Air Carrier Contract Maintenance Requirements, 67584-67593 [2012-27433]

Download as PDF 67584 Federal Register / Vol. 77, No. 219 / Tuesday, November 13, 2012 / Proposed Rules DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Parts 121 and 135 [Docket No.: FAA–2011–1136; Notice No. 12–07] RIN 2120–AJ33 Air Carrier Contract Maintenance Requirements Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed rulemaking (NPRM). AGENCY: The Federal Aviation Administration (FAA) proposes to amend the maintenance regulations for domestic, flag, and supplemental operations, and commuter and ondemand operations for aircraft type certificated with a passenger seating configuration of 10 seats or more (excluding any pilot seat). The proposed rules would require these operators to develop policies, procedures, methods, and instructions for performing contract maintenance that are acceptable to the FAA and to include them in their maintenance manuals. The rules would also require the operators to provide a list to the FAA of all persons with whom they contract their maintenance. These changes are needed because contract maintenance has increased to over 70 percent of all air carrier maintenance, and numerous investigations have shown deficiencies in maintenance performed by contract maintenance providers. The proposals would help ensure consistency between contract and in-house air carrier maintenance and enhance the oversight capabilities of both the air carriers and the FAA. DATES: Send comments on or before February 11, 2013. ADDRESSES: Send comments identified by docket number FAA–2011–1136 using any of the following methods: • Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for sending your comments electronically. • Mail: Send comments to Docket Operations, M–30; U.S. Department of Transportation (DOT), 1200 New Jersey Avenue SE., Room W12–140, West Building Ground Floor, Washington, DC 20590–0001. • Hand Delivery or Courier: Take comments to Docket Operations in Room W12–140 of the West Building Ground Floor at 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. srobinson on DSK4SPTVN1PROD with SUMMARY: VerDate Mar<15>2010 16:23 Nov 09, 2012 Jkt 229001 • Fax: Fax comments to Docket Operations at 202–493–2251. Privacy: The FAA will post all comments it receives, without change, to http://www.regulations.gov, including any personal information the commenter provides. Using the search function of the docket web site, anyone can find and read the electronic form of all comments received into any FAA docket, including the name of the individual sending the comment (or signing the comment for an association, business, labor union, etc.). DOT’s complete Privacy Act Statement can be found in the Federal Register published on April 11, 2000 (65 FR 19477–19478), as well as at http://DocketsInfo.dot.gov. Docket: Background documents or comments received may be read at http://www.regulations.gov at any time. Follow the online instructions for accessing the docket or go to the Docket Operations in Room W12–140 of the West Building Ground Floor at 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: For technical questions concerning this action, contact Patricia K. Williams, Aircraft Maintenance Division, Air Carrier Maintenance Branch, AFS–330, Federal Aviation Administration, 800 Independence Avenue SW., Washington, DC 20591; telephone (202) 385–6432; email patricia.k.williams@faa.gov. For legal questions concerning this action, contact Ed Averman, Office of the Chief Counsel, Airworthiness, Advanced Aircraft, and Commercial Space Law Branch, AGC–210, Federal Aviation Administration, 800 Independence Avenue SW., Washington, DC; telephone (202) 267– 3147; facsimile (202) 267–5106, email ed.averman@faa.gov. SUPPLEMENTARY INFORMATION: Authority for This Rulemaking The FAA’s authority to issue rules on 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, Subpart III, Section 447, Section 44701(a)(2)(A) and (B) and (5). Under that section, the FAA is charged with prescribing regulations and minimum standards in the interest of safety for inspecting, servicing, and overhauling aircraft, aircraft engines, propellers, and appliances, and equipment and facilities PO 00000 Frm 00003 Fmt 4702 Sfmt 4702 for, and the timing of and manner of, the inspecting, servicing and overhauling, and prescribing regulations the FAA finds necessary for safety and commerce. This regulation is within the scope of that authority. In addition, the ‘‘FAA Modernization and Reform Act of 2012’’ (the Act), Public Law 112–95 (February 14, 2012), in section 319 (Maintenance providers), requires the FAA to issue regulations ‘‘requiring that covered work on an aircraft used to provide air transportation under part 121 * * *, be performed by persons in accordance with subsection (b).’’ Subsection (b), in addition to listing persons authorized under existing regulations, referenced additional terms and conditions in subsection (c) that would apply to persons who provide contract maintenance workers, services, or maintenance functions to a part 121 air carrier for covered work. The Act defines covered work, and mandates that the applicable part 121 air carrier must be directly in charge of covered work being performed for it under contract, and that the work be done under the supervision and control of the air carrier. These statutory requirements are addressed in this proposal. I. Overview of Proposed Rule The proposed amendments would apply to certificate holders who conduct either domestic, flag, or supplemental operations under 14 CFR part 121, and who conduct either commuter operations or on-demand operations with aircraft type certificated for a passenger seating configuration, excluding any pilot seat, of ten seats or more 1 under 14 CFR part 135, if they contract any of their maintenance, preventive maintenance, or alteration work to an outside source. The amendments would require that each certificate holder who contracts for such work must first have developed policies, procedures, methods, and instructions for the accomplishment of that work. These must ensure that, if they are followed, the work will be performed in accordance with the certificate holder’s maintenance program and maintenance manual. Each certificate holder would also be required to ensure that its system for the continuing analysis and surveillance of that work contains procedures for its oversight. All of these policies, procedures, methods, and instructions would have to be acceptable to the FAA and be included in the certificate holder’s maintenance manual. In addition, each certificate 1 For brevity throughout this preamble, we will refer to these aircraft as ‘‘10 or more.’’ E:\FR\FM\13NOP1.SGM 13NOP1 Federal Register / Vol. 77, No. 219 / Tuesday, November 13, 2012 / Proposed Rules holder who contracts any of its maintenance, preventive maintenance, or alteration work to an outside source would be required to provide to its local FAA Certificate Holding District Office a list that includes the name and address of each maintenance provider it uses and a description of the type of maintenance that would be performed. The requirement that any person performing maintenance for an air carrier must follow the carrier’s maintenance program is not new—FAA regulations have long required this. For example, § 121.363(b) authorizes a certificate holder to arrange with another person to perform its maintenance,2 and the regulation makes clear that doing so does not relieve the carrier from remaining primarily responsible for the airworthiness of its aircraft. Further, § 121.367(a) requires specifically that maintenance performed by either a certificate holder, or by another person, must be performed in accordance with the certificate holder’s manual. Similar provisions are found in §§ 135.413 and 135.425. Despite those general requirements, the Department of Transportation Inspector General (IG) had noted lapses in the means to ensure air carrier manuals are followed when contracted maintenance is performed. The deficiencies noted include a lack of guidance and training for the maintenance providers, and insufficient oversight of that maintenance. The IG reports recommended the FAA develop a means to identify these contract maintenance providers so the agency could better target its inspector resources in surveilling air carrier maintenance. In a separate rulemaking the FAA is proposing mandatory training programs for air carrier maintenance that would have to be approved by the FAA. srobinson on DSK4SPTVN1PROD with II. Background A. Statement of the Problem Over the past three decades, air carrier maintenance has evolved from mostly an ‘‘in-house’’ operation to an extended network of maintenance providers that fulfill contracts with air carriers to perform their aircraft maintenance. The reasons for this shift are many, including air carriers lowering costs by employing fewer maintenance personnel and reducing their inventories of maintenance-related tools, equipment, and housing by allowing others with specialized 2 Throughout this preamble, unless otherwise indicated, when we refer to the generic term ‘‘maintenance,’’ the term is meant to include ‘‘maintenance, preventive maintenance, and alterations.’’ VerDate Mar<15>2010 16:23 Nov 09, 2012 Jkt 229001 equipment and expertise to work on their aircraft and its safety-critical components. Thus, air carriers, in making business decisions, have shifted much of their maintenance to contract providers. By regulation, each air carrier remains primarily responsible for the airworthiness of its aircraft, whether the maintenance is contracted to another person or not. Any person performing maintenance for an air carrier must follow the air carrier’s maintenance manual. (14 CFR 121.363, 121.367(a), 135.413, and 135.425(a).) In addition, each air carrier is required to document in its general maintenance manual, both a listing of persons with whom it contracts maintenance and a general description of the contracted work. (14 CFR 121.369(a), and 135.427(a).) However, air carrier general maintenance manuals often are geared toward in-house maintenance. They fail to provide the necessary instructions to maintenance providers to enable them to follow the air carriers’ maintenance programs. This is exacerbated when an air carrier’s manual contains proprietary data, or other confidential information that an air carrier may not want to share with a maintenance provider. Often, the maintenance provider may also work on a competitor’s aircraft. Consequently, according to the IG, air carriers often are reluctant to share such information, and therefore, often do not. In addition, the FAA has found that, although air carriers are required to list their maintenance providers and a description of the work to be done in their maintenance manuals, these lists are not always kept up to date, are not always complete, and are not always in a format that is readily useful for FAA oversight and analysis purposes. The FAA needs this information to be complete and readily available centrally. This data is used by the FAA in planning surveillance of air carrier maintenance programs and determining the extent to which maintenance providers are performing their work according to the air carriers’ maintenance manuals. Without accurate and complete information on the work being performed for air carriers, the FAA cannot adequately target its inspection resources for surveillance and make accurate risk assessments. B. History In May 1996, employees of SabreTech, a contract maintenance provider to air carriers, placed mislabeled and mishandled oxygen generators into the cargo compartment of a passenger jet. Those mishandled hazardous materials caused a fire in the PO 00000 Frm 00004 Fmt 4702 Sfmt 4702 67585 cargo hold that caused Valujet Flight 592 from Miami to Atlanta to crash into the Everglades in Florida, taking the lives of all 110 people on board. Since then, the FAA’s surveillance of air carrier maintenance and contract maintenance has been a particular area of focus for the Department of Transportation’s Office of Inspector General (DOT/OIG). The OIG has been performing investigations and audits of the FAA’s safety oversight of air carriers’ use of repair stations to perform their maintenance, the use by air carriers of non-certificated repair facilities, and the air carriers’ outsourcing of maintenance. In each of those reports (detailed below), the OIG found fault with the FAA’s methods of tracking where air carriers perform their maintenance, who performs it, and how it is performed. A 2003 Department of Transportation IG report 3 identified a trend of air carriers increasingly contracting their maintenance to outside sources such as repair stations. The report revealed that major air carriers spent approximately $1.5 billion on outsourced maintenance in 1996 and approximately $2.5 billion in 2002. The report attributed the trend to cost savings that can be realized by air carriers contracting their maintenance to outside repair facilities. The report was based, in part, on investigators’ visits to several FAA field offices and to 21 repair stations to evaluate the effectiveness of the FAA’s oversight of the maintenance work being performed for air carriers. The investigation identified weaknesses in maintenance practices at 15 of the 21 repair stations and concluded that a lack of FAA oversight, especially for repeat issues, contributed to the deficiencies. The IG report made several recommendations on ways the FAA could enhance the effectiveness of its oversight of air carrier contracted maintenance. Among them was that the FAA should develop a process to identify repair stations air carriers use to perform aircraft maintenance, and to target FAA inspector resources based on risk assessments or analysis of the data collected on air carrier maintenance outsourcing practices (Recommendation 2). In 2005, the IG issued a second report on air carriers’ use of outside maintenance providers 4—this one reporting on the use of non-certificated repair facilities. The report discussed air 3 Review of Air Carriers’ Use of Aircraft Repair Stations, Report No. AV–2003–047 (July 8, 2003). 4 Air Carrier’s Outsourcing Use of NonCertificated Repair Facilities, Report No. AV–2006– 031 (Dec. 15, 2005). E:\FR\FM\13NOP1.SGM 13NOP1 67586 Federal Register / Vol. 77, No. 219 / Tuesday, November 13, 2012 / Proposed Rules srobinson on DSK4SPTVN1PROD with carriers’ use of both non-certificated facilities (i.e., maintenance facilities not certificated by the FAA as repair stations) and individual mechanics hired on a temporary basis. The report echoed a recommendation from the 2003 IG report by recommending that the FAA inventory air carrier vendor lists that include all maintenance providers working on air carrier aircraft and identify non-certificated repair facilities that perform critical or scheduled maintenance (Recommendation 1). The report also recommended that the FAA determine whether air carriers evaluate the background, experience, and qualifications of the temporary maintenance personnel used by the contractors to ensure the work they perform is completed in accordance with FAA and air carrier requirements (Recommendation 7). The problem areas discussed above were emphasized at Congressional hearings in testimony by the Inspector General in 2007. The Inspector General stated: ‘‘If FAA is to achieve the planned improvements in oversight of outsourced maintenance, it will need to obtain definitive data on where air carriers are getting the maintenance performed, including critical and scheduled maintenance work done at non-certificated repair facilities, so that it can focus its inspections to areas of greatest risk.’’ 5 In 2008, the IG issued a third related report on air carriers’ outsourcing of maintenance.6 The report noted a continuing trend of air carriers outsourcing more of their maintenance. The IG based this report on its review of nine major air carriers, which sent 71% of their heavy maintenance checks to repair stations in 2007—up from 34% in 2003.7 The report pointed out the continuing need for better oversight of contract maintenance, both by the FAA and by air carriers, especially when the air carriers are contracting repairs of critical components. In addition, the report found that air carrier maintenance manuals have traditionally been geared toward in-house maintenance, and noted that repair stations may perform work for various 5 Scovel, Aviation Safety, FAA Oversight of Repair Stations, June 20, 2007, CC 2007–076 Senate Committee on Science, Transportation and Commerce, Subcommittee on Operations, Safety and Security. 6 Air Carrier’s Outsourcing of Aircraft Maintenance, Report No. AV–2008–090 (Sept. 30, 2008). 7 The report noted that, ‘‘overall, major air carriers outsourced an average of 64 percent of their maintenance expenses in 2007, compared to only 37 percent in 1996.’’ Report No. AV–2008–090 (Sept. 30, 2008) at p. 1. VerDate Mar<15>2010 16:23 Nov 09, 2012 Jkt 229001 air carriers, all with different in-house procedures. In this regard, the report concluded that the FAA should ensure that air carriers provide well-defined maintenance procedures and guidance for their outsourced repairs. The report specifically recommended that the FAA: ‘‘Encourage the industry best practice of using airworthiness agreements between air carriers and repair stations that more closely define maintenance procedures and responsibilities’’ (Recommendation 7). Need for the Rule As noted in the IG reports discussed above, air carrier use of contract maintenance providers continues to grow, averaging 64% of air carrier maintenance costs in 2007. The air carrier regulations have long stipulated that each certificate holder is primarily responsible for the airworthiness of its aircraft, even if maintenance is contracted to another person. (See §§ 121.363 and 135.413.) Air carriers cannot abrogate this responsibility. Consistent with this responsibility are the requirements that when persons other than the certificate holder (i.e., contract maintenance providers) perform maintenance for it, the maintenance must be performed in accordance with the certificate holder’s maintenance manual. Section 121.367 has long required that each certificate holder shall have a maintenance program that ensures that: ‘‘Maintenance, preventive maintenance, and alterations performed by it, or by other persons, are performed in accordance with the certificate holder’s manual.’’ (§§ 121.367(a) and 135.425(a) (emphasis added).) And, current § 121.369(b) requires, in pertinent part, that: The certificate holder’s manual must contain the programs required by § 121.367 that must be followed in performing maintenance, preventive maintenance, and alterations of that certificate holder’s airplanes, including airframes, aircraft engines, propellers, appliances, emergency equipment, and parts thereof * * *. A nearly identical requirement is in § 135.427(b). While these requirements may be clear, the specifics of how to achieve the result may not be. As noted in the three IG reports discussed above, the investigators found numerous problems with maintenance being outsourced by air carriers. One conclusion reached by the IG was, as noted above, that air carriers should provide their contract maintenance providers with well-defined maintenance procedures. Implicit is that these procedures would be designed by PO 00000 Frm 00005 Fmt 4702 Sfmt 4702 each air carrier so that its maintenance providers could follow its manual. The FAA believes that a root cause of this problem may be that many air carrier maintenance manuals were written at a time when maintenance was performed mostly in-house. Thus parts of these manuals may contain proprietary information obtained from various sources, for example, original equipment manufacturer (OEM), Type Certificate (TC) holder, or Supplemental Type Certificate (STC) holder, or the information may have been developed by the air carrier. Because of the proprietary nature of the data, an air carrier may be reluctant to provide its maintenance providers with all of the complete and specific guidance within its maintenance manual. This reluctance by an air carrier to provide the specific proprietary guidance/information may indicate that it does not fully recognize the maintenance provider as an extension of its own maintenance program. In those situations, the maintenance provider may be unable to follow the air carrier’s program to the extent required by the regulations. Repair stations have been frustrated by their inability to obtain the necessary applicable portions of some air carrier maintenance manuals when performing work under contract for them. The repair station regulations require repair stations to follow the maintenance manuals of the air carriers for whom they are doing the work. Section 145.205(a) provides that: A certificated repair station that performs maintenance, preventive maintenance, or alterations for an air carrier or commercial operator that has a continuous airworthiness maintenance program under part 121 or part 135 must follow the air carrier’s or commercial operator’s program and applicable sections of its maintenance manual. It stands to reason that if a repair station must follow the air carrier’s or commercial operator’s manual in order to comply with this regulation, then the corresponding part 121 and part 135 regulations should require the air carrier or commercial operator to provide the repair station that does the work with the applicable portions of its maintenance manual. This would be consistent with the air carriers’ remaining primarily responsible for the airworthiness of their aircraft and the concept that when a maintenance provider performs maintenance for an air carrier, the provider is an extension of the air carrier’s maintenance program. The IG reports placed much emphasis on the need for improved FAA oversight of air carrier contract maintenance. In order for the FAA to improve this E:\FR\FM\13NOP1.SGM 13NOP1 srobinson on DSK4SPTVN1PROD with Federal Register / Vol. 77, No. 219 / Tuesday, November 13, 2012 / Proposed Rules oversight, the IG, in 2003, recommended the agency develop a means to identify repair stations that perform maintenance for air carriers. The current regulations require only that air carriers put in their manuals a list of persons with whom they have arranged for the performance of maintenance and a general description of that work. (See §§ 121.369(a) and 135.427(a).) Although the FAA may review these manuals, no current rule requires air carriers to keep such a list up to date and to provide it to the FAA in an acceptable format. As explained below, the FAA has found that the lists maintained by air carriers in their manuals in some cases are not readily useful for oversight purposes. The requirements that an air carrier put in its maintenance manual a list of persons with whom it has arranged to perform maintenance, including a general description of that work, has been in place since at least 1965. As a consequence of the IG reports, between June and September 2010, the FAA did an internal investigation to determine the effectiveness of the requirement that air carriers include in their manual the list of outside maintenance providers. The agency found inconsistent compliance with the rule. Some carriers failed to specify an adequate description of the type of work, and some failed to include the name and address of their maintenance providers, using instead only alpha-numeric designators. This piecemeal and inconsistent availability of the information is not conducive to FAA analysis and targeting of problem areas. The FAA agrees with the IG’s recommendations that the agency should have an accurate, consistent inventory of each air carrier’s contract maintenance providers. Such a list would enable the FAA to more accurately assess the risk associated with air carriers increasingly maintaining their fleets by contract maintenance providers. Although the identity of contract maintenance providers is currently available to the FAA through the air carriers’ manuals and available upon request, it is not published in a format that readily allows for analysis, as it may be annotated in various formats, and the information is not available to the FAA in a single data base. In accordance with the IG’s recommendations, we are proposing this rule so the FAA would have a dedicated and readily available list in an acceptable format of all air carrier contract maintenance providers. These lists would be useful for purposes of FAA analysis and oversight of both the air carriers that contract portions of their maintenance and their VerDate Mar<15>2010 16:23 Nov 09, 2012 Jkt 229001 maintenance providers. The FAA envisions that this list would be administered via air carriers’ operations specifications or through the agency’s new safety assurance system that allows each certificate holder to enter its own data electronically into the FAA system. This would provide the FAA with real time data and assist it in meeting its oversight responsibilities and in making risk assessments. III. Discussion of the Proposal Because current FAA regulations do not clearly address air carrier requirements for contract maintenance providers, the resulting lack of standardization makes it difficult for both the air carriers and the FAA to provide meaningful oversight to ensure proper maintenance that is vital for the public’s continued safety. Consistent with the IG’s recommendations, we propose to address weaknesses in contracted maintenance on two fronts. The first would add consistency and structure to the arrangements air carriers make with their outside maintenance providers, with the goal of ensuring that the air carriers’ maintenance manuals would be followed. The second would assist the FAA in its oversight of contracted maintenance by requiring each air carrier that contracts any of its maintenance to provide, and keep updated, a list of those maintenance providers to the FAA. The list would include the physical (street) address where the work would be performed, and a description of the work to be performed by each maintenance provider. While the current regulations do require that any person (whether certificated or not) with whom an air carrier arranges to perform maintenance must follow the carrier’s manual, the requirement is broadly stated and often loosely implemented. In order to assure consistency in any future FAA guidance material, we are proposing in new §§ 121.368 and 135.426 to define a maintenance provider as any person (whether certificated or not) who performs maintenance for a certificate holder other than a person who is trained by and employed by that certificate holder. These new sections would also require each air carrier that contracts any part of its maintenance to a maintenance provider to first have policies and procedures in place to ensure that, if they were followed, the carrier’s contracted maintenance would be performed in accordance with its maintenance program and maintenance manual. Proprietary data issues could be addressed by carefully drafted airworthiness agreements between the PO 00000 Frm 00006 Fmt 4702 Sfmt 4702 67587 air carrier and its maintenance provider, as recommended in the 2008 IG report. Each certificate holder would also be required to ensure that its system for the continuing analysis and surveillance of that work contains procedures for its oversight. All of these policies, procedures, methods, and instructions would have to be acceptable to the FAA and be included in the certificate holder’s maintenance manual. For completeness, we are also proposing a new paragraph (b)(10) to current §§ 121.369 and 135.427 (Manual requirements) to include the above requirements for procedures and oversight in the air carriers’ maintenance manuals. We are also proposing in new §§ 121.368 and 135.426 to require each air carrier that contracts any of its maintenance to an outside source to provide to its FAA Certificate Holding District Office, in a format acceptable to the FAA, a list that includes the name and address of each maintenance provider used by that certificate holder under contract, and a description of the work that would be performed. This would enable the FAA to have a meaningful data base that would show who was doing the work for each air carrier and the kind of work being done. This would assist the FAA in its oversight responsibilities, especially in determining which maintenance providers were performing critical maintenance. The FAA recognizes that operators will need time to fully develop the policies, procedures, methods, and instructions for contract maintenance and to provide them in an acceptable format to the FAA. Similarly, they will need time to prepare the list with the required information of their contract maintenance providers and to provide them in an acceptable format to their Certificate Holding District Offices. The FAA will also need time to review the information submitted by the operators. In view of these considerations, the FAA is proposing to make the effective date of the final rule one year after its publication. We are requesting public comments on the reasonableness of this one-year ‘‘compliance’’ period, as well as any other aspect of this proposal. In addition, as explained in the Authority for this Rulemaking section of this preamble, the ‘‘FAA Modernization and Reform Act of 2012’’ (the Act), Public Law 112–95 (February 14, 2012), in section 319 (Maintenance providers), requires the FAA to issue regulations ‘‘requiring that covered work on an aircraft used to provide air transportation under part 121 * * *, be performed by persons in accordance E:\FR\FM\13NOP1.SGM 13NOP1 srobinson on DSK4SPTVN1PROD with 67588 Federal Register / Vol. 77, No. 219 / Tuesday, November 13, 2012 / Proposed Rules with subsection (b).’’ Subsection (b) of the Act, in addition to listing persons already authorized to perform maintenance under existing regulations, referenced additional terms and conditions in subsection (c) that would apply to persons who provide contract maintenance workers, services, or maintenance functions to a part 121 air carrier for the performance of covered work. The Act defines covered work as any of the following: ‘‘(A) Essential maintenance that could result in a failure, malfunction, or defect endangering the safe operation of an aircraft if not performed properly or if improper materials are used. (B) Regularly scheduled maintenance. (C) A required inspection item (as defined by the Administrator).’’ The Act also requires that covered work be carried out under the supervision and control of the part 121 air carrier directly in charge of the covered work being performed for it by a maintenance provider, and that the covered work be carried out in accordance with the air carrier’s maintenance manual. In accordance with these statutory requirements, we are proposing to include in §§ 121.368(a) and 135.426(a) the definition of covered work set forth in the statute, and to provide definitions of supervision and control and directly in charge. The definition of directly in charge would be similar to the current definitions in §§ 121.378 and 135.435. As required by the statute, we are also proposing: In §§ 121.368(b) and 135.426(b), that each certificate holder must be directly in charge of all covered work it contracts to a maintenance provider; in §§ 121.368(c) and 135.426(c), that all covered work must be carried out in accordance with the certificate holder’s maintenance manual; and in §§ 121.368(d) and 135.426(d), that no covered work may be performed by a maintenance provider unless that work is carried out under the supervision and control of the certificate holder. Although the statute mandates these amendments for part 121 air carriers, the FAA believes that, in the interest of providing an equivalent level of safety for commuter and on demand operations, the same requirements should apply to persons conducting operations under part 135 in aircraft configured with 10 or more passenger seats. Accordingly, we are proposing the changes mandated by the Act for both part 121 and part 135 (10 or more) certificate holders. VerDate Mar<15>2010 16:23 Nov 09, 2012 Jkt 229001 IV. Regulatory Notices and Analyses A. Regulatory Evaluation Changes to Federal regulations must undergo several economic analyses. First, Executive Order 12866 and Executive Order 13563 direct 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 (Pub. L. 96–354) requires agencies to analyze the economic impact of regulatory changes on small entities. Third, the Trade Agreements Act (Pub. L. 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). This portion of the preamble summarizes the FAA’s analysis of the economic impacts of this proposed rule. We suggest readers seeking greater detail read the full regulatory evaluation, a copy of which we have placed in the docket for this rulemaking. In conducting these analyses, FAA has determined that this proposed 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) would not have a significant economic impact on a substantial number of small entities; (5) would not create unnecessary obstacles to the foreign commerce of the United States; and (6) would 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. Total Benefits and Costs of This Rule This proposed rule would ensure consistency between contract and inhouse air carrier maintenance and assist the FAA in its oversight responsibilities. The DOT IG reports placed much emphasis on the need for improved PO 00000 Frm 00007 Fmt 4702 Sfmt 4702 FAA oversight of air carrier contract maintenance. In order for the FAA to better be able to provide this oversight, the IG, in 2003, recommended the agency develop a means to identify repair stations that perform maintenance for air carriers. In accord with the IG’s recommendations, we are proposing this rule so the FAA would have a dedicated and readily available list in an acceptable format of all air carrier contract maintenance providers. These lists would be useful for purposes of FAA analysis and oversight of both the air carriers that contract portions of their maintenance and their maintenance providers. These new sections would also require each air carrier that contracts any part of its maintenance to a maintenance provider to first have policies and procedures in place to ensure that, if they were followed, the carrier’s contracted maintenance would be performed in accordance with its maintenance program and maintenance manual. Proprietary data issues could be addressed by carefully drafted airworthiness agreements between the air carrier and its maintenance provider, as recommended in the 2008 IG report. In addition, this proposed rule responds to a provision (Section 319 on Maintenance Providers) in the FAA Modernization and Reform Act of 2012 mandating that the FAA issue regulations ‘‘requiring that covered work on an aircraft used to provide air transportation under part 121 * * *, be performed by persons in accordance with subsection (b) [of that section].’’ Subsection (b), in addition to listing persons authorized under existing regulations, referenced additional terms and conditions in subsection (c) that would apply to persons who provide contract maintenance workers, services, or maintenance functions to a part 121 air carrier for covered work. The section defines covered work, and mandates that the applicable part 121 air carrier must be directly in charge of covered work being performed for it under contract, and that the work be done under the supervision and control of the air carrier. As already explained under Discussion of the Proposal in this preamble, in the interest of providing an equivalent level of safety for commuter and on demand operations, we are proposing the above statutory requirements for certificate holders operating under part 135 as well as for those operating under part 121. Over 10 years, the cost to part 121 and part 135 (10 or more) air carriers and the FAA would be approximately $2.4 E:\FR\FM\13NOP1.SGM 13NOP1 Federal Register / Vol. 77, No. 219 / Tuesday, November 13, 2012 / Proposed Rules million ($1.6 million, present value at 7%), or essentially minimal cost. The FAA believes the benefits discussed above have value exceeding the costs. srobinson on DSK4SPTVN1PROD with Who is potentially affected by this rule? Part 121 and part 135 (10 or more) air carriers. Assumptions: • The rule is expected to take effect in 2014. The time horizon for these potential benefits is 10 years, 2014 through 2023. • All monetary values were expressed in constant 2011 dollars. We calculated the present value of the potential benefit stream by discounting the monetary values using a 7 percent interest rate from 2014 to 2023. • The FAA identified 301 part 121 and part 135 (10 or more) air carriers that would be affected by this proposed rule. Benefits of This Rule This proposed rule would ensure consistency between contract and inhouse air carrier maintenance and assist the FAA in its oversight responsibilities. The DOT IG reports placed much emphasis on the need for improved FAA oversight of air carrier contract maintenance. In order for the FAA to better be able to provide this oversight, the IG, in 2003, recommended the agency develop a means to identify repair stations that perform maintenance for air carriers. In accord with the IG’s recommendations, we are proposing this rule so the FAA would have a dedicated and readily available list in an acceptable format of all air carrier contract maintenance providers. These lists would be useful for purposes of FAA analysis and oversight of both the air carriers that contract portions of their maintenance and their maintenance providers. Although the IG reports discussed earlier dealt primarily with maintenance conducted for part 121 certificate holders, the FAA has found similar problems with maintenance providers not following the maintenance programs of certificate holders conducting commuter and on-demand operations with aircraft type certificated for a passenger seating configuration, excluding any pilot seat, of ten seats or more under part 135. In a similar vein, the FAA has also found that some of these operators conduct insufficient oversight of their maintenance providers. Even before the passage of Public Law 112–95 in February 2012, the FAA was planning to propose rules for both part 121 and 135 certificate VerDate Mar<15>2010 16:23 Nov 09, 2012 Jkt 229001 holders that would require additional procedures and oversight to help ensure that the certificate holders’ manuals would be followed by outside maintenance providers. The statute mandates new requirements for part 121 certificate holders, including that they be directly in charge of what it defines as ‘‘covered work.’’ Because the FAA has observed the same types of lapses with maintenance performed for part 135 certificate holders operating aircraft with 10 or more seats, we are proposing the same requirements for these operators. The FAA believes that by requiring part 135 certificate holders to adopt the new part 121 statutory requirements, a higher level of safety would be achieved. Costs of This Rule From 2014 to 2023, the cost to part 121 and part 135 (10 or more) air carriers and the FAA would be approximately $2.4 million ($1.6 million, present value). The FAA solicits comments regarding this determination and requests that all comments be accompanied by clear and detailed supporting economic documentation. B. 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-forprofit 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 PO 00000 Frm 00008 Fmt 4702 Sfmt 4702 67589 factual basis for this determination, and the reasoning should be clear. The FAA identified a total of 269 small entities out of 301 air carriers that would be affected by this proposed rule. For each of these entities, the FAA attempted to retrieve their annual revenue data from World Aviation Directory. The FAA found data for 36 of the 269 small entities. The FAA then compared their revenue data with their annualized costs. The projected annualized costs of the proposed rule as a percent of revenue would be less than 1 percent for the 36 small entities, which is not a significant economic impact. Therefore, the FAA certifies this proposed rule would not have a significant economic impact on a substantial number of small entities. The FAA solicits comments regarding this determination. C. International Trade Impact Assessment The Trade Agreements Act of 1979 (Pub. L. 96–39), as amended by the Uruguay Round Agreements Act (Pub. L. 103–465), prohibits Federal agencies from establishing standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. Pursuant to these Acts, the establishment of standards is not considered an unnecessary obstacle to the foreign commerce of the United States, so long as the standard has a legitimate domestic objective, such as the protection of safety, and does not operate in a manner that excludes imports that meet this objective. 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 proposed rule and determined that the objective is to improve safety: therefore, it would not create unnecessary obstacles to the foreign commerce of the United States. D. 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 (in 1995 dollars) 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 $143.1 million instead of $100 million. This proposed rule does not contain such a mandate; therefore, the E:\FR\FM\13NOP1.SGM 13NOP1 67590 Federal Register / Vol. 77, No. 219 / Tuesday, November 13, 2012 / Proposed Rules srobinson on DSK4SPTVN1PROD with requirements of Title II of the Act do not apply. E. Paperwork Reduction The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires that the FAA considers the impact of paperwork and other information collection burdens imposed on the public. According to the 1995 amendments to the Paperwork Reduction Act (5 CFR 1320.8(b)(2)(vi)), 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. This action contains the following proposed amendments to the existing information collection requirements previously approved under OMB Control Number 2120–XXXX. As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), the FAA has submitted these proposed information collection amendments to OMB for its review. Summary: Each operator which seeks to obtain, or is in possession of, an air carrier operating certificate must comply with the requirements of 14 CFR part 121 in order to maintain data which is used to determine if the air carrier is operating in accordance with minimum safety standards. Original certification is completed in accordance with part 119. Each operator which seeks to obtain, or is in possession of a commuter or ondemand operating certificate must comply with the requirements of 14 CFR part 135 in order to maintain data which is used to determine if the air carrier is operating in accordance with minimum safety standards. Original certification is completed in accordance with part 119. Continuing certification is completed in accordance with part 121 and part 135. One form is used. The use of this form was taken into account in estimating the burden for this section. Use: This information collection supports the Department of Transportation’s strategic goal of safety. Specifically, the goal is to promote the public health and safety by working toward the elimination of transportation-related deaths, injuries, and destruction of property. Title 49 U.S.C., Section 44702, empowers the Secretary of Transportation to issue air carrier operating certificates and to establish minimum safety standards for the operation of the air carrier to whom such certificates are issued. Under the authority of Title 49 CFR, Section 44701, Federal Aviation Regulations part 121 and part 135 prescribe the VerDate Mar<15>2010 16:23 Nov 09, 2012 Jkt 229001 terms, conditions, and limitations as are necessary to ensure safety in air transportation. Respondents (including number of): There are approximately 94 part 121 air carriers and 207 part 135 operators affected by this proposed rule. Frequency: The manual requirements will be submitted as part of the submission of maintenance manuals to the FAA for acceptance. Annual Burden Estimate: The proposed rule would require that the air carrier’s manual has all the policies, procedures, methods, and instructions for the accomplishment of maintenance by another person to include the information necessary for certificate holders to ensure all maintenance is performed in accordance with its maintenance program. The proposed rule would also require that the air carrier provides a list with the name and address of each maintenance provider used and the type of maintenance that is to be performed. Private Sector Costs The proposed rule would require that the air carrier’s manual has all the policies, procedures, methods, and instructions for the accomplishment of maintenance by another person to include the information necessary for certificate holders to ensure all maintenance is performed in accordance with its maintenance program. The proposed rule would also require that the air carrier provides a list with the name and address of each maintenance provider used and the type of maintenance that is to be performed and updates and maintains that list. To calculate the cost of revising the manual and revising and maintaining the list, the following assumptions were used, paralleling those in the regulatory evaluation: • 94 part 121 manuals have to be revised in year 1. • 207 part 135 manuals have to be revised in year 1. • 94 part 121 air carriers have to provide a list in year 1. • 207 part 135 air carriers have to provide a list in year 1. • Part 121: amount of time revising manual (manager): 4 hours. • Part 121: amount of time revising manual (technical writer): 40 hours. • Part 121: amount of time revising manual (editor): 2 hours. • Part 135: amount of time revising manual (manager): 8 hours. • Part 121: amount of time to provide the list (manager): 1 hour. • Part 121: amount of time to provide the list (technical writer): 3 hours. • Part 121: amount of time to provide the list (auditor): 10 hours. PO 00000 Frm 00009 Fmt 4702 Sfmt 4702 • Part 135: amount of time to provide the list (manager): 5 hours. • Parts 121 & 135: amount of time to maintain list (manager): 6 hours/year. • Parts 121 & 135: amount of time to maintain list (technical writer): 6 hours/ year. • Wage per hour for manager: $69.78. • Wage per hour for technical writer: $36.76. • Wage per hour for editor: $43.45. • Wage per hour for auditor: $49.79. First Year Costs for Part 121 Cost = 94 × ((4 hours × $69.78) + (40 hours × $36.76) + (2 hours × $43.45) + (1 hour × $69.78) + (3 hours × $36.76) + (10 hours × $49.79) + (6 hours × $69.78) + (6 hours × $36.76)) = $296,454. Time = 94 × (4 hours + 40 hours + 2 hours + 1 hour + 3 hours + 10 hours + 6 hours + 6 hours) = 6,768. Subsequent Year Costs for Part 121 Cost = 94 × ((6 hours × $69.78) + (6 hours × $36.76)) = $60,091. Time = 94 × (6 hours + 6 hours) = 1,128. First Year Costs for Part 135 Cost = 207 × ((8 hours × $69.78) + (5 hours × $69.78) + (6 hours × $69.78) + (6 hours × $36.76)) = $320,114. Time = 207 × (8 hours + 5 hours + 6 hours + 6 hours) = 5,175. Subsequent Year Costs for Part 135 Cost = 207 × ((6 hours × $69.78) + (6 hours × $36.76)) = $132,329. Time = 207 × (6 hours + 6 hours) = 2,484. Total Over 10 Years Cost = ($296,454 + $320,114 + (9 × $60,091) + (9 × $132,329)) = $2,348,351. Time = (6,768 hours + 5,175 hours + (9 × 1,128 hours) + (9 × 2,484 hours)) = 44,451. Average Per Year Cost = $2,348,351/10 = $234,835. Time = 44,451/10 = 4,445 hours. FAA Costs The FAA has to ensure that the air carrier’s manual has all the policies, procedures, methods, and instructions for the accomplishment of maintenance by another person to include the information necessary for certificate holders to ensure all maintenance is performed in accordance with its maintenance program. To calculate the cost of revising the manual, the following assumptions were used, paralleling those in the regulatory evaluation: • 94 part 121 manuals have to be revised in year 1. E:\FR\FM\13NOP1.SGM 13NOP1 Federal Register / Vol. 77, No. 219 / Tuesday, November 13, 2012 / Proposed Rules • 207 part 135 manuals have to be revised in year 1. • Part 121: amount of time revising manual (FAA inspector): 1 hour. • Part 135: amount of time revising manual (FAA inspector): 1 hour. • Wage per hour for FAA inspector: $96.14. First Year Costs for Part 121 Cost = 94 × ((1 hour × $96.14)) = $9,037. Time = 94 × (1 hour) = 94 hours. First Year Costs for Part 135 Cost = 207 × ((1 hour × $96.14)) = $19,901. Time = 207 × (1 hour) = 207 hours. V. Executive Order Determinations Total Over 10 Years Cost = ($9,037 + $19,901) = $28,938. Time = (94 hours + 207 hours) = 301 hours. srobinson on DSK4SPTVN1PROD with Average Per Year Cost = $28,938/10 = $2,894. Time = 301/10 = 30 hours. The agency is soliciting comments to— (1) Evaluate whether the proposed information requirement is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) Evaluate the accuracy of the agency’s estimate of the burden; (3) Enhance the quality, utility, and clarity of the information to be collected; and (4) Minimize the burden of collecting information on those who are to respond, including by using appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology. Individuals and organizations may send comments on the information collection requirement to the address listed in the ADDRESSES section at the beginning of this preamble by February 11, 2013. Comments also should be submitted to the Office of Management and Budget, Office of Information and Regulatory Affairs, Attention: Desk Officer for FAA, New Executive Office Building, Room 10202, 725 17th Street NW., Washington, DC 20053. F. International Compatibility In keeping with U.S. obligations under the Convention on International Civil Aviation, it is FAA policy to conform to International Civil Aviation Organization (ICAO) Standards and Recommended Practices to the maximum extent practicable. The FAA has determined there are no ICAO Standards and Recommended Practices that correspond to these proposed regulations. VerDate Mar<15>2010 16:23 Nov 09, 2012 Jkt 229001 G. 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 Chapter 3, paragraph 312d and involves no extraordinary circumstances. A. Executive Order 13132, Federalism The FAA has analyzed this proposed rule under the principles and criteria of Executive Order 13132, Federalism. The agency has determined that this action would not have a substantial direct effect on the States, or the relationship between the Federal Government and the States, or on the distribution of power and responsibilities among the various levels of government, and, therefore, would not have Federalism implications. B. Executive Order 13211, Regulations That Significantly Affect Energy Supply, Distribution, or Use The FAA analyzed this proposed rule under Executive Order 13211, Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use (May 18, 2001). The agency has determined that it would not be a ‘‘significant energy action’’ under the executive order and would not be likely to have a significant adverse effect on the supply, distribution, or use of energy. VI. Additional Information A. Comments Invited The FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views. The agency also invites comments relating to the economic, environmental, energy, or federalism impacts that might result from adopting the proposals in this document. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should send only one copy of written comments, or if comments are filed electronically, commenters should submit only one time. The FAA will file in the docket all comments it receives, as well as a report summarizing each substantive public contact with FAA personnel concerning PO 00000 Frm 00010 Fmt 4702 Sfmt 4702 67591 this proposed rulemaking. Before acting on this proposal, the FAA will consider all comments it receives on or before the closing date for comments. The FAA will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. The agency may change this proposal in light of the comments it receives. Proprietary or Confidential Business Information: Commenters should not file proprietary or confidential business information in the docket. Such information must be sent or delivered directly to the person identified in the FOR FURTHER INFORMATION CONTACT section of this document, and marked as proprietary or confidential. If submitting information on a disk or CD ROM, mark the outside of the disk or CD ROM, and identify electronically within the disk or CD ROM the specific information that is proprietary or confidential. Under 14 CFR 11.35(b), if the FAA is aware of proprietary information filed with a comment, the agency does not place it in the docket. It is held in a separate file to which the public does not have access, and the FAA places a note in the docket that it has received it. If the FAA receives a request to examine or copy this information, it treats it as any other request under the Freedom of Information Act (5 U.S.C. 552). The FAA processes such a request under Department of Transportation procedures found in 49 CFR part 7. B. Availability of Rulemaking Documents An electronic copy of rulemaking documents may be obtained from the Internet by— 1. Searching the Federal eRulemaking Portal (http://www.regulations.gov); 2. Visiting the FAA’s Regulations and Policies web page at http:// www.faa.gov/regulations_policies or 3. Accessing the Government Printing Office’s Web page at http:// www.gpoaccess.gov/fr/index.html. Copies may also be obtained 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. Commenters must identify the docket or notice number of this rulemaking. All documents the FAA considered in developing this proposed rule, including economic analyses and technical reports, may be accessed from the Internet through the Federal eRulemaking Portal referenced in item (1) above. E:\FR\FM\13NOP1.SGM 13NOP1 67592 Federal Register / Vol. 77, No. 219 / Tuesday, November 13, 2012 / Proposed Rules List of Subjects 14 CFR Part 121 Aircraft, Aviation safety. 14 CFR Part 135 Aircraft, Aviation safety. The Proposed Amendment In consideration of the foregoing, the Federal Aviation Administration proposes to amend chapter I of title 14, Code of Federal Regulations as follows: PART 121—OPERATING REQUIREMENTS: DOMESTIC, FLAG, AND SUPPLEMENTAL OPERATIONS 1. The authority citation for part 121 continues to read as follows: Authority: 49 U.S.C. 106(g), 1153, 40101, 40102, 40103, 41721, 44105, 44106, 44111, 44701–44717, 44722, 44901, 44903, 44904, 44906, 44912, 44914, 44936, 44938, 46103, 46105. 2. Add new § 121.368 as follows: srobinson on DSK4SPTVN1PROD with § 121.368 Contract maintenance. (a) A certificate holder may arrange with another person for the performance of maintenance, preventive maintenance, and alterations as authorized in § 121.379(a) only if all the requirements in this section are met. For purposes of this section— (1) A maintenance provider is any person who performs maintenance, preventive maintenance, or an alteration for a certificate holder other than a person who is trained by and employed directly by that certificate holder. (2) Covered work means any of the following: (i) Essential maintenance that could result in a failure, malfunction, or defect endangering the safe operation of an aircraft if not performed properly or if improper materials are used; (ii) Regularly scheduled maintenance; or (iii) A required inspection item on an aircraft. (3) Directly in charge means having responsibility for covered work performed by a maintenance provider. A representative of the certificate holder directly in charge of covered work does not need to physically observe and direct each maintenance provider constantly, but must be available for consultation on matters requiring instruction or decision. (4) Supervision and control means that a representative of the certificate holder must be available to personally observe the covered work being done to the extent necessary to ensure it is being done properly, and when the representative is not physically present to observe the work, the representative VerDate Mar<15>2010 16:23 Nov 09, 2012 Jkt 229001 must be available for consultation on matters requiring instruction or decision. (b) Each certificate holder must be directly in charge of all covered work done for it by a maintenance provider. (c) All covered work must be carried out in accordance with the certificate holder’s maintenance manual. (d) No covered work may be performed by a maintenance provider unless that work is carried out under the supervision and control of the certificate holder. (e) Each certificate holder who contracts for maintenance, preventive maintenance, or alterations to be carried out by a maintenance provider must develop policies, procedures, methods, and instructions for the accomplishment of all such maintenance, preventive maintenance, and alterations, and these policies, procedures, methods, and instructions must ensure that, if they are followed, the maintenance, preventive maintenance, and alterations are performed in accordance with the certificate holder’s maintenance program and maintenance manual. (f) Each certificate holder who contracts for maintenance, preventive maintenance, or alterations to be carried out by a maintenance provider must ensure that its system for the continuing analysis and surveillance of the maintenance, preventive maintenance, and alterations carried out by the maintenance provider, as required by § 121.373(a), contains procedures for oversight of all contracted covered work. (g) The policies, procedures, methods, and instructions required by paragraph (e) and (f) of this section must be acceptable to the FAA and included in the certificate holder’s maintenance manual as provided in § 121.369(b)(10). (h) Each certificate holder who contracts for maintenance, preventive maintenance, or alterations to be carried out by a maintenance provider must provide to its FAA Certificate Holding District Office, in a format acceptable to the FAA, a list that includes the name and physical (street) address, or addresses, where the work is carried out for each maintenance provider that performs work for the certificate holder, and a description of the type of maintenance, preventive maintenance, or alteration that is to be performed at each location. The list must be updated with any changes, including additions or deletions, and the updated list provided to the FAA in a format acceptable to the FAA by the last day of each calendar month. 3. Amend § 121.369 by adding paragraph (b)(10) as follows: PO 00000 Frm 00011 Fmt 4702 Sfmt 4702 § 121.369 Manual requirements. * * * * * (b) * * * (10) Policies, procedures, methods, and instructions for the accomplishment of all maintenance, preventive maintenance, and alterations carried out by a maintenance provider. These policies, procedures, methods, and instructions must be acceptable to the FAA and ensure that, when followed by the maintenance provider, the maintenance, preventive maintenance, and alterations are performed in accordance with the certificate holder’s maintenance program and maintenance manual. * * * * * PART 135—OPERATING REQUIREMENTS: COMMUTER AND ON DEMAND OPERATIONS AND RULES GOVERNING PERSONS ON BOARD SUCH AIRCRAFT 4. The authority citation for part 135 continues to read as follows: Authority: 49 U.S.C. 106(g), 41706, 40113, 44701–44702, 44705, 44709, 44711–44713, 44715–44717, 44722, 45101–451050. 5. Add new § 135.426 to read as follows: § 135.426 Contract maintenance. (a) A certificate holder may arrange with another person for the performance of maintenance, preventive maintenance, and alterations as authorized in § 135.437(a) only if all the requirements in this section are met. For purposes of this section— (1) A maintenance provider is any person who performs maintenance, preventive maintenance, or an alteration for a certificate holder other than a person who is trained by and employed directly by that certificate holder. (2) Covered work means any of the following: (i) Essential maintenance that could result in a failure, malfunction, or defect endangering the safe operation of an aircraft if not performed properly or if improper materials are used; (ii) Regularly scheduled maintenance; or (iii) A required inspection item on an aircraft. (3) Directly in charge means having responsibility for covered work performed by a maintenance provider. A representative of the certificate holder directly in charge of covered work does not need to physically observe and direct each maintenance provider constantly, but must be available for consultation on matters requiring instruction or decision. (4) Supervision and control means that a representative of the certificate holder must be available to personally E:\FR\FM\13NOP1.SGM 13NOP1 srobinson on DSK4SPTVN1PROD with Federal Register / Vol. 77, No. 219 / Tuesday, November 13, 2012 / Proposed Rules observe the covered work being done to the extent necessary to ensure it is being done properly, and when the representative is not physically present to observe the work, the representative must be available for consultation on matters requiring instruction or decision. (b) Each certificate holder must be directly in charge of all covered work done for it by a maintenance provider. (c) All covered work must be carried out in accordance with the certificate holder’s maintenance manual. (d) No covered work may be performed by a maintenance provider unless that work is carried out under the supervision and control of the certificate holder. (e) Each certificate holder who contracts for maintenance, preventive maintenance, or alterations to be carried out by a maintenance provider must develop policies, procedures, methods, and instructions for the accomplishment of all contracted maintenance, preventive maintenance, and alterations, and these policies, procedures, methods, and instructions must ensure that, if they are followed, the maintenance, preventive maintenance, and alterations are performed in accordance with the certificate holder’s maintenance program and maintenance manual. (f) Each certificate holder who contracts for maintenance, preventive maintenance, or alterations to be carried out by a maintenance provider must ensure that its system for the continuing analysis and surveillance of the maintenance, preventive maintenance, and alterations carried out by a maintenance provider under this section contains procedures for oversight of the contracted work, as required by § 135.431(a), contains procedures for oversight of all contracted covered work. (g) The policies, procedures, methods, and instructions required by paragraphs (e) and (f) of this section must be acceptable to the FAA and included in the certificate holder’s maintenance manual as provided in § 135.427(b)(10). (h) Each certificate holder who contracts for maintenance, preventive maintenance, or alterations to be carried out by a maintenance provider must provide to its FAA Certificate Holding District Office, in a format acceptable to the FAA, a list that includes the name and physical (street) address, or addresses, where the work is carried out for each maintenance provider that performs work for the certificate holder, and a description of the type of maintenance, preventive maintenance, or alteration that is to be performed at VerDate Mar<15>2010 16:23 Nov 09, 2012 Jkt 229001 each location. The list must be updated with any changes, including additions or deletions, and the updated list provided to the FAA in a format acceptable to the FAA by the last day of each calendar month. 6. Amend § 135.427 by adding paragraph (b)(10) as follows: § 135.427 Manual requirements. * * * * * (b) * * * (10) Policies, procedures, methods, and instructions for the accomplishment of all maintenance, preventive maintenance, and alterations carried out by a maintenance provider. These policies, procedures, methods, and instructions must be acceptable to the FAA and ensure that, when followed by the maintenance provider, the maintenance, preventive maintenance, and alterations are performed in accordance with the certificate holder’s maintenance program and maintenance manual. * * * * * Issued in Washington, DC, on November 6, 2012. John M. Allen, Director, Flight Standards Service. [FR Doc. 2012–27433 Filed 11–9–12; 8:45 am] BILLING CODE 4910–13–P DEPARTMENT OF COMMERCE International Trade Administration 19 CFR Part 360 [Docket Number 121016549–2549–01] RIN 0625–AA93 Steel Import Monitoring and Analysis System Import Administration, International Trade Administration, Commerce. ACTION: Proposed rule. AGENCY: The Department of Commerce publishes this proposed rule to request public comments on proposed modifications to the regulations for the Steel Import Monitoring and Analysis (SIMA) System that would extend the system until March 2017. This extension would continue the Department’s ability to track as early as possible certain steel mill imports into the United States and make the import data publicly available approximately seven weeks in advance of the full public trade data release by the Bureau of the Census. Having access to full information about imports provides the SUMMARY: PO 00000 Frm 00012 Fmt 4702 Sfmt 4702 67593 public with greater knowledge to evaluate current market conditions. DATES: Comments must be submitted on or before 5 p.m. EST, December 13, 2012. Submission of Comments As specified above, to be assured of consideration, comments must be received no later than 30 days after the publication of this notice in the Federal Register. All comments must be submitted through the Federal eRulemaking Portal at http:// www.regulations.gov, into Docket Number ITA–2012–0005, unless the commenter does not have access to the Internet. Commenters that do not have access to the Internet may submit the original and two copies of each set of comments by mail or hand delivery/ courier. Please address the written comments to the Secretary of Commerce, Attention: Steven Presing, Director for Industry Support and Analysis, Import Administration, Room 2845, Import Administration, U.S. Department of Commerce, Constitution Avenue and 14th Street NW., Washington, DC 20230. The Department will not accept comments accompanied by a request that part or all of the material be treated confidentially because of its business proprietary nature or for any other reason. All comments responding to this notice will be a matter of public record and will be available for inspection at Import Administration’s Central Records Unit (Room 7046 of the Herbert C. Hoover Building) and on the Department’s Web site at http://www.trade.gov/ia/. Any questions concerning file formatting, document conversion, access on the Internet, or other electronic filing issues should be addressed to Andrew Lee Beller, Import Administration Webmaster, at (202) 482–0866, email address: webmastersupport@trade.gov. All Personal Identifying Information (for example, name, address, etc.) voluntarily submitted by the commenter may be publicly accessible. Attachments to electronic comments will be accepted in Microsoft Word or Excel, WordPerfect, or Adobe PDF file formats only. All Federal Register notices regarding the SIMA system can be accessed at http://ia.ita.doc.gov/steel/ license/SIMA-FR-Notices.html. FOR FURTHER INFORMATION CONTACT: For information on the SIMA system, please contact Steven Presing (202) 482–1672 or Julie Al-Saadawi (202) 482–1930. SUPPLEMENTARY INFORMATION: On March 2, 2002, the Bush Administration authorized the implementation of a steel E:\FR\FM\13NOP1.SGM 13NOP1

Agencies

[Federal Register Volume 77, Number 219 (Tuesday, November 13, 2012)]
[Proposed Rules]
[Pages 67584-67593]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-27433]



[[Page 67584]]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Parts 121 and 135

[Docket No.: FAA-2011-1136; Notice No. 12-07]
RIN 2120-AJ33


Air Carrier Contract Maintenance Requirements

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The Federal Aviation Administration (FAA) proposes to amend 
the maintenance regulations for domestic, flag, and supplemental 
operations, and commuter and on-demand operations for aircraft type 
certificated with a passenger seating configuration of 10 seats or more 
(excluding any pilot seat). The proposed rules would require these 
operators to develop policies, procedures, methods, and instructions 
for performing contract maintenance that are acceptable to the FAA and 
to include them in their maintenance manuals. The rules would also 
require the operators to provide a list to the FAA of all persons with 
whom they contract their maintenance. These changes are needed because 
contract maintenance has increased to over 70 percent of all air 
carrier maintenance, and numerous investigations have shown 
deficiencies in maintenance performed by contract maintenance 
providers. The proposals would help ensure consistency between contract 
and in-house air carrier maintenance and enhance the oversight 
capabilities of both the air carriers and the FAA.

DATES: Send comments on or before February 11, 2013.

ADDRESSES: Send comments identified by docket number FAA-2011-1136 
using any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for sending your 
comments electronically.
     Mail: Send comments to Docket Operations, M-30; U.S. 
Department of Transportation (DOT), 1200 New Jersey Avenue SE., Room 
W12-140, West Building Ground Floor, Washington, DC 20590-0001.
     Hand Delivery or Courier: Take comments to Docket 
Operations in Room W12-140 of the West Building Ground Floor at 1200 
New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., 
Monday through Friday, except Federal holidays.
     Fax: Fax comments to Docket Operations at 202-493-2251.
    Privacy: The FAA will post all comments it receives, without 
change, to http://www.regulations.gov, including any personal 
information the commenter provides. Using the search function of the 
docket web site, anyone can find and read the electronic form of all 
comments received into any FAA docket, including the name of the 
individual sending the comment (or signing the comment for an 
association, business, labor union, etc.). DOT's complete Privacy Act 
Statement can be found in the Federal Register published on April 11, 
2000 (65 FR 19477-19478), as well as at http://DocketsInfo.dot.gov.
    Docket: Background documents or comments received may be read at 
http://www.regulations.gov at any time. Follow the online instructions 
for accessing the docket or go to the Docket Operations in Room W12-140 
of the West Building Ground Floor at 1200 New Jersey Avenue SE., 
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, 
except Federal holidays.

FOR FURTHER INFORMATION CONTACT: For technical questions concerning 
this action, contact Patricia K. Williams, Aircraft Maintenance 
Division, Air Carrier Maintenance Branch, AFS-330, Federal Aviation 
Administration, 800 Independence Avenue SW., Washington, DC 20591; 
telephone (202) 385-6432; email patricia.k.williams@faa.gov.
    For legal questions concerning this action, contact Ed Averman, 
Office of the Chief Counsel, Airworthiness, Advanced Aircraft, and 
Commercial Space Law Branch, AGC-210, Federal Aviation Administration, 
800 Independence Avenue SW., Washington, DC; telephone (202) 267-3147; 
facsimile (202) 267-5106, email ed.averman@faa.gov.

SUPPLEMENTARY INFORMATION: 

Authority for This Rulemaking

    The FAA's authority to issue rules on 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, Subpart III, Section 447, Section 44701(a)(2)(A) 
and (B) and (5). Under that section, the FAA is charged with 
prescribing regulations and minimum standards in the interest of safety 
for inspecting, servicing, and overhauling aircraft, aircraft engines, 
propellers, and appliances, and equipment and facilities for, and the 
timing of and manner of, the inspecting, servicing and overhauling, and 
prescribing regulations the FAA finds necessary for safety and 
commerce. This regulation is within the scope of that authority.
    In addition, the ``FAA Modernization and Reform Act of 2012'' (the 
Act), Public Law 112-95 (February 14, 2012), in section 319 
(Maintenance providers), requires the FAA to issue regulations 
``requiring that covered work on an aircraft used to provide air 
transportation under part 121 * * *, be performed by persons in 
accordance with subsection (b).'' Subsection (b), in addition to 
listing persons authorized under existing regulations, referenced 
additional terms and conditions in subsection (c) that would apply to 
persons who provide contract maintenance workers, services, or 
maintenance functions to a part 121 air carrier for covered work. The 
Act defines covered work, and mandates that the applicable part 121 air 
carrier must be directly in charge of covered work being performed for 
it under contract, and that the work be done under the supervision and 
control of the air carrier. These statutory requirements are addressed 
in this proposal.

I. Overview of Proposed Rule

    The proposed amendments would apply to certificate holders who 
conduct either domestic, flag, or supplemental operations under 14 CFR 
part 121, and who conduct either commuter operations or on-demand 
operations with aircraft type certificated for a passenger seating 
configuration, excluding any pilot seat, of ten seats or more \1\ under 
14 CFR part 135, if they contract any of their maintenance, preventive 
maintenance, or alteration work to an outside source. The amendments 
would require that each certificate holder who contracts for such work 
must first have developed policies, procedures, methods, and 
instructions for the accomplishment of that work. These must ensure 
that, if they are followed, the work will be performed in accordance 
with the certificate holder's maintenance program and maintenance 
manual. Each certificate holder would also be required to ensure that 
its system for the continuing analysis and surveillance of that work 
contains procedures for its oversight. All of these policies, 
procedures, methods, and instructions would have to be acceptable to 
the FAA and be included in the certificate holder's maintenance manual. 
In addition, each certificate

[[Page 67585]]

holder who contracts any of its maintenance, preventive maintenance, or 
alteration work to an outside source would be required to provide to 
its local FAA Certificate Holding District Office a list that includes 
the name and address of each maintenance provider it uses and a 
description of the type of maintenance that would be performed.
---------------------------------------------------------------------------

    \1\ For brevity throughout this preamble, we will refer to these 
aircraft as ``10 or more.''
---------------------------------------------------------------------------

    The requirement that any person performing maintenance for an air 
carrier must follow the carrier's maintenance program is not new--FAA 
regulations have long required this. For example, Sec.  121.363(b) 
authorizes a certificate holder to arrange with another person to 
perform its maintenance,\2\ and the regulation makes clear that doing 
so does not relieve the carrier from remaining primarily responsible 
for the airworthiness of its aircraft. Further, Sec.  121.367(a) 
requires specifically that maintenance performed by either a 
certificate holder, or by another person, must be performed in 
accordance with the certificate holder's manual. Similar provisions are 
found in Sec. Sec.  135.413 and 135.425. Despite those general 
requirements, the Department of Transportation Inspector General (IG) 
had noted lapses in the means to ensure air carrier manuals are 
followed when contracted maintenance is performed. The deficiencies 
noted include a lack of guidance and training for the maintenance 
providers, and insufficient oversight of that maintenance. The IG 
reports recommended the FAA develop a means to identify these contract 
maintenance providers so the agency could better target its inspector 
resources in surveilling air carrier maintenance. In a separate 
rulemaking the FAA is proposing mandatory training programs for air 
carrier maintenance that would have to be approved by the FAA.
---------------------------------------------------------------------------

    \2\ Throughout this preamble, unless otherwise indicated, when 
we refer to the generic term ``maintenance,'' the term is meant to 
include ``maintenance, preventive maintenance, and alterations.''
---------------------------------------------------------------------------

II. Background

A. Statement of the Problem

    Over the past three decades, air carrier maintenance has evolved 
from mostly an ``in-house'' operation to an extended network of 
maintenance providers that fulfill contracts with air carriers to 
perform their aircraft maintenance. The reasons for this shift are 
many, including air carriers lowering costs by employing fewer 
maintenance personnel and reducing their inventories of maintenance-
related tools, equipment, and housing by allowing others with 
specialized equipment and expertise to work on their aircraft and its 
safety-critical components. Thus, air carriers, in making business 
decisions, have shifted much of their maintenance to contract 
providers.
    By regulation, each air carrier remains primarily responsible for 
the airworthiness of its aircraft, whether the maintenance is 
contracted to another person or not. Any person performing maintenance 
for an air carrier must follow the air carrier's maintenance manual. 
(14 CFR 121.363, 121.367(a), 135.413, and 135.425(a).) In addition, 
each air carrier is required to document in its general maintenance 
manual, both a listing of persons with whom it contracts maintenance 
and a general description of the contracted work. (14 CFR 121.369(a), 
and 135.427(a).)
    However, air carrier general maintenance manuals often are geared 
toward in-house maintenance. They fail to provide the necessary 
instructions to maintenance providers to enable them to follow the air 
carriers' maintenance programs. This is exacerbated when an air 
carrier's manual contains proprietary data, or other confidential 
information that an air carrier may not want to share with a 
maintenance provider. Often, the maintenance provider may also work on 
a competitor's aircraft. Consequently, according to the IG, air 
carriers often are reluctant to share such information, and therefore, 
often do not.
    In addition, the FAA has found that, although air carriers are 
required to list their maintenance providers and a description of the 
work to be done in their maintenance manuals, these lists are not 
always kept up to date, are not always complete, and are not always in 
a format that is readily useful for FAA oversight and analysis 
purposes. The FAA needs this information to be complete and readily 
available centrally. This data is used by the FAA in planning 
surveillance of air carrier maintenance programs and determining the 
extent to which maintenance providers are performing their work 
according to the air carriers' maintenance manuals. Without accurate 
and complete information on the work being performed for air carriers, 
the FAA cannot adequately target its inspection resources for 
surveillance and make accurate risk assessments.

B. History

    In May 1996, employees of SabreTech, a contract maintenance 
provider to air carriers, placed mislabeled and mishandled oxygen 
generators into the cargo compartment of a passenger jet. Those 
mishandled hazardous materials caused a fire in the cargo hold that 
caused Valujet Flight 592 from Miami to Atlanta to crash into the 
Everglades in Florida, taking the lives of all 110 people on board. 
Since then, the FAA's surveillance of air carrier maintenance and 
contract maintenance has been a particular area of focus for the 
Department of Transportation's Office of Inspector General (DOT/OIG). 
The OIG has been performing investigations and audits of the FAA's 
safety oversight of air carriers' use of repair stations to perform 
their maintenance, the use by air carriers of non-certificated repair 
facilities, and the air carriers' outsourcing of maintenance. In each 
of those reports (detailed below), the OIG found fault with the FAA's 
methods of tracking where air carriers perform their maintenance, who 
performs it, and how it is performed.
    A 2003 Department of Transportation IG report \3\ identified a 
trend of air carriers increasingly contracting their maintenance to 
outside sources such as repair stations. The report revealed that major 
air carriers spent approximately $1.5 billion on outsourced maintenance 
in 1996 and approximately $2.5 billion in 2002. The report attributed 
the trend to cost savings that can be realized by air carriers 
contracting their maintenance to outside repair facilities. The report 
was based, in part, on investigators' visits to several FAA field 
offices and to 21 repair stations to evaluate the effectiveness of the 
FAA's oversight of the maintenance work being performed for air 
carriers. The investigation identified weaknesses in maintenance 
practices at 15 of the 21 repair stations and concluded that a lack of 
FAA oversight, especially for repeat issues, contributed to the 
deficiencies. The IG report made several recommendations on ways the 
FAA could enhance the effectiveness of its oversight of air carrier 
contracted maintenance. Among them was that the FAA should develop a 
process to identify repair stations air carriers use to perform 
aircraft maintenance, and to target FAA inspector resources based on 
risk assessments or analysis of the data collected on air carrier 
maintenance outsourcing practices (Recommendation 2).
---------------------------------------------------------------------------

    \3\ Review of Air Carriers' Use of Aircraft Repair Stations, 
Report No. AV-2003-047 (July 8, 2003).
---------------------------------------------------------------------------

    In 2005, the IG issued a second report on air carriers' use of 
outside maintenance providers \4\--this one reporting on the use of 
non-certificated repair facilities. The report discussed air

[[Page 67586]]

carriers' use of both non-certificated facilities (i.e., maintenance 
facilities not certificated by the FAA as repair stations) and 
individual mechanics hired on a temporary basis. The report echoed a 
recommendation from the 2003 IG report by recommending that the FAA 
inventory air carrier vendor lists that include all maintenance 
providers working on air carrier aircraft and identify non-certificated 
repair facilities that perform critical or scheduled maintenance 
(Recommendation 1). The report also recommended that the FAA determine 
whether air carriers evaluate the background, experience, and 
qualifications of the temporary maintenance personnel used by the 
contractors to ensure the work they perform is completed in accordance 
with FAA and air carrier requirements (Recommendation 7).
---------------------------------------------------------------------------

    \4\ Air Carrier's Outsourcing Use of Non-Certificated Repair 
Facilities, Report No. AV-2006-031 (Dec. 15, 2005).
---------------------------------------------------------------------------

    The problem areas discussed above were emphasized at Congressional 
hearings in testimony by the Inspector General in 2007. The Inspector 
General stated: ``If FAA is to achieve the planned improvements in 
oversight of outsourced maintenance, it will need to obtain definitive 
data on where air carriers are getting the maintenance performed, 
including critical and scheduled maintenance work done at non-
certificated repair facilities, so that it can focus its inspections to 
areas of greatest risk.'' \5\
---------------------------------------------------------------------------

    \5\ Scovel, Aviation Safety, FAA Oversight of Repair Stations, 
June 20, 2007, CC 2007-076 Senate Committee on Science, 
Transportation and Commerce, Subcommittee on Operations, Safety and 
Security.
---------------------------------------------------------------------------

    In 2008, the IG issued a third related report on air carriers' 
outsourcing of maintenance.\6\ The report noted a continuing trend of 
air carriers outsourcing more of their maintenance. The IG based this 
report on its review of nine major air carriers, which sent 71% of 
their heavy maintenance checks to repair stations in 2007--up from 34% 
in 2003.\7\ The report pointed out the continuing need for better 
oversight of contract maintenance, both by the FAA and by air carriers, 
especially when the air carriers are contracting repairs of critical 
components. In addition, the report found that air carrier maintenance 
manuals have traditionally been geared toward in-house maintenance, and 
noted that repair stations may perform work for various air carriers, 
all with different in-house procedures. In this regard, the report 
concluded that the FAA should ensure that air carriers provide well-
defined maintenance procedures and guidance for their outsourced 
repairs. The report specifically recommended that the FAA: ``Encourage 
the industry best practice of using airworthiness agreements between 
air carriers and repair stations that more closely define maintenance 
procedures and responsibilities'' (Recommendation 7).
---------------------------------------------------------------------------

    \6\ Air Carrier's Outsourcing of Aircraft Maintenance, Report 
No. AV-2008-090 (Sept. 30, 2008).
    \7\ The report noted that, ``overall, major air carriers 
outsourced an average of 64 percent of their maintenance expenses in 
2007, compared to only 37 percent in 1996.'' Report No. AV-2008-090 
(Sept. 30, 2008) at p. 1.
---------------------------------------------------------------------------

Need for the Rule
    As noted in the IG reports discussed above, air carrier use of 
contract maintenance providers continues to grow, averaging 64% of air 
carrier maintenance costs in 2007. The air carrier regulations have 
long stipulated that each certificate holder is primarily responsible 
for the airworthiness of its aircraft, even if maintenance is 
contracted to another person. (See Sec. Sec.  121.363 and 135.413.) Air 
carriers cannot abrogate this responsibility. Consistent with this 
responsibility are the requirements that when persons other than the 
certificate holder (i.e., contract maintenance providers) perform 
maintenance for it, the maintenance must be performed in accordance 
with the certificate holder's maintenance manual.
    Section 121.367 has long required that each certificate holder 
shall have a maintenance program that ensures that: ``Maintenance, 
preventive maintenance, and alterations performed by it, or by other 
persons, are performed in accordance with the certificate holder's 
manual.'' (Sec. Sec.  121.367(a) and 135.425(a) (emphasis added).) And, 
current Sec.  121.369(b) requires, in pertinent part, that:

    The certificate holder's manual must contain the programs 
required by Sec.  121.367 that must be followed in performing 
maintenance, preventive maintenance, and alterations of that 
certificate holder's airplanes, including airframes, aircraft 
engines, propellers, appliances, emergency equipment, and parts 
thereof * * *.

    A nearly identical requirement is in Sec.  135.427(b). While these 
requirements may be clear, the specifics of how to achieve the result 
may not be. As noted in the three IG reports discussed above, the 
investigators found numerous problems with maintenance being outsourced 
by air carriers. One conclusion reached by the IG was, as noted above, 
that air carriers should provide their contract maintenance providers 
with well-defined maintenance procedures. Implicit is that these 
procedures would be designed by each air carrier so that its 
maintenance providers could follow its manual.
    The FAA believes that a root cause of this problem may be that many 
air carrier maintenance manuals were written at a time when maintenance 
was performed mostly in-house. Thus parts of these manuals may contain 
proprietary information obtained from various sources, for example, 
original equipment manufacturer (OEM), Type Certificate (TC) holder, or 
Supplemental Type Certificate (STC) holder, or the information may have 
been developed by the air carrier. Because of the proprietary nature of 
the data, an air carrier may be reluctant to provide its maintenance 
providers with all of the complete and specific guidance within its 
maintenance manual. This reluctance by an air carrier to provide the 
specific proprietary guidance/information may indicate that it does not 
fully recognize the maintenance provider as an extension of its own 
maintenance program. In those situations, the maintenance provider may 
be unable to follow the air carrier's program to the extent required by 
the regulations.
    Repair stations have been frustrated by their inability to obtain 
the necessary applicable portions of some air carrier maintenance 
manuals when performing work under contract for them. The repair 
station regulations require repair stations to follow the maintenance 
manuals of the air carriers for whom they are doing the work. Section 
145.205(a) provides that:

    A certificated repair station that performs maintenance, 
preventive maintenance, or alterations for an air carrier or 
commercial operator that has a continuous airworthiness maintenance 
program under part 121 or part 135 must follow the air carrier's or 
commercial operator's program and applicable sections of its 
maintenance manual.

    It stands to reason that if a repair station must follow the air 
carrier's or commercial operator's manual in order to comply with this 
regulation, then the corresponding part 121 and part 135 regulations 
should require the air carrier or commercial operator to provide the 
repair station that does the work with the applicable portions of its 
maintenance manual. This would be consistent with the air carriers' 
remaining primarily responsible for the airworthiness of their aircraft 
and the concept that when a maintenance provider performs maintenance 
for an air carrier, the provider is an extension of the air carrier's 
maintenance program.
    The IG reports placed much emphasis on the need for improved FAA 
oversight of air carrier contract maintenance. In order for the FAA to 
improve this

[[Page 67587]]

oversight, the IG, in 2003, recommended the agency develop a means to 
identify repair stations that perform maintenance for air carriers. The 
current regulations require only that air carriers put in their manuals 
a list of persons with whom they have arranged for the performance of 
maintenance and a general description of that work. (See Sec. Sec.  
121.369(a) and 135.427(a).) Although the FAA may review these manuals, 
no current rule requires air carriers to keep such a list up to date 
and to provide it to the FAA in an acceptable format. As explained 
below, the FAA has found that the lists maintained by air carriers in 
their manuals in some cases are not readily useful for oversight 
purposes.
    The requirements that an air carrier put in its maintenance manual 
a list of persons with whom it has arranged to perform maintenance, 
including a general description of that work, has been in place since 
at least 1965. As a consequence of the IG reports, between June and 
September 2010, the FAA did an internal investigation to determine the 
effectiveness of the requirement that air carriers include in their 
manual the list of outside maintenance providers. The agency found 
inconsistent compliance with the rule. Some carriers failed to specify 
an adequate description of the type of work, and some failed to include 
the name and address of their maintenance providers, using instead only 
alpha-numeric designators. This piecemeal and inconsistent availability 
of the information is not conducive to FAA analysis and targeting of 
problem areas.
    The FAA agrees with the IG's recommendations that the agency should 
have an accurate, consistent inventory of each air carrier's contract 
maintenance providers. Such a list would enable the FAA to more 
accurately assess the risk associated with air carriers increasingly 
maintaining their fleets by contract maintenance providers. Although 
the identity of contract maintenance providers is currently available 
to the FAA through the air carriers' manuals and available upon 
request, it is not published in a format that readily allows for 
analysis, as it may be annotated in various formats, and the 
information is not available to the FAA in a single data base. In 
accordance with the IG's recommendations, we are proposing this rule so 
the FAA would have a dedicated and readily available list in an 
acceptable format of all air carrier contract maintenance providers. 
These lists would be useful for purposes of FAA analysis and oversight 
of both the air carriers that contract portions of their maintenance 
and their maintenance providers. The FAA envisions that this list would 
be administered via air carriers' operations specifications or through 
the agency's new safety assurance system that allows each certificate 
holder to enter its own data electronically into the FAA system. This 
would provide the FAA with real time data and assist it in meeting its 
oversight responsibilities and in making risk assessments.

III. Discussion of the Proposal

    Because current FAA regulations do not clearly address air carrier 
requirements for contract maintenance providers, the resulting lack of 
standardization makes it difficult for both the air carriers and the 
FAA to provide meaningful oversight to ensure proper maintenance that 
is vital for the public's continued safety. Consistent with the IG's 
recommendations, we propose to address weaknesses in contracted 
maintenance on two fronts. The first would add consistency and 
structure to the arrangements air carriers make with their outside 
maintenance providers, with the goal of ensuring that the air carriers' 
maintenance manuals would be followed. The second would assist the FAA 
in its oversight of contracted maintenance by requiring each air 
carrier that contracts any of its maintenance to provide, and keep 
updated, a list of those maintenance providers to the FAA. The list 
would include the physical (street) address where the work would be 
performed, and a description of the work to be performed by each 
maintenance provider.
    While the current regulations do require that any person (whether 
certificated or not) with whom an air carrier arranges to perform 
maintenance must follow the carrier's manual, the requirement is 
broadly stated and often loosely implemented. In order to assure 
consistency in any future FAA guidance material, we are proposing in 
new Sec. Sec.  121.368 and 135.426 to define a maintenance provider as 
any person (whether certificated or not) who performs maintenance for a 
certificate holder other than a person who is trained by and employed 
by that certificate holder. These new sections would also require each 
air carrier that contracts any part of its maintenance to a maintenance 
provider to first have policies and procedures in place to ensure that, 
if they were followed, the carrier's contracted maintenance would be 
performed in accordance with its maintenance program and maintenance 
manual. Proprietary data issues could be addressed by carefully drafted 
airworthiness agreements between the air carrier and its maintenance 
provider, as recommended in the 2008 IG report. Each certificate holder 
would also be required to ensure that its system for the continuing 
analysis and surveillance of that work contains procedures for its 
oversight. All of these policies, procedures, methods, and instructions 
would have to be acceptable to the FAA and be included in the 
certificate holder's maintenance manual.
    For completeness, we are also proposing a new paragraph (b)(10) to 
current Sec. Sec.  121.369 and 135.427 (Manual requirements) to include 
the above requirements for procedures and oversight in the air 
carriers' maintenance manuals.
    We are also proposing in new Sec. Sec.  121.368 and 135.426 to 
require each air carrier that contracts any of its maintenance to an 
outside source to provide to its FAA Certificate Holding District 
Office, in a format acceptable to the FAA, a list that includes the 
name and address of each maintenance provider used by that certificate 
holder under contract, and a description of the work that would be 
performed. This would enable the FAA to have a meaningful data base 
that would show who was doing the work for each air carrier and the 
kind of work being done. This would assist the FAA in its oversight 
responsibilities, especially in determining which maintenance providers 
were performing critical maintenance.
    The FAA recognizes that operators will need time to fully develop 
the policies, procedures, methods, and instructions for contract 
maintenance and to provide them in an acceptable format to the FAA. 
Similarly, they will need time to prepare the list with the required 
information of their contract maintenance providers and to provide them 
in an acceptable format to their Certificate Holding District Offices. 
The FAA will also need time to review the information submitted by the 
operators. In view of these considerations, the FAA is proposing to 
make the effective date of the final rule one year after its 
publication. We are requesting public comments on the reasonableness of 
this one-year ``compliance'' period, as well as any other aspect of 
this proposal.
    In addition, as explained in the Authority for this Rulemaking 
section of this preamble, the ``FAA Modernization and Reform Act of 
2012'' (the Act), Public Law 112-95 (February 14, 2012), in section 319 
(Maintenance providers), requires the FAA to issue regulations 
``requiring that covered work on an aircraft used to provide air 
transportation under part 121 * * *, be performed by persons in 
accordance

[[Page 67588]]

with subsection (b).'' Subsection (b) of the Act, in addition to 
listing persons already authorized to perform maintenance under 
existing regulations, referenced additional terms and conditions in 
subsection (c) that would apply to persons who provide contract 
maintenance workers, services, or maintenance functions to a part 121 
air carrier for the performance of covered work. The Act defines 
covered work as any of the following: ``(A) Essential maintenance that 
could result in a failure, malfunction, or defect endangering the safe 
operation of an aircraft if not performed properly or if improper 
materials are used. (B) Regularly scheduled maintenance. (C) A required 
inspection item (as defined by the Administrator).'' The Act also 
requires that covered work be carried out under the supervision and 
control of the part 121 air carrier directly in charge of the covered 
work being performed for it by a maintenance provider, and that the 
covered work be carried out in accordance with the air carrier's 
maintenance manual.
    In accordance with these statutory requirements, we are proposing 
to include in Sec. Sec.  121.368(a) and 135.426(a) the definition of 
covered work set forth in the statute, and to provide definitions of 
supervision and control and directly in charge. The definition of 
directly in charge would be similar to the current definitions in 
Sec. Sec.  121.378 and 135.435. As required by the statute, we are also 
proposing: In Sec. Sec.  121.368(b) and 135.426(b), that each 
certificate holder must be directly in charge of all covered work it 
contracts to a maintenance provider; in Sec. Sec.  121.368(c) and 
135.426(c), that all covered work must be carried out in accordance 
with the certificate holder's maintenance manual; and in Sec. Sec.  
121.368(d) and 135.426(d), that no covered work may be performed by a 
maintenance provider unless that work is carried out under the 
supervision and control of the certificate holder. Although the statute 
mandates these amendments for part 121 air carriers, the FAA believes 
that, in the interest of providing an equivalent level of safety for 
commuter and on demand operations, the same requirements should apply 
to persons conducting operations under part 135 in aircraft configured 
with 10 or more passenger seats. Accordingly, we are proposing the 
changes mandated by the Act for both part 121 and part 135 (10 or more) 
certificate holders.

IV. Regulatory Notices and Analyses

A. Regulatory Evaluation

    Changes to Federal regulations must undergo several economic 
analyses. First, Executive Order 12866 and Executive Order 13563 direct 
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 (Pub. 
L. 96-354) requires agencies to analyze the economic impact of 
regulatory changes on small entities. Third, the Trade Agreements Act 
(Pub. L. 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). This portion of the preamble summarizes the FAA's 
analysis of the economic impacts of this proposed rule. We suggest 
readers seeking greater detail read the full regulatory evaluation, a 
copy of which we have placed in the docket for this rulemaking.
    In conducting these analyses, FAA has determined that this proposed 
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) would not have a 
significant economic impact on a substantial number of small entities; 
(5) would not create unnecessary obstacles to the foreign commerce of 
the United States; and (6) would 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.
Total Benefits and Costs of This Rule
    This proposed rule would ensure consistency between contract and 
in-house air carrier maintenance and assist the FAA in its oversight 
responsibilities. The DOT IG reports placed much emphasis on the need 
for improved FAA oversight of air carrier contract maintenance. In 
order for the FAA to better be able to provide this oversight, the IG, 
in 2003, recommended the agency develop a means to identify repair 
stations that perform maintenance for air carriers.
    In accord with the IG's recommendations, we are proposing this rule 
so the FAA would have a dedicated and readily available list in an 
acceptable format of all air carrier contract maintenance providers. 
These lists would be useful for purposes of FAA analysis and oversight 
of both the air carriers that contract portions of their maintenance 
and their maintenance providers.
    These new sections would also require each air carrier that 
contracts any part of its maintenance to a maintenance provider to 
first have policies and procedures in place to ensure that, if they 
were followed, the carrier's contracted maintenance would be performed 
in accordance with its maintenance program and maintenance manual. 
Proprietary data issues could be addressed by carefully drafted 
airworthiness agreements between the air carrier and its maintenance 
provider, as recommended in the 2008 IG report.
    In addition, this proposed rule responds to a provision (Section 
319 on Maintenance Providers) in the FAA Modernization and Reform Act 
of 2012 mandating that the FAA issue regulations ``requiring that 
covered work on an aircraft used to provide air transportation under 
part 121 * * *, be performed by persons in accordance with subsection 
(b) [of that section].'' Subsection (b), in addition to listing persons 
authorized under existing regulations, referenced additional terms and 
conditions in subsection (c) that would apply to persons who provide 
contract maintenance workers, services, or maintenance functions to a 
part 121 air carrier for covered work. The section defines covered 
work, and mandates that the applicable part 121 air carrier must be 
directly in charge of covered work being performed for it under 
contract, and that the work be done under the supervision and control 
of the air carrier. As already explained under Discussion of the 
Proposal in this preamble, in the interest of providing an equivalent 
level of safety for commuter and on demand operations, we are proposing 
the above statutory requirements for certificate holders operating 
under part 135 as well as for those operating under part 121.
    Over 10 years, the cost to part 121 and part 135 (10 or more) air 
carriers and the FAA would be approximately $2.4

[[Page 67589]]

million ($1.6 million, present value at 7%), or essentially minimal 
cost.
    The FAA believes the benefits discussed above have value exceeding 
the costs.
Who is potentially affected by this rule?
    Part 121 and part 135 (10 or more) air carriers.
    Assumptions:
     The rule is expected to take effect in 2014. The time 
horizon for these potential benefits is 10 years, 2014 through 2023.
     All monetary values were expressed in constant 2011 
dollars. We calculated the present value of the potential benefit 
stream by discounting the monetary values using a 7 percent interest 
rate from 2014 to 2023.
     The FAA identified 301 part 121 and part 135 (10 or more) 
air carriers that would be affected by this proposed rule.
Benefits of This Rule
    This proposed rule would ensure consistency between contract and 
in-house air carrier maintenance and assist the FAA in its oversight 
responsibilities. The DOT IG reports placed much emphasis on the need 
for improved FAA oversight of air carrier contract maintenance. In 
order for the FAA to better be able to provide this oversight, the IG, 
in 2003, recommended the agency develop a means to identify repair 
stations that perform maintenance for air carriers.
    In accord with the IG's recommendations, we are proposing this rule 
so the FAA would have a dedicated and readily available list in an 
acceptable format of all air carrier contract maintenance providers. 
These lists would be useful for purposes of FAA analysis and oversight 
of both the air carriers that contract portions of their maintenance 
and their maintenance providers.
    Although the IG reports discussed earlier dealt primarily with 
maintenance conducted for part 121 certificate holders, the FAA has 
found similar problems with maintenance providers not following the 
maintenance programs of certificate holders conducting commuter and on-
demand operations with aircraft type certificated for a passenger 
seating configuration, excluding any pilot seat, of ten seats or more 
under part 135. In a similar vein, the FAA has also found that some of 
these operators conduct insufficient oversight of their maintenance 
providers. Even before the passage of Public Law 112-95 in February 
2012, the FAA was planning to propose rules for both part 121 and 135 
certificate holders that would require additional procedures and 
oversight to help ensure that the certificate holders' manuals would be 
followed by outside maintenance providers. The statute mandates new 
requirements for part 121 certificate holders, including that they be 
directly in charge of what it defines as ``covered work.'' Because the 
FAA has observed the same types of lapses with maintenance performed 
for part 135 certificate holders operating aircraft with 10 or more 
seats, we are proposing the same requirements for these operators. The 
FAA believes that by requiring part 135 certificate holders to adopt 
the new part 121 statutory requirements, a higher level of safety would 
be achieved.
Costs of This Rule
    From 2014 to 2023, the cost to part 121 and part 135 (10 or more) 
air carriers and the FAA would be approximately $2.4 million ($1.6 
million, present value). The FAA solicits comments regarding this 
determination and requests that all comments be accompanied by clear 
and detailed supporting economic documentation.

B. 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 FAA identified a total of 269 small entities out of 301 air 
carriers that would be affected by this proposed rule. For each of 
these entities, the FAA attempted to retrieve their annual revenue data 
from World Aviation Directory. The FAA found data for 36 of the 269 
small entities. The FAA then compared their revenue data with their 
annualized costs. The projected annualized costs of the proposed rule 
as a percent of revenue would be less than 1 percent for the 36 small 
entities, which is not a significant economic impact. Therefore, the 
FAA certifies this proposed rule would not have a significant economic 
impact on a substantial number of small entities. The FAA solicits 
comments regarding this determination.

C. International Trade Impact Assessment

    The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the 
Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal 
agencies from establishing standards or engaging in related activities 
that create unnecessary obstacles to the foreign commerce of the United 
States. Pursuant to these Acts, the establishment of standards is not 
considered an unnecessary obstacle to the foreign commerce of the 
United States, so long as the standard has a legitimate domestic 
objective, such as the protection of safety, and does not operate in a 
manner that excludes imports that meet this objective. 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 proposed rule and determined that 
the objective is to improve safety: therefore, it would not create 
unnecessary obstacles to the foreign commerce of the United States.

D. 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 
(in 1995 dollars) 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 $143.1 million instead of $100 
million. This proposed rule does not contain such a mandate; therefore, 
the

[[Page 67590]]

requirements of Title II of the Act do not apply.

E. Paperwork Reduction

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires 
that the FAA considers the impact of paperwork and other information 
collection burdens imposed on the public. According to the 1995 
amendments to the Paperwork Reduction Act (5 CFR 1320.8(b)(2)(vi)), 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.
    This action contains the following proposed amendments to the 
existing information collection requirements previously approved under 
OMB Control Number 2120-XXXX. As required by the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3507(d)), the FAA has submitted these proposed 
information collection amendments to OMB for its review.
    Summary: Each operator which seeks to obtain, or is in possession 
of, an air carrier operating certificate must comply with the 
requirements of 14 CFR part 121 in order to maintain data which is used 
to determine if the air carrier is operating in accordance with minimum 
safety standards. Original certification is completed in accordance 
with part 119.
    Each operator which seeks to obtain, or is in possession of a 
commuter or on-demand operating certificate must comply with the 
requirements of 14 CFR part 135 in order to maintain data which is used 
to determine if the air carrier is operating in accordance with minimum 
safety standards. Original certification is completed in accordance 
with part 119. Continuing certification is completed in accordance with 
part 121 and part 135. One form is used. The use of this form was taken 
into account in estimating the burden for this section.
    Use: This information collection supports the Department of 
Transportation's strategic goal of safety. Specifically, the goal is to 
promote the public health and safety by working toward the elimination 
of transportation-related deaths, injuries, and destruction of 
property.
    Title 49 U.S.C., Section 44702, empowers the Secretary of 
Transportation to issue air carrier operating certificates and to 
establish minimum safety standards for the operation of the air carrier 
to whom such certificates are issued. Under the authority of Title 49 
CFR, Section 44701, Federal Aviation Regulations part 121 and part 135 
prescribe the terms, conditions, and limitations as are necessary to 
ensure safety in air transportation.
    Respondents (including number of): There are approximately 94 part 
121 air carriers and 207 part 135 operators affected by this proposed 
rule.
    Frequency: The manual requirements will be submitted as part of the 
submission of maintenance manuals to the FAA for acceptance.
    Annual Burden Estimate: The proposed rule would require that the 
air carrier's manual has all the policies, procedures, methods, and 
instructions for the accomplishment of maintenance by another person to 
include the information necessary for certificate holders to ensure all 
maintenance is performed in accordance with its maintenance program. 
The proposed rule would also require that the air carrier provides a 
list with the name and address of each maintenance provider used and 
the type of maintenance that is to be performed.
Private Sector Costs
    The proposed rule would require that the air carrier's manual has 
all the policies, procedures, methods, and instructions for the 
accomplishment of maintenance by another person to include the 
information necessary for certificate holders to ensure all maintenance 
is performed in accordance with its maintenance program. The proposed 
rule would also require that the air carrier provides a list with the 
name and address of each maintenance provider used and the type of 
maintenance that is to be performed and updates and maintains that 
list.
    To calculate the cost of revising the manual and revising and 
maintaining the list, the following assumptions were used, paralleling 
those in the regulatory evaluation:
     94 part 121 manuals have to be revised in year 1.
     207 part 135 manuals have to be revised in year 1.
     94 part 121 air carriers have to provide a list in year 1.
     207 part 135 air carriers have to provide a list in year 
1.
     Part 121: amount of time revising manual (manager): 4 
hours.
     Part 121: amount of time revising manual (technical 
writer): 40 hours.
     Part 121: amount of time revising manual (editor): 2 
hours.
     Part 135: amount of time revising manual (manager): 8 
hours.
     Part 121: amount of time to provide the list (manager): 1 
hour.
     Part 121: amount of time to provide the list (technical 
writer): 3 hours.
     Part 121: amount of time to provide the list (auditor): 10 
hours.
     Part 135: amount of time to provide the list (manager): 5 
hours.
     Parts 121 & 135: amount of time to maintain list 
(manager): 6 hours/year.
     Parts 121 & 135: amount of time to maintain list 
(technical writer): 6 hours/year.
     Wage per hour for manager: $69.78.
     Wage per hour for technical writer: $36.76.
     Wage per hour for editor: $43.45.
     Wage per hour for auditor: $49.79.
First Year Costs for Part 121
Cost = 94 x ((4 hours x $69.78) + (40 hours x $36.76) + (2 hours x 
$43.45) + (1 hour x $69.78) + (3 hours x $36.76) + (10 hours x $49.79) 
+ (6 hours x $69.78) + (6 hours x $36.76)) = $296,454.
Time = 94 x (4 hours + 40 hours + 2 hours + 1 hour + 3 hours + 10 hours 
+ 6 hours + 6 hours) = 6,768.
Subsequent Year Costs for Part 121
Cost = 94 x ((6 hours x $69.78) + (6 hours x $36.76)) = $60,091.
Time = 94 x (6 hours + 6 hours) = 1,128.
First Year Costs for Part 135
Cost = 207 x ((8 hours x $69.78) + (5 hours x $69.78) + (6 hours x 
$69.78) + (6 hours x $36.76)) = $320,114.
Time = 207 x (8 hours + 5 hours + 6 hours + 6 hours) = 5,175.
Subsequent Year Costs for Part 135
Cost = 207 x ((6 hours x $69.78) + (6 hours x $36.76)) = $132,329.
Time = 207 x (6 hours + 6 hours) = 2,484.
Total Over 10 Years
Cost = ($296,454 + $320,114 + (9 x $60,091) + (9 x $132,329)) = 
$2,348,351.
Time = (6,768 hours + 5,175 hours + (9 x 1,128 hours) + (9 x 2,484 
hours)) = 44,451.
Average Per Year
Cost = $2,348,351/10 = $234,835.
Time = 44,451/10 = 4,445 hours.
FAA Costs
    The FAA has to ensure that the air carrier's manual has all the 
policies, procedures, methods, and instructions for the accomplishment 
of maintenance by another person to include the information necessary 
for certificate holders to ensure all maintenance is performed in 
accordance with its maintenance program.
    To calculate the cost of revising the manual, the following 
assumptions were used, paralleling those in the regulatory evaluation:
     94 part 121 manuals have to be revised in year 1.

[[Page 67591]]

     207 part 135 manuals have to be revised in year 1.
     Part 121: amount of time revising manual (FAA inspector): 
1 hour.
     Part 135: amount of time revising manual (FAA inspector): 
1 hour.
     Wage per hour for FAA inspector: $96.14.
First Year Costs for Part 121
Cost = 94 x ((1 hour x $96.14)) = $9,037.
Time = 94 x (1 hour) = 94 hours.
First Year Costs for Part 135
Cost = 207 x ((1 hour x $96.14)) = $19,901.
Time = 207 x (1 hour) = 207 hours.
Total Over 10 Years
Cost = ($9,037 + $19,901) = $28,938.
Time = (94 hours + 207 hours) = 301 hours.
Average Per Year
Cost = $28,938/10 = $2,894.
Time = 301/10 = 30 hours.

    The agency is soliciting comments to--
    (1) Evaluate whether the proposed information requirement is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
    (2) Evaluate the accuracy of the agency's estimate of the burden;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of collecting information on those who are 
to respond, including by using appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology.
    Individuals and organizations may send comments on the information 
collection requirement to the address listed in the ADDRESSES section 
at the beginning of this preamble by February 11, 2013. Comments also 
should be submitted to the Office of Management and Budget, Office of 
Information and Regulatory Affairs, Attention: Desk Officer for FAA, 
New Executive Office Building, Room 10202, 725 17th Street NW., 
Washington, DC 20053.

F. International Compatibility

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

G. 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 Chapter 3, paragraph 312d and involves no 
extraordinary circumstances.

V. Executive Order Determinations

A. Executive Order 13132, Federalism

    The FAA has analyzed this proposed rule under the principles and 
criteria of Executive Order 13132, Federalism. The agency has 
determined that this action would not have a substantial direct effect 
on the States, or the relationship between the Federal Government and 
the States, or on the distribution of power and responsibilities among 
the various levels of government, and, therefore, would not have 
Federalism implications.

B. Executive Order 13211, Regulations That Significantly Affect Energy 
Supply, Distribution, or Use

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

VI. Additional Information

A. Comments Invited

    The FAA invites interested persons to participate in this 
rulemaking by submitting written comments, data, or views. The agency 
also invites comments relating to the economic, environmental, energy, 
or federalism impacts that might result from adopting the proposals in 
this document. The most helpful comments reference a specific portion 
of the proposal, explain the reason for any recommended change, and 
include supporting data. To ensure the docket does not contain 
duplicate comments, commenters should send only one copy of written 
comments, or if comments are filed electronically, commenters should 
submit only one time.
    The FAA will file in the docket all comments it receives, as well 
as a report summarizing each substantive public contact with FAA 
personnel concerning this proposed rulemaking. Before acting on this 
proposal, the FAA will consider all comments it receives on or before 
the closing date for comments. The FAA will consider comments filed 
after the comment period has closed if it is possible to do so without 
incurring expense or delay. The agency may change this proposal in 
light of the comments it receives.
    Proprietary or Confidential Business Information: Commenters should 
not file proprietary or confidential business information in the 
docket. Such information must be sent or delivered directly to the 
person identified in the FOR FURTHER INFORMATION CONTACT section of 
this document, and marked as proprietary or confidential. If submitting 
information on a disk or CD ROM, mark the outside of the disk or CD 
ROM, and identify electronically within the disk or CD ROM the specific 
information that is proprietary or confidential.
    Under 14 CFR 11.35(b), if the FAA is aware of proprietary 
information filed with a comment, the agency does not place it in the 
docket. It is held in a separate file to which the public does not have 
access, and the FAA places a note in the docket that it has received 
it. If the FAA receives a request to examine or copy this information, 
it treats it as any other request under the Freedom of Information Act 
(5 U.S.C. 552). The FAA processes such a request under Department of 
Transportation procedures found in 49 CFR part 7.

B. Availability of Rulemaking Documents

    An electronic copy of rulemaking documents may be obtained from the 
Internet by--
    1. Searching the Federal eRulemaking Portal (http://www.regulations.gov);
    2. Visiting the FAA's Regulations and Policies web page at http://www.faa.gov/regulations_policies or
    3. Accessing the Government Printing Office's Web page at http://www.gpoaccess.gov/fr/index.html.
    Copies may also be obtained 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. 
Commenters must identify the docket or notice number of this 
rulemaking.
    All documents the FAA considered in developing this proposed rule, 
including economic analyses and technical reports, may be accessed from 
the Internet through the Federal eRulemaking Portal referenced in item 
(1) above.

[[Page 67592]]

List of Subjects

14 CFR Part 121

    Aircraft, Aviation safety.

14 CFR Part 135

    Aircraft, Aviation safety.

The Proposed Amendment

    In consideration of the foregoing, the Federal Aviation 
Administration proposes to amend chapter I of title 14, Code of Federal 
Regulations as follows:

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

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

    Authority: 49 U.S.C. 106(g), 1153, 40101, 40102, 40103, 41721, 
44105, 44106, 44111, 44701-44717, 44722, 44901, 44903, 44904, 44906, 
44912, 44914, 44936, 44938, 46103, 46105.

    2. Add new Sec.  121.368 as follows:


Sec.  121.368  Contract maintenance.

    (a) A certificate holder may arrange with another person for the 
performance of maintenance, preventive maintenance, and alterations as 
authorized in Sec.  121.379(a) only if all the requirements in this 
section are met. For purposes of this section--
    (1) A maintenance provider is any person who performs maintenance, 
preventive maintenance, or an alteration for a certificate holder other 
than a person who is trained by and employed directly by that 
certificate holder.
    (2) Covered work means any of the following:
    (i) Essential maintenance that could result in a failure, 
malfunction, or defect endangering the safe operation of an aircraft if 
not performed properly or if improper materials are used;
    (ii) Regularly scheduled maintenance; or (iii) A required 
inspection item on an aircraft.
    (3) Directly in charge means having responsibility for covered work 
performed by a maintenance provider. A representative of the 
certificate holder directly in charge of covered work does not need to 
physically observe and direct each maintenance provider constantly, but 
must be available for consultation on matters requiring instruction or 
decision.
    (4) Supervision and control means that a representative of the 
certificate holder must be available to personally observe the covered 
work being done to the extent necessary to ensure it is being done 
properly, and when the representative is not physically present to 
observe the work, the representative must be available for consultation 
on matters requiring instruction or decision.
    (b) Each certificate holder must be directly in charge of all 
covered work done for it by a maintenance provider.
    (c) All covered work must be carried out in accordance with the 
certificate holder's maintenance manual.
    (d) No covered work may be performed by a maintenance provider 
unless that work is carried out under the supervision and control of 
the certificate holder.
    (e) Each certificate holder who contracts for maintenance, 
preventive maintenance, or alterations to be carried out by a 
maintenance provider must develop policies, procedures, methods, and 
instructions for the accomplishment of all such maintenance, preventive 
maintenance, and alterations, and these policies, procedures, methods, 
and instructions must ensure that, if they are followed, the 
maintenance, preventive maintenance, and alterations are performed in 
accordance with the certificate holder's maintenance program and 
maintenance manual.
    (f) Each certificate holder who contracts for maintenance, 
preventive maintenance, or alterations to be carried out by a 
maintenance provider must ensure that its system for the continuing 
analysis and surveillance of the maintenance, preventive maintenance, 
and alterations carried out by the maintenance provider, as required by 
Sec.  121.373(a), contains procedures for oversight of all contracted 
covered work.
    (g) The policies, procedures, methods, and instructions required by 
paragraph (e) and (f) of this section must be acceptable to the FAA and 
included in the certificate holder's maintenance manual as provided in 
Sec.  121.369(b)(10).
    (h) Each certificate holder who contracts for maintenance, 
preventive maintenance, or alterations to be carried out by a 
maintenance provider must provide to its FAA Certificate Holding 
District Office, in a format acceptable to the FAA, a list that 
includes the name and physical (street) address, or addresses, where 
the work is carried out for each maintenance provider that performs 
work for the certificate holder, and a description of the type of 
maintenance, preventive maintenance, or alteration that is to be 
performed at each location. The list must be updated with any changes, 
including additions or deletions, and the updated list provided to the 
FAA in a format acceptable to the FAA by the last day of each calendar 
month.
    3. Amend Sec.  121.369 by adding paragraph (b)(10) as follows:


Sec.  121.369  Manual requirements.

* * * * *
    (b) * * *
    (10) Policies, procedures, methods, and instructions for the 
accomplishment of all maintenance, preventive maintenance, and 
alterations carried out by a maintenance provider. These policies, 
procedures, methods, and instructions must be acceptable to the FAA and 
ensure that, when followed by the maintenance provider, the 
maintenance, preventive maintenance, and alterations are performed in 
accordance with the certificate holder's maintenance program and 
maintenance manual.
* * * * *

PART 135--OPERATING REQUIREMENTS: COMMUTER AND ON DEMAND OPERATIONS 
AND RULES GOVERNING PERSONS ON BOARD SUCH AIRCRAFT

    4. The authority citation for part 135 continues to read as 
follows:

    Authority: 49 U.S.C. 106(g), 41706, 40113, 44701-44702, 44705, 
44709, 44711-44713, 44715-44717, 44722, 45101-451050.

    5. Add new Sec.  135.426 to read as follows:


Sec.  135.426  Contract maintenance.

    (a) A certificate holder may arrange with another person for the 
performance of maintenance, preventive maintenance, and alterations as 
authorized in Sec.  135.437(a) only if all the requirements in this 
section are met. For purposes of this section--
    (1) A maintenance provider is any person who performs maintenance, 
preventive maintenance, or an alteration for a certificate holder other 
than a person who is trained by and employed directly by that 
certificate holder.
    (2) Covered work means any of the following: (i) Essential 
maintenance that could result in a failure, malfunction, or defect 
endangering the safe operation of an aircraft if not performed properly 
or if improper materials are used; (ii) Regularly scheduled 
maintenance; or (iii) A required inspection item on an aircraft.
    (3) Directly in charge means having responsibility for covered work 
performed by a maintenance provider. A representative of the 
certificate holder directly in charge of covered work does not need to 
physically observe and direct each maintenance provider constantly, but 
must be available for consultation on matters requiring instruction or 
decision.
    (4) Supervision and control means that a representative of the 
certificate holder must be available to personally

[[Page 67593]]

observe the covered work being done to the extent necessary to ensure 
it is being done properly, and when the representative is not 
physically present to observe the work, the representative must be 
available for consultation on matters requiring instruction or 
decision.
    (b) Each certificate holder must be directly in charge of all 
covered work done for it by a maintenance provider.
    (c) All covered work must be carried out in accordance with the 
certificate holder's maintenance manual.
    (d) No covered work may be performed by a maintenance provider 
unless that work is carried out under the supervision and control of 
the certificate holder.
    (e) Each certificate holder who contracts for maintenance, 
preventive maintenance, or alterations to be carried out by a 
maintenance provider must develop policies, procedures, methods, and 
instructions for the accomplishment of all contracted maintenance, 
preventive maintenance, and alterations, and these policies, 
procedures, methods, and instructions must ensure that, if they are 
followed, the maintenance, preventive maintenance, and alterations are 
performed in accordance with the certificate holder's maintenance 
program and maintenance manual.
    (f) Each certificate holder who contracts for maintenance, 
preventive maintenance, or alterations to be carried out by a 
maintenance provider must ensure that its system for the continuing 
analysis and surveillance of the maintenance, preventive maintenance, 
and alterations carried out by a maintenance provider under this 
section contains procedures for oversight of the contracted work, as 
required by Sec.  135.431(a), contains procedures for oversight of all 
contracted covered work.
    (g) The policies, procedures, methods, and instructions required by 
paragraphs (e) and (f) of this section must be acceptable to the FAA 
and included in the certificate holder's maintenance manual as provided 
in Sec.  135.427(b)(10).
    (h) Each certificate holder who contracts for maintenance, 
preventive maintenance, or alterations to be carried out by a 
maintenance provider must provide to its FAA Certificate Holding 
District Office, in a format acceptable to the FAA, a list that 
includes the name and physical (street) address, or addresses, where 
the work is carried out for each maintenance provider that performs 
work for the certificate holder, and a description of the type of 
maintenance, preventive maintenance, or alteration that is to be 
performed at each location. The list must be updated with any changes, 
including additions or deletions, and the updated list provided to the 
FAA in a format acceptable to the FAA by the last day of each calendar 
month.
    6. Amend Sec.  135.427 by adding paragraph (b)(10) as follows:


Sec.  135.427  Manual requirements.

* * * * *
    (b) * * *
    (10) Policies, procedures, methods, and instructions for the 
accomplishment of all maintenance, preventive maintenance, and 
alterations carried out by a maintenance provider. These policies, 
procedures, methods, and instructions must be acceptable to the FAA and 
ensure that, when followed by the maintenance provider, the 
maintenance, preventive maintenance, and alterations are performed in 
accordance with the certificate holder's maintenance program and 
maintenance manual.
* * * * *

    Issued in Washington, DC, on November 6, 2012.
John M. Allen,
Director, Flight Standards Service.
[FR Doc. 2012-27433 Filed 11-9-12; 8:45 am]
BILLING CODE 4910-13-P