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

SUMMARY: This notice of proposed rulemaking would update existing fees

for airmen and repair station certification services performed outside

the United States (U.S.) to reflect current cost levels; establish a

schedule of fees where no fee currently exists for: tests,

authorizations, certificates, permits, or ratings relating to any

airmen certification, and repair station certification performed

outside the United States; establish the methodology for computing user

fees and a timetable for periodic updates of fees; and establish

additional methods of collecting those fees.

This proposed rulemaking is necessary to allow the FAA to fully

recover the costs it incurs in performing airmen certification, and

repair station certification services outside the United States and to

bring current airmen fees charges more nearly in line with

nondiscrimination principles of multilateral trade agreements to which

the U.S. is a signatory including the General Agreement on Tariffs and

Trade (GATT) and the GATT Aircraft Code.

The intended effect of this proposed action is to recover the costs

of providing airmen, and repair station certification services outside

the United States. Recovering these costs would allow the FAA to

continue to provide airmen, and repair station certification services

outside the United States, thereby facilitating the acceptance of U.S.

aeronautical products overseas.

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

ADDRESSES: Comments on this notice should be mailed or delivered in

triplicate to: Federal Aviation Administration, Office of the Chief

Counsel, Attention: Rules Docket (AGC-10), Docket No. 27809, 800

Independence Avenue SW., Washington, DC 20591. Comments may be examined

in the Rules Docket, Room 915-G weekdays between 8:30 a.m. and 5 p.m.,

except on Federal holidays.

FOR FURTHER INFORMATION CONTACT:

Emily A. White, Flight Standards Service, AFS-50, Federal Aviation

Administration, 800 Independence Avenue SW., Washington, DC 20591,

telephone (202) 267-3301.

SUPPLEMENTARY INFORMATION:

Comments Invited

Interested persons are invited to participate in the making of the

proposed rule by submitting such written data, views, or arguments as

they may desire. Comments relating to the environmental, energy,

federalism, or economic impact that might result from adopting the

proposals in this notice are also invited. Substantive comments should

be accompanied by cost estimates, if appropriate. Comments should

identify the regulatory docket or notice number and should be submitted

in triplicate to the Rules Docket address specified above. All comments

received on or before the closing date for comments specified will be

considered by the Administrator before taking action on this proposed

rulemaking. The proposals contained in this notice may be changed in

light of comments received. All comments received will be available,

both before and after the closing date for comments, in the Rules

Docket for examination by interested persons. A report summarizing each

FAA-public contact, concerned with the substance of this rulemaking,

will be filed in the docket. Commenters wishing the FAA to acknowledge

receipt of their comments submitted in response to this notice must

include a preaddressed, stamped postcard on which the following

statement is made: ``Comments to Docket No. 27809.'' The postcard will

be date/time stamped and mailed to the commenter.

Availability of NPRMs

Any person may obtain a copy of this NPRM by submitting a request

to the Federal Aviation Administration, Office of Public Affairs,

Attention: Public Inquiry Center (APA-200), 800 Independence Avenue,

SW., Washington, DC 20591, or by calling (202) 267-3484. Communications

must identify the notice number of this NPRM.

Persons interested in being placed on the mailing list for future

NPRMs should request from the above office a copy of Advisory Circular

11-2A, Notice of Proposed Rulemaking Distribution System, which

describes the application procedures.

Background

Statement of the Problem

The fee schedule that appears in 14 CFR part 187, appendix A, was

established by rulemaking and became effective on October 18, 1982. It

contains fees for certain certification services performed outside of

the United States by the FAA. However, it does not contain fees for the

full scope of activities for which fees may be charged under current

statutory authority. Rather, the fee schedule lists only fees for

services that were being rendered outside the United States at the time

of that rulemaking. The fee schedule has not been updated since 1982,

although the FAA's costs for performing these services has escalated

since adoption of the present rule in 1982. The FAA incurs special

costs to operate overseas that increase the costs for providing

services outside the United States. These additional costs include

cost-of-living allowances as well as allowances for housing and

education. Due to these costs, employing an inspector outside the

United States is approximately $85.4 thousand more costly than

employing the same inspector within the United States.

Further, since the methodology for computing fee schedules and time

table for adjustment of fees was not established in 14 CFR part 187,

appendix A, it is currently necessary to update this fee schedule by

rulemaking.

The changes set out in this NPRM make the FAA's fee practice more

nearly consistent with the principles of nondiscrimination and most-

favored-nation treatment that are at the core of the international

trade regime set up by the GATT, and which includes the Aircraft Code

and the General Agreement on Trade in Services. Under these core trade

principles, governments should not treat foreign nationals differently

in the measures that they take that affect international trade. Airman

certifications are not governed by any trade agreement to which the

U.S. is a party, but the FAA has determined that bringing its fee

practices into line with international trade practices is desirable, if

not required by any specific obligation of the U.S. FAA measures with

regard to certification of foreign repair stations, however, including

fees charged, will be subject to U.S. obligations under the General

Agreement on Trade in Service (GATS), recently concluded in the so-

called Uruguay Round of GATT negotiations. The U.S. signed the

agreement, but has not ratified it, and it is not in force.

Implementing legislation has not yet been submitted to Congress.

Nevertheless, the GATS, which applies multilateral trade principles to

trade in services for the first time, will cover some aspects of

aircraft maintenance. This NPRM will be consistent with U.S.

obligations under the GATS, once it goes into effect.

Statutory Authority

Title VI of the Federal Aviation Act of 1958, as amended (the Act),

gives the Administrator authority to issue certificates for airmen,

instructors, schools, and repair stations.

In addition, under Title V of the Independent Offices Appropriation

Act of 1952 (31 U.S.C. 9701), the FAA has been charged with

establishing a fair and equitable system for recovering full costs

expended for any service, such as the issuance of the certificates

discussed in this proposal, that provide a special benefit to an

individual beyond those that accrue to the general public. Section 403a

of that Act provides, in part, as follows:

It is the sense of the Congress that any work service,

publication, report, document, benefit, privilege, authority, use,

franchise, license, permit, certificate, registration, or similar

thing of value or utility performed, furnished, provided, granted,

prepared or issued by any Federal Agency * * * to or for any person

(including groups, associations, organizations, partnerships,

corporations, or businesses), except those engaged in the

transaction of official business of the Government, shall be self-

sustaining to the fullest extent possible * * *.

Section 483a further provides, in part:

The head of each Federal agency is authorized by regulation

(which, in the case of agencies in the Executive Branch, shall be as

uniform as practicable and subject to such policies as the President

may prescribe) to prescribe therefore such fee, charge, or price, if

any, as he shall determine, in case none exists, or redetermine, in

case of any existing one, to be fair and equitable taking into

consideration direct and indirect cost to the Government, value to

the recipient, public policy or interest served, and other pertinent

facts * * *.

Finally, in 1980, Congress passed the International Air

Transportation Competition Act of 1979 (hereinafter ``IATC Act'')

giving the FAA authority to establish fee schedules for airmen and

repair station certification services provided outside the U.S. Section

28 of the IATC Act amended Section 45 of the Airline Deregulation Act

to read as follows:

Nothing in this section shall prohibit the Secretary of

Transportation or the Administrator from collecting a fee, charge,

or price for any test, authorization, certificate, permit, or

rating, administered or issued outside the United States, relating

to any airman or repair station. (49 U.S.C. 334, second sentence).

The amounts collected shall be paid to the Federal Government.

Office of Management and Budget (OMB) Guidelines

To aid in establishing fee schedules, OMB has prescribed in

Circular No. A-25 the general guidelines to be used in developing an

equitable and reasonable uniform system of charges for certain

government services and property. The circular provides that ``where a

service (or privilege) provides special benefits to an identifiable

recipient above and beyond those that accrue to the public at large, a

charge should be imposed to receive the full cost to the Federal

Government of rendering that service.'' Circular No. A-25 specifies the

following:

A special benefit will be considered to accrue and a charge should

be imposed when a Government-rendered service:

(a) Enables the beneficiary to obtain more immediate or substantial

gains or values (which may or may not be measurable in monetary terms)

than those which accrue to the general public (for example, receiving a

patent, crop insurance, or license to carry on a specific business), or

(b) Provides business stability or assures public confidence in the

business activity of the beneficiary (for example, certificates of

necessity and convenience [sic: convenience and necessity] for airline

routes, or safety inspections of craft); or

(c) Is performed at the request of the recipient and is above and

beyond the services regularly received by other members of the same

industry or group, or of the general public (for example, receiving

passport visa, airman's certificate, or an inspection after regular

duty hours).

General Discussion of the Proposals

This notice proposes that the fee schedule in 14 CFR part 187,

Appendix A, be amended to provide the methodology for computing user

fees that permit full recovery of the FAA costs incurred in performing

these services authorized by legislation and to develop a timetable for

updating fees. The method of payment of fees prescribed in 14 CFR

187.15 would also be amended to take advantage of some additionally

available banking services, that is, wire transfers and payment by

credit card, that would expedite deposit of funds to the U.S.

Government.

In keeping with the authority granted under the IATC Act, this

notice would establish the schedule of fees that would be published in

an FAA Advisory Circular on inspector fees. Under this proposal, hourly

rates for repair station certifications, and fixed fees for each airman

certificate issued would be derived from total costs to the FAA of

providing the services and have been computed using direct and indirect

labor costs (excluding holiday, Sunday, and overtime costs), and

overhead costs. Fees for transportation and subsistence expenses

associated with the issuance of certificates have not been included in

the computation of hourly fees and fixed fees. Fees covering those

expenses would be charged to applicants in addition to the specified

fee whenever such expenses are incurred by the FAA in providing the

requested service. Consistent with OMB Circular A-25, under this NPRM

the FAA would recover all costs incurred for performing the above-

described certification services outside the U.S.

Airman Certifications

There are 55 categories of airman certification actions for which

fees are prescribed under the Appendix A at the present time. These

were the only categories of airman certification actions being

administered by the FAA outside the United States at the time of the

original fees rulemaking in 1982. Since that time, demand for airman

certification services outside the U.S. has increased, and the FAA now

administers airman tests, approvals, and ratings for which fees have

not been established.

There are 96 categories of FAA airman tests, approvals, or ratings

that currently may be performed outside the U.S. This proposal would

update existing fees for the 55 types of airman tests, approvals, and

ratings listed in 14 CFR part 187, Appendix A, and would also establish

fees for the 41 other types of airman tests, approvals and ratings that

the FAA may administer outside the United States. Thus, the proposed

rule would prescribe fees for all tests, renewals, authorizations, or

approvals relating to airman certification outside the United States.

This NPRM would also permit FAA recovery of transportation and

subsistence expenses that may be incurred in the administering of

airman tests, approvals, and ratings outside the United States.

Generally, written airman tests are given at the FAA Flight Standards

Office (FSO) and practical airman tests are conducted at a nearby

airport where transportation and subsistence expenses are not incurred.

When inspectors give airman tests at locations outside of the FAA duty

station city, those tests are typically conducted in conjunction with a

scheduled inspection. Since the fees charged for airman tests do not

offset the costs associated with travel, the FAA currently does not

send its inspectors to locations outside their duty stations solely for

the purpose of conducting airman tests.

An occasion may arise, however, where an individual or group of

individuals, such as a flying club, may be willing to pay the

transportation and subsistence expenses of an FAA inspector to permit

him or her to travel in order to administer airman tests. In instances

of this type, this notice of proposed rulemaking would permit the FAA

to recover transportation and subsistence expenses in addition to the

established airman fee.

Under the current rule, the FAA may charge only foreign nationals

when it administers airman tests or performs similar services outside

the United States. This NPRM would remove that limitation by permitting

the FAA to charge all applicants for these services, regardless of

country of citizenship, as authorized by the IATC Act. The removal of

this limitation will correct the current inequity of FAA charging U.S.-

owed foreign repair stations for certification actions but not charging

other U.S. citizens for airman certification.

The cost to the FAA of providing airman certification services

outside the United States is the same for all applicants for the same

type of test regardless of the citizenship of the applicant. Because

Federal law prohibits charging anyone, a foreign national or a U.S.

citizen, more than the cost of services provided, the application of

fees only to foreign nationals effectively precludes full recovery of

costs. Moreover, it is highly unlikely that costs of services provided

abroad to U.S. citizens could be recovered through the indirect user

taxes that provide most of the FAA's funding. These taxes--assessed on

the value of domestic passenger tickets, domestic freight charges,

passengers departing the United States, and aviation fuel sold in the

United States--are not paid by airmen living abroad, whether U.S.

citizens or foreign nationals.

Most U.S. citizens already pay for airman testing services provided

outside the United States by using FAA designated test examiners for

obtaining airman certification services. Under this proposal, U.S.

citizens would pay the same fee as anyone else for the certification

services described in this NPRM, regardless of whether a service is

provided by an FAA designated test examiner or by an FAA inspector.

Repair Stations

This proposal would also revise the hourly billing rate paid to the

FAA for the certification of repair stations. The current rate, found

in 14 CFR part 187, Appendix A, would be increased from $47 per

inspector hour to $80 per inspector hour to cover the FAA's current

costs incurred while performing this service. In addition to the hourly

fees for inspector services, this proposal would permit the FAA to

recover transportation and subsistence expenses that may be incurred in

connection with repair station and services. The transportation and

subsistence expenses incurred by FAA inspectors represent a large

portion of the costs incurred by the FAA when performing repair station

certification work. Most of this work must be performed on-site and,

therefore, requires that an FAA inspector travel to the repair station

facility to be inspected. Repair stations facilities range from 20

minutes to 30 hours in travel time from FAA FSO's and, in some

instances, lack of funds to cover the FAA's transportation and

subsistence costs may prevent the agency from sending inspectors to

perform needed repair station certification evaluations.

This proposal would delete the existing hourly fee of $14 for

clerical time devoted to repair station certification activities listed

in 14 CFR part 187, Appendix A. Instead of computing a direct fee for

clerical time, clerical costs have been included in the hourly base

rate that would be charged for the FAA inspector's time.

Fee Computation

Proposed fixed fees and hourly rates have been derived based on the

standard methodology used in FAA cost allocation studies. A single,

average hourly billing rate for all Flight Standards Aviation Safety

Inspectors (ASI'S), both domestic based ASI'S and foreign based ASI'S,

was derived using the methodology discussed in this section. Domestic

based ASI'S perform certification services, in addition to foreign

based ASI'S. While domestic based ASI'S are employed at a much lower

rate than foreign based ASI'S ($85.4 thousand annual difference) it is

beneficial, and consistent with international treaties, to have one

average hourly billing rate for ASI services, rather than have multiple

rates based on ASI location.

To determine the average hourly rate the FY94 Flight Standards

operations budget of $270,515,400, excluding direct ASI travel, Sunday,

holiday and overtime pay, was used as the base. The annual

appropriations for facilities and equipment and research and

development were also not used in the rate base. The operations budget

contains the following items.

(1) Personnel compensation and benefits, budget code series 1100

(excluding codes 1151 and 1152--overtime, Sunday and holiday pay), 1200

and 1300.

(2) Travel and transportation of persons, budget code series 2100

(excluding code 2100--site visit travel).

(3) Transportation of things, budget code series 2200.

(4) Rental, communications, utilities, budget code series 2300.

(5) Printing and reproduction, budget code series 2400.

(6) Contractual services, budget code series 2500.

(7) Supplies and materials, budget code series 2600.

(8) Equipment, budget code series 3100.

(9) Lands and structures, budget code series 3200.

10. Insurance claims and indemnities, budget code series 4200.

In order to recover overhead costs attributable to providing safety

services, all costs are assigned to the inspector. This is accomplished

by dividing the operations budget of $270,515,400 by 2,694 ASI's on

board at the beginning of FY94. The number 2,694 is taken from the

Flight Standards monthly staffing report and is the total number of

ASI'S in the OMB position series 1825. This division results in an

annual ASI cost of $100,414.03. The annual ASI cost of $100,414,03 is

divided by 2,087 hours, which is the annual paid hours of each federal

government employee. This results in an hourly cost of $48.11 per

``paid hour'' (the actual amount paid by the FAA for each hour of work

performed by an inspector), based on 2,087 paid hours per inspector

year.

This cost of $48.11 per hour does not ensure full recovery of

costs. Inspectors spend a significant amount of time in indirect work

such as training and the preparation of administrative reports, to

support their inspection activities, much of which cannot be allocated

to any one client. In addition, not all 2,087 annual paid hours are

available as work hours. Training, providing technical assistance,

leave, and other factors reduce the work hours that may be directly

billed. Consequently, it is necessary to increase the hourly ASI

government paid amount of $48.11 by an indirect work factor of 1.66 to

arrive at the full cost recovery hourly ASI billing rate.

The indirect work factor of 1.66 is derived as follows. The Flight

Standards Staffing Standard (FAA Order 1380.28B, dated January 15,

1985) uses an indirect work rate of 0.43 to project the amount of time

an ASI spends in indirect work activities, as opposed to certification

and surveillance work, during the year. The indirect work activities

are:

(a) Development of master minimum equipment lists on Flight Operations

Evaluation Board

(b) Development of aircraft training documents on Flight

Standardization Board

(c) Development of Maintenance program documents on Maintenance Review

Board

(d) Providing technical assistance

(e) Assisting legal counsel

(f) Evaluation of technical documents

(g) Leave (all types)

(h) Training

(i) Administrative time

(j) travel for indirect work

Further, OMB guidelines require agencies to use 1,800 average

annual hours available for work and 280 average annual leave hours (all

types of leave) for computing manpower requirements. From the OMB

guidelines, the ratio of yearly leave hours to average annual hours

available for work (280 divided by 1800) is computed at 0.16. Thus, the

indirect work factor for billing purposes is computed using the

following formula:

TP30JN94.000

where:

a=indirect work rate, and

b=leave usage (total leave hours divided by total hours available for

work).

This computation yields an indirect work factor of 1.66, which is

computed from (1+0.43)(1+0.16). The indirect work factor shows that the

FAA actually pays for 1.66 hours for each direct billable hour of ASI

time.

The hourly inspector billing rate is determined by multiplying the

$48.11 hourly government paid rate by the indirect work factor of 1.66

to arrive at the hourly ASI billing rate of $79.81, or $80 rounded to

the nearest dollar. The proposed hourly billing rate of $80 per ASI

hour is applied to airman and repair station certification actions as

follows.

The proposed fixed fees for airman certification were derived by

multiplying the proposed ASI billing rate of $80 by the total time used

in the Flight Standards Staffing Standard or airman test guidelines as

necessary to complete each certification activity. The FAA is not

proposing fixed fees for the certification of air agencies, such as

airman schools and repair stations, because the time involved in

certificating these facilities varies widely and therefore there is no

average staffing standard time.

For certification actions where there is no fixed fee, as air

agency certifications, this notice proposes that applicants, at the

time of application, submit a prepaid deposit at the hourly ASI billing

rate of $80 per hour for the minimum estimated time required to

complete the certification applied for, as determined by the certifying

Flight Standards Office (FSO). When the certification effort is

completed, the applicant would either receive a refund or submit the

additional amount due, depending upon the time actually required for

certification, plus transportation and subsistence expenses.

The charges to applicants by the FAA for inspector transportation

and subsistence expenses, are governed by Federal Travel Regulations,

and would reflect the cost expended by the FAA on the requested

certification action.

Proposed Future Revisions to the Fee Schedule

The FAA plans to review actual costs incurred in the certification

efforts every year, at the beginning of the fiscal year, using the same

fee methodology described above, and, the FAA proposes to amend the fee

schedule on an annual basis to either increase or decrease fees. Each

amended fee schedule would be published in the Federal Register and

published in an FAA Advisory Circular on the subject of Inspector Fees.

The proposed fee schedule that would be established as a result of

this rulemaking is contained in the attached Table to this NPRM.

Fee Collection

For airman certification actions, the FAA would collect the fee at

the time of application for a certification, rating or approval, after

first ascertaining the applicant's eligibility. The FSO or designated

examiner would determine whether the applicant meets the preliminary

eligibility requirements, such as age and currency. If these

requirements are met, the FSO would issue a receipt as evidence of

payment, ensure the deposit of fees into a U.S. Treasury approved bank,

and forward the fee deposit information to the regional accounting

office serving the area.

Under this NPRM, payments for services rendered by FAA inspectors

would have to be in the form of a check, money order, draft, or wire

transfer, and would have to be payable in U.S. currency to the FAA and

drawn on a U.S. bank. Bank processing fees may also be added to the

fees charged to applicants, where such processing fees are charged to

U.S. Government accounts. No application would be acted upon until

evidence of payment by the applicant has been presented.

Generally, there would be no refund of any fee paid for FAA

certification services, including fees paid for any airman test,

approval, or authorization that an applicant fails to pass. However, if

an applicant notifies the FAA of a test cancellation at least one week

prior to a scheduled examination, the FAA would refund the fee after

deducting a minimal service charge to cover the cost of processing the

application.

In the case of a request for airman certification and repair

station facility certifications (air agency certification), applicants

would submit as prepayment a deposit in the amount specified by the

certifying FSO. This prepayment would be based on the estimated minimum

number of hours that an ASI would need to certificate the facility, as

determined by the FSO performing the service. The hourly rate to be

paid for the inspector's time would be the rate specified in Appendix A

of Part 187. If the cost to complete the certification is less than the

amount prepaid by the applicant, the FAA would submit to the applicant

a refund to cover the difference between the prepayment and the actual

charges. Conversely, if the cost is greater, the applicant would be

required to submit the additional charges. As in the case of airman

certificates, applicants for air agency certification would have to pay

the required fees, regardless of whether an FAA certificate is issued.

Comparison of FAA Proposal With International Civil Aviation

Organization (ICAO) and European Joint Aviation Authority (JAA)

Regulations

ICAO does not perform airman or agency certification actions of the

type proposed by the FAA in this NPRM.

The JAA currently has not completed writing its operations

regulations and, therefore, has no airman charges at this time. For

foreign repair station certification, the JAA has announced a charge of

$1,000 per non-European facility. The charge will be assessed

irregardless of an inspection visit. Within Europe, JAA certificates

are issued by the appropriate Civil Aviation Authority (CAA) of the JAA

member country and applicants are charged according to the fees of that

CAA. Two examples of fees for comparable services provided by the CAA's

of JAA member countries follow.

The United Kingdom CAA hourly inspector rate is 147,

which is approximately $297 U.S. per inspector hour. Repair station

certification charges range from 442 to 3,180

($884 to $6,360 U.S.). Additional hourly charges may be assessed.

Actual transportation and subsistence costs are added for facilities

located outside the U.K. These charges include a 7.5% profit on

certification actions.

The German LBA repair station charges range from 800 to 7,000

Deutsche Marks (DM), which is approximately $479 to $4,191 U.S.

Transportation costs are also added.

Paperwork Reduction Act

There are no reporting or recordkeeping requirements associated

with this NPRM.

Regulatory Evaluation Summary

Executive Order 12866 established the requirement that, within the

extent permitted by law, a Federal regulatory action may be undertaken

only if the potential benefits to society for the regulation outweigh

the potential costs to society. In response to this requirement, and in

accordance with Department of Transportation policies and procedures,

the FAA has estimated the anticipated benefits and costs of this

rulemaking action. The FAA has determined that this proposed rule is

not a ``significant rulemaking action,'' as defined by Executive Order

12866 (Regulatory Planning and Review). The results are summarized in

this section.

This proposed rule would not impose any additional costs on any

members of society other than those requesting FAA certification

services outside the United States. The proposed rules, if implemented

as final rules, would reimburse the FAA for the cost of services

currently being provided to the users. Thus, the beneficiaries, rather

than the general taxpayers, would pay for the services provided by the

FAA. The FAA has determined that the proposed fees are equitable and

reflect the cost of providing these services. The benefits of this NPRM

would therefore be the elimination of the need for general revenues by

the FAA to cover the costs of these services provided by the FAA.

Regulatory Flexibility Determination

The Regulatory Flexibility Act of 1980 (RFA) was enacted by

Congress to ensure that small entities are not unnecessarily burdened

by government regulations. The RFA requires agencies to consider the

impact of proposed rules on small entities, that is, small businesses,

nonprofit organizations, and local governments. If there is a

significant impact on a substantial number of small entities, the

Agency must prepare a draft Regulatory Flexibility Analysis (RFA) for

the NPRM and a final RFA for the final rule.

The proposed rule would primarily affect general aviation pilots

and foreign repair stations. The RFA applies neither to individuals nor

foreign entities. Therefore, a RFA is not required.

International Trade Impact

This proposed rule would affect primarily general aviation pilots

and foreign repair stations. The proposal would have a favorable

competitive impact on U.S. repair stations by removing the subsidy that

the FAA has provided to foreign repair stations in the form of lower

charges for certification services. The NPRM would enhance the

competitiveness of domestic firms.

Federalism Implications

The regulations proposed herein would not have substantial direct

implications on the states, on the relationship between the national

government and the states, or on the distribution of power and

responsibilities among the various levels of government. Therefore, in

accordance with Executive Order 12866, it is determined that this

proposal would not have sufficient federalism implications to warrant

the preparation of a Federalism Assessment.

Conclusion

For the reasons discussed in the preamble, and based on the

findings in the Regulatory Flexibility Determination and the

International Trade Impact Analysis, the FAA has determined that this

proposed regulation is nonsignificant under Executive Order 12866. In

addition, the FAA certifies that this proposal, if adopted, will not

have a significant economic impact, positive or negative, on a

substantial number of small entities under the criteria of the

Regulatory Flexibility Act. This proposal is not considered significant

under Order DOT 2100.5, Policies and Procedures for Simplication,

Analysis, and Review of Regulations. A draft regulatory evaluation of

the proposal, including a Regulatory Flexibility Determination and

International Trade Impact Analysis, has been placed in the docket. A

copy may be obtained by contacting the person identified under FOR

FURTHER INFORMATION CONTACT.

List of Subjects in 14 CFR Part 187

Administrative practice and procedure, Air transportation, Federal

Aviation Administration.

The Proposed Amendment

In consideration of the foregoing, the Federal Aviation

Administration proposes to amend part 187 of the Federal Aviation

Regulations (14 CFR part 187) as follows:

PART 187--FEES

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

follows:

Authority: Sec. 501, 65 Stat. 290; 31 U.S.C. 9701; secs. 301,

302, 303, 305, 307, 313, 314; 72 Stat. 744, 747, 749, 752, 754; 49

U.S.C. 341, 1343, 1344, 1346, 1348, 1354, 1355.

2. Section 187.15 is amended by designating the current text as

paragraph (a) and by adding paragraphs (b) and (c), to read as follows:

Sec. 187.15 Payment of fees.

(a) * * *

(b) The fees prescribed in Appendix A of this part may be paid by

wire transfer.

(c) Applicants for the FAA services described in Appendix A of part

187 shall pay bank processing charges, when such charges are assessed

by banks on U.S. Government deposits.

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

Appendix A to Part 187--Methodology for Computation of Fees for

Certification Services Performed Outside the United States

(a) Fixed fees and hourly rates have been derived using the

methodology described below to ensure full cost recovery for

certification actions or approvals provided by the FAA for persons

outside the United States.

(b) These rates are based on aviation safety inspector time

rather than calculating a separate rate for managerial or clerical

time because the inspector is the individual performing the actual

service. Charging for inspector time, while building in all costs

into the rate base, provides for efficient cost recovery and time

measurement.

(c) The hourly billing rate has been determined by using the

annual operations budget of the Flight Standards Service. The budget

is comprised of the following:

(1) Personnel compensation and benefits, budget code series 1100

(excluding codes 1151 and 1152--overtime, Sunday and holiday pay),

1200, and 1300.

(2) Travel and transportation of persons, budget code series

2100 (excluding code 2100--site visit travel).

(3) Transportation of things, budget code series 2200.

(4) Rental, communications, utilities, budget code series 2300.

(5) Printing and reproduction, budget code series 2400.

(6) Contractual services, budget code series 2500.

(7) Supplies and materials, budget code series 2600.

(8) Equipment, budget code series 3100.

(9) Lands and structures, budget code series 3200.

(10) Insurance claims and indemnities, budget code series 4200.

(d) In order to recover overhead costs attributable to the

budget, all costs other than direct inspector transportation and

subsistence, overtime, and Sunday/holiday costs, are assigned to the

number of inspector positions. An hourly cost per inspector is

developed by dividing the annual Flight Standards Operations Budget,

excluding the items enumerated above, by the number of aviation

safety inspections (OMB position series 1825) on board at the

beginning of the fiscal year, to determine the annual cost of an

aviation safety inspector. This annual cost of an aviation safety

inspector is divided by 2,087 hours, which is the annual paid hours

of a U.S. Federal Government employee. This results in the hourly

government paid cost of an aviation safety inspector.

(e) To ensure that the hourly inspector cost represents a

billing rate that ensures full recovery of costs, the hourly cost

per inspector must be multiplied by an indirect work factor to

determine the hourly inspector billing rate. This is necessary for

the following reasons:

(1) Inspectors spend a significant amount of time in indirect

work to support their inspection activities, much of which cannot be

allocated to any one client.

(2) Not all 2,087 annual paid hours are available as work hours

because training, providing technical assistance, leave, and other

indirect work activities reduce the work time that may be directly

billed. Consequently, the hourly cost per inspector must be adjusted

upwards by an indirect work factor. The calculation of an indirect

work factor is discussed below.

(f) The indirect work factor is determined using the following

formula:

TP30JN94.001

where:

a=indirect work rate, and

b=leave usage (total leave hours divided by total hours available

for work).

The components of the formula are derived as follows.

(1) a=indirect work rate. Indirect work rate is taken from the

Flight Standards Staffing Standard Order and is used to project the

amount of time an aviation safety inspector spends in indirect

activities, as opposed to certification and surveillance work. The

indirect work activities are:

(i) Development of master minimum equipment lists on Flight

Operations Evaluation Board.

(ii) Development of aircraft training documents on Flight

Standardization Board.

(iii) Development of Maintenance program documents on

Maintenance Review Board.

(iv) Providing technical assistance.

(v) Assisting legal counsel.

(vi) Evaluation of technical documents.

(vii) Leave (all types).

(viii) Training.

(ix) Administrative time.

(x) Travel for indirect work.

(2) b = leave usage (total leave hours divided by total hours

available for work). This is computed by using OMB guidelines of 280

average annual hours leave hours and 1,800 average annual hours

available for work for computer manpower requirements.

(g) The hourly inspector cost, when multiplied by the indirect

work factor, yields the hourly inspector billing rate and ensures

full cost recovery by incorporating the total amount of FAA paid

hours needed to produce one hour of direct billable inspector time.

(h) Certifications and approvals for which there are fixed

times, such as a airmen tests, are determined by multiplying the

time used in the Flight Standards Staffing Standard or airman test

guidelines by the inspector hourly billing rate.

(i) Certifications and approvals for which there are no fixed

work rates, such as airman, and repair station facilities (air

agencies), are billed at the hourly inspector billing rate.

(j) Actual transportation and subsistence expenses incurred in

certification or approval actions will be billed in addition to the

hourly inspector billing rate, where such expenses are incurred.

(k) In no event will the fees exceed the actual costs of

providing certification or approval services.

(l) The methodology for computing user fees is published in 14

CFR part 187, Appendix A. The User fee schedule will be published in

an FAA Advisory Circular entitled ``Flight Standards Service

Schedule of Charges Outside the United States.''

(m) Fees will be reviewed every year, at the beginning of the

fiscal year, and adjusted either upward or downward in order to

reflect the current costs of performing tests authorizations,

certifications, permits, or ratings.

(1) Notice of any changes to the user fee schedule will be

published in the Federal Register.

(2) Notice of any changes to the methodology for computing the

user fees will be published in the Federal Register.

Issued in Washington, DC on June 24, 1994.

William J. White,

Acting Director, Flight Standards Service.

Appendix to the Proposed Rule

Table.--Proposed Flight Standards Service Schedule of Charges Outside the United States

[Federal Aviation Administration Flight Standards Service Schedule of Charges Outside the United States]

----------------------------------------------------------------------------------------------------------------

Category of service 14 CFR reference Charge Rate Time

----------------------------------------------------------------------------------------------------------------

1. Transportation and Subsistence

Charges, All Categories of Services

Transportation and subsistence will be ..................... Actual cost.......... ........... ...........

assessed to applicants in addition to

the charge published below for

certification actions requiring travel

from the duty station city.

II. Airman Certification, All Categories

of Airmen

Authorizations for written or practical Parts 61, 63 65...... $40 80 0.5

tests unless specified below.

Special medical check................... Part 67.............. $160 80 2

FA Act Section 609 re-exam.............. Parts 61, 63, 65..... $208 80 2.6

Inspector review for all tests, Part 61, 63, 65...... $40 80 0.5

approvals, ratings given by designated

examiners and evaluators.

Pilots

Written tests, including: tests for

initial issue or renewal of a

certificate of rating; restriction and

limitation removals, determination of

knowledge based on military experience

in the categories below:

Private pilot....................... Part 61.103.......... $40 80 0.5

Recreation pilot.................... Part 61.96........... $40 80 0.5

Commercial pilot.................... Part 61.123.......... $40 80 0.5

Airline Transport pilot............. Part 61.153 or Part $40 80 0.5

61.159.

Instrument Rating................... Part 61.65 or Part $40 80 0.5

6l.75.

Flight Instructor: ..................... $40 80 0.5

(a) Fundamental of Instructing.... Part 61.183.......... $40 80 0.5

(b) Written, other than gyroplane. Part 61.183.......... $40 80 0.5

(c) Written for gyroplane......... Part 61.183.......... $40 80 0.5

Ground Instructor................... Part 143.3........... $40 80 0.5

Practical tests (oral, flight, simulated

flight increments, or combinations),

for initial award or renewal of a

certificate or training, restriction

and limitation removals, determination

of knowledge based on military

experience in the categories below:

Student pilot....................... Part 61.83........... $32 80 0.4

Recreational pilot.................. Part 61.96(e)........ $0 80 0

Private pilot....................... Part 61.103.......... $248 80 3.1

Commercial pilot.................... Part 61.123.......... $248 80 3.1

Commercial pilot limited to VFR..... Part 61.129(a)....... $248 80 3.1

Commercial pilot reissue certificate Part 61.11........... $248 80 3.1

Airline transport pilot............. Part 61.157 or Part $400 80 5

61.163.

Airline transport pilot, applicant Part 61.157 or Part $400 80 5

without IFR rating. 61.163 or Part 61.65.

Replacement of a lost or destroyed Part 61.29........... $0 80 0

certificate.

Instrument rating................... Part 61.65 or Part $256 80 3.2

61.75.

Flight instructor:

(a) Instrument rating............. Part 61.191 or Part $288 80 3.6

61.65.

(b) Added category rating......... Part 61.191 or Part $248 80 3.1

61.63.

(c) Added class rating............ Part 61.191 or Part $248 80 3.1

61.63.

(d) Renewal....................... Part 61.197.......... $160 80 2

(e) Reinstatement................. Part 61.199(b)....... $160 80 2

Ground instructor................... Part 143.3........... $40 80 0.5

Type rating with instrument rating.. Part 61.63 or Part $368 80 4.6

61.157 or Part

61.163.

Type rating without instrument Part 61.63........... $368 80 4.6

rating.

Category rating..................... Part 61.63 or Part $368 80 4.6

61.165.

Class rating........................ Part 61.63........... $368 80 4.6

Special purpose pilot on basis of Part 61.75........... $68 80 0.85

foreign certificate.

Special purpose pilot on basis of Part 61.77(e)(4)..... $68 80 0.85

aircraft lease.

Pilot proficiency check--12 month... Part 61.58(b)........ $296 80 3.7

Pilot proficiency check--24 month... Part 61.58(c)........ $296 80 3.7

Instrument competency check......... Part 61.57........... $320 80 4

Statement of demonstrated ability... Part 61.13(d)........ $320 80 4

Category II authorization........... Part 61.57........... $320 80 4

Category III authorization.......... Part 61.58........... $320 80 4

Pilot-in-command in lieu of type Part 61.31(b) or Part $464 80 5.8

rating (LOA) authorization. 61.31(h)(3).

Aerobatic competence authorization.. Part 91.............. $320 80 4

Pilot knowledge/skill authorization. Parts 91, 125, 133, $320 80 4

135, 137.

Flight instructor simulator Parts 121,135........ $320 80 4

authorization.

Flight Engineers

Written tests, including: initial, Part 63.35 (a) & (b). $40 80 0.5

renewal, added ratings, restriction

removals, reissuances, and tests based

on military competence.

Practical tests (oral, flight, or Part 63.33(b)(1)..... $400 80 5

combined) for initials, renewals, added

ratings, simulators, restriction

removals, reissuances.

Special purpose flight engineer based on Part 63.42........... $68 80 0.85

foreign license (initial, renewal, VFR

or IFR, with our without medical).

Special purpose flight engineer Part 63.23........... $68 80 0.85

based on aircraft lease (initial,

renewal, VFR or IFR, with or

without medical).

Flight Navigators

..................... $0 80 ...........

Written tests, including: initial, Part 63.53(a)........ $40 80 0.5

renewal, added ratings, restriction

removals, reissuances, and tests based

on military competence.

Practical tests (oral, flight, or Part 63.57........... $400 80 5

combined) for initials, renewals, added

ratings, simulators, restriction

removals, reissuances, including tests

based on military competency.

Aircraft Dispatchers

Written tests, including: initial, Part 63.55(a)........ $40 80 0.5

renewal, added ratings, restriction

removals, reissuances, and tests based

on military competence.

Practical tests (oral, flight, or Part 65.59........... $400 80 5

combined) for initials, renewals, added

ratings, simulators, restriction

removals, reissuances, including tests

based on military competency--

competency for airplane and helicopter.

Mechanics

Written tests, including: initial, Part 65.71(a), 65.77. $40 80 0.5

renewal, added ratings, restriction

removals, reissuances, and tests based

on military competence--general,

airframe, powerplant.

Practical tests for initials, renewals, Part 65.79........... $504 80 6.3

added ratings, restriction removals,

reissuances--airframe or powerplant.

Inspection Authorization

Inspection Authorization (IA)--initial.. Part 65.91........... $392 80 4.9

Inspection Authorization (IA)--renewal.. Part 65.93........... $72 80 0.9

Repairmen

Initial, renewal, added rating.......... Part 65.101.......... $152 80 1.9

Parachute Riggers

Written tests, including: initial, Part 65.115(a); Part $40 80 0.5

renewal, added ratings, restriction 65.117; Part

removals, reissuances, and tests based 65.119(b).

on military competence--senior or

master.

Practical tests for initials, renewals, Part 65.115(c)....... $440 80 5.5

added ratings, restriction removals,

reissuances, including tests based on

military competency.

Designated Examiners

For all categories--including written

and practical tests, initials, added

ratings, renewals, restriction

removals, reissuances unless specified

below

Pilot examiners: Part 183.23.......... .....................

Large turbine....................... ..................... $960 80 12

Pilot proficiency................... ..................... $440 80 5.5

Written test examiner............... ..................... $640 80 8

Airmen certification representative. ..................... $400 80 5

Other types as the FAA may designate Part 183.11(b)....... $960 80 12

Aircraft dispatch examiner (DADE)....... Part 183.25(f)....... $960 80 12

Flight engineer examiner (DFEE)......... Part 183.25(d)....... $960 80 12

Flight navigator examiner (DFNE)........ Part 183.25(e)....... $960 80 12

Designated airworthiness Representative Part 183.33.......... $440 80 5.5

(DAR)--initial.

Designated airworthiness Representative Part 183.33.......... $160 80 2

(DAR)--renewal.

Designated Mechanic Examiner (DME)-- Part 183.25(a)....... $504 80 6.3

initial.

Designated Mechanic Examiner (DME)-- Part 183.25(a)....... $184 80 2.3

renewal.

Designated Parachute Rigger Examiner Part 183.25(b)....... $504 80 6.3

(DPRE)--initial.

Designated Parachute Rigger Examiner Part 183.25(b)....... $184 80 2.3

(DPRE)--renewal.

Other designees as the FAA may designate Part 183.11(b)....... $504 80 6.3

III. Air Agencies

Repair station certification/approval/ Part 145, Subpart C.. $80 per inspector per ........... ...........

authorization actions. hour.

Pilot school certification/approval/ Part 141............. $80 per inspector per ........... ...........

authorization actions. hour.

Airmen training centers certification/ Proposed Part 142.... $80 per inspector per ........... ...........

approval/authorization actions. hour.

Aviation maintenance technical schools Part 147............. $80 per inspector per ........... ...........

certification/approval/authorizing hour.

actions.

-----------------------------------------

1-Feb-94

----------------------------------------------------------------------------------------------------------------

[FR Doc. 94-15968 Filed 6-29-94; 8:45 am]

BILLING CODE 4910-13-M