[Federal Register Volume 70, Number 30 (Tuesday, February 15, 2005)]
[Proposed Rules]
[Pages 7830-7837]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-2799]



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Part III





Department of Transportation





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Federal Aviation Administration



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14 CFR Parts 21 and 91



Standard Airworthiness Certification of New Aircraft; Proposed Rule

  Federal Register / Vol. 70, No. 30 / Tuesday, February 15, 2005 / 
Proposed Rules  

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Parts 21 and 91

[Docket No. FAA-2003-14825; Notice No. 05-01]
RIN 2120-AH90


Standard Airworthiness Certification of New Aircraft

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The FAA seeks public comments on a proposal to amend the 
regulations for issuing a standard airworthiness certificate to certain 
new aircraft manufactured in the United States. The proposal addresses 
a concern that under the current regulations, certain new aircraft are 
eligible for a standard airworthiness certificate without meeting the 
requirements of a type certificate and without having been manufactured 
under an FAA production approval. The intended effect of this proposal 
is to ensure that new aircraft manufactured in the United States that 
receive a standard airworthiness certificate are type certificated and 
manufactured under an FAA production approval.
    The FAA also proposes to incorporate requirements contained in laws 
recently passed by Congress. A holder of a type certificate or 
supplemental type certificate who allows another person to use the 
certificate would have to provide written permission to that person. In 
addition, any person who manufactures an aircraft, aircraft engine, or 
propeller based on a type certificate would have to either hold the 
type certificate or have a licensing agreement from the holder. The 
proposal would also prohibit a person from altering an aircraft based 
on a supplemental type certificate (STC) unless the owner or operator 
either holds the STC or has written permission from the holder. 
Additionally, it would require the owner or operator of an aircraft 
that has been altered based on written permission to use a supplemental 
type certificate to retain that permission and transfer it at the time 
the aircraft is sold.

DATES: Send comments to reach us before April 18, 2005.

ADDRESSES: You may send comments identified by Docket Number FAA-2003-
14825, using any of the following methods:
     DOT Docket Web Site: Go to http://dms.dot.gov 
and follow the instructions for sending your comments electronically.
     Government-wide Rulemaking Web Site: Go to 
http://www.regulations.gov and follow the instructions for sending your 
comments electronically.
     Mail: Docket Management Facility; U.S. 
Department of Transportation, 400 Seventh Street, SW., Nassif Building, 
Room PL-401, Washington, DC 20590-001.
     Fax: 1-202-493-2251.
     Hand Delivery: Room PL-401 on the plaza level of 
the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    For more information on the rulemaking process, see the 
SUPPLEMENTARY INFORMATION section of this document.
    Privacy: We will post all comments we receive, without change, to 
http://dms.dot.gov, including any personal information you provide. For 
more information, see the Privacy Act discussion in the SUPPLEMENTARY 
INFORMATION section of this document.
    Docket: To read background documents or comments received, go to 
http://dms.dot.gov at any time or to Room PL-401 on the plaza level of 
the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 
a.m. and 5 p.m., Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Dan Hayworth, Airworthiness 
Certification Branch, AIR-220, Federal Aviation Administration, 800 
Independence Avenue, SW., Washington, DC 20591, telephone (202) 267-
8449.

SUPPLEMENTARY INFORMATION:

Comments Invited

    The FAA invites interested people to take part in this rulemaking 
by sending written comments, data, or views. We also invite comments 
about the economic, environmental, energy, or federalism impacts that 
might result from adopting the proposals in this document. The most 
helpful comments reference a specific portion of this notice, explain 
the reason for any recommendation, and include supporting data. We ask 
that you send us two copies of written comments.
    We will file in the docket all comments we receive, as well as a 
report summarizing each substantive public contact with FAA personnel 
about this notice. The docket is available for public inspection before 
and after the comment closing date. If you wish to review the docket in 
person, go to the address in the ADDRESSES section of this notice. The 
docket is open between 9 a.m. and 5 p.m., Monday through Friday, except 
Federal holidays. You may also review the docket using the Internet at 
the Web address in the ADDRESSES section.
    Before taking other rulemaking action we will consider all comments 
we receive before the closing date for comments. We will consider 
comments filed late if it is possible to do so without incurring 
expense or delay. We may change this proposal because of the comments 
we receive.
    If you want the FAA to acknowledge receipt of your comments on this 
notice, include with your comments a preaddressed, stamped postcard on 
which the docket number appears. We will stamp the date on the postcard 
and mail it back to you.

Proprietary or Confidential Business Information

    Do not file in the docket information that you consider to be 
proprietary or confidential business information. Send or deliver this 
information directly to the person identified in the FOR FURTHER 
INFORMATION CONTACT section of this document. You must mark the 
information that you consider proprietary or confidential. If you send 
the information on a disk or CD ROM, mark the outside of the disk or CD 
ROM and also identify electronically within the disk or CD ROM the 
specific information that is proprietary or confidential.
    Under 14 CFR 11.35(b), when we are aware of proprietary information 
filed with a comment, we do not place it in the docket. We hold it in a 
separate file to which the public does not have access, and place a 
note in the docket that we have received it. If we receive a request to 
examine or copy this information, we treat it as any other request 
under the Freedom of Information Act (5 U.S.C. 552). We process such a 
request under the DOT procedures found in 49 CFR part 7.

Availability of Rulemaking Documents

    You can get an electronic copy using the Internet by:
     Searching the Department of Transportation's electronic 
Docket Management System (DMS) Web page (http://dms.dot.gov/search);
     Visiting the Office of Rulemaking's Web page at http://www.faa.gov/avr/arm/index.cfm; or
     Accessing the Government Printing Office's Web page at 
http://www.access.gpo.gov/su_docs/aces/aces140.html.
    You can also get a copy by sending a request to the Federal 
Aviation Administration, Office of Rulemaking,

[[Page 7831]]

ARM-1, 800 Independence Avenue SW., Washington, DC 20591, or by calling 
(202) 267-9680. Make sure to identify the docket number, notice number, 
or amendment number of this rulemaking.

Background

    This notice of proposed rulemaking (NPRM) addresses a concern that 
under the current regulations, certain new aircraft are eligible for a 
standard airworthiness certificate without meeting the requirements of 
a type certificate and without having been manufactured under an FAA 
production approval. The NPRM also proposes to incorporate requirements 
contained in laws recently passed by Congress. The requirements apply 
to holders and users of both type certificates and supplemental type 
certificates. We have divided the explanatory material that follows 
into three parts: Issuance of standard airworthiness certificates to 
used aircraft and surplus military aircraft; use of type certificates 
to manufacture new aircraft, aircraft engines, or propellers; and use 
of supplemental type certificates for alterations. Within each of the 
three parts, we provide both background information and a discussion of 
the specific amendatory language we are proposing.

1. Issuance of Standard Airworthiness Certificates to Used Aircraft and 
Surplus Military Aircraft

    14 CFR 21.183 governs the issuance of standard airworthiness 
certificates. Section 21.183(a) applies to new aircraft manufactured 
under a production certificate, Sec.  21.183(b) applies to new aircraft 
manufactured under type certificate only, and Sec.  21.183(c) applies 
to import aircraft.
    Section 21.183(d) of our current regulations applies to applicants 
for standard airworthiness certificates for aircraft not covered by 
Sec.  21.183(a), (b), or (c). An applicant is entitled to a standard 
airworthiness certificate under Sec.  21.183(d)(1) if he or she 
presents evidence the aircraft conforms to a type design approved under 
a type certificate or a supplemental type certificate and applicable 
Airworthiness Directives. The FAA must also find, after inspection, the 
aircraft conforms to the type design and is in condition for safe 
operation (14 CFR 21.183(d)(3)).
    The requirements of Sec.  21.183(d) were originally adopted in 1959 
as an amendment to Sec.  1.67(d) of the Civil Air Regulations (CAR), 
which were issued by the FAA's predecessor, the Federal Aviation 
Agency. CAR Amendment 1-2, dated September 1, 1959 (24 FR 7065), added 
a new paragraph (d), entitled ``Other aircraft'' to Sec.  1.67. 
Amendment 1-2 provided for the airworthiness certification of aircraft 
that were used in military service and later released for civil use, 
and for other aircraft that had not had their airworthiness status 
maintained. The discussion of the amendment stated the regulation was 
created for other than newly manufactured aircraft. The requirements 
initially set forth in Sec.  1.67(d) of the CAR, and now contained in 
Sec.  21.183(d), have remained substantially unchanged since 1959.
    The plain language of the regulation, however, does not limit the 
applicability of Sec.  21.183(d) to surplus military aircraft, aircraft 
that have not had their airworthiness status maintained, or other than 
newly manufactured aircraft. Limited data and historical records show 
that, until recently, only a few newly manufactured aircraft have 
received standard airworthiness certificates on a case-by-case basis 
under Sec.  21.183(d). These newly manufactured aircraft are presented 
for airworthiness certification as new aircraft that have not been 
produced under an FAA production approval. Also, the practice of 
issuing standard airworthiness certificates to surplus military 
aircraft released for civil use and aircraft that have not had their 
airworthiness status maintained has been ongoing for many years. 
Surplus military aircraft and aircraft that have not had their 
airworthiness status maintained are presented for airworthiness 
certifications as used aircraft (those that have had time in-service).
    In 1966, the FAA proposed to amend Sec.  21.183 by creating a 
separate paragraph for aircraft not manufactured under a type 
certificate or a production certificate. See 31 FR 8075, June 8, 1966. 
Public comments received in response to the proposal showed a 
misunderstanding of the proposal's intent. Commenters believed the FAA 
intended a broad change to the past certification practice of issuing 
airworthiness certificates to surplus military aircraft and aircraft 
that had not had their airworthiness status maintained. Since the FAA 
did not intend such a broad change, and since few new aircraft fell 
within the intended scope of the change, the FAA decided to abandon the 
proposal. The FAA stated that we would not adopt the proposed change, 
and we would continue to issue standard airworthiness certificates to 
newly manufactured aircraft under Sec.  21.183(d). See 32 FR 14926, 
Oct. 28, 1967.
The System for Production of New Duplicate Aircraft Issued Standard 
Airworthiness Certificates
    For the FAA to have confidence in the certification system for new 
aircraft manufactured in the United States and issued standard 
airworthiness certificates, the FAA has created a three-step system of 
type certification, production certification, and airworthiness 
certification. Type certification examines the basic design of the 
aircraft against the applicable airworthiness standards. Issuance of a 
type certificate (TC) for an aircraft is FAA approval that the design 
meets the applicable airworthiness standards of our regulations. 
Production certification for an aircraft examines whether the system 
produces duplicate aircraft that meet the design provisions of the 
pertinent TC. Issuance of a production certificate (PC) is a finding by 
the FAA that the quality control system of a manufacturer will permit 
it to produce duplicate versions of aircraft that conform to an 
approved type design. The FAA issues a standard airworthiness 
certificate to individual aircraft after finding that the aircraft 
conforms to the type design and is in condition for safe operation. The 
FAA relies heavily on the PC quality control system to make this 
finding.
Safety Benefits From the Linkage of the Type Certificate and the 
Production Certificate for Aircraft Issued Standard Airworthiness 
Certificates
    A connection between the TC and the PC provides both an individual 
and a cumulative benefit. The individual benefit applies to an aircraft 
produced for initial airworthiness certification by a PC holder. For 
these aircraft, any deviation from the approved type design that is 
found during the conformity inspection can be evaluated by comparison 
to the data that supports issuance of the TC and any changes made after 
the initial TC issuance. This evaluation determines that the individual 
aircraft meets all the airworthiness standards identified by the TC.
    The cumulative benefit applies to evaluating the total effect of 
any design change made after the initial issuance of the TC. The 
linkage of the PC to the data supporting the TC enables the aircraft 
manufacturer to evaluate the cumulative effect of design changes over 
time. The manufacturer can more readily determine whether a changed 
aircraft presented for original airworthiness certification continues 
to comply with the airworthiness standards identified in the TC.

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The Level of Safety Assumed for Newly Manufactured Aircraft Issued 
Standard Airworthiness Certificates
    Nearly all new aircraft manufactured in the United States are 
eligible for a standard airworthiness certificate if they are produced 
under the TC and PC processes. This ensures the aircraft conform to a 
type design and are in condition for safe operation. For aircraft 
issued standard airworthiness certificates, the FAA, the manufacturer, 
civil aviation authorities of other countries, and the public rely on 
the TC and PC processes to accurately produce multiple copies of an 
aircraft that meet airworthiness standards. Paragraphs (a) and (b) of 
Sec.  21.183 recognize this process in issuing standard airworthiness 
certificates to aircraft produced in this manner. Also, as discussed in 
subsequent sections of this notice, TC and PC holders have certain 
responsibilities connected with holding these certificates.
    Currently, new aircraft presented for standard airworthiness 
certification under Sec.  21.183(d) do not have the same level of 
production oversight as newly manufactured aircraft produced under the 
TC and PC processes. Aircraft presented for airworthiness certification 
under Sec.  21.183(d) do not have the advantage of prior examination 
and approval by the FAA of a production quality system, and a finding 
by the FAA of accurate reproduction to a type design is difficult. The 
applicant for an airworthiness certificate under Sec.  21.183(d) must 
make a detailed aircraft-by-aircraft showing to support the entitlement 
to individual airworthiness certificates, placing a great burden on 
both the applicant and the FAA.
Advance Notice of Proposed Rulemaking (ANPRM)
    The FAA published an ANPRM on this issue in the Federal Register on 
April 3, 2003 (68 FR 16217). We asked for public comments in advance of 
a specific proposal. The comment period closed June 6, 2003. We 
received four comments. Three of the four commenters, Cessna Aircraft, 
The New Piper Aircraft, Inc., and Air Transport Association of America, 
Inc., agreed with the concept expressed in the ANPRM, although one was 
concerned that the definitions of the terms ``spare parts'' and 
``surplus parts'' were inadequate to meet current practices. The other 
commenter, Mr. Darrell A. Freeman, opposed the concept expressed in the 
ANPRM.
    Mr. Freeman believed this change should be abandoned, as it was in 
1966, because of the minor number of aircraft involved. As discussed 
earlier, the FAA decided, in 1967, that adoption of a separate 
paragraph specifically addressing certification of new aircraft not 
manufactured under a TC or PC was not appropriate since few new 
aircraft fell within the intended scope of the change and these 
aircraft could be certificated under the existing regulation. Now, 
however, we have seen a recent increase in the number of applicants 
engaging in serial production of new aircraft without holding a type 
certificate or production certificate and seeking a standard 
airworthiness certificates under section 21.183(d). This recent 
development causes us to revisit the 1966 proposal.
    A member of the Air Transport Association of America believed that 
strict application of the proposed definitions of ``spare parts'' and 
``surplus parts'' would cause the FAA to not consider parts produced 
under 14 CFR 21.303(b)(2), 21.502, or 43.13(b) as ``spare parts,'' and 
might require a manufacturer to get FAA production approval for such 
parts. Also, the commenter believed it is not clear whether the FAA 
would consider ``standard parts,'' as defined in 14 CFR 21.303(b)(4), 
as ``spare parts.'' As a result of this comment, we reviewed all 
definitions set forth in the ANPRM and decided to exclude them from 
this NPRM.
Basis for the Proposal
    Readers should note that we are directing the proposed changes to 
Sec.  21.183(d) to applicants seeking issuance of standard 
airworthiness certificates. Aircraft that have received a standard 
airworthiness certificate prior to the final rule would not be affected 
by this proposal. We do not intend for this change to apply to the new 
category of light-sport aircraft, which is the subject of a recent 
final rule (69 FR 44772, July 27, 2004).
    The FAA's Aircraft Certification Service has learned that people 
are, or plan to be, engaged in the manufacture or assembly of new 
aircraft, with the intent of obtaining standard airworthiness 
certificates under 14 CFR 21.183(d). These people intend to build 
aircraft that match a type design under a previously approved TC. The 
builders of these aircraft do not hold a TC, or a PC, nor do they have 
authorization from the original TC holder to use the TC in the 
manufacture of new aircraft.
    Since these aircraft builders do not hold a PC, the FAA has no 
assurance preceding issuance of a standard airworthiness certificate 
that the individual aircraft produced conforms to a type design. Each 
aircraft must be individually evaluated, compared to type design data, 
and determined to be in condition for safe operation, which is often 
difficult to do. If the builder can meet this burden for each aircraft 
produced, the resulting burden on the FAA to make the evaluations is 
significant. Given the limited resources available to the FAA, such a 
process is impractical.
    Also, since these builders do not hold a TC, several of the 
regulatory responsibilities of a TC holder do not apply. For example, 
without a TC, builders of new aircraft who apply for standard 
airworthiness certificates under paragraph (d) do not have to:
     Have access to the supporting data originally used to show 
compliance to the airworthiness standards;
     Provide instructions for continued airworthiness;
     Establish and maintain an FAA production approval;
     Report failures, malfunctions, or defects; or
     Develop design changes to address safety issues identified 
by an Airworthiness Directive.
    As a result, safety may be compromised, and an undue burden placed 
on the FAA to oversee or independently perform these functions, which 
legitimately should remain with the TC holder for the aircraft.
    Obtaining type and production certificates for manufacturing new 
products is a fundamental concept in the regulatory framework for the 
issuance of a standard airworthiness certificate. Inherent in this 
concept is that a PC holder is entitled to obtain a standard 
airworthiness certificate for an aircraft without further showing to 
the FAA. However, building new aircraft for the issuance of standard 
airworthiness certificates under Sec.  21.183(d) is not consistent with 
the regulatory framework or with the requirements for obtaining 
standard airworthiness certificates for new aircraft manufactured under 
a production certificate under Sec.  21.183(a) or new aircraft 
manufactured under type certificate only under Sec.  21.183(b).
Section-by-Section Analysis
    The FAA proposes to amend the current Sec.  21.183(d) to preclude 
standard airworthiness certification of new aircraft manufactured by 
persons who do not hold a type certificate (or license to it), and 
production approval. Specifically, paragraph (d) would apply only to 
used aircraft and surplus military aircraft. This would include used 
aircraft without a current airworthiness certificate, used aircraft

[[Page 7833]]

certificated under Sec.  21.29, and U.S.-manufactured civil aircraft 
that were exported and later returned to the United States for FAA 
certification. Under this section, used aircraft are considered 
aircraft with time in service that have held an airworthiness 
certificate or have been operated by the U.S. Armed Forces. Time in 
service does not include aircraft operations for the purpose of 
conducting research and development or production flight testing.
    Used aircraft do not include aircraft that have been classified as 
destroyed or demolished by the National Transportation Safety Board. 
Additionally, the term used aircraft does not include an aircraft 
damaged to the extent that it would be impracticable or unsafe to 
return it to an airworthy condition. Such an aircraft would be 
classified as destroyed. This action could be the result of occurrences 
such as tornados, hurricanes, floods, fires, or vandalism. Under 
current regulations, the FAA considers these aircraft as totally 
destroyed for the purposes of meeting the provisions of Sec.  
47.41(a)(3). Section 47.41 terminates the Certificate of Aircraft 
Registration once an aircraft is identified as destroyed. At that time 
the owner must return the Certificate of Aircraft Registration to the 
FAA Aircraft Registry per Sec.  47.41(b)(3). With the Certificate of 
Aircraft Registration terminated, the standard airworthiness 
certificate is no longer effective per Sec.  21.181(a)(1). Although 
these aircraft would not be entitled to a standard airworthiness 
certificate under Sec.  21.183(d), an applicant, in special 
circumstances, may want to pursue issuance of a special airworthiness 
certificate.
    This proposed amendment would ensure the proper assignment of type 
certificate and production approval holder responsibilities to 
manufacturers of new aircraft produced in the United States. We are not 
proposing any change to other paragraphs under Sec.  21.183.

2. Use of Type Certificates To Manufacture New Aircraft, Aircraft 
Engines, or Propellers

    Vision 100--Century of Aviation Reauthorization Act of 2003 (Pub. 
L. 108-176, 117 Stat. 2490) was signed into law December 12, 2003. This 
Act amends 49 U.S.C. 44704(a) by adding a requirements paragraph to the 
section. This paragraph establishes a requirement for the type 
certificate holder to provide persons permitted to use its type 
certificate to manufacture a new aircraft, aircraft engine, or 
propeller with written evidence of that permission in a form and manner 
acceptable to the FAA. In addition, the statute states that a person 
may manufacture a new aircraft, aircraft engine, or propeller based on 
a type certificate only if the person is the holder of the certificate, 
or has permission from the holder of the certificate.
Section-by-Section Analysis
    The FAA proposes adding new Sec.  21.6, titled ``Manufacture of new 
aircraft, aircraft engines, and propellers.'' This new section would 
prohibit a person from manufacturing a new aircraft, aircraft engine, 
or propeller based on a type certificate unless the person--
     Is the holder of the type certificate, or has a licensing 
agreement from the holder of the type certificate to manufacture the 
product; and
     Meets the requirements of subpart F or G of part 21.
    The reference to subparts F and G means that the person would have 
to comply with our regulations governing production under a type 
certificate only or production certificates, respectively when 
manufacturing a new aircraft, aircraft engine, or propeller.
    The FAA also proposes adding new Sec.  21.55, titled 
``Responsibility of type certificate holders to provide written 
licensing agreements.'' This new section would require a type 
certificate holder who agrees to permit another person to use a type 
certificate to manufacture a new aircraft, aircraft engine, or 
propeller to provide that person with a licensing agreement in a form 
and manner acceptable to the FAA. To be acceptable to the FAA, the 
licensing agreement should contain the following:
     A written statement of the agreement specifying product(s) 
to be manufactured;
     The model number; and
     The name of the person(s) who is being given consent to 
use the type certificate.
    The type certificate holder may include more information, such as 
the effective date of the agreement or how long the type certificate 
may be used.

3. Use of Supplemental Type Certificates for Alterations

    The Federal Aviation Reauthorization Act of 1996 (Pub. L. 104-264, 
110 Stat. 3213) was signed into law on October 9, 1996. This Act 
amended 49 U.S.C. 44704 by establishing a requirement for a 
supplemental type certificate (STC) holder to provide to persons 
permitted to use the STC to alter an aircraft, aircraft engine, or 
propeller written evidence of the agreement in a form and manner 
acceptable to the FAA. In addition, a person may alter an aircraft, 
aircraft engine, or propeller based on an STC only if the person 
requesting the change is the holder of the certificate, or has written 
permission from the holder of the certificate.
Section-by-Section Analysis
    The FAA proposes adding new Sec.  21.120, titled ``Responsibility 
of supplemental type certificate holders to provide written permission 
for alterations.'' This new section would require a supplemental type 
certificate holder who agrees to permit another person to use a 
supplemental type certificate to alter an aircraft, aircraft engine, or 
propeller to provide that person with written permission. This written 
permission would be known as the ``permission statement.'' The form of 
the permission statement, to be acceptable to the FAA, should contain 
at least the following:
     A written statement of the agreement specifying product(s) 
to be altered;
     The STC number; and
     The name of the person(s) who is being given consent to 
use the STC.
    The STC holder may include more information, such as the effective 
date of the permission and how many times the STC may be used for 
fleets of aircraft.
    The FAA also proposes adding a new Sec.  91.403(d) that would 
establish a requirement that a person may only alter an aircraft based 
on a supplemental type certificate if the owner or operator of the 
aircraft is the holder of the supplemental type certificate or has 
written permission from the holder. After the effective date of the 
rule, any owner or operator of an aircraft who receives written 
permission to alter an aircraft based on a supplemental type 
certificate would be required to retain the written permission until 
the alteration is superceded. The owner or operator also would be 
required to transfer this written permission with the aircraft at the 
time the aircraft is sold.
    In addition, when a person alters an aircraft by installing an 
aircraft engine or propeller that had previous alterations based on 
another person's supplemental type certificate, under proposed Sec.  
91.403(d), the owner or operator would be required to retain the 
written permission used to alter each engine or propeller installed on 
the aircraft. If an STC holder is making alterations to an aircraft, 
aircraft engine, or propeller that the STC holder owns, the proposed 
provisions of Sec.  91.403(d) would not apply. The FAA has determined 
that such provisions should not apply to STC holders because ownership 
is identified on the STC

[[Page 7834]]

document itself and the document is available for review.
    Each person who alters an aircraft based on another person's STC, 
including a person making an alteration for a product owner or 
operator, should be aware of the statutory requirement for the person 
requesting the change to have the permission of the STC holder before 
performing the alteration. The statute also clearly prohibits a person 
from performing the alteration unless the person requesting the change 
has the permission of the STC holder. The mechanic, repair station, or 
other facility making the installation should, to ensure their own 
compliance with the statutory requirement, request to see a copy of the 
written permission provided by the STC holder to the person requesting 
the change. The installer, mechanic, or repair station who has obtained 
permission directly from the STC holder to use the STC should also 
furnish a copy of the STC holder's permission statement to the owner or 
operator of the modified product to ensure the owner's compliance with 
statutory and regulatory requirements.
    The FAA is not proposing to apply the recordkeeping requirement 
retroactively to alterations made before the final rule becomes 
effective. STC holders who have obtained the STC by transfer after the 
final rule is issued would not be required to issue a retroactive 
permission statement for already installed STCs. The FAA notes, 
however, that compliance with the statutory requirements of 49 U.S.C. 
44704(b)(3) is required. Compliance with these requirements is not 
dependent upon adoption of this proposal.
    FAA responsibilities for certification activities would remain 
unchanged if we adopt this NPRM. The FAA, during the certification 
process, makes a finding that the applicable airworthiness requirements 
have been met (based on data submitted by an applicant). Once this 
finding has been made, the FAA issues a certificate to the applicant. 
The certificate is the means by which the FAA conveys its approval for 
the certificate holder to exercise the privileges of that certificate.

Paperwork Reduction Act

    Information collection requirements associated with this NPRM have 
been approved previously by the Office of Management and Budget (OMB) 
under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)) and have been assigned OMB Control Number 2120-0005.

International Compatibility

    In keeping with U.S. obligations under the Convention on 
International Civil Aviation, it is FAA policy to comply with 
International Civil Aviation Organization (ICAO) Standards and 
Recommended Practices to the maximum extent practicable. The FAA has 
determined that there are no ICAO Standards and Recommended Practices 
that correspond to these proposed regulations.

Economic Impact

Initial Economic Assessment

    Changes to Federal regulations must undergo several economic 
analyses. First, Executive Order 12866 directs that each Federal agency 
shall propose or adopt a regulation only upon a reasoned determination 
that the benefits of the intended regulation justify its costs. Second, 
the Regulatory Flexibility Act of 1980 requires agencies to analyze the 
economic effect of regulatory changes on small entities. Third, the 
Trade Agreements Act (19 U.S.C. section 2531-2533) prohibits agencies 
from setting standards that create unnecessary obstacles to the foreign 
commerce of the United States. In developing U.S. standards, this Trade 
Act also requires the consideration of international standards and, 
where appropriate, that they be the basis of U.S. standards. And 
fourth, the Unfunded Mandates Reform Act of 1995 requires agencies to 
prepare a written assessment of the costs, benefits, and other effects 
of proposed or final rules that include a Federal mandate likely to 
result in the expenditure by State, local, or tribal governments, in 
the aggregate, or by the private sector of $100 million or more 
annually (adjusted for inflation).
    The FAA has determined that this proposed rule has minimal costs, 
and that it is neither ``a significant regulatory action'' as defined 
in Executive Order 12866, nor ``significant'' as defined in DOT's 
Regulatory Policies and Procedures. Further, this proposal would not 
have a significant economic impact on a substantial number of small 
entities, would not impact international trade, and would not impose an 
Unfunded Mandate on State, local, or tribal governments, or on the 
private sector.
    DOT Order 2100.5 prescribes policies and procedures for 
simplification, analysis, and review of regulations. If it is 
determined the expected impact is so minimal the rule does not warrant 
a full evaluation, a statement to that effect and the basis for it is 
included in the regulation. Accordingly, the FAA has determined the 
expected impact of this rule is so minimal the rule does not warrant a 
full evaluation. The basis for this determination is provided below.

Background

    There are two Public Laws upon which this proposal is based: Vision 
100--Century of Aviation Reauthorization Act of 2003 was signed into 
law on December 12, 2003. This Act amends Title 49 U.S.C. 44704(a)(3). 
It states:

If the holder of a type certificate agrees to permit another person 
to use the certificate to manufacture a new aircraft, aircraft 
engine, propeller, or appliance, the holder shall provide the other 
person with written evidence, in a form acceptable to the 
Administrator, of that agreement. Such other person may manufacture 
a new aircraft, aircraft engine, propeller, or appliance based on a 
type certificate only if the person is the holder of the type 
certificate or has permission from the holder.

    The Federal Aviation Authorization Act of 1996 was signed into law 
on October 9, 1996. This Act amends Title 49 U.S.C. 44704(b). It 
states:

If the holder of a supplemental type certificate agrees to permit 
another person to use the certificate to modify an aircraft, 
aircraft engine, propeller, or appliance, the holder shall provide 
the other person with written evidence, in a form acceptable to the 
Administrator, of that agreement. A person may change an aircraft, 
aircraft engine, propeller, or appliance based on a supplemental 
type certificate only if the person requesting the change is the 
holder of the supplemental type certificate or has permission from 
the holder to make the change.

    The FAA believes the economic impact of this proposal to be minimal 
because this proposed rule would establish a regulatory framework to 
ensure that the statutory requirements are met. It would also codify 
common industry business practice for the manufacture of new aircraft 
that are issued standard airworthiness certificates.
    To make this determination in the economic assessment, the FAA 
evaluates each section of the proposal and its relation to current 
public law or to current industry practice. The FAA seeks comments on 
its determination, and requests that all comments be accompanied by 
supporting data and additional documentation.

Standard Airworthiness Certificates (Used Aircraft and Surplus Military 
Aircraft)

    The proposed change to Sec.  21.183(d) would codify common industry 
practices for the manufacture of new

[[Page 7835]]

aircraft that are issued standard airworthiness certificates.
    It would require airplane manufacturers to hold both a type 
certificate and production approval for all airplanes produced that are 
issued a standard airworthiness certificate. Current industry practice 
shows that TC holders who are involved in the serial production of 
aircraft, also hold production approval. Production approvals relieve 
manufacturers of the additional time required to have the FAA examine 
each aircraft prior to the issuance of its airworthiness certificate. 
The FAA believes the proposed requirement meets the statutory intent 
and codifies common industry practice for the manufacture of new 
aircraft that are issued standard airworthiness certificates. The FAA 
believes that this requirement would not result in significant 
additional cost to the industry.

Responsibility of Supplemental Type Certificate Holders

    The FAA proposes Sec.  21.120 to conform with 49 U.S.C. 44704(b), 
Supplemental Type Certificates. The proposal would require supplemental 
type certificate holders to provide written permission, when allowing 
use of a supplemental type certificate. The proposed change does not 
impose cost to the industry because it is a current statutory 
requirement for STC holders.

Alterations Based on Supplemental Type Certificates

    The FAA proposes Sec.  91.403(d) to conform with 49 U.S.C. 
44704(b), Supplemental Type Certificates. It would require an owner or 
operator requesting that an aircraft be altered based on a supplemental 
type certificate to obtain written permission from the supplemental 
type certificate holder. The owner or operator of an aircraft who 
receives written permission to alter an aircraft based on a 
supplemental type certificate must retain the written permission until 
the alteration is superceded. The owner or operator must transfer this 
written permission with the aircraft at the time the aircraft is sold. 
Requiring the owner or operator to retain written permission provides a 
means to ensure compliance with the statute. The FAA believes that 
these records are retained by owners and operators as common industry 
practice and therefore would not impose additional cost to the 
industry.

Responsibility of Type Certificate Holder To Provide Written Licensing 
Agreements

    The FAA proposes Sec.  21.55 to conform with the statutory intent 
of 49 U.S.C. 44704(a)(3). The proposal would require a type certificate 
holder to provide a person with a licensing agreement when allowing use 
of a type certificate to manufacture an aircraft, aircraft engine, or 
propeller. The proposed change does not impose a cost to the industry 
because it is a current statutory requirement for TC holders to provide 
written evidence in a form acceptable to the Administrator of such an 
agreement.

Manufacture of New Aircraft, Aircraft Engines and Propellers

    The FAA proposes Sec.  21.6 to conform with 49 U.S.C. 44704(a)(3). 
It would preclude a person from manufacturing new aircraft, aircraft 
engines and propellers, based on a type certificate, without a 
licensing agreement from the type certificate holder. The proposed 
change does not impose a cost to the industry because it is a current 
statutory requirement that a person manufacturing a new aircraft, 
aircraft engine, or propeller based on a type certificate do so only if 
that person is the holder of the type certificate or has permission 
from the holder.

Economic Summary

    The FAA believes the economic impacts of this proposal are minimal 
because the proposal would codify common industry business practice and 
is based upon current public law. The FAA requests comments regarding 
these findings and requests that these comments provide supporting 
documentation.

Initial Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (RFA) establishes ``as a 
principle of regulatory issuance that agencies shall endeavor, 
consistent with the objective of the rule and of applicable statutes, 
to fit regulatory and informational requirements to the scale of the 
business, organizations, and governmental jurisdictions subject to 
regulation.'' To achieve that principle, the Act requires agencies to 
solicit and consider flexible regulatory proposals and to explain the 
rationale for their actions. The Act covers a wide range of small 
entities, including small businesses, not-for-profit organizations, and 
small governmental jurisdictions.
    Agencies must perform a review to determine whether a proposed or 
final rule will have a significant economic impact on a substantial 
number of small entities. If the determination is that it will, the 
agency must prepare a regulatory flexibility analysis as described in 
the Act.
    However, if an agency determines that a proposed or final rule is 
not expected to have a significant economic impact on a substantial 
number of small entities, section 605(b) of the Act provides that the 
head of the agency may so certify and a regulatory flexibility analysis 
is not required. The certification must include a statement providing 
the factual basis for this determination, and the reasoning should be 
clear.
    Individuals affected by this proposal would include applicants for 
standard airworthiness certificates under Sec.  21.183(d), supplemental 
type certificate holders, persons who alter aircraft, type certificate 
holders, and owners or operators of aircraft. Many of these would 
qualify as small businesses. Although the proposed rule could affect a 
substantial number of small businesses, the FAA believes there would be 
no small entity impact for the following reasons:
    The proposed change to Sec.  21.183(d) would codify common industry 
practices for the manufacture of new aircraft that are issued standard 
airworthiness certificates.
    Current industry practice shows that TC holders, who are involved 
in the serial production of aircraft, also hold production approvals. 
Because all new aircraft intended for standard airworthiness 
certification are type certificated and are either manufactured or 
intended to be manufactured under a production approval, there are no 
resulting costs to small entities.
    In addition, supplemental type certificate holders, persons who 
alter aircraft, type certificate holders, manufacturers of new 
aircraft, and owners or operators of aircraft would be affected by this 
proposal. Although many are small businesses, they would not be 
adversely affected by the proposed rule because the proposal would 
establish a regulatory framework to ensure that the existing statutory 
requirements are met.
    Consequently, the FAA certifies that the rule would not have a 
significant economic impact on a substantial number of small entities. 
The FAA invites comments on this determination and requests all 
comments be accompanied by clear and detailed supporting documentation.

Initial International Trade Impact Assessment

    The Trade Agreement Act of 1979 prohibits Federal agencies from

[[Page 7836]]

engaging in any standards or related activities that create unnecessary 
obstacles to the foreign commerce of the United States. Legitimate 
domestic objectives, such as safety, are not considered unnecessary 
obstacles. The statute also requires consideration of international 
standards and, where appropriate, that they be the basis for U.S. 
standards.
    This proposed rule considers and incorporates existing public laws 
and common industry practices as the basis of an FAA regulation. Thus, 
the FAA believes that the proposed rule would not create obstacles to 
international trade.

Initial Unfunded Mandates Assessment

    The Unfunded Mandates Reform Act of 1995 (the Act), enacted as 
Public Law 104-4 on March 22, 1995, is intended, among other things, to 
curb the practice of imposing unfunded Federal mandates on State, 
local, and tribal governments.
    Title II of the Act requires each Federal agency to prepare a 
written statement assessing the effects of any Federal mandate in a 
proposed or final agency rule that may result in a $100 million or more 
expenditure (adjusted annually for inflation) in any one year by State, 
local, and tribal governments, in the aggregate, or by the private 
sector. Such a mandate is deemed to be a ``significant regulatory 
action.'' The FAA currently uses an inflation-adjusted value of $120.7 
million in lieu of $100 million.
    This proposed rule does not contain such a mandate. Therefore, the 
requirements of Title II of the Unfunded Mandates Reform Act of 1995 do 
not apply.

Executive Order 13132, Federalism

    The FAA has analyzed this proposed rule under the principles and 
criteria of Executive Order 13132, Federalism. We determined that this 
action would not have a substantial direct effect 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, and therefore would not have federalism implications.

Plain English

    Executive Order 12866 (58 FR 51735, Oct. 4, 1993) requires each 
agency to write regulations that are simple and easy to understand. We 
invite your comments on how to make these proposed regulations easier 
to understand, including answers to questions such as the following:
     Are the requirements in the proposed regulations clearly 
stated?
     Do the proposed regulations contain unnecessary technical 
language or jargon that interferes with their clarity?
     Would the regulations be easier to understand if they were 
divided into more (but shorter) sections?
     Is the description in the preamble helpful in 
understanding the proposed regulations?
    Please send your comments to the address specified in the ADDRESSES 
section.

Environmental Analysis

    FAA Order 1050.1E identifies FAA actions that are categorically 
excluded from preparation of an environmental assessment of 
environmental impact statement under the National Environmental Policy 
Act in the absence of extraordinary circumstances. The FAA has 
determined this proposed rulemaking action qualifies for the 
categorical exclusion identified in paragraph 308c(1) and involves no 
extraordinary circumstances.

Regulations That Significantly Affect Energy Supply, Distribution, or 
Use

    The FAA has analyzed this NPRM under Executive Order 13211, Actions 
Concerning Regulations that Significantly Affect Energy Supply, 
Distribution, or Use (May 18, 2001). We have determined that it is not 
a ``significant energy action'' under the executive order because it is 
not a ``significant regulatory action'' under Executive Order 12866, 
and it is not likely to have a significant adverse effect on the 
supply, distribution, or use of energy.

List of Subjects

14 CFR Part 21

    Aircraft, Aviation safety, Exports, Imports, Reporting and 
recordkeeping requirements.

14 CFR Part 91

    Aircraft, Airmen, Airports, Aviation safety, Reporting and 
recordkeeping requirements.

The Proposed Amendment

    In consideration of the foregoing, the FAA proposes to amend 
chapter I of Title 14, Code of Federal Regulations, as follows:

PART 21--CERTIFICATION PROCEDURES FOR PRODUCTS AND PARTS

    1. The authority citation for part 21 is revised to read as 
follows:

    Authority: 42 U.S.C. 7572; 49 U.S.C. 106(g), 40105, 40113, 
44701-44702, 44704, 44707, 44709, 44711, 44713, 44715, 45303.

    2. Add new Sec.  21.6 to read as follows:


Sec.  21.6  Manufacture of new aircraft, aircraft engines, and 
propellers.

    A person must not manufacture a new aircraft, aircraft engine, or 
propeller based on a type certificate unless the person--
    (a) Is the holder of the type certificate or has a licensing 
agreement from the holder of the type certificate to manufacture the 
product; and
    (b) Meets the requirements of subparts F or G of this part.
    3. Add new Sec.  21.55 to read as follows:


Sec.  21.55  Responsibility of type certificate holders to provide 
written licensing agreements.

    A type certificate holder who allows another person to use the type 
certificate to manufacture a new aircraft, aircraft engine, or 
propeller must provide that person with a written licensing agreement 
acceptable to the FAA.
    4. Add new Sec.  21.120 to read as follows:


Sec.  21.120  Responsibility of supplemental type certificate holders 
to provide written permission for alterations.

    A supplemental type certificate holder who allows another person to 
use the supplemental type certificate to alter an aircraft, aircraft 
engine, or propeller must provide that person with written permission 
acceptable to the FAA.
    5. Amend Sec.  21.183 by revising paragraph (d) introductory text 
to read as follows:


Sec.  21.183  Issue of standard airworthiness certificates for normal, 
utility, acrobatic, commuter, and transport category aircraft; manned 
free balloons; and special classes of aircraft.

* * * * *
    (d) Used aircraft and surplus military aircraft. An applicant for a 
standard airworthiness certificate for a used aircraft or surplus 
military aircraft is entitled to a standard airworthiness certificate 
if--
* * * * *

PART 91--GENERAL OPERATING AND FLIGHT RULES

    6. The authority citation for part 91 is revised to read as 
follows:

    Authority: 49 U.S.C. 106(g), 1155, 40103, 40113, 40120, 44101, 
44111, 44701, 44704, 44709, 44711, 44712, 44715, 44716, 44717, 
44722, 46306, 46315, 46316, 46504, 46506-46507, 47122, 47508, 47528-
47531, articles 12 and 29 of the Convention on International Civil 
Aviation (61 Stat. 1180).

    7. Add new paragraph (d) to Sec.  91.403 to read as follows:

[[Page 7837]]

Sec.  91.403  General.

* * * * *
    (d) A person must not alter an aircraft based on a supplemental 
type certificate unless the owner or operator of the aircraft is the 
holder of the supplemental type certificate, or has written permission 
from the holder. After (INSERT EFFECTIVE DATE OF THE FINAL RULE), any 
owner or operator of an aircraft who receives written permission to 
alter the aircraft based on a supplemental type certificate must retain 
the written permission until the alteration is superseded. The owner or 
operator must transfer this written permission with the aircraft at the 
time the aircraft is sold.

    Issued in Washington, DC, on February 7, 2005.
Nicholas A. Sabatini,
Associate Administrator for Aviation Safety.
[FR Doc. 05-2799 Filed 2-14-05; 8:45 am]
BILLING CODE 4910-13-P