamental of Instructing....  Part 61.183..........  $40                             80          0.5
      (b) Written, other than gyroplane.  Part 61.183..........  $40                             80          0.5
      (c) Written for gyroplane.........  Part 61.183..........  $40                             80          0.5
    Ground Instructor...................  Part 143.3...........  $40                             80          0.5
Practical tests (oral, flight, simulated                                                                        
 flight increments, or combinations),                                                                           
 for initial award or renewal of a                                                                              
 certificate or training, restriction                                                                           
 and limitation removals, determination                                                                         
 of knowledge based on military                                                                                 
 experience in the categories below:                                                                            
    Student pilot.......................  Part 61.83...........  $32                             80          0.4
    Recreational pilot..................  Part 61.96(e)........  $0                              80            0
    Private pilot.......................  Part 61.103..........  $248                            80          3.1
    Commercial pilot....................  Part 61.123..........  $248                            80          3.1
    Commercial pilot limited to VFR.....  Part 61.129(a).......  $248                            80          3.1
    Commercial pilot reissue certificate  Part 61.11...........  $248                            80          3.1
    Airline transport pilot.............  Part 61.157 or Part    $400                            80            5
                                           61.163.                                                              
    Airline transport pilot, applicant    Part 61.157 or Part    $400                            80            5
     without IFR rating.                   61.163 or Part 61.65.                                                
    Replacement of a lost or destroyed    Part 61.29...........  $0                              80            0
     certificate.                                                                                               
    Instrument rating...................  Part 61.65 or Part     $256                            80          3.2
                                           61.75.                                                               
    Flight instructor:                                                                                          
      (a) Instrument rating.............  Part 61.191 or Part    $288                            80          3.6
                                           61.65.                                                               
      (b) Added category rating.........  Part 61.191 or Part    $248                            80          3.1
                                           61.63.                                                               
      (c) Added class rating............  Part 61.191 or Part    $248                            80          3.1
                                           61.63.                                                               
      (d) Renewal.......................  Part 61.197..........  $160                            80            2
      (e) Reinstatement.................  Part 61.199(b).......  $160                            80            2
    Ground instructor...................  Part 143.3...........  $40                             80          0.5
    Type rating with instrument rating..  Part 61.63 or Part     $368                            80          4.6
                                           61.157 or Part                                                       
                                           61.163.                                                              
    Type rating without instrument        Part 61.63...........  $368                            80          4.6
     rating.                                                                                                    
    Category rating.....................  Part 61.63 or Part     $368                            80          4.6
                                           61.165.                                                              
    Class rating........................  Part 61.63...........  $368                            80          4.6
    Special purpose pilot on basis of     Part 61.75...........  $68                             80         0.85
     foreign certificate.                                                                                       
    Special purpose pilot on basis of     Part 61.77(e)(4).....  $68                             80         0.85
     aircraft lease.                                                                                            
    Pilot proficiency check--12 month...  Part 61.58(b)........  $296                            80          3.7
    Pilot proficiency check--24 month...  Part 61.58(c)........  $296                            80          3.7
    Instrument competency check.........  Part 61.57...........  $320                            80            4
    Statement of demonstrated ability...  Part 61.13(d)........  $320                            80            4
    Category II authorization...........  Part 61.57...........  $320                            80            4
    Category III authorization..........  Part 61.58...........  $320                            80            4
    Pilot-in-command in lieu of type      Part 61.31(b) or Part  $464                            80          5.8
     rating (LOA) authorization.           61.31(h)(3).                                                         
    Aerobatic competence authorization..  Part 91..............  $320                            80            4
    Pilot knowledge/skill authorization.  Parts 91, 125, 133,    $320                            80            4
                                           135, 137.                                                            
    Flight instructor simulator           Parts 121,135........  $320                            80            4
     authorization.                                                                                             
                                                                                                                
            Flight Engineers                                                                                    
                                                                                                                
Written tests, including: initial,        Part 63.35 (a) & (b).  $40                             80          0.5
 renewal, added ratings, restriction                                                                            
 removals, reissuances, and tests based                                                                         
 on military competence.                                                                                        
Practical tests (oral, flight, or         Part 63.33(b)(1).....  $400                            80            5
 combined) for initials, renewals, added                                                                        
 ratings, simulators, restriction                                                                               
 removals, reissuances.                                                                                         
Special purpose flight engineer based on  Part 63.42...........  $68                             80         0.85
 foreign license (initial, renewal, VFR                                                                         
 or IFR, with our without medical).                                                                             
    Special purpose flight engineer       Part 63.23...........  $68                             80         0.85
     based on aircraft lease (initial,                                                                          
     renewal, VFR or IFR, with or                                                                               
     without medical).                                                                                          
                                                                                                                
            Flight Navigators                                                                                   
                                                                                                                
                                          .....................  $0                              80  ...........
Written tests, including: initial,        Part 63.53(a)........  $40                             80          0.5
 renewal, added ratings, restriction                                                                            
 removals, reissuances, and tests based                                                                         
 on military competence.                                                                                        
Practical tests (oral, flight, or         Part 63.57...........  $400                            80            5
 combined) for initials, renewals, added                                                                        
 ratings, simulators, restriction                                                                               
 removals, reissuances, including tests                                                                         
 based on military competency.                                                                                  
                                                                                                                
          Aircraft Dispatchers                                                                                  
                                                                                                                
Written tests, including: initial,        Part 63.55(a)........  $40                             80          0.5
 renewal, added ratings, restriction                                                                            
 removals, reissuances, and tests based                                                                         
 on military competence.                                                                                        
Practical tests (oral, flight, or         Part 65.59...........  $400                            80            5
 combined) for initials, renewals, added                                                                        
 ratings, simulators, restriction                                                                               
 removals, reissuances, including tests                                                                         
 based on military competency--                                                                                 
 competency for airplane and helicopter.                                                                        
                                                                                                                
                Mechanics                                                                                       
                                                                                                                
Written tests, including: initial,        Part 65.71(a), 65.77.  $40                             80          0.5
 renewal, added ratings, restriction                                                                            
 removals, reissuances, and tests based                                                                         
 on military competence--general,                                                                               
 airframe, powerplant.                                                                                          
Practical tests for initials, renewals,   Part 65.79...........  $504                            80          6.3
 added ratings, restriction removals,                                                                           
 reissuances--airframe or powerplant.                                                                           
                                                                                                                
        Inspection Authorization                                                                                
                                                                                                                
Inspection Authorization (IA)--initial..  Part 65.91...........  $392                            80          4.9
Inspection Authorization (IA)--renewal..  Part 65.93...........  $72                             80          0.9
                                                                                                                
                Repairmen                                                                                       
                                                                                                                
Initial, renewal, added rating..........  Part 65.101..........  $152                            80          1.9
                                                                                                                
            Parachute Riggers                                                                                   
                                                                                                                
Written tests, including: initial,        Part 65.115(a); Part   $40                             80          0.5
 renewal, added ratings, restriction       65.117; Part                                                         
 removals, reissuances, and tests based    65.119(b).                                                           
 on military competence--senior or                                                                              
 master.                                                                                                        
Practical tests for initials, renewals,   Part 65.115(c).......  $440                            80          5.5
 added ratings, restriction removals,                                                                           
 reissuances, including tests based on                                                                          
 military competency.                                                                                           
                                                                                                                
          Designated Examiners                                                                                  
                                                                                                                
For all categories--including written                                                                           
 and practical tests, initials, added                                                                           
 ratings, renewals, restriction                                                                                 
 removals, reissuances unless specified                                                                         
 below                                                                                                          
Pilot examiners:                          Part 183.23..........  .....................                          
    Large turbine.......................  .....................  $960                            80           12
    Pilot proficiency...................  .....................  $440                            80          5.5
    Written test examiner...............  .....................  $640                            80            8
    Airmen certification representative.  .....................  $400                            80            5
    Other types as the FAA may designate  Part 183.11(b).......  $960                            80           12
Aircraft dispatch examiner (DADE).......  Part 183.25(f).......  $960                            80           12
Flight engineer examiner (DFEE).........  Part 183.25(d).......  $960                            80           12
Flight navigator examiner (DFNE)........  Part 183.25(e).......  $960                            80           12
Designated airworthiness Representative   Part 183.33..........  $440                            80          5.5
 (DAR)--initial.                                                                                                
Designated airworthiness Representative   Part 183.33..........  $160                            80            2
 (DAR)--renewal.                                                                                                
Designated Mechanic Examiner (DME)--      Part 183.25(a).......  $504                            80          6.3
 initial.                                                                                                       
Designated Mechanic Examiner (DME)--      Part 183.25(a).......  $184                            80          2.3
 renewal.                                                                                                       
Designated Parachute Rigger Examiner      Part 183.25(b).......  $504                            80          6.3
 (DPRE)--initial.                                                                                               
Designated Parachute Rigger Examiner      Part 183.25(b).......  $184                            80          2.3
 (DPRE)--renewal.                                                                                               
Other designees as the FAA may designate  Part 183.11(b).......  $504                            80          6.3
                                                                                                                
            III. Air Agencies                                                                                   
                                                                                                                
Repair station certification/approval/    Part 145, Subpart C..  $80 per inspector per  ...........  ...........
 authorization actions.                                           hour.                                         
Pilot school certification/approval/      Part 141.............  $80 per inspector per  ...........  ...........
 authorization actions.                                           hour.                                         
Airmen training centers certification/    Proposed Part 142....  $80 per inspector per  ...........  ...........
 approval/authorization actions.                                  hour.                                         
Aviation maintenance technical schools    Part 147.............  $80 per inspector per  ...........  ...........
 certification/approval/authorizing                               hour.                                         
 actions.                                                                                                       
-----------------------------------------                                                                       
1-Feb-94                                                                                                        
----------------------------------------------------------------------------------------------------------------

[FR Doc. 94-15968 Filed 6-29-94; 8:45 am]
BILLING CODE 4910-13-M