[Federal Register Volume 71, Number 6 (Tuesday, January 10, 2006)]
[Rules and Regulations]
[Pages 1666-1677]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-205]



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Part IV





Department of Transportation





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Federal Aviation Administration



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14 CFR Part 121



Antidrug and Alcohol Misuse Prevention Programs for Personnel Engaged 
in Specified Aviation Activities; Final Rule

  Federal Register / Vol. 71, No. 6 / Tuesday, January 10, 2006 / Rules 
and Regulations  

[[Page 1666]]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 121

[Docket No.: FAA-2002-11301; Amendment No. 121-315]
RIN 2120-AH14


Antidrug and Alcohol Misuse Prevention Programs for Personnel 
Engaged in Specified Aviation Activities

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: This final rule amends the FAA regulations governing drug and 
alcohol testing to clarify that each person who performs a safety-
sensitive function for a regulated employer by contract, including by 
subcontract at any tier, is subject to testing. These amendments are 
necessary because in the 1990s, the FAA issued conflicting guidance 
about which contractors were subject to drug and alcohol testing. This 
action also rescinds all prior guidance on the subject of testing 
contractors.

DATES: These amendments become effective April 10, 2006. Affected 
parties, however, do not have to comply with the information collection 
requirements in part 121, Appendix I, Section IX, and Appendix J, 
Section VII, until the FAA publishes in the Federal Register the 
control numbers assigned by the Office of Management and Budget (OMB) 
for these information collection requirements. We will publish the 
control number to notify the public that OMB has approved these 
information collection requirements under the Paperwork Reduction Act 
of 1995.

FOR FURTHER INFORMATION CONTACT: For technical information, Diane J. 
Wood, Manager, Drug Abatement Division, AAM-800, Office of Aerospace 
Medicine, Federal Aviation Administration, 800 Independence Avenue SW., 
Washington, DC 20591, telephone number (202) 267-8442. For legal 
information, Patrice M. Kelly, Senior Attorney, Regulations Division, 
AGC-200, Federal Aviation Administration, 800 Independence Avenue, SW., 
Washington, DC 20591, telephone number (202) 267-8442.

SUPPLEMENTARY INFORMATION:

Availability of Rulemaking Documents

    You can get an electronic copy of this rule using the Internet by:
    (1) Searching the Department of Transportation's electronic Docket 
Management System (DMS) web page (http://dms.dot.gov/search);
    (2) Visiting the Office of Rulemaking's web page at http://www.faa.gov/regulations_policies/; or
    (3) 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 submitting a request to the Federal 
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence 
Avenue SW., Washington, DC 20591, or by calling (202) 267-9680. Make 
sure to identify the docket number of this rulemaking.
    Anyone is able to search the electronic form of all comments 
received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review DOT's 
complete Privacy Act statement in the Federal Register published on 
April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit 
http://dms.dot.gov.

Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 
1996 requires FAA to comply with small entity requests for information 
or advice about compliance with statutes and regulations within its 
jurisdiction. If you are a small entity and you have a question 
regarding this document, you may contact its local FAA official, or the 
person listed under FOR FURTHER INFORMATION CONTACT. You can find out 
more about SBREFA on the Internet at http://www.faa.gov/regulations_policies/rulemaking/sbre_act/.

Authority for This Rulemaking

    The FAA's authority to issue rules regarding aviation safety is 
found in Title 49 of the United States Code. Subtitle I, Section 106 
describes the authority of the FAA Administrator. Subtitle VII, 
Aviation Programs, describes in more detail the scope of the agency's 
authority.
    This rulemaking is promulgated under the authority described in 
Subtitle VII, Part A, Chapter 451, section 45102, Alcohol and 
Controlled Substances Testing Programs. Under section 45102, the FAA is 
charged with prescribing regulations to establish programs for drug and 
alcohol testing of employees performing safety-sensitive functions for 
air carriers and to take certificate or other action when an employee 
violates the testing regulations. This regulation is within the scope 
of the FAA's authority because it clarifies the existing regulations 
regarding individuals who perform a safety-sensitive function for a 
regulated employer by contract. This rulemaking is a current example of 
FAA's continuing effort to ensure that only drug- and alcohol-free 
individuals perform safety-sensitive functions for regulated employers.

Background

History

    Since the inception of the FAA drug and alcohol testing 
regulations, the FAA has not directly regulated contractors or 
subcontractors of regulated parties. The FAA defines who is a regulated 
``employer,'' for drug and alcohol testing purposes as a part 121 
certificate holder, a part 135 certificate holder, an operator as 
defined in 14 CFR 135.1(c), or an air traffic control facility not 
operated by the FAA or by or under contract to the U.S. military. (14 
CFR part 121, appendix I, section II, and appendix J, section I.D.)
    On February 28, 2002, the FAA published in the Federal Register a 
notice of proposed rulemaking (NPRM) (67 FR 9366). The NPRM proposed 
changing several provisions in 14 CFR part 121, appendices I and J. 
Among other proposals in the NPRM, the FAA proposed to clarify that 
each person who performs a safety-sensitive function directly or by 
contract (including by subcontract at any tier) for a regulated 
employer is subject to testing. Currently, both 14 CFR part 121, 
appendix I, section III and appendix J, section II specify employees 
performing a safety-sensitive function must be subject to testing if 
they are performing the function ``directly or by contract for an 
employer.'' We proposed to add the parenthetical phrase ``including by 
subcontract at any tier'' after the word ``contract.''
    Several commenters to the NPRM, including trade associations, 
repair stations certificated under 14 CFR part 145 (certificated repair 
stations), and non-certificated entities, indicated the proposed 
clarification on subcontractors would impose an economic burden on the 
aviation industry. We did not include any costs or benefits for the 
subcontractor issue in the preliminary regulatory evaluation 
accompanying the NPRM because we considered the proposed language to be 
merely clarifying. On January 12, 2004, we published a final rule 
addressing all issues proposed in the NPRM, except for the 
subcontractor issue (69 FR 1840).

[[Page 1667]]

    Employees affect aviation safety whenever they perform a safety-
sensitive function listed in appendices I and J. Thus, it is important 
that individuals who perform any safety-sensitive function be subject 
to drug and alcohol testing under the FAA regulations. We recognize the 
aviation industry frequently uses subcontractors to perform safety-
sensitive functions.
    For more than a decade, we have required each regulated employer to 
ensure any individual performing a safety-sensitive function by 
contract be subject to drug and alcohol testing under the FAA 
regulations. If the regulated employer wants to use the individual 
under a contract, there are two options for drug and alcohol testing. 
One option is for the contractor company to obtain and implement its 
own FAA drug and alcohol testing programs. Under this option, the 
contractor company must subject the individual to testing. The other 
option is for the regulated employer to maintain its own testing 
programs and subject the individual to testing under these programs.
    Our experience indicates that many regulated employers and 
contractor companies have recognized contractors and subcontractors are 
subject to testing under the regulations. The FAA believes it would be 
inconsistent with aviation safety to change the regulations so that 
regulated employers are no longer required to ensure individuals 
performing safety-sensitive functions ``by contract'' are subject to 
testing.
    Many commenters to the NPRM were concerned the proposed language 
would cause considerable costs by requiring subcontractors to conduct 
drug and alcohol testing for the first time. However, these commenters 
did not substantiate their cost concerns with specific data. In 
response to the economic comments regarding the subcontractor issue in 
the NPRM, we published a supplemental notice of proposed rulemaking 
(SNPRM), in the Federal Register on May 17, 2004 (69 FR 27980). In the 
SNPRM, we proposed the same language we proposed in the NPRM. We asked 
commenters to provide economic information to help us address the 
concerns they raised in the NPRM.
    We prepared a regulatory evaluation for the SNPRM regarding the 
possible costs associated with explicitly including the words ``by 
subcontract at any tier.'' We evaluated the costs that could be 
generated by additional subcontractors who might be subject to testing 
under the proposal.

Conflicting Guidance

    In both the NPRM and the SNPRM, we discussed conflicting FAA 
guidance about the testing of subcontractors. In the initial 
implementation phase of the drug testing rule in 1989, the FAA issued 
informal guidance stating maintenance subcontractors would not be 
required to be subject to testing unless they took airworthiness 
responsibility. This guidance was provided to persons and companies as 
late as the mid-1990s, on an ad hoc basis. However, this guidance 
constricted the potential reach of the regulation, which offered no 
exceptions for subcontractors who did not take airworthiness 
responsibility but performed safety-sensitive activities. Accordingly, 
this guidance was in conflict with the objective of the regulations, 
i.e., ensuring that each person who performs a safety-sensitive 
function is subject to testing. Today's final rule clarifies that the 
level of contractual relationship with a regulated employer does not 
limit the requirement that all persons performing safety-sensitive work 
must be subject to drug and alcohol testing.
    As noted in the SNPRM, we are hereby rescinding all prior guidance 
regarding subcontractors (69 FR at 27981).

Discussion of Comments

General Overview

    The comment period for the SNPRM closed on August 16, 2004. The FAA 
received approximately 35 comments in response to the SNPRM. To ensure 
we meaningfully considered all comments on the issue, the FAA reviewed 
both the comments filed to the SNPRM and any comments filed to the NPRM 
not addressed in the preamble to the SNPRM. We note that none of the 
commenters opposing the proposal provided specific data challenging the 
FAA's fundamental economic assumptions. The regulatory evaluation 
accompanying this final rule specifically addresses the comments about 
costs and benefits.
    Commenters included the Air Transportation Association of America 
(ATA); Regional Airline Association (RAA); Drug and Alcohol Testing 
Industry Association (DATIA); International Brotherhood of Teamsters 
(Teamsters); Aircraft Mechanics Fraternal Association (AMFA); Aviation 
Suppliers Association; and Aeronautical Repair Station Association 
(ARSA), which filed joint comments on behalf of itself and 12 other 
associations.
    Approximately 10 of the commenters, including United Technologies 
Corporation (UTC), the Teamsters, AMFA National, AMFA Local 33, and 
several individuals, stated they generally support the FAA's Antidrug 
and Alcohol Misuse Prevention Program regulations. Specifically, UTC 
said they believe the ``regulations are a valuable tool to the aviation 
industry in ensuring workplace and public safety.'' One individual 
stated the proposal makes it clear the duties the individual performs 
define whether or not the individual will be subject to drug and 
alcohol testing. Several commenters, including three union commenters, 
supported the proposal because they believed it would improve aviation 
safety. One commenter, an individual, stated the regulations will make 
flying safer.
    The remaining 25 commenters opposed the proposal, with many of them 
citing the comments filed by ARSA. The commenters questioned the FAA's 
estimates of the cost of the proposal and the benefits to aviation 
safety. Additionally, ARSA, the Aircraft Electronics Association, and a 
certificated repair station stated the proposal would substantially 
expand the scope of the FAA-regulated drug and alcohol testing programs 
without any evidence it would enhance safety. The Aircraft Electronics 
Association believes the proposal is based more on a moral preference 
than on science. ARSA also raised invasion of privacy issues associated 
with drug and alcohol testing. The Aircraft Electronics Association 
commented the drug and alcohol testing regulations should not apply to 
outsourced maintenance.
    Commenters also suggested the rule is vague, may add additional 
regulatory requirements to existing duties, and may exceed the FAA's 
regulatory mandate. Specifically, ARSA cited the FAA's general 
regulatory mandate in 49 U.S.C. 44701(d)(1)(A) as a limitation on the 
FAA's authority to impose requirements on non-certificated entities 
that supply services to directly regulated parties. The Aviation 
Suppliers Association was concerned distributors could be 
recharacterized as performing safety-sensitive functions and opposed 
the proposal, believing it was not supported by a reasonable government 
purpose. They requested we publish a statement in the final rule 
recognizing that the distribution of an aircraft part is not considered 
to be a safety-sensitive function for the purposes of this rule.
    One commenter, who filed comments on behalf of the National 
Association of Metal Finishers, the American Electroplaters and Surface 
Finishers Society, and the Metal Finishing Suppliers' Association, 
requested the

[[Page 1668]]

FAA not add regulatory requirements to their members' existing duties. 
This commenter noted existing regulatory requirements represent a large 
percentage of their operating expenses.
    This final rule does not expand the scope of the FAA-regulated drug 
and alcohol testing programs. Rather, it clarifies that any individual 
who performs a safety-sensitive function by contract must be subject to 
the FAA-regulated drug and alcohol testing requirements, regardless of 
the tier of the contract under which the individual performs. This 
rulemaking is not questioning or expanding the current outsourcing 
process. Instead, the final rule eliminates any confusion that might 
have existed regarding drug and alcohol testing of subcontractors who 
are connected to the regulated employer through the outsourcing 
process. In addition, the issues regarding invasion of privacy were 
resolved more than 15 years ago when the drug testing regulation 
carefully balanced the interests of individual privacy with the Federal 
government's duty to ensure aviation safety. The purpose of this 
rulemaking is not to reopen the long-settled issue of invasion of 
privacy.
    Further, we do not agree that this rule results in vague standards. 
We have adopted the proposal as a final rule to create a clear standard 
for regulated employers to follow for drug and alcohol testing of 
subcontractors. Contractor companies often choose to conduct their own 
drug and alcohol testing under the FAA regulations because it improves 
their marketability. However, the requirement to ensure individuals 
performing safety sensitive functions are subject to testing ultimately 
rests with the regulated employer.
    In addition, we want to emphasize the proposal does not in any way 
change the scope of safety-sensitive functions currently covered by the 
drug and alcohol testing regulations. Drug and alcohol testing applies 
to any individual who performs a safety-sensitive function, including 
maintenance or preventive maintenance functions for a regulated 
employer. The FAA defines ``maintenance'' and ``preventive 
maintenance'' in 14 CFR 1.1 and 14 CFR part 43. The distribution of an 
aircraft part is not ``maintenance'' or ``preventive maintenance'' and 
is not considered a safety-sensitive activity.
    While ARSA cited the FAA's general authority for regulating air 
carriers, 49 U.S.C. 44701(d)(1)(A), as a limitation on testing 
authority, the Omnibus Transportation Employees Testing Act of 1991 
(Omnibus Act), 49 U.S.C. 45101-45106, gave the FAA specific authority 
to regulate drug and alcohol testing in aviation. In the Omnibus Act, 
Congress acknowledged the FAA's existing regulations requiring the 
testing of air carrier employees performing safety-sensitive functions 
directly or by contract. Specifically, the Omnibus Act ``does not 
prevent the Administrator from continuing in effect, amending, or 
further supplementing a regulation prescribed before October 28, 1991, 
governing the use of alcohol or a controlled substance * * *.'' 49 
U.S.C. 45106 (c). When Congress gave the FAA authority to ``continue'' 
regulations prescribed before October 28, 1991, they were acknowledging 
the drug testing regulation that was already in existence.
    The drug and alcohol testing regulations have always required any 
individual performing safety-sensitive functions directly or by 
contract for a regulated employer to be subject to testing. As this 
final rule is not adding more regulatory requirements, the ``reasonable 
government purpose'' of aviation safety that has been the foundation of 
the drug and alcohol testing regulations since their inception remains 
valid.

Do Safety Concerns Support Continuing To Subject Subcontractors to Drug 
and Alcohol Testing?

    AOPA, ARSA, and other commenters including certificated repair 
stations and non-certificated entities, stated the FAA did not show any 
accident data attributable to drug and alcohol abuse by maintenance 
personnel to support this rulemaking. In addition, AOPA argued ``it is 
unreasonable for the FAA to require maintenance contractors performing 
non-safety critical maintenance functions to incur the added expense of 
developing and implementing a drug and alcohol testing program.'' Two 
certificated repair stations and an individual said the redundancies 
built into the maintenance system already ensure maintenance errors are 
likely to be caught by someone else through the high level of scrutiny 
and evaluation in the supervision and inspection process. Also, one 
certificated repair station noted the largest number of positive test 
results for maintenance employees exist in pre-employment testing, 
which indicates individuals who pose a potential threat to aviation 
safety are being screened out before they enter the performance of 
safety-sensitive functions.
    In addition, the Aircraft Electronics Association commented that it 
is not correct for the FAA to assume increasing air carrier maintenance 
outsourcing decreases aviation safety because ``part 135 on-demand air 
carriers have been outsourcing maintenance for years without a decline 
in aviation safety.'' This commenter said the proposal would expand the 
drug and alcohol testing regulations to include all certificated repair 
stations and their subcontractors. The commenter stated the majority of 
individuals who would be included in testing programs have not been 
shown to be substance abusers.
    We believe the safety data showing the number of current positive 
test results offer strong support for this rulemaking. We do not 
believe we should wait until there is an actual loss of human life 
before we take action to ensure the remaining subcontractors who are 
not already subjected to testing are brought into compliance with the 
regulations. Only one link in the safety chain would have to fail for 
an accident to occur.
    The Aircraft Electronics Association takes issue with the 
discussion in the SNPRM preamble regarding increased maintenance 
outsourcing. In the SNPRM preamble, we merely discussed the Department 
of Transportation Inspector General's reports regarding maintenance 
outsourcing and offered no independent conclusions (69 FR 27982). We 
included this information to further explain why it is important for 
the FAA to clarify its existing drug and alcohol testing regulations 
regarding outsourced maintenance.
    This final rule does not expand the drug and alcohol testing 
regulations to include all certificated repair stations and their 
subcontractors. As we said earlier, we have not changed the scope of 
who is required to conduct testing. We are merely clarifying that a 
contractor includes a subcontractor. In addition, many certificated 
repair stations already have drug and alcohol testing programs. 
According to the FAA's Operations Specifications Subsystem (OPSS), over 
3,000 certificated repair stations currently have drug and alcohol 
testing programs under the existing regulations. This represents more 
than 60 percent of all certificated repair stations in the FAA's OPSS.
    In addition, the Aircraft Electronics association stated the 
majority of individuals affected by the proposal have not been shown to 
be substance abusers. While this may be true, a substantial number of 
maintenance workers have had positive test results on FAA-required 
tests. As we noted in the SNPRM preamble, in the first 11 years of drug 
testing, almost half of the 30,192 positive drug test results were 
attributable to maintenance workers.

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Also, in the first 6 years of alcohol testing, almost half of the 876 
alcohol violations were attributable to maintenance workers. (69 FR 
27984) Thus, there is data showing substance abuse in the maintenance 
population causing sufficient safety concern to justify this final 
rule.
    As one commenter noted, the largest number of positive test results 
for maintenance employees was in the pre-employment testing context. 
This data demonstrates the existing regulations were successful in 
screening out many maintenance personnel who use illegal drugs. The 
individuals who were prevented from entering the aviation maintenance 
field were pre-employment tested by many types of entities including 
regulated employers, contractors, and subcontractors. However, as 
evidenced by the continuing number of positive random drug test results 
each year, pre-employment testing is not a complete barrier to 
individuals who use illegal drugs, and random testing is a necessary 
form of detection and deterrence. Thus, the large number of positive 
test results for maintenance personnel further demonstrates why it is 
important for regulated employers to ensure all subcontractors are 
subject to testing.
    Safety-sensitive functions include all maintenance or preventive 
maintenance performed for a regulated employer. The drug and alcohol 
testing regulations do not differentiate between safety critical and 
non-safety critical forms of maintenance. This final rule does not 
expand the types of maintenance functions that are considered to be 
``safety-sensitive.'' While there might be redundancies built into the 
maintenance system, the supervisory and other quality assurance 
processes involved in aviation maintenance do not constitute a 
substitute for the protections afforded by drug and alcohol testing. 
Therefore, we will continue to require subcontractors be subject to 
drug and alcohol testing.
    RAA commented the rate of positive test results for maintenance 
personnel was not significantly higher than the rate of positive test 
results for all safety-sensitive employees. To illustrate its point, 
RAA used the rates for calendar year 1999 when ``the rate for 
maintenance personnel who test positive for alcohol was 0.02% compared 
to a 0.18% rate for all employees who tested positive. The rate for 
maintenance personnel who test positive for drugs was 1.5% compared to 
a 1.2% rate for all employees who tested positive.'' The Aircraft 
Electronics Association also commented about the positive test result 
data, saying the data failed to distinguish between the positive test 
results of large businesses versus small businesses.
    RAA's analysis, while flawed,\1\ simply argues that maintenance 
personnel should be subjected to the same requirements as other 
personnel performing safety-sensitive functions. The purpose of today's 
rule is not to apply more stringent requirements on maintenance 
personnel, but rather to clarify which maintenance personnel are 
subject to testing, i.e., all personnel performing a safety sensitive 
function regardless of who their direct employer is.
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    \1\ We disagree with RAA's analysis of the testing data. When 
RAA analyzed the calendar year 1999 data, they compared the rate for 
maintenance with the rate for all personnel (including maintenance). 
For a true comparison of the data, one should compare the positive 
rate for maintenance against the positive rate for all personnel, 
excluding maintenance. For a full discussion of the data, see the 
Regulatory Evaluation for this final rule.
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    The Aircraft Electronic Association is correct in noting the 
positive test result rates have been declining. We believe this annual 
decline shows the effectiveness of the FAA drug and alcohol testing 
regulations in deterring illegal drug use and alcohol misuse. Because 
the data prove the effectiveness of our regulations, we do not see the 
declining positive rate as grounds for eliminating any safety-sensitive 
personnel who are subject to testing, including maintenance 
subcontractors.

Should Airworthiness Responsibility Be the Determining Factor for Drug 
and Alcohol Testing?

    ARSA stated the FAA regulations do not currently regulate non-
certificated maintenance subcontractors or require them to take 
airworthiness responsibility for the work they perform, so the non-
certificated maintenance subcontractors should not be subject to drug 
and alcohol testing. Several commenters, including certificated repair 
stations and non-certificated entities, expressed similar concerns. In 
addition, AOPA referred to ``non-aviation contractors that perform non-
safety maintenance functions for certificated repair stations,'' saying 
they should not be required to comply with the FAA drug and alcohol 
testing regulations.
    Several commenters, including ARSA, UTC, RAA, and several 
certificated repair stations, believe the current regulatory system for 
maintenance provides sufficient oversight to ensure certificated repair 
stations adequately monitor the work performed by non-certificated 
maintenance facilities. ARSA noted a certificated repair station has 
the responsibility to sign off on the airworthiness of any repair 
performed by its non-certificated contractors. ARSA said the proposal 
would require a certificated repair station to oversee its non-
certificated contractors' participation in drug and alcohol testing 
programs, and this would be beyond the scope of a repair station's 
competencies. ARSA added that a repair station would need to make 
investments in procedures and personnel in order to fulfill this new 
regulatory burden.
    ARSA and UTC suggested that because non-certificated maintenance 
entities ensure quality control when they perform repairs, each 
subcontractor in the chain of maintenance is responsible for its work 
and that of its noncertificated subcontractors. Thus, each 
subcontractor in the chain of maintenance relies on the certificated 
work that is performed. In addition, ARSA noted certificated mechanics 
who sign off on airworthiness are subject to drug and alcohol testing. 
ARSA believes these safeguards protect against even the negligent 
maintenance that results from drug or alcohol abuse. ARSA asserted that 
an article repaired under the influence of drugs is no less conspicuous 
in its inability to conform to airworthiness standards than an article 
improperly repaired due to a failure to follow prescribed procedures. 
For these reasons, ARSA and UTC supported testing only for those with 
airworthiness responsibility.
    ARSA and the Aircraft Electronics Association suggested that 
because the FAA regulations do not allow non-certificated maintenance 
subcontractors to take airworthiness responsibility for the work they 
perform, they cannot perform safety-sensitive work. Also, the Aviation 
Suppliers Association commented the FAA regulations do not regulate 
non-certificated maintenance subcontractors or require them to take 
airworthiness responsibility for their work. RAA said the current FAA 
guidance rightfully limits the group of subcontractors only to those 
technicians who actually work on the airplane or have airworthiness 
responsibility for the component before it is installed on the 
airplane. RAA did not believe all maintenance and preventive 
maintenance should be considered safety-sensitive, rather the 
airworthiness of a product or actual work on the airplane itself should 
be the defining line in describing a safety sensitive position.
    There is no ``non-safety maintenance'' recognized in our 
regulations. Within certificated repair stations, there are non-
certificated individuals such as mechanic's helpers, who have been

[[Page 1670]]

subject to testing for more than 15 years. Thus, not only are non-
certificated individuals allowed to perform safety-sensitive 
maintenance but the regulations contemplate the performance of 
maintenance by non-certificated individuals and entities.
    The FAA drug and alcohol testing regulations have never articulated 
a difference between safety-sensitive functions performed by a 
certificated versus a non-certificated maintenance facility. Our 
regulations identify all maintenance and preventive maintenance duties 
as safety-sensitive functions. Anyone performing maintenance or 
preventive maintenance duties for a regulated employer must be subject 
to testing, regardless of who signs off on the airworthiness of the 
maintenance.
    As we acknowledged in the NPRM and SNPRM preambles, some of our 
early guidance only required subcontractors who took airworthiness 
responsibility to be subject to drug and alcohol testing. By the mid 
1990s, the guidance we developed eliminated the airworthiness 
responsibility component and followed the rule language explicitly. The 
point of this rulemaking is to clarify that any individual who performs 
safety-sensitive functions for a regulated employer must be subject to 
drug and alcohol testing.
    The airworthiness signoff process is not designed to address the 
safety risk arising from safety-sensitive functions performed by 
individuals who use illegal drugs or misuse alcohol. ARSA spoke of 
quality control procedures and review by certificated mechanics as the 
safeguards to ensure ``negligent maintenance'' will be discovered and 
corrected. However, the maintenance quality control procedures do not 
remove individuals who use illegal drugs or misuse alcohol. The FAA 
drug and alcohol regulations are designed to address exactly this 
safety risk by deterring drug and alcohol use, and through removing 
from safety-sensitive functions, individuals who engage in such 
prohibited practices.

Should the Level of Contractual Relationship Limit Who Is Subject to 
Drug and Alcohol Testing?

    ATA stated it ``does not take issue with the premise that 
individuals actually performing safety sensitive functions for airlines 
should be subjected to the highest standards for performance, including 
appropriate drug and alcohol testing.'' ATA noted ``we agree with the 
statement in the SNPRM that `[t]he level of contractual relationship 
with an employer should not be read as a limitation on the requirement 
that all safety-sensitive work be performed by drug- and alcohol-free 
employees.' '' Furthermore, ATA commented ``it is the nature of the 
function being performed by an individual, and not the employment 
relationship of that individual to the airline, that is relevant.''
    The FAA agrees with ATA. As we stated in the preamble to the SNPRM, 
the level of contractual relationship should not limit the requirement 
for all safety-sensitive work to be performed by drug-free and alcohol-
free employees. If individuals are performing safety-sensitive 
functions for a regulated employer, the individuals must be subject to 
testing, regardless of the tier of contract under which they are 
performing.
    It would be inconsistent with aviation safety for individuals 
performing maintenance work within the certificated repair station to 
be subject to drug and alcohol testing, while individuals performing 
the same maintenance work under a subcontract would not be subject to 
drug and alcohol testing. In addition, if drug and alcohol testing 
could be avoided by simply sending the maintenance work to a 
subcontractor, a company could form separate subsidiaries within its 
organization in order to create an internal subcontracting system that 
avoids drug and alcohol testing.

Should Subcontractors Be Distinguished From Contractors Based on 
Differing Contractual Relationships?

    ARSA said the language to include subcontractors at any tier is a 
change in the reach of the regulation, rather than a clarification. In 
making this assertion, ARSA asserted that a contract is binding only 
between the parties to the contract, based on the doctrine of privity. 
In ARSA's opinion, privity does not extend to subcontractors. Thus, 
ARSA concluded the law does not consider the subcontractor bound by 
contract to an entity with which it has no direct relationship, in this 
case the air carrier. UTC echoed this statement, emphasizing the legal 
concept of privity of contract as being between signatory parties, 
giving each responsibilities and rights in pursuit of a common goal. 
Accordingly, UTC asserted that a contractual relationship and all that 
it incorporates cannot extend to any unnamed party.
    In addition, ARSA discussed the Drug-Free Workplace Act (DFWA) 
requirements that apply to Department of Defense (DoD) contracts.\2\ 
ARSA stated the DoD applies the DFWA to its contractors through 
specific contract clauses required by regulation. ARSA said DoD does 
not require the DFWA requirements to extend beyond direct contractors 
to subcontractors. Based on DoD's practice, ARSA argued it is 
inconsistent with safety and economics to extend drug and alcohol 
testing to any tier of the maintenance process, including 
subcontractors that are not part of a certificated repair station or 
the aviation industry. DoD's decision to exclude subcontractors from 
its contracts is not relevant to this rulemaking, and we offer no 
opinion to the contract practices of other Federal agencies. We note 
that the DFWA does not apply to the FAA and we are not compelled to 
follow DoD's lead in this regard.
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    \2\ DFWA requires Federal contractors to maintain programs for 
achieving a drug-free workplace, but does not require drug and 
alcohol testing.
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    The issue of subcontractor privity is irrelevant to this 
regulation, because the FAA will take enforcement action against those 
employers directly covered by the drug and alcohol regulations by 
virtue of their part 121 or part 135 operations, as well as those 
contractors who have voluntarily submitted to our jurisdiction by 
obtaining their own drug and alcohol programs. This final rule 
clarifies that these two groups of regulated entities must ensure all 
individuals performing a safety sensitive function are subject to 
testing. If the regulated employer or contractor is concerned that 
there is insufficient privity between itself and a subcontractor to 
assure that employees of a subcontractor are subject to testing, it can 
require a testing provision be placed in each contract between its 
contractors and their subcontractors. Such provisions are common in 
other contexts and are likely already used by some carriers in this 
context.
    The FAA guidance has always indicated subcontractors were covered 
by the drug and alcohol testing regulations. The conflict in the 
guidance was whether all subcontractors or only those subcontractors 
with airworthiness responsibility were required to be subject to drug 
and alcohol testing. The guidance requiring all contractors to be 
subject to testing is consistent with the fact all individuals 
performing safety-sensitive functions directly or by contract are 
required to be subject to testing.

[[Page 1671]]

How Will This Rule Affect Contractual Relationships, Including Auditing 
Contractor's and Subcontractor's Drug and Alcohol Testing Programs?

    ATA and ChevronTexaco requested guidance on how air carriers can 
ensure their contractors and subcontractors are complying with the drug 
and alcohol testing regulations. In addition, the commenters requested 
guidance on satisfying the audit requirement for both domestic and 
overseas contractors and subcontractors.\3\ Specifically, ATA asked if 
air carriers should continue to retain a copy of the contractor's 
OpSpec or registration. ATA also stated air carriers currently do not 
independently verify the status of subcontractors' compliance with drug 
and alcohol testing requirements. ChevronTexaco noted that it currently 
requests information from its contractors to verify ``they have drug 
and alcohol prevention plans in place and they audit their contractors 
for the same.'' ChevronTexaco stated it uses a questionnaire for many 
of its contractors but not for all subcontractors. Similarly, a 
certificated repair station said air carriers have used questionnaires 
as an alternative to performing on-site audits.
---------------------------------------------------------------------------

    \3\ FAA drug and alcohol testing regulations prohibit testing 
outside the United States and its territories. Today's rule does not 
add an extra territorial testing requirement.
---------------------------------------------------------------------------

    ARSA suggested the proposed rule would require certificated repair 
stations and the air carriers with whom they contract to look beyond 
the airworthiness of a particular article to the person who performed 
maintenance, no matter how insignificant the job or how far removed 
from the aircraft. ARSA also expressed concern that direct contractors 
would need to ensure their subcontractors actually implemented drug and 
alcohol testing programs. ARSA stated the proposal would require direct 
contractors ``to take on the role of human resource auditor'' for all 
non-certificated subcontractors. Thus, ARSA asserted the proposal would 
alter contractual relationships and expectations for non-certificated 
entities performing contracted maintenance functions on the industry's 
behalf.
    The FAA regulations require a regulated employer to ensure any 
individuals performing safety-sensitive functions for it by contract 
are included in the FAA-regulated drug and alcohol testing programs of 
either the regulated employer or the contractor. While it is advisable 
for the regulated employer to retain a copy of the contractor's OpSpec 
or registration, merely retaining this copy does not ensure all 
individuals performing safety-sensitive functions by contract for the 
regulated employer are subject to drug and alcohol testing under the 
regulations. While OpSpec or registration documentation may indicate 
that a contractor has agreed to implement a drug and alcohol program, 
it does not provide a regulated employer with specific information to 
determine if the contractor has actually implemented its programs. 
Accordingly, more oversight is needed. A regulated employer could ask 
its contractor specific questions and request documentation to ensure 
the contractor has fully implemented its testing programs and to ensure 
the individuals who will perform safety-sensitive functions for the 
regulated employer are subject to testing. It is also a good business 
practice for an employer to verify and document that specific 
individuals performing safety-sensitive functions by contract are 
currently subject to testing under the contractor's drug and alcohol 
testing program.
    Direct contractors must both determine the airworthiness of an 
article and ensure subcontractors have actually implemented drug and 
alcohol testing programs because both have safety implications. 
Regulated employers and contractors at any tier should not disregard 
the requirements of either safety responsibility. Accordingly, it is 
not necessary for companies to become auditors because the FAA's 
regulations do not specifically require audits to ensure the testing 
requirements are met.
    Finally, we note the commenters have not provided any data or 
information to support an assumption the proposal would alter 
expectations and contractual relationships with non-certificated 
entities. As stated previously, the FAA believes the majority of 
regulated employers are already ensuring individuals who are performing 
safety-sensitive functions for them under a contract at any tier are 
subject to drug and alcohol testing.

Who Is Responsible for Subcontractor Compliance?

    Several commenters questioned who would be responsible for ensuring 
subcontractor compliance with drug and alcohol testing. Specifically, 
they asked if certificated repair stations or regulated employers (air 
carriers) would be held responsible for any and all subcontractors at 
any tier. Prime Turbines commented to both the NPRM and the SNPRM, 
expressing concern that it will be held liable for all tiers of 
contract work. Another commenter, ChevronTexaco, stated its current 
practice is to audit its contractors' drug and alcohol prevention 
programs. ChevronTexaco also specifies in its contractual agreements 
that contractors must audit subcontractors' programs because it is 
common for them to have several tiers of subcontractors. ChevronTexaco 
was concerned the proposal ``would cascade employer responsibility for 
auditing drug and alcohol programs to ALL these subcontractors with 
which we have no direct business or contractual relationship.'' 
Similarly, UTC questioned whether a third tier subcontractor's non-
compliance has any affect on the fourth tier subcontractor or on the 
second tier subcontractor.
    We applaud ChevronTexaco for creating a contract provision to 
require its contractors to audit subcontractors and ensure individuals 
performing safety-sensitive functions by contract are subject to drug 
and alcohol testing. While the contract provision ChevronTexaco 
describes is an excellent business practice, the FAA's regulations have 
not required ``auditing,'' and this final rule does not require it. As 
we discussed in the preamble to the SNPRM, although auditing is a 
business decision, we believe it is a good way to determine if an 
entity has FAA drug and alcohol testing programs and is testing its 
employees (69 FR 27982).
    As we said in the preamble to the SNPRM, the safety of the air 
carrier's maintenance and operations ultimately rests with the air 
carrier (69 FR 27983). Similarly, in 14 CFR 121.363(a) and 135.413(a), 
we recognize that air carriers are primarily responsible for the 
airworthiness of its aircraft. A regulated employer must ensure any 
individual performing safety-sensitive functions for it is subject to 
the required drug and alcohol testing. Thus, the regulated employer has 
the ultimate responsibility to ensure individuals performing safety-
sensitive functions for it by contract are subject to FAA-regulated 
testing.
    A contractor company can test individuals performing safety-
sensitive functions for a regulated employer under the contractor 
company's own FAA-regulated testing programs. Once a contractor company 
obtains its FAA-regulated testing programs, the FAA will hold the 
contractor company responsible for its compliance with the regulations. 
There may be circumstances where the regulated employer may also share 
responsibility for a contractor company's non-compliance.
    If a contractor company has FAA-regulated testing programs, it must 
ensure any individual performing a safety-sensitive function by 
contract (including by subcontract at any tier) below it is subject to 
testing. The FAA

[[Page 1672]]

recognizes there may be multiple tiers of subcontractors in the 
aviation industry. Any lower tier contractor company with FAA-regulated 
testing programs will be held responsible for its own compliance with 
the FAA drug and alcohol testing regulations. Also, there may be 
circumstances where the regulated employer and higher tier contractor 
companies share responsibility for the lower tier contractor company's 
noncompliance.
    The FAA provides information to assist regulated employers and 
their contractors to implement drug and alcohol testing programs. 
Entities can obtain this information by:

--Contacting the Drug Abatement Division at the address in the FOR 
FURTHER INFORMATION CONTACT paragraph listed earlier; or
--Referencing the Drug Abatement Division's Web site: http://www.faa.gov/about/office_org/headquarters_offices/avs/offices/aam/drug_alcohol/.

What Are the Consequences for Subcontractor Noncompliance?

    Several commenters, including UTC and ARSA, expressed concern about 
oversight responsibilities for subcontractors and contended that air 
carriers would be required to oversee drug and alcohol programs for 
every subcontractor at any lower tier in the maintenance process. UTC 
noted the FAA had not proposed to require audits or other specific 
means of ensuring contractors and subcontractors were properly 
conducting drug and alcohol testing. UTC believed the lack of an audit 
requirement would create a wide diversity of compliance standards and a 
potential variability in enforcement. In addition, UTC was concerned 
certificated repair stations would audit other certificated repair 
stations that are subcontractors. This was problematic for UTC because 
it views certificate oversight as an FAA responsibility.
    Since the inception of the FAA drug and alcohol testing 
regulations, we have had a requirement that any individual who performs 
a safety-sensitive function directly or by contract must be subject to 
drug and alcohol testing. The FAA deliberately chose not to specify how 
regulated employers would ensure subcontractor compliance with the drug 
and alcohol testing regulations. Similarly, the FAA deliberately chose 
not to specify how contractors that opt to obtain drug and alcohol 
testing programs would comply with the regulations.\4\ The means for 
achieving the requirement are somewhat flexible--the regulated employer 
may conduct the testing or the contractor company may conduct the 
testing, but the regulated employer must ensure individuals performing 
safety-sensitive functions for it are subject to testing.
---------------------------------------------------------------------------

    \4\ There is no difference between the FAA's method for 
inspecting certificated versus non-certificated maintenance 
contractors that have opted to obtain drug and alcohol testing 
programs. Also, we do not vary our inspection method based on the 
difficulty or criticality of the maintenance performed. While our 
inspection methodology does not vary by type of company, the 
sanctions the FAA imposes vary depending on the specific 
circumstances surrounding the actual violation. We note the FAA has 
always handled interpretations and enforcement matters on a case-by-
case basis. We are not aware that this has caused difficulties in 
maintenance productivity in the past.
---------------------------------------------------------------------------

    Regulated employers and entities opting to obtain testing programs 
must include individuals performing safety-sensitive functions by 
contract in their own programs. Alternatively, they can allow an 
individual to perform a safety-sensitive function by contract for them 
if the individual is subject to testing under the contractor company's 
drug and alcohol testing programs. One way to determine if the 
individual is subject to testing in accordance with the FAA regulations 
is to inquire further about the specifics of the contractor company's 
programs and request supporting documentation from the contractor 
company. Merely obtaining a program registration or an OpSpec does not 
indicate a company has implemented compliant drug and alcohol testing 
programs.
    Because each regulated employer currently has a duty to ensure any 
individual performing a safety-sensitive function by contract for it is 
subject to testing, several regulated employers might conduct inquiries 
to ensure the same individual is subject to testing. For example, a 
contractor company might have personnel with skills that put them in 
high demand with many regulated employers. Before each of these 
regulated employers can allow the contractor company's personnel to 
perform safety-sensitive functions by contract, each regulated employer 
must ensure the individuals performing safety-sensitive functions by 
contract for it are subject to drug and alcohol testing in accordance 
with the FAA regulations. We do not view this as a duplication of 
effort or as an administrative burden because each regulated employer 
has a separate duty to ensure drug and alcohol testing occurs.
    Furthermore, we acknowledge there will be times when a higher tier 
contractor company and its lower tier contractors are certificated 
repair stations. To ensure specific individuals performing safety-
sensitive functions by contract are subject to testing, the higher tier 
contractor company may choose to audit or otherwise inquire into its 
lower tier contractors' drug and alcohol testing programs. It is 
possible one certificated repair station might audit the drug and 
alcohol testing programs of another certificated repair station. We do 
not see this as a difficulty or a conflict because certificated repair 
stations can audit their contractors under the current regulations, and 
the FAA already has and will continue to have oversight 
responsibilities for certificated repair station certificates.

Should Certificated Repair Stations Disclose Their Subcontractors?

    One certificated repair station commented that most air carriers 
allow repair stations to subcontract, but the identity of these 
subcontractors normally is not disclosed. Therefore, the FAA should not 
be allowed to force a repair station to disclose all of its contractors 
both by name and by contacts. In addition, RAA asserted its members are 
not able to continuously ensure that subcontractors are being tested. 
RAA stated that many individuals working for a subcontractor may be an 
employee only for a short period of time or the contractor may want to 
quickly replace subcontractors. RAA also said airlines will have 
difficulty identifying who to include in drug and alcohol testing 
programs.
    We do not agree certificated repair stations should not provide 
information about subcontractors to regulated employers. The FAA 
regulations have always required regulated employers to ensure they 
tested or their contractors tested all contractor and subcontractor 
employees performing safety-sensitive functions for the regulated 
employer. This is not a new requirement. At issue in this rulemaking is 
the confusion resulting from conflicting guidance about which 
contractors were required to be subject to drug and alcohol testing. 
The regulated employer must continue to receive information about the 
drug and alcohol testing programs of contractor companies whose 
employees are performing safety-sensitive work for the regulated 
employer under a contract. Regulated employers need this information to 
continue to ensure individuals performing safety-sensitive functions 
for them are subject to testing in accordance with the FAA regulations.
    We agree regulated employers will have problems identifying who 
should be subject to drug and alcohol testing if certificated repair 
stations or other contractors do not provide the regulated employers 
with current information about which contractors and

[[Page 1673]]

subcontractors are performing safety-sensitive functions. Providing 
this information is already necessary under the FAA's drug and alcohol 
testing requirements and is not added by this rulemaking. It is 
imperative to safety that certificated repair stations and other 
contractors share current identifying information about subcontractors 
with the regulated employers to ensure individuals performing safety-
sensitive functions for the regulated employers are subject to testing 
in accordance with the FAA regulations.

Should Subcontractors That Are Not Primarily Aviation-Related 
Businesses Be Subject to Testing?

    Some certificated repair stations and businesses that are not 
primarily aviation-related commented that the rule, if amended, could 
place economic pressure on subcontractors that provide service to more 
than the aviation industry. In addition, several commenters, including 
ARSA, opposed requiring non-certificated subcontractors be subject to 
testing. Furthermore, some commenters expressed concern that if non-
certificated subcontractors are subject to testing, those entities 
might stop providing services to the aviation industry.
    The FAA disagrees with these commenters' distinction between 
certificated and non-certificated subcontractors when it comes to the 
issue of safety-sensitive work. When subcontractors choose to perform 
safety-sensitive functions for regulated employers, they are choosing 
to comply with the FAA drug and alcohol testing regulations. The impact 
these subcontractors have on aviation safety is not related to whether 
they hold a repair station certificate. Instead, they have an impact 
because they actually perform safety-sensitive functions.
    The commenters did not provide data to support the premise that 
non-certificated subcontractors would cease providing service to the 
aviation industry. Furthermore, as discussed in detail in the 
accompanying regulatory evaluation, the data provided by commenters 
showed the majority of such contractors would continue doing business 
with the aviation industry after the final rule becomes effective.

What Is Safety-Sensitive Maintenance or Preventive Maintenance?

    ATA believes ``individuals actually performing safety-sensitive 
functions for airlines should be subjected to the highest standards for 
performance, including appropriate drug and alcohol testing.'' However, 
ATA questioned whether many subcontractors doing work for airlines are 
actually performing safety-sensitive functions.
    While ATA recognized the FAA regulations define the terms 
``maintenance'' and ``preventive maintenance'' (see 14 CFR 1.1 and 14 
CFR part 43), they requested additional guidance. Specifically, ATA 
requested the FAA provide guidance clearly describing ``maintenance and 
preventive maintenance for flight-critical systems, and those 
components whose failure could have a direct adverse effect on the 
continued airworthiness of the aircraft.'' In addition, ATA requested 
the guidance distinguish safety-sensitive maintenance from other types 
of ``maintenance'' that do not have the potential to directly impact 
airworthiness.
    In a related comment, one commenter holding multiple air carrier 
certificates and a repair station certificate said the proposed rule 
would cause difficulty whenever an entertainment system component needs 
repair. This commenter provided cost data on how much revenue air 
carriers would lose if they had to modify the aircraft to accept a new 
unit every time an entertainment unit system broke and could not be 
repaired by a drug and alcohol tested technician. Also, a non-
certificated subcontractor company that does interior plating 
decoration on non-essential components said the proposed rule would 
have a large impact on the way it does business. This commenter asked 
the FAA to exclude it from drug and alcohol testing.
    The ATA correctly notes the FAA defines maintenance and preventive 
maintenance in 14 CFR 1.1 and 14 CFR part 43. In the drug and alcohol 
testing regulations, any maintenance or preventive maintenance (as 
defined in 14 CFR 1.1 or part 43) an individual performs for a 
regulated employer is a safety-sensitive function, and therefore 
subject to drug and alcohol testing.
    The FAA Drug Abatement Division defers to the Flight Standards 
Service for decisions on whether a task is maintenance or preventive 
maintenance. If we were to attempt to further define maintenance and 
preventive maintenance functions through a guidance document, it would 
likely be quickly outdated and would not be helpful. Since job titles 
and functions vary from company to company, the title of a task 
performed at one company may not be the title of a similar task at 
another company. Determining whether a particular task fits under the 
definitions of ``maintenance'' or ``preventive maintenance'' is the 
responsibility of the regulated employer, working in conjunction with 
the regulated employer's assigned FAA principal inspector. Once the 
principal inspector determines a task is maintenance or preventive 
maintenance, the individual performing the task for the regulated 
employer must be subject to drug and alcohol testing.
    With respect to the specific assertion that repairing an 
entertainment system could subject an entity to drug testing, we note 
that repairing entertainment system components usually is not 
considered ``maintenance.'' Consequently, drug and alcohol testing 
usually is not required for individuals who repair these components. On 
the other hand, removing the entertainment system component from the 
aircraft and reinstalling the repaired component on the aircraft is 
maintenance and subject to testing. Similarly, interior plating 
decoration to nonessential components is ``preventive maintenance'' 
under 14 CFR part 43, appendix A. Consequently, drug and alcohol 
testing is required for individuals who perform this type of plating.

Does the Regulatory Flexibility Act Apply to This Rulemaking?

    ARSA, several certificated repair stations, and some non-
certificated entities stated the FAA failed to conduct a required 
Regulatory Flexibility Act (RFA) analysis. In ARSA's opinion, the FAA 
understated ``the impact of this regulation on the aviation industry 
and on those industries providing maintenance support services.'' ARSA 
believes an Initial Regulatory Flexibility Act analysis (IRFA) would 
help the FAA and the public evaluate the costs and benefits of the 
proposed rule. Also, ARSA argued the FAA failed to meet the RFA 
requirement to consider significant alternatives to minimize the 
SNPRM's economic impact on small entities.
    The FAA disagrees with ARSA and other commenters who raised RFA 
issues. In 14 CFR part 121, appendix I, section II, and appendix J, 
section I.D, the FAA defines which employers are directly regulated by 
the drug and alcohol testing regulations. Specifically, the directly 
regulated employers are: Air carriers operating under 14 CFR parts 121 
and 135; Sec.  135.1(c) operators; and air traffic control facilities 
not operated by the FAA or by or under contract to the U.S. military. 
These directly regulated employers must conduct drug and alcohol 
testing under the FAA regulations. For drug and alcohol testing 
purposes, certificated repair stations are contractors, and contractors 
are not regulated employers. Contractors can

[[Page 1674]]

choose to obtain drug and alcohol testing programs. Once a contractor 
chooses to obtain such programs, it must follow the FAA drug and 
alcohol testing regulations.
    Twenty years ago, the U.S. Court of Appeals for the DC Circuit held 
the RFA only applies to small entities directly regulated by a proposed 
rule. ``Congress did not intend to require that every agency consider 
every indirect effect that any regulation might have on small 
businesses in any stratus of the national economy.'' Mid-Tex Electric 
Cooperative v. FERC, 773 F.2d 327, 343 (DC Cir. 1985). The DC Circuit 
held the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 
1996 did not change the fact the RFA only applies to directly regulated 
entities. American Trucking Associations v. EPA, 175 F.3d 1027, 1044 
(DC Cir. 1999). The DC Circuit ``has consistently rejected the 
contention that the RFA applies to small businesses indirectly affected 
by the regulation of other entities.'' Cement Kiln Recycling Coalition 
v. EPA, 225 F.3d 855, 869 (DC Cir. 2001) (citing Mid-Tex Electric 
Cooperative v. FERC, and its progeny). In Cement Kiln, the 
Environmental Protection Agency (EPA) had done a regulatory evaluation 
to cost out the impact on small businesses indirectly affected by the 
proposed regulation. While the EPA's cost evaluation was based on small 
businesses indirectly impacted, it was ``in the spirit of the RFA 
because some portion of the burden of compliance might pass through to 
[these small businesses].'' Cement Kiln, 255 F.3d at 868. Similarly in 
the SNPRM, the FAA followed the spirit of the RFA by evaluating the 
costs of the proposal on indirectly affected small businesses 
(contractors). However, the DC Circuit said conducting an economic cost 
evaluation for small businesses indirectly affected does not trigger 
the requirements of a full RFA analysis. Cement Kiln, 255 F.3d at 868-
869.
    The DC Circuit specifically explained ``* * * application of the 
RFA does turn on whether particular entities are the `targets' of a 
given rule. The statute requires that the agency conduct the relevant 
analysis or certify `no impact' for those small businesses that are 
`subject to' the regulation, that is, those to which the regulation 
`will apply.' '' Cement Kiln, 255 F.3d at 869 (citations omitted). In 
addition, the DC Circuit went on to say ``The rule will doubtless have 
economic impacts in many sectors of the economy. But to require an 
agency to assess the impact on all of the nation's small businesses 
possibly affected by a rule would be to convert every rulemaking 
process into a massive exercise in economic modeling, an approach we 
have already rejected.'' Cement Kiln, 255 F.3d at 869.
    Accordingly, we have determined we are not required to conduct an 
RFA analysis, including considering significant alternatives, because 
contractors (including subcontractors at any tier) are not the 
``targets'' of the proposed regulation, and are instead indirectly 
regulated entities. For the purpose of the RFA, we have evaluated the 
impact on the regulated employers to reach our decision to certify that 
this action will not have a significant economic impact on a 
substantial number of small entities.
    While an IRFA can be a tool for evaluating costs and benefits of a 
proposal, the main tool is the regulatory evaluation. Accordingly, we 
used the regulatory evaluation to determine the impact on the number of 
indirectly regulated entities that might be affected by the proposal. 
This provided a better idea of what the costs to the regulated 
employers would ultimately be. Evaluating the costs the indirectly 
regulated entities might bear complied with the spirit of the RFA and 
provided us with a realistic total cost that could be distributed among 
regulated employers. We are now explicitly distributing the total cost 
among regulated employers.

Should FAA Provide More Time for Pre-Employment Testing of 
Subcontractors?

    DATIA (an association of service agents in the drug and alcohol 
testing industry) and AMFA Local 33 supported the proposed pre-
employment provision. The proposal contemplated providing an employer 
with a 90-day window after the effective date of the rule in which to 
conduct pre-employment testing of existing subcontractors who have not 
previously been tested. Both commenters stated the proposed 90-day 
window would assist air carriers, contractors, and subcontractors to 
implement any necessary pre-employment testing.
    The FAA notes that today's rule merely clarifies an existing 
requirement that we have estimated at least 60 percent of the industry 
already follows. Additionally, the regulated parties are not required 
to establish new testing programs. Accordingly, a 90-day window for 
pre-employment testing subcontractors appears excessive. In order to 
provide some additional time to complete testing we have decided to 
make today's rule effective 90 days after publication rather than our 
usual 30.

Miscellaneous Comments

    One certificated repair station questioned why the FAA requires 
drug and alcohol testing for a non-certificated entity performing 
maintenance on a business jet operated under part 135 but not if the 
same business jet is operated under part 91. This commenter also said 
it can contract with non-certificated entities ``to perform maintenance 
on a part 91 aircraft and the FAA has no issue with airworthiness or 
safety.''
    The commenter is not correct in saying the FAA has ``no issue with 
airworthiness or safety'' for part 91 aircraft. We are very much 
concerned that maintenance on part 91 aircraft is performed in 
accordance with airworthiness requirements. Aviation safety is not 
limited to maintenance on air carriers.
    However, commercial operators carrying passengers for compensation 
or hire are required to meet a higher level of safety than general 
aviation, which operates under part 91. Included in the higher level of 
safety is the requirement for regulated employers to conduct drug and 
alcohol testing.

Issues Outside the Scope of This Rulemaking

    The FAA received a number of comments concerning: The repeal of the 
moonlighting exception to drug and alcohol testing; the Antidrug and 
Alcohol Misuse Prevention Program OpSpec requirement; revising the 
definitions of certain safety-sensitive functions to tie them to safety 
risk; drug and alcohol testing outside the United States and its 
Territories; drug and alcohol testing for manufacturers; and drug and 
alcohol testing for general aviation. These issues are outside the 
scope of the SNPRM. Therefore, we have not addressed them in this final 
rule.

Paperwork Reduction Act

    This final rule contains information collection activities subject 
to the Paperwork Reduction Act (44 U.S.C. 3507(d)). No agency may 
conduct or sponsor and no person is required to respond to a collection 
of information unless it displays a currently valid OMB control number. 
In accordance with the Paperwork Reduction Act, documentation 
describing the information collection activities was submitted to the 
Office of Management and Budget (OMB) for review and approval. The FAA 
will publish the OMB control number for this information collection in 
the Federal Register after the Office of Management and Budget approves 
it.

[[Page 1675]]

    This rule imposes additional reporting and recordkeeping 
requirements on regulated employers (part 121 and 135 certificate 
holders, and operators as defined in Sec.  135.1(c)). This rulemaking 
indirectly affects contractors and subcontractors, including non-
certificated maintenance contractors, performing maintenance and 
preventive maintenance for these regulated employers at any tier if 
they elect to obtain antidrug and alcohol misuse prevention programs.

International Compatibility

    In keeping with U.S. obligations under the Convention on 
International Civil Aviation, it is the FAA policy to comply with 
International Civil Aviation Organization (ICAO) Standards and 
Recommended Practices to the maximum extent practicable. The FAA has 
reviewed the corresponding ICAO Standards and Recommended Practices and 
has identified no differences with these regulations.

Executive Order 12866 and DOT Regulatory Policies and Procedures

    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. The FAA has 
determined this rule has benefits that justify its costs, is not a 
``significant regulatory action'' as defined in section 3(f) of 
Executive Order 12866, and is not ``significant'' as defined in DOT's 
Regulatory Policies and Procedures.
    This rulemaking directly affects regulated employers (part 121 and 
135 certificate holders, and operators as defined in Sec.  135.1(c)). 
This rulemaking indirectly affects contractors and subcontractors, 
including non-certificated maintenance contractors, performing 
maintenance and preventive maintenance for these regulated employers at 
any tier. Approximately 300 non-certificated maintenance contractors 
will have to develop anti-drug and alcohol misuse prevention programs, 
affecting about 5,000 employees in 2006, rising to approximately 5,700 
employees by 2015.
    The FAA is not changing the current regulations, but is simply 
clarifying them. As such, there should be no additional costs. However, 
the FAA recognizes that, due to conflicting guidance, some companies 
may have to modify their current anti-drug and alcohol misuse 
prevention programs or implement such programs. The FAA does not know 
how many additional employees or contractor companies will be subject 
to anti-drug and alcohol misuse prevention programs, but has 
conservatively estimated that over 10 years, costs sum to $3.08 million 
and cost savings sum to $790,300, for net total costs of $2.29 million 
($1.76 million, discounted).
    The major benefit from this rulemaking will be the prevention of 
potential injuries and fatalities and property losses resulting from 
accidents attributed to neglect or error on the part of individuals 
whose judgment or motor skills may be impaired by the presence of drugs 
and/or alcohol. The FAA estimates 10-year benefits sum to $15.07 
million ($10.59 million, discounted).
    A full evaluation of the estimated costs and benefits associated 
with today's rule is provided in the final regulatory evaluation 
located in the docket.

Regulatory Flexibility Assessment

    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 RFA requires agencies to 
solicit and consider flexible regulatory proposals and to explain the 
rationale for their actions. The RFA 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 agency determines 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 1980 RFA 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.
    For this rule, the small entity group is considered to be small 
part 121 and 135 certificate holders and operators under Sec.  135.1(c) 
(North American Industry Classification System [NAICS] 481111). The FAA 
examined the annual revenues of all the certificated air carriers under 
part 121, 121/135, 135, as well as operators under Sec.  135.1(c).
    For the certificated air carriers under part 121, 121/135, and 135, 
annual revenue data is not available by 14 CFR part number, so the FAA 
used Forms 41 and 298C, available from the Bureau of Transportation 
Statistics (BTS), for this data. In these forms, BTS breaks down the 
different airplane operators that file Form 41, by revenue. Large 
certificated carriers (which includes Majors through Medium Regionals), 
which file Form 41, must fly aircraft with 60 seats or more or have a 
payload of at least 18,000 lbs.
    Carriers reporting on Form 298C are classified as either ``Small 
Certificated'' (also known as Small Regionals) or ``Commuter'' air 
carriers. While neither of these types of carriers are defined by 
annual revenues, some small certificated carriers have more than $100 
million in annual revenues.
    Carriers that file Form 41 that have annual revenue over $20 
million (Majors, Nationals, and Large Regionals) report revenue data 
quarterly, while carriers that File 41 that have annual revenue less 
than $20 million (Medium Regionals) report revenue data twice a year. 
All carriers that file Form 298C, report revenue data quarterly. 
Unfortunately, the data is not consistent as it is not available for 
some carriers for every reporting period. The FAA examined data from 
the last 3 years to identify the most recent consecutive four quarters 
or two half-year periods, whichever was applicable, for each carrier to 
be used as the relevant operating revenue for that carrier. Using this 
air carrier operator information, the FAA separated the carriers into 
part 121, part 121/135, and part 135 certificated carriers, and 
operators under Sec.  135.1(c). The average annual revenue for these 
three categories is $1,686.60, $58.74, and $59.10, respectively, in 
millions of dollars.
    The FAA used a different method to calculate the annual revenue for 
the operators under Sec.  135.1(c), as this information is not 
collected by BTS. As shown in an earlier (2002) analysis, the FAA 
collected information on both part 135 and part 91 aircraft engaged in 
air tours. The FAA determined that the group that was most similar to 
the operators under Sec.  135.1(c), in this analysis, was the core part 
91 operators with the annual revenue per operator of $62,600.
    This rule will cost $2.29 million over 10 years ($1.76 million, 
discounted). The annualized cost is about $800 for each of the 
approximately 300 contractors to put together an antidrug and alcohol 
misuse prevention program and then implement it. These

[[Page 1676]]

contractors will absorb some of these costs, while the rest will be 
passed on to both the companies at the other tiers that they are 
contracting for or with as well as to the regulated employers. Given 
such low annualized costs, the FAA does not believe that most of the 
costs will be passed on to companies at other tiers. However, the FAA 
assumes that all of the additional NCMS cost is passed along to the 
regulated employers in order to estimate the maximum impact of this 
regulation on regulated employers.
    For this analysis, the FAA considers each part 135 certificate 
holder and operator under Sec.  135.1(c) to be a small entity, and some 
of the part 121 and 121/135 certificate holders to also be small 
entities. The FAA examined the costs of this rule two different ways:
    a. The costs are shared equally by all regulated employers; and
    b. In order to determine the maximum impact of this rule, the 
entire cost is borne by one regulated employer.
    a. Given 2,562 air carrier certificate holders and 250 operators 
under Sec.  135.1(c), the cost borne by each regulated employer would 
equal about $800 ($600, discounted). Using the same capital recovery 
rate yields an annualized cost of about $100. The costs to each air 
carrier certificate holder would be less than 0.0002% of their annual 
revenues, while the costs to each operator under Sec.  135.1(c) would 
be less than 0.15% of their annual revenues. Given that the majority of 
Sec.  135.1(c) operators usually has one or two aircraft, and operates 
in and out of one airport, it is unlikely that they would interact with 
multiple subcontractors in the regular course of business operations. 
Therefore, it is unlikely that their annualized costs as a percentage 
of annual revenues would be much higher than 0.15%.
    b. Under this scenario, with the entire cost being borne by one 
regulated employer that is not a small entity, the costs sum to $2.29 
million over 10 years ($1.76 million, discounted). It is highly 
unlikely that one or a small number of regulated employers would bear 
the costs of this rule exclusively because the regulated employers vary 
in size, number of aircraft, and geographic location. The smaller the 
operator, the fewer aircraft that operator would use, hence the smaller 
the number of subcontractors that operator would use for safety-
sensitive maintenance. Therefore, this scenario would not be applicable 
to many small entities, including many part 135 operators or any 
operator under Sec.  135.1(c).
    Using the same capital recovery rate yields an annualized cost of 
about $251,200. Even if one regulated employer absorbed all the costs, 
these costs would be less than 0.5% of annual median revenue. Clearly, 
no regulated employer is going to absorb all, or even most, of the 
costs to the exclusion of the other regulated employers, so the impact 
on their revenues will be much less than 0.5% of annual median revenue. 
In addition, it is highly unlikely that all of the additional costs to 
the NCMS will be passed along to these regulated employers.
    Under both scenarios, the economic impact is minimal. Therefore, 
the Administrator certifies that this action will not have a 
significant economic impact on a substantial number of small entities.

International Trade Impact Assessment

    The Trade Agreements Act of 1979 prohibits Federal agencies from 
establishing any standards or engaging in 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. The FAA has assessed the 
potential effect of this NPRM and has determined that it would have 
only a domestic impact and therefore no affect on any trade-sensitive 
activity.

Unfunded Mandates Assessment

    The Unfunded Mandates Reform Act of 1995 (the Act) 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 an expenditure of $100 million or more (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 final rule does not contain such a mandate. The requirements 
of Title II do not apply.

Executive Order 13132, Federalism

    The FAA has analyzed this final rule under the principles and 
criteria of Executive Order 13132, Federalism. We determined that this 
action will not have a substantial direct effect on the States, or 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 does not have federalism implications.

Environmental Analysis

    FAA Order 1050.1E identifies FAA actions that are categorically 
excluded from preparation of an environmental assessment or 
environmental impact statement under the National Environmental Policy 
Act in the absence of extraordinary circumstances. The FAA has 
determined this rulemaking action qualifies for the categorical 
exclusion identified in paragraph 312f and involves no extraordinary 
circumstances.

Regulations That Significantly Affect Energy Supply, Distribution, or 
Use

    The FAA has analyzed this final rule under Executive Order 13211, 
Actions Concerning Regulations that Significantly Affect Energy Supply, 
Distribution, or Use (May 18, 2001). We have determined it is not a 
``significant energy action'' under Executive Order 13211 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 in 14 CFR Part 121

    Air carriers, Aircraft, Airmen, Alcohol abuse, Alcoholism, Aviation 
Safety, Charter flights, Drug abuse, Drug Testing, Safety, 
Transportation.

The Amendment

0
In consideration of the foregoing, the Federal Aviation Administration 
amends part 121 of Title 14, Code of Federal Regulations as follows:

PART 121--OPERATING REQUIREMENTS: DOMESTIC, FLAG AND SUPPLEMENTAL 
OPERATIONS

0
1. The authority citation for part 121 continues to read as follows:

    Authority: 49 U.S.C. 106(g), 40113, 40119, 41706, 44101, 44701-
44702, 44705, 44709-44711, 44713, 44716-44717, 44722, 44901, 44903-
44904, 44912, 45101-45105, 46105, 46301.

0
2. Amend appendix I to part 121 by revising the introductory text to 
section III.

Appendix I to Part 121--Drug Testing Program

* * * * *

    III. Employees Who Must be Tested. Each employee, including any 
assistant, helper, or individual in a training status, who performs

[[Page 1677]]

a safety-sensitive function listed in this section directly or by 
contract (including by subcontract at any tier) for an employer as 
defined in this appendix must be subject to drug testing under an 
antidrug program implemented in accordance with this appendix. This 
includes full-time, part-time, temporary, and intermittent employees 
regardless of the degree of supervision. The safety-sensitive 
functions are:

* * * * *

0
3. Amend appendix J to part 121 by revising paragraph A introductory 
text of section II.

Appendix J To Part 121--Alcohol Misuse Prevention Program

* * * * *

II. Covered Employees

    A. Each employee, including any assistant, helper, or individual 
in a training status, who performs a safety-sensitive function 
listed in this section directly or by contract (including by 
subcontract at any tier) for an employer as defined in this appendix 
must be subject to alcohol testing under an alcohol misuse 
prevention program implemented in accordance with this appendix. 
This includes full-time, part-time, temporary, and intermittent 
employees regardless of the degree of supervision. The safety-
sensitive functions are:
* * * * *

    Issued in Washington, DC, on December 22, 2005.
Marion C. Blakey,
Administrator.
[FR Doc. 06-205 Filed 1-9-06; 8:45 am]
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