Production and Airworthiness Approvals, Part Marking, and Miscellaneous Proposals, 63797-63800 [E7-22111]

Agencies

• Federal Aviation Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 72, Number 218 (Tuesday, November 13, 2007)]
[Rules and Regulations]
[Pages 63797-63800]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-22111]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 21

[Docket No. FAA-2006-25877; Amendment No. 21-91]
RIN 2120-AI78


Production and Airworthiness Approvals, Part Marking, and 
Miscellaneous Proposals

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: The FAA is amending its requirements to allow the issuance of 
export airworthiness approvals for Class II and III products located at 
facilities outside the United States. The FAA proposed this change in a 
Notice of Proposed Rulemaking (NPRM) issued on October 5, 2006. That 
NPRM proposed comprehensive changes to 14 CFR part 21 to standardize 
production and airworthiness requirements for production approval 
holders. This final rule expedites the promulgation of a simple and 
uncontroversial portion of that rulemaking. The FAA intends to issue a 
separate final rule on other proposals in that NPRM.

DATES: This amendment becomes effective January 14, 2008.

FOR FURTHER INFORMATION CONTACT: For technical questions concerning 
this final rule, contact John Linsenmeyer, Production Certification 
Branch, AIR-220, Federal Aviation Administration, 800 Independence 
Avenue, SW., Washington, DC 20591; telephone (202) 493-5571; facsimile 
(202) 267-5580, e-mail john.linsenmeyer@faa.gov.

SUPPLEMENTARY INFORMATION: 

Authority for This Rulemaking

    Under the laws of the United States, the Department of 
Transportation has the responsibility to develop transportation 
policies and programs that contribute to providing fast, safe, 
efficient, and convenient transportation (49 U.S.C. 101). The Federal 
Aviation Administration (FAA or ``we'') is an agency of the Department. 
The FAA has general authority to issue rules regarding aviation safety, 
including minimum standards for appliances and for the design, 
material, construction, quality of work, and performance of aircraft, 
aircraft engines, and propellers (49 U.S.C. 106(g) and 44701). We may 
also prescribe regulations in the interest of safety for registering 
and identifying an aircraft engine, propeller, or appliance (49 U.S.C. 
44104).
    The FAA may issue, among other things, type certificates, 
production certificates and airworthiness certificates (49 U.S.C. 
44702). We issue a production certificate authorizing the production of 
a duplicate of an aircraft, aircraft engine, propeller, or appliance 
for which a type certificate has been issued when we find the duplicate 
will conform to the certificate. We may include in a production 
certificate terms required in the interest of safety. We issue an 
airworthiness certificate for an aircraft when we find the aircraft 
conforms to its type design and is in condition for safe operation. We 
may include in an airworthiness certificate

[[Page 63798]]

terms required in the interest of safety (49 U.S.C. 44704).
    This document adopts a change to our regulations governing the 
certification procedures for products and parts. This change will make 
it easier for manufacturers to produce and obtain aircraft parts in the 
global marketplace, which should aid the efficiency and competitiveness 
of the industry. For these reasons, this final rule is a reasonable and 
necessary exercise of the FAA's rulemaking authority and obligations.

Background

    On October 5, 2006, the FAA issued an NPRM to amend its 
certification procedures and identification requirements for 
aeronautical products and parts (71 FR 58914). Included in that NPRM 
was a proposed change to Sec.  21.325(b)(3) to allow an export 
airworthiness approval to be issued for a product or article located 
outside of the U.S. if the FAA finds no undue burden in administering 
its regulations (Emphasis added). One aspect of the proposed change was 
to substitute the words ``product or article'' for ``Class II and III 
products.'' This change was part of a comprehensive effort to 
standardize terminology throughout part 21. Because the NPRM has not 
yet been adopted, this final rule allows for the issuance of export 
airworthiness approvals outside the U.S., but it retains the reference 
to ``Class II and III products.''

Summary of Comments

    The FAA received one comment on our proposed changes to the 
regulations affecting export airworthiness approvals. The Aviation 
Suppliers Association noted that the proposal still imposes an 
obligation to apply to the FAA for the ``no undue burden'' analysis. In 
the commenter's view, such an analysis is not necessary. Designated 
Airworthiness Representatives (DARs) must already receive permission to 
operate outside his or her geographic region. If the DAR has the 
authority to operate and make findings outside the U.S., then the DAR 
should also be permitted to issue an export airworthiness approval. An 
``undue burden analysis'' would be duplicative and a waste of 
Government resources. The commenter recommends removal of the ``undue 
burden analysis.''
    The FAA disagrees with the commenter. Pursuant to Title 49 of the 
United States Code, the Administrator of the FAA may delegate to a 
qualified private person a matter related to the examination, testing, 
and inspection necessary to issue a certificate. However, these 
assignees work on behalf of the Administrator. Ultimately, the FAA has 
a statutory responsibility to inspect products and determine their 
airworthiness status. We use the undue burden determination to ensure, 
with FAA's limited resources, we can meet the requirements of Title 49; 
our obligations under that statute cannot by circumvented by 
application of a rule.

Discussion of the Final Rule

    Part 21, Subpart L contains regulations for exporting aviation 
products. This rulemaking amends the regulations governing how export 
airworthiness approvals for Class II and III products are issued. 
Export airworthiness approvals are used to identify the airworthiness 
status of a particular product. Specifically, export airworthiness 
approvals attest that a particular product conforms to the approved 
design and is in a condition for safe operation. These approvals 
provide a certain level of assurance that a product or part that has 
been placed in the aviation stream of commerce poses a negligible risk 
to the flying public. They serve both civil aviation authorities 
approving the products for import and the end-user who places them into 
service. Although export approvals are required only when requested by 
the importing civil airworthiness authority, these documents have 
become increasingly valued in the aviation industry. Products and parts 
with an airworthiness approval have increased sales potential over 
those same parts that do not have an approval.
    This rulemaking amends Subpart L to allow the issuance of export 
airworthiness approvals for Class II and III products, regardless of 
their location. Previously, the rule only permitted approvals to be 
issued for these products manufactured and located in the United 
States.
    When Sec.  21.325(b)(3) was adopted (30 FR 8465, Jul. 2, 1965), the 
international market for aviation products was minimal compared with 
today's international market. Additionally, FAA resources were limited 
for issuing export airworthiness approvals outside the United States. 
However, FAA designees are now available to issue export airworthiness 
approvals for production approval holders (PAHs) and other exporters. 
This rulemaking relieves the past restriction on issuing approvals, as 
well as the public's burden of petitioning for exemptions, by allowing 
export airworthiness approvals to be issued for any Class II or Class 
III product located in another country, if the FAA finds no undue 
burden in administering its requirements. Consequently, a PAH may 
direct ship its products from a supplier facility without first 
shipping the product to the United States to obtain an export 
airworthiness approval.
    Certificate management and designee oversight responsibilities are 
examples of potential burdens on the FAA. For the PAHs, the assessment 
of undue burden related to issuing an export airworthiness approval 
would be performed during the FAA's undue burden assessment of a 
prospective production facility located outside the United States. Part 
of this assessment is a determination by the FAA that the PAH has 
established and implemented supplier control procedures that are 
acceptable to the FAA.
    The FAA has granted many petitions for exemption to Sec.  
21.325(b)(3), and this rulemaking will resolve the direct-ship issue 
that prompted organizations to request them. Expediting this rulemaking 
results in a more efficient disposition of those petitions for 
exemption.
    For the reasons stated above, this final rule adds new paragraph 
Sec.  21.325(b)(4) which allows export airworthiness approvals to be 
issued for Class II and III products located outside of the United 
States if the FAA finds no undue burden in administering the applicable 
requirements of Title 49 U.S.C. and subchapter C of Title 14 of the 
Code of Federal Regulations.

Paperwork Reduction Act

    Information collection requirements associated with this final rule 
have been approved previously by the Office of Management and Budget 
(OMB) under the provisions of the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507(d)), and have been assigned OMB Control Number 2120-0721.
    An agency may not collect or sponsor the collection of information, 
nor may it impose an information collection requirement unless it 
displays a currently valid Office of Management and Budget (OMB) 
control number.

International Compatibility

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

[[Page 63799]]

Regulatory Evaluation, Regulatory Flexibility Determination, 
International Trade Impact Assessment, and Unfunded Mandates Assessment

    Changes to Federal regulations must undergo several economic 
analyses. First, Executive Order 12866 directs that each Federal agency 
shall propose or adopt a regulation only upon a reasoned determination 
that the benefits of the intended regulation justify its costs. Second, 
the Regulatory Flexibility Act of 1980 (Public Law 96-354) requires 
agencies to analyze the economic impact of regulatory changes on small 
entities. Third, the Trade Agreements Act (Public Law 96-39) prohibits 
agencies from setting standards that create unnecessary obstacles to 
the foreign commerce of the United States. In developing U.S. 
standards, this Trade Act requires agencies to consider international 
standards and, where appropriate, that they be the basis of U.S. 
standards. Fourth, the Unfunded Mandates Reform Act of 1995 (Pub. L. 
104-4) requires agencies to prepare a written assessment of the costs, 
benefits, and other effects of proposed or final rules that include a 
Federal mandate likely to result in the expenditure by State, local, or 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more annually (adjusted for inflation with base year of 
1995).
    In conducting these analyses, FAA has determined that this final 
rule: (1) Has benefits that justify its costs, (2) is not an 
economically ``significant regulatory action'' as defined in section 
3(f) of Executive Order 12866, (3) is not ``significant'' as defined in 
DOT's Regulatory Policies and Procedures; (4) will not have a 
significant economic impact on a substantial number of small entities; 
(5) will not create unnecessary obstacles to the foreign commerce of 
the United States; and (6) will not impose an unfunded mandate on 
state, local, or tribal governments, or on the private sector by 
exceeding the threshold identified above. These analyses are summarized 
below.

Regulatory Evaluation Summary

    This portion of the preamble summarizes the FAA's analysis of the 
economic impact of this rule. It also includes summaries of the final 
regulatory flexibility analysis, international trade impact assessment, 
and the unfunded mandate assessment. For more information, we suggest 
readers go to the full regulatory evaluation, a copy of which we have 
placed in the docket for this rulemaking.

Total Costs and Benefits of This Rulemaking

    This Regulatory Evaluation examines the impact of an FAA rule 
allowing for the issuance of export airworthiness approvals for Class 
II (major components) and Class III (parts and components) products 
located at facilities outside the United States. Export airworthiness 
approvals are required by the FAA only if required by the importing 
country. Consequently, there is no issue of ``market failure'', at 
least from the perspective of the United States.
    As this rule relieves regulatory burden, there are cost-relieving 
benefits and no costs. The FAA estimates the annual cost savings from 
this rule to be $11,867,500. As the rule is a procedural change with no 
front-loaded costs, we use a 10-year period of analysis. Discounting 
this stream of annual cost savings (at 7%) for ten years yields a 
present value of approximately $83 million.

Who Is Potentially Affected by This Rulemaking

    This rule potentially affects directly all production approval 
holders, including holders of Production Certificates, Technical 
Standard Order Authorizations, and Parts Manufacturer Approvals. The 
rule also potentially affects distributors, importers and exporters of 
airplane parts, air operators and carriers, and the flying public.

Assumptions

    This evaluation makes the following assumptions:
     This rule would become effective on January 1, 2008.
     The discount rate is 7 percent (Office of Management and 
Budget, Circular A-94, ``Guidelines and Discount Rates for Benefit-Cost 
Analysis of Federal Programs'', October 29, 1992, p. 8).
     The period of analysis is the 10-year period, 2008-2017.
     For purposes of discounting, cost savings are 
conventionally assumed to occur at the end of the year. (If assumed to 
occur at the beginning of the year, the discounted present value of the 
cost savings increases by 7%.)

Changes From the NPRM to the Final Rule

     The effective date of the rule changes from 18 months 
after publication in the Federal Register to effective on January 1, 
2008.
     The period of analysis changes from 2009-2018 to 2008-
2017.
     The base year changes from 2005 to 2008.

Benefits of This Rulemaking

    The FAA estimates the present discounted value of the benefits of 
this rule to be approximately $83 million.

Costs of This Rulemaking

    As this rule relieves regulatory burden, there are no costs of this 
rule.

Alternatives Considered

    The Status Quo--The status quo represents a situation in which the 
FAA would continue to issue exemptions from Sec.  21.325(b)(3) 
indefinitely. As that would perpetuate ``rulemaking by exemption,'' we 
choose not to continue with the status quo.

Final Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) (RFA) 
establishes ``as a principle of regulatory issuance that agencies shall 
endeavor, consistent with the objectives of the rule and of applicable 
statutes, to fit regulatory and informational requirements to the scale 
of the businesses, organizations, and governmental jurisdictions 
subject to regulation. To achieve this principle, agencies are required 
to solicit and consider flexible regulatory proposals and to explain 
the rationale for their actions to assure that such proposals are given 
serious consideration.'' 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 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 RFA. 
However, if an agency determines that a rule is not expected to have a 
significant economic impact on a substantial number of small entities, 
section 605(b) of the 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.
    The Initial Regulatory Flexibility Analysis of the rules proposed 
in the NPRM found a significant economic impact on a substantial number 
of small entities. This result was reported in the NPRM and the full 
IRFA was placed in the docket (FAA-2006-25877), along with the Initial 
Regulatory Analysis, and was also published in the Federal Register (72 
FR 6968, February 14, 2007). This final rule, however, is cost 
relieving and, therefore, imposes no

[[Page 63800]]

economic cost on small entities. Moreover, we did not receive any 
comments regarding the small entity impact of this part of the NPRM. 
Therefore as the Acting FAA Administrator, I certify that this rule 
will not have a significant economic impact on a substantial number of 
small entities.

International Trade Impact Assessment

    The Trade Agreements Act of 1979 (Pub. L. 96-39) 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 final rule and determined it would promote 
international trade by reducing the cost of export airworthiness 
approvals for Class II products (major components) and Class III 
products (parts and components).

Unfunded Mandates Assessment

    Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4) 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 with the base year 1995) 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 $128.1 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 308(b) 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 that it is not 
a ``significant energy action'' under the executive order because it is 
not a ``significant regulatory action'' under Executive Order 12866, 
and it is not likely to have a significant adverse effect on the 
supply, distribution, or use of energy.

Availability of Rulemaking Documents

    You can get an electronic copy of rulemaking documents using the 
Internet by--
    1. Searching the Federal eRulemaking portal at https://
www.regulations.gov;
    2. Visiting the FAA's Regulations and Policies Web page at https://
www.faa.gov/regulations_policies/; or
    3. Accessing the Government Printing Office's Web page at https://
www.gpoaccess.gov/fr/.
    You can also get a copy by sending 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 amendment number or 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 
https://DocketsInfo.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 your local FAA official, or 
the person listed under the FOR FURTHER INFORMATION CONTACT heading at 
the beginning of the preamble. You can find out more about SBREFA on 
the Internet at https://www.faa.gov/regulations_policies/rulemaking/
sbre_act/.

List of Subjects in 14 CFR Part 21

    Aircraft, Certification procedures for products and parts, Export 
airworthiness approvals.

The Amendment

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

PART 21--CERTIFICATION PROCEDURES FOR PRODUCTS AND PARTS

0
1. The authority citation for part 21 continues to read as follows:

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


0
2. Amend Sec.  21.325 by adding new paragraph (b)(4) to read as 
follows:


Sec.  21.325  Export airworthiness approvals.

* * * * *
    (b)* * *
    (4) Class II and III products located outside of the United States 
if the FAA finds no undue burden in administering the applicable 
requirements of Title 49 U.S.C. and this subchapter.
* * * * *

    Issued in Washington, DC, on November 6, 2007.
Robert A. Sturgell,
Acting Administrator.
 [FR Doc. E7-22111 Filed 11-9-07; 8:45 am]
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