U.S. Agents for Service on Individuals With Foreign Addresses Who Hold or Apply for Certain Certificates, Ratings, or Authorizations, 81305-81313 [2024-22000]

Agencies

• Federal Aviation Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 89, Number 195 (Tuesday, October 8, 2024)]
[Rules and Regulations]
[Pages 81305-81313]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-22000]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 3

[Docket No.: FAA-2023-1194; Amendment No. 3-3]
RIN 2120-AL85


U.S. Agents for Service on Individuals With Foreign Addresses Who 
Hold or Apply for Certain Certificates, Ratings, or Authorizations

AGENCY: Federal Aviation Administration (FAA), Department of 
Transportation (DOT).

ACTION: Final rule.

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SUMMARY: The FAA will require individuals with foreign addresses, and 
no U.S. physical address of record on file with the FAA, who hold or 
apply for certain certificates, ratings, or authorizations to designate 
a U.S. agent for service of FAA documents. The U.S. agent will receive 
service of FAA documents on the certificate holder or applicant's 
behalf. This rule facilitates the FAA's ability to accomplish prompt 
and cost-effective service of process and service of other safety-
critical or time-sensitive documents to individuals abroad through 
service on their U.S. agents.

DATES: 
    Effective dates: Amendatory instructions 1 (part 3) and 2 (subpart 
C of part 3) are effective October 8, 2024, amendatory instruction 3 
(Sec.  3.303(d) and (e)) is effective January 6, 2025, and amendatory 
instruction 4 (Sec.  3.303(d)) is effective July 7, 2025.
    Compliance dates: The compliance dates for this final rule are as 
follows: January 6, 2025, for applicants of any certificate, rating, or 
authorization issued under part 47, 61, 63, 65, 67, or 107, and July 7, 
2025 for holders of any certificate, rating, or authorization issued 
under part 47, 61, 63, 65, 67, or 107.

ADDRESSES: For information on where to obtain copies of rulemaking 
documents and other information related to this final rule, see ``How 
to Obtain

[[Page 81306]]

Additional Information'' in the SUPPLEMENTARY INFORMATION section of 
this document.

FOR FURTHER INFORMATION CONTACT: Jessica Kabaz-Gomez, Office of the 
Chief Counsel, Enforcement Division, AGC-300, Federal Aviation 
Administration, 800 Independence Avenue SW, Washington, DC 20591; (202) 
267-7395; email [email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Executive Summary
    A. Overview of Final Rule
    B. Summary of the Costs and Benefits
II. Authority for This Rulemaking
III. Background
    A. Statement of the Problem
    B. Summary of the NRPM
    C. General Overview of Comments
IV. Discussion of Comments and the Final Rule
    A. Request for Use of the Defined Term ``U.S. agent address''
    B. Request for Exception From the U.S. Agent for Service 
Requirement for U.S. Government Employees, Military Members, and 
Special Purpose Pilot Authorization (SPPA) Holders
    C. Request for Pilots To Have Alternatives to a U.S. Agent for 
Service Such as Email or Voluntary and Temporary Certificate 
Surrender When Pilots Go Abroad
    D. Miscellaneous Issues
V. Regulatory Notices and Analyses
    A. Regulatory Impact Analysis
    B. Regulatory Flexibility Act
    C. International Trade Impact Assessment
    D. Unfunded Mandates Assessment
    E. Paperwork Reduction Act
    F. International Compatibility
    G. Environmental Analysis
VI. Executive Order Determinations
    A. Executive Order 13132, Federalism
    B. Executive Order 13175, Consultation and Coordination With 
Indian Tribal Governments
    C. Executive Order 13211, Regulations That Significantly Affect 
Energy Supply, Distribution, or Use
    D. Executive Order 13609, Promoting International Regulatory 
Cooperation
VII. Privacy
VIII. Additional Information
    A. Electronic Access and Filing
    B. Small Business Regulatory Enforcement Fairness Act

I. Executive Summary

A. Overview of Final Rule

    This final rule adds subpart C to part 3 of title 14 of the Code of 
Federal Regulations (14 CFR). Subpart C requires individuals who have a 
foreign address and no U.S. physical address of record on file with the 
FAA to designate a U.S. agent for service if they apply for a 
certificate, rating, or authorization issued under 14 CFR part 47, 61, 
63, 65, 67, or 107, or hold a certificate, rating, or authorization 
issued under any of these parts.\1\
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    \1\ See U.S. Agents for Service on Individuals With Foreign 
Addresses Who Hold or Apply for Certain Certificates, Ratings, or 
Authorizations, 88 FR 38003 (June 12, 2023). These individuals 
comprise the majority of individuals holding FAA certificates, 
ratings, and authorizations abroad and represent those who the 
agency most commonly serves with process and other safety-critical 
or time-sensitive documents. Individuals who only hold or apply for 
FAA certificates, ratings, or authorizations other than those issued 
under 14 CFR part 47, 61, 63, 65, 67, or 107 are not covered by the 
rule due to the limited benefit that would be derived by having the 
rule apply to them.
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    The U.S. agent will receive service of FAA documents on behalf of 
the certificate, rating, or authorization holder or applicant. This 
final rule facilitates the FAA's ability to accomplish prompt and cost-
effective service of process and service of other safety-critical or 
time-sensitive documents to individuals abroad through service on their 
U.S. agents.\2\ This will conserve agency resources, ensure that 
lengthy delays in service of process do not compromise aviation safety, 
and provide individuals abroad with timely notice of FAA actions and 
the opportunity for more expedient due process.
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    \2\ See U.S. Agents for Service on Individuals With Foreign 
Addresses Who Hold or Apply for Certain Certificates, Ratings, or 
Authorizations, 88 FR 38004 (June 12, 2023). Examples of documents 
that may be served on U.S. agents may include reexamination letters, 
letters of investigation, Office of Aerospace Medicine letters 
requesting additional information or denying a medical certificate, 
and notices to aircraft owners of ineffective or invalid aircraft 
registration. Additionally, service of process includes the FAA's 
service of documents that compel compliance, may be time-sensitive 
or safety-critical, and are subject to administrative or legal 
review, such as notices of proposed civil penalty or assessment, 
orders of suspension or revocation, and emergency orders of 
suspension or revocation.
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B. Summary of the Costs and Benefits

    Approximately 115,000 individuals outside the U.S. as of July 2022 
hold certificates, ratings, or authorizations issued under 14 CFR part 
47, 61, 63, 65, 67, or 107 and do not have a U.S. physical address of 
record on file with the FAA. Service of process abroad imposes 
burdensome costs on the FAA. This rule will eliminate a majority of the 
costs of affecting international service and transfer some of these 
transaction costs back to the individual applicant or certificate 
holder by requiring designation of a U.S. agent. The costs experienced 
by these individuals will depend on the arrangements made (e.g., hiring 
a professional U.S. agent for service of process could cost $50 to $200 
annually). Although there may be some initial costs to the FAA to 
revise its systems to accommodate the change, these costs will be 
offset by avoiding the foreign service of process costs that include 
international mailings and foreign translations.

II. Authority for This Rulemaking

    The FAA's authority to issue rules on aviation safety, such as the 
rules governing service that are addressed in this notice, 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, 
including the authority to issue regulations.
    This rulemaking is issued under the authority described in 49 
U.S.C. 44701(a)(5), which establishes the authority of the 
Administrator to prescribe regulations and minimum standards for other 
practices, methods, and procedures the Administrator finds necessary 
for safety in air commerce and national security. These regulations are 
within the scope of that authority and are consistent with 49 U.S.C. 
46103, which governs the FAA's service of notice, process, and actions, 
and provides that the FAA may effectuate service on an agent.

III. Background

A. Statement of the Problem

    Previously, only U.S. air carriers, foreign air carriers and 
foreign persons operating a U.S.-registered aircraft in common carriage 
solely outside the United States were required to designate a U.S. 
agent for service of FAA documents.\3\ However, individuals across the 
world can hold and apply for FAA certificates, ratings, and 
authorizations. As of July 2022, there were approximately 115,000 
individuals holding certificates, ratings, or authorizations issued 
under 14 CFR part 47, 61, 63, 65, 67, or 107 who had a foreign address 
and did not have a U.S. physical address of record on file with the 
FAA. Serving certain documents on these individuals outside of the U.S. 
presented a challenge for the FAA. Accomplishing valid service of 
process abroad requires compliance with international service 
requirements under multi-lateral treaties \4\ or by other means that 
comport with the receiving

[[Page 81307]]

country's laws and the U.S.'s applicable laws regulating 
extraterritorial service.
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    \3\ See 49 U.S.C. 46103(a)(1) (requiring air carriers and 
foreign air carriers to designate an agent) and 14 CFR 119.49 and 
129.9 (implementing 46103(a)(1)).
    \4\ See for example, the Hague Service Convention, 20 U.S.T. 361 
(signed Nov. 15, 1965), the Inter-American Convention on Letters 
Rogatory (adopted Jan. 30, 1975), and the Additional Protocol to the 
Convention (IACAP) (adopted May 8, 1979), S. Treaty Doc. No. 98-27 
(1986).
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    The FAA's service of process abroad triggers these international 
service requirements, specifically when the FAA sends documents abroad 
that compel compliance and are subject to administrative or judicial 
review. Such documents may include notices of proposed civil penalties, 
orders of suspension or revocation, and emergency orders of suspension 
or revocation. International service requirements can significantly 
delay service of these documents for months (and in some cases over a 
year), and also impose additional costs on the agency. Document 
recipients cannot waive these international service requirements, nor 
can they be circumvented with electronic service.

B. Summary of the Notice of Proposed Rulemaking (NPRM)

    The NPRM was published in the Federal Register on June 12, 2023, 
and the comment period for the NPRM closed on August 11, 2023.\5\ The 
comment period was reopened on October 13, 2023, until October 30, 
2023, due to a commenter's request to extend the comment period.\6\
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    \5\ U.S. Agents for Service on Individuals With Foreign 
Addresses Who Hold or Apply for Certain Certificates, Ratings, or 
Authorizations, Notice of Proposed Rulemaking, 88 FR 38001 (June 12, 
2023).
    \6\ 88 FR 70911.
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    The NPRM proposed adding a new subpart C to part 3 of 14 CFR to 
require individuals who have a foreign address and no U.S. physical 
address of record on file with the FAA to designate a U.S. agent for 
service if they apply for a certificate, rating, or authorization 
issued under 14 CFR part 47, 61, 63, 65, 67, or 107, or hold a 
certificate, rating, or authorization issued under any of these parts. 
A U.S. agent for service was defined as an entity or an adult (18 or 
older) with a U.S. address who is designated to receive FAA service on 
their behalf. Accordingly, the NPRM proposed allowing individuals to 
hire any entity, including registered agent service companies, with a 
U.S. address to be their designated U.S. agent. Alternatively, it 
proposed permitting individuals to designate any adult who is 18 or 
older with a U.S. address, including a relative or associate, to be 
their U.S. agent. The rule also provided requirements on what type of 
U.S. address the FAA would accept as sufficient for a U.S. agent.
    The NPRM proposed that a U.S. agent would receive service of 
process, and other time-sensitive or safety-critical documents from the 
FAA on behalf of the individual certificate, rating, or authorization 
holder or applicant. The U.S. agent would be responsible for timely 
transmitting all documents the FAA served on the U.S. agent to the 
individual who designated them. For this reason, the NPRM proposed the 
requirement that a U.S. agent be mentally competent to assume this 
duty. The NPRM also proposed that an individual must ensure their U.S. 
agent understands the requirements for serving as a U.S. agent and 
agrees to serve in that capacity. As explained in the NPRM, the 
responsibility for ensuring these requirements are met would fall on 
the individual designating the U.S. agent. Individuals designating U.S. 
agents would be required to certify to the FAA, under penalty of 
perjury, that a U.S. agent has accepted the responsibility of receiving 
FAA service on behalf of the individual.
    Additionally, the NPRM emphasized that the individual who 
designates a U.S. agent would be responsible for ensuring that the FAA 
can serve documents to their U.S. agent. An individual designating a 
U.S. agent for service would be required to provide the U.S. agent's 
full name; their U.S. address; their email address, should electronic 
service be feasible; their fax number (optional); and their phone 
number (optional), in the event of service issues. Individuals would be 
required to keep their U.S. agent designation current. Absent 
extraordinary circumstances, the FAA would consider service on an 
individual's U.S. agent the equivalent of service directly on the 
individual, triggering all appeal and reply deadlines provided in the 
document being served.
    The NPRM explained that the rule would facilitate the FAA's ability 
to accomplish prompt and cost-effective service of process and service 
of other safety-critical or time-sensitive documents to individuals 
abroad through service on their U.S. agents. This would conserve agency 
resources, ensure that lengthy delays in service of process do not 
compromise aviation safety, and provide individuals abroad with timely 
notice of FAA actions and the opportunity for more expedient due 
process.

C. General Overview of Comments

    The FAA received a total of 14 comments, two of which were 
duplicates. All comments were from individual anonymous commenters. 
Five of the commenters opposed the rule. Three of these commenters 
suggested changes, as did one additional commenter who neither 
supported nor opposed the proposed rule. The commenters' suggested 
changes are discussed more fully in the Discussion of Comments and the 
Final Rule section. Seven of the comments were outside the scope of the 
rule.

IV. Discussion of Comments and the Final Rule

A. Request for Use of the Defined Term ``U.S. agent address''

    A commenter noted that the proposed rule defined the term ``U.S. 
agent address'' in proposed Sec.  3.302, the definition section, but 
the term was not used in the proposed regulation. The FAA agrees and 
amends proposed Sec.  3.303(b) in the final rule to include the term 
``U.S. agent address'' for clarification. This is a non-substantive 
change.

B. Request for Exception From the U.S. Agent for Service Requirement 
for U.S. Government Employees, Military Members, and Special Purpose 
Pilot Authorization (SPPA) Holders

    Two commenters requested full exception from the applicability of 
the rule for certain certificate holders. Specifically, the commenters 
suggested that U.S. Government employees, military members, and special 
purpose pilot authorization (SPPA) holders should be excepted from the 
rule because the FAA should easily be able to find and contact them 
through their employers (such as the U.S. Government, military, or 
private companies). The FAA notes the purpose of the rule is to provide 
service of documents within the U.S. to designated agents of 
individuals, including those whose location abroad may already be 
known, such as U.S. Government employees, military members, and SPPA 
holders. More importantly, service on an individual's employer that has 
not been designated as their agent does not satisfy service of process 
requirements under 49 U.S.C. 46103. The rule, however, does not 
preclude that individual from designating their employer as their U.S. 
agent for service if the employer agrees and meets the requirements 
provided by this rule in 14 CFR part 3, subpart C. Accordingly, the FAA 
is adopting the rule as proposed, without the requested exceptions.

C. Request for Pilots To Have Alternatives to a U.S. Agent for Service 
Such as Email or Voluntary and Temporary Certificate Surrender When 
Pilots Go Abroad

    One commenter requested that the FAA consider alternatives to the 
rule that would only apply to pilots. Specifically, the commenter 
requested

[[Page 81308]]

that the FAA consider email service for pilots or allow pilots to 
temporarily and voluntarily surrender their certificate(s) to the FAA 
for the time they are abroad. The FAA notes that alternatives to the 
rule that would only apply to pilots, as the commenter proposed, rather 
than all the applicable certificate, rating, and authorization holders 
and applicants impacted by this rule would be unequal because there is 
not any justification for favoring pilots over other impacted groups. 
Nevertheless, the FAA considered the proposed alternatives, in case 
they could be viable options for all individuals impacted by the rule. 
The FAA determined that neither option is a viable alternative to a 
U.S. agent.
    The NPRM already addressed why email service was not a viable 
alternative to this rule. Specifically, the NPRM explained that 
international service conventions do not expressly authorize email 
service of process abroad, and that email service abroad could violate 
the domestic law of the receiving state and potentially result in 
judgments that are unenforceable in foreign courts.\7\ Accordingly, the 
FAA did not adopt the commenter's proposed email alternative to a U.S. 
agent.
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    \7\ While section 219 of the FAA Reauthorization Act of 2024 
permits electronic or facsimile transmission by the FAA to the 
person to be served or the designated agent of that person, the FAA 
must also comply with international service conventions that 
currently do not expressly authorize email service of process 
abroad.
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    The commenter's second proposed alternative of temporary and 
voluntary certificate surrender to the FAA does not remedy the issue 
the rule is addressing. The purpose of the rule is to assist the FAA 
with efficient and effective service of documents to individuals 
abroad. An individual's temporary and voluntary certificate surrender 
for the time they are abroad would not assist the FAA with serving a 
document to the individual once they are outside the United States. For 
example, if an individual violates the Federal Aviation Regulations 
before going to live abroad for a year, the FAA may need to take 
enforcement action and serve the individual with a notice or order for 
that violation when they are abroad. This would be true regardless of 
whether the individual decides to put their certificate on hold with 
the FAA temporarily and voluntarily for the time they are abroad. 
Lastly, the FAA's regulations do not provide for temporary and 
voluntary certificate surrenders because to create a system to receive, 
temporarily store, and return an individual's physical certificates 
would be costly. The FAA, therefore, has not adopted the commenter's 
proposed alternative of temporary and voluntary certificate surrender 
to the FAA.

D. Miscellaneous Issues

1. Commenters Who Opposed the Rule Without Proposing Changes
    Two commenters generally opposed the rule, without proposing any 
changes, which the FAA believes is based on a misunderstanding of 
current requirements or the rule, as proposed. Both commenters asserted 
that an individual with a U.S. address of record with the FAA does not 
have to designate a U.S. agent or be reachable at their U.S. address, 
and, therefore, questioned why an individual abroad, with no U.S. 
postal address, would need to establish more reliable postal 
communication with the FAA by designating a U.S. agent. The underlying 
assumption that certificate, rating, and authorization holders do not 
have to be reachable at their address of record with the FAA, whether 
in the U.S. or abroad, is incorrect. The FAA's responsibility of 
ensuring a safe National Airspace System requires that the agency be 
able to reach certificate, rating, and authorization holders.\8\ 
Individuals are expected to be reachable at their address of record on 
file with the FAA.
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    \8\ See U.S. Agents for Service on Individuals With Foreign 
Addresses Who Hold or Apply for Certain Certificates, Ratings, or 
Authorizations, Notice of Proposed Rulemaking, 88 FR 38002 (June 12, 
2023). The FAA's service of process abroad can trigger international 
service requirements, which can create a serious risk to aviation 
safety. For example, when the FAA is serving emergency orders of 
revocation or suspension, the individual may attempt to continue 
exercising the associated privileges of the certificate, rating, or 
authorization, until the FAA serves the individual in accordance 
with international service requirements, which may take months and 
in some instances over a year.
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    However, the purpose of this rule is not to address the reliability 
of individuals' addresses, regardless of location. Rather, this rule is 
intended to provide the FAA with a means to provide timely and cost-
effective service to individuals located abroad in light of 
international service requirements. The FAA can more effectively and 
efficiently send mail to a U.S. address than abroad due to 
international service requirements that are discussed in the NPRM.\9\ 
This distinction justifies the requirement of U.S. agents for 
individuals who have a foreign address of record on file with the FAA 
and no U.S. physical address of record on file with the FAA.
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    \9\ See 88 FR 38002. The two international service conventions 
applicable to the FAA's service of certain documents are the Hague 
Service Convention, 20 U.S.T. 361 (signed Nov. 15, 1965), and the 
Inter-American Convention on Letters Rogatory, adopted January 30, 
1975, together with the Additional Protocol to the Convention 
(IACAP), adopted May 8, 1979, S. Treaty Doc. No. 98-27 (1986). The 
main method for service under either convention, is through a 
country's designated central authority, which is cumbersome, slow, 
and costly compared to service of process accomplished directly 
through registered mail on the intended recipient.
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    The FAA believes the second commenter also misunderstood the 
proposed rule as requiring individuals to designate a secondary U.S. 
agent in the event their primary U.S. agent is on vacation. The NPRM 
did not propose to require individuals to designate two U.S. agents. 
Rather, the NPRM explained the importance of ensuring reachability in 
the event a designated U.S. agent for service is temporarily unable to 
accept service and offered an example of a proposed solution that did 
not require the designation of a back-up U.S. agent. The NPRM provided 
that U.S. agents could have a friend or associate collect the mail and 
notify the individual of the service. Therefore, the FAA is not making 
any changes to the rule as a result of the comments.
2. Comments on the Privacy Impact Assessment and Civil Aircraft 
Registry Electronic Services Requirements
    The FAA received three comments that asked about the public 
availability of the Privacy Impact Assessment (PIA), which was 
addressed by reopening the comment period when the PIA became publicly 
available on the Department of Transportation's website. Another 
comment, received after the comment period was reopened, stated that 15 
days was not enough time to comment on the PIA. The FAA considered 15 
days to be sufficient time to comment on the PIA. The document was 
publicly available since August 23, 2023, almost two months before the 
reopening of the comment period and is not a document that requires 
public comment under the Administrative Procedure Act.
    Finally, three comments were about the Civil Aircraft Registry 
Electronic Services (CARES) requirements and availability of that 
system for U.S. agent designation. These comments are out of scope and 
premature because they did not specifically discuss the implementation 
of the NPRM, but rather were about the CARES system, which is not the 
system of collection for the U.S. agent information. The PIA simply 
identified CARES as one potential system FAA could use to collect U.S. 
agent information at some point in the future. The FAA has not made 
changes in the final rule based on these comments and recommends 
certificate holders and applicants reference

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Advisory Circular (AC) 3-1 \10\ for further information on the 
information that the FAA will collect and how it will do so in 
accordance with this final rule.
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    \10\ AC 3-1 was published in concurrence with this final rule 
and can be found at drs.faa.gov/browse/AC/doctypeDetails.
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3. Final Rule Compliance Dates
    This final rule changes the compliance date noted in the NPRM, 
which was six months after the date of publication in the Federal 
Register to nine months after the date of publication in the Federal 
Register. The final rule clarifies there are two compliance dates. The 
compliance dates for this final rule are as follows: January 6, 2025, 
for applicants of any certificate, rating, or authorization issued 
under part 47, 61, 63, 65, 67, or 107, and July 7, 2025 for holders of 
any certificate, rating, or authorization issued under part 47, 61, 63, 
65, 67, or 107. This additional time for current certificate, rating, 
or authorization holders is provided to ensure FAA preparedness for the 
collection of U.S. agent designations and to provide more time for 
individuals to come into compliance with the final rule.
4. FAA Guidance Materials: Advisory Circulars and Orders
    The FAA is publishing an Advisory Circular, U.S. Agents for 
Service, with this final rule.\11\ It specifies the acceptable form and 
manner for individuals to submit their designation of a U.S. agent. The 
following FAA Advisory Circulars will also be updated, as necessary, to 
reflect this final rule: AC 61-65H, AC 61-135A, AC 61-143, AC 65-30B, 
AC 65-23A, AC 65-32A and AC 65-34A. The FAA's Advisory Circulars are 
publicly available on FAA's website.\12\
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    \11\ The FAA has placed a copy of these Advisory Circular in the 
docket for this rulemaking, with the exception of AC 65-32A which is 
also under revision as part of another rulemaking and will be 
published with that rule.
    \12\ FAA Advisory Circulars are available at: www.faa.gov/regulations_policies/advisory_circulars/.
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V. Regulatory Notices and Analyses

    Federal agencies consider impacts of regulatory actions under a 
variety of Executive orders and other requirements. First, Executive 
Order 12866 and Executive Order 13563, as amended by Executive Order 
14094 (``Modernizing Regulatory Review''), direct that each Federal 
agency 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. 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 that may 
result in the expenditure by State, local, and tribal governments, in 
the aggregate, or by the private sector, of $100,000,000 or more 
(adjusted annually for inflation) in any one year. The current 
threshold after adjustment for inflation is $183,000,000, using the 
most current (2023) Implicit Price Deflator for the Gross Domestic 
Product. This portion of the preamble summarizes the FAA's analysis of 
the economic impacts of this rulemaking.
    In conducting these analyses, the FAA has determined that this 
final rule: (i) will result in benefits that justify costs; (ii) is not 
an economically ``significant regulatory action'' as defined in section 
3(f) of Executive Order 12866; (iii) will not have a significant 
economic impact on a substantial number of small entities as amended; 
(iv) will not create unnecessary obstacles to the foreign commerce of 
the United States; and (v) will not impose an unfunded mandate on 
State, local, or tribal governments, or on the private sector.

A. Regulatory Impact Analysis

    On June 12, 2023, the FAA published a NPRM and received 14 
comments. None of the comments expressed concerns with economic impacts 
of the proposal except one. One commenter expressed concern that the 
rule's cost to individual pilots would be between $15 million and $30 
million annually, and also expressed concern about the cost of enacting 
the proposed regulatory change. However, the commenter does not provide 
an explanation for the cost estimate, therefore the FAA continues to 
use the estimate provided in the NPRM.
    However, FAA has updated the cost of hiring a registered U.S. agent 
service company based on a more recent source. In the NPRM, FAA 
reported this cost could range from $150 to $300. The updated source 
reports this could be between $50 and $200.
1. Baseline for the Analysis
    In July 2022, approximately 115,000 individuals applied for or held 
certificates, ratings, and authorizations issued under 14 CFR parts 47, 
61, 63, 65, 67, and 107, had a foreign address, and did not have a U.S. 
physical address of record on file with the FAA. The FAA estimates that 
approximately 97 percent of these individuals that used a foreign 
address are citizens of foreign countries. The FAA notes service of 
process abroad imposes costs on the agency. The FAA estimates that it 
sends over 8,000 documents abroad annually, including both service of 
process and other documents, at a cost close to $600,000 including 
mailing costs, staff time, and translation services when required.\13\ 
Examples of documents that have been sent abroad are as follows:
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    \13\ The average cost to FAA per document served abroad is $75.
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    1. Aerospace Medicine's Letters: a. All Denial Letters, b. 
Withdrawal of Special Issuance (SI) Authorization Letters, c. Special 
Issuance Authorization Letters, d. Re-examination/Request for 
Information Letters, e. Lack of Qualification Letters with Referral to 
Legal, f. Letters of Investigation, and g. Federal Drug and Alcohol 
Testing Letters of Investigation,
    2. Enforcement action documents: a. Notice of Proposed Civil 
Penalty (NOPCP), b. Final Notice of Civil Penalty (FNPOCP), c. Order 
Assessing Civil Penalty (OACP), d. Notice of Proposed Assessment 
(NOPA), e. Civil Penalty Letter, f. Notice of Proposed Certificate 
Action (NOPCA), g. Order of Suspension (OS), h. Order of Revocation 
(OR), i. Emergency Order of Revocation (EOR), and j. Emergency Order of 
Suspension (EOS),
    3. Flight Standards Reexamination Letters,
    4. All FAA Program Office's Letters of Investigation, and
    5. Aircraft Registry Letters: a. Notices to Aircraft Owners of 
Ineffective Aircraft Registration, and b. Notices to Aircraft Owners of 
Invalid Aircraft Registration.
2. Benefits
    The benefits of the final rule include prompt and cost-effective 
service of these documents to individuals abroad through service on 
their U.S. agents. Prompt service will conserve agency resources, 
ensure that lengthy delays in service do not compromise aviation 
safety, and provide individuals abroad timely notice of the FAA's 
actions. However, these benefits are not quantified because the 
ultimate impacts on aviation are not known.
3. Costs
    Under this final rule, the affected individuals will bear the 
transaction costs associated with having a foreign address on file with 
the FAA. There is a minimal cost associated with

[[Page 81310]]

designating a new U.S. agent and any updates thereafter. Individuals 
may designate an entity or an adult (18 or older) with a U.S. address 
to serve as their U.S. agent. The FAA determined that the cost of 
hiring a registered U.S. agent service company may range from $50 to 
$200 annually.\14\ However, as discussed in the NPRM, many individuals 
with foreign addresses may have a friend or family member residing in 
the U.S. whom they may choose to designate as their U.S. agent, 
resulting in no annual costs to those individuals for hiring a U.S. 
agent for service.
---------------------------------------------------------------------------

    \14\ See www.chamberofcommerce.org/best-registered-agent-virginia (last accessed April 23, 2024).
---------------------------------------------------------------------------

    The FAA will incur implementation costs to collect the U.S. agent 
information. However, the FAA anticipates developing an automated 
system that would not require agency staff processing time. The initial 
implementation costs will then be offset by saving the baseline foreign 
service process costs and avoiding the costs of translation services 
(required by contracting parties to the Hague Service Convention or 
IACAP).
4. Summary
    In summary, the FAA expects that the benefits of prompt document 
service, which could affect aviation safety, will exceed any costs 
associated with implementing this rule. Costs associated with 
designating a U.S. agent for affected individuals abroad will be 
largely incurred by the individual who holds, or is applying for, the 
certificate, rating, or authorization, rather than the FAA. This final 
rule will eliminate a majority of the FAA's current costs of affecting 
international service and transfer some of these transaction costs back 
to the individual being served by requiring designation of a U.S. 
agent.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) of 1980, Public Law 96-354, 94 
Stat. 1164 (5 U.S.C. 601-612), as amended by the Small Business 
Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 
857, Mar. 29, 1996) and the Small Business Jobs Act of 2010 (Pub. L. 
111-240, 124 Stat. 2504, Sept. 27, 2010), requires Federal agencies to 
consider the effects of the regulatory action on small business and 
other small entities and to minimize any significant economic impact. 
The term ``small entities'' comprises small businesses and not-for-
profit organizations that are independently owned and operated and are 
not dominant in their fields, and governmental jurisdictions with 
populations of less than 50,000.
    The FAA did not identify any small entities that would be affected 
by this rule because it concerns only individuals and not their 
employers or entities or businesses the individuals are associated 
with. The FAA did not receive any comments on the basis for this 
certification during the public comment period after the publication of 
the associated NPRM. Therefore, the FAA certifies that this rule will 
not have a significant economic impact on a substantial number of small 
entities. International Trade Impact Assessment
    The Trade Agreements Act of 1979 (Pub. L. 96-39), 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 
determined that this rule is not considered an unnecessary obstacle to 
trade.

C. Unfunded Mandates Assessment

    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 
that may result in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more (adjusted annually for inflation) in any one year. The 
current threshold after adjustment for inflation is $183 million using 
the most current (2023) Implicit Price Deflator for the Gross Domestic 
Product. The FAA determined that this final rule will not result in the 
expenditure of $187 million or more by State, local, or tribal 
governments or by the private sector, in the aggregate, or the private 
sector, in any one year.

D. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires 
that the FAA consider 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 new information collection 
requirements. As required by the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507(d)), the FAA has submitted the information collection to 
OMB for its review.
    Summary: The FAA is requiring individuals who hold or apply for 
certificates, ratings, or authorizations issued under 14 CFR part 47, 
61, 63, 65, 67, or 107 and who have a foreign address and no U.S. 
physical address of record on file with the FAA to designate a U.S. 
agent.
    Use: The information collected and maintained in FAA databases is 
used to serve various documents to the designated U.S. agents of 
individuals with a foreign address.
    Respondents: As of July 2022, there were 115,132 individuals who 
held certificates, ratings, or authorizations issued under 14 CFR part 
47, 61, 63, 65, 67, or 107 with a foreign address and who did not have 
a U.S. physical address of record on file with the FAA. After the 
implementation of the rule in Year 1, the FAA expects that the number 
of new applicants who would be required to designate a U.S. agent would 
be 4,362 annually. In addition, the FAA estimates that annually 
approximately 4,606 respondents might process a change of U.S. agent 
designation or an update to their U.S. agents' contact information.
    Frequency: All 115,132 individuals with a foreign address, with no 
U.S. physical address, who currently hold certificates, ratings, or 
authorizations issued under 14 CFR part 47, 61, 63, 65, 67, or 107 are 
required to designate a U.S. agent once during the implementation of 
the rule in Year 1. Similarly, 4,362 respondents identified as 
applicants who do not currently hold any certificates, ratings, or 
authorization, would be required to designate a U.S. agent at the time 
of their application in Year 2. Additionally, 4,606 respondents might 
need to change their U.S. agent or update the information for their 
current U.S. agent. This would require submission of a new U.S. agent 
designation.
    Annual Burden Estimate: The FAA estimates that it would take an 
individual 10 minutes to submit a U.S.

[[Page 81311]]

agent designation. In Year 1, the number of annual burden hours would 
be 19,189 [(115,132 individuals x (10 minutes / 60 minutes)], and 1,495 
hours each year afterwards (=[(4,362 + 4,606) x (10 minutes / 60 
minutes)]). The annual cost of this U.S. agent designation requirement 
to individuals would be $1,195,761 in Year 1 and $93,131 each year 
afterwards.\15\
---------------------------------------------------------------------------

    \15\ Using a loaded composite wage rate of $62.32 obtained from 
a select of number of foreign countries and $10 a minute (=10/60 or 
0.167 hour) estimated to submit a U.S. agent designation, the FAA 
calculates that these individuals would incur $1,195,761, (= 115,132 
x $62/hour x 0.167 hour).
---------------------------------------------------------------------------

    The collection of the U.S. agent designation will be fully 
automated. Therefore, there will be no new annual cost to the 
government.

E. 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 effects of this rule and determined that it will 
not create unnecessary obstacles to the foreign commerce of the United 
States.

F. Environmental Analysis

    FAA Order 1050.1F identifies FAA actions that are categorically 
excluded from preparation of an environmental assessment or 
environmental impact statement under the National Environmental Policy 
Act in the absence of extraordinary circumstances. The FAA has 
determined this rulemaking action qualifies for the categorical 
exclusion identified in paragraph 5-6.6f and involves no extraordinary 
circumstances.

VI. Executive Order Determinations

A. Executive Order 13132, Federalism

    The FAA has analyzed this final rule under the principles and 
criteria of Executive Order (E.O.) 13132, Federalism. The FAA has 
determined that this action will 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, will not have 
federalism implications.

B. Executive Order 13175, Consultation and Coordination With Indian 
Tribal Governments

    Consistent with Executive Order 13175, Consultation and 
Coordination with Indian Tribal Governments,\16\ and FAA Order 1210.20, 
American Indian and Alaska Native Tribal Consultation Policy and 
Procedures,\17\ the FAA ensures that Federally Recognized Tribes 
(Tribes) are given the opportunity to provide meaningful and timely 
input regarding proposed Federal actions that have the potential to 
have substantial direct effects on one or more Indian tribes, on the 
relationship between the Federal Government and Indian tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian tribes; or to affect uniquely or significantly 
their respective tribes. At this point, the FAA has not identified any 
unique or significant effects, environmental or otherwise, to Indian 
tribes resulting from this final rule.
---------------------------------------------------------------------------

    \16\ 65 FR 67249 (Nov. 6, 2000).
    \17\ FAA Order No. 1210.20 (Jan. 28, 2004), available at 
www.faa.gov/documentLibrary/media/1210.pdf.
---------------------------------------------------------------------------

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

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

D. Executive Order 13609, Promoting International Regulatory 
Cooperation

    Executive Order 13609, Promoting International Regulatory 
Cooperation, promotes international regulatory cooperation to meet 
shared challenges involving health, safety, labor, security, 
environmental, and other issues and to reduce, eliminate, or prevent 
unnecessary differences in regulatory requirements. The FAA has 
analyzed this action under the policies and agency responsibilities of 
Executive Order 13609, and has determined that this action will have no 
effect on international regulatory cooperation.

VII. Privacy

    With regard to the information persons may submit in accordance 
with this final rule's requirements, the FAA conducted a privacy impact 
assessment (PIA) under section 522(a)(5) of division H of the FY 2005 
Omnibus Appropriations Act, Public Law 108-447, 118 Stat. 3268 (Dec. 8, 
2004) and section 208 of the E-Government Act of 2002, Public Law 107-
347, 116 Stat. 2889 (Dec. 17, 2002). The PIA found the NPRM's proposed 
requirements affecting privacy include the collection of personally 
identifiable information (PII) of U.S. agents designated by individuals 
with a foreign address and no U.S. physical address on file with the 
FAA that hold or apply for certificates, ratings, or authorizations 
issued under 14 CFR part 47, 61, 63, 65, 67, or 107. The rule collects 
the U.S. agent's full name, U.S. address, fax number (optional), phone 
number (optional), and email address.
    As part of the PIA, the FAA analyzed the effect the rule would have 
on collecting, storing, and disseminating personally identifiable 
information (PII) of U.S. agents designated by individuals with a 
foreign address and no U.S. physical address on file with the FAA that 
hold or apply for certificates, ratings, or authorizations issued under 
14 CFR part 47, 61, 63, 65, 67, or 107. The FAA also examined and 
evaluated protections and alternative information-handling processes in 
developing the rule to mitigate potential privacy risks. A copy of PIA 
is posted on DOT's website.\18\
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    \18\ Upon finalization, PIAs are posted on the Department of 
Transportation's Privacy Program page, available at 
www.transportation.gov/individuals/privacy/privacy-impact-assessments#Federal%20Aviation%20Administration%20(FAA).
---------------------------------------------------------------------------

VIII. Additional Information

A. Electronic Access and Filing

    A copy of the NPRM, all comments received, this final rule, the AC 
for designation of U.S. agents, and all background material may be 
viewed online at www.regulations.gov using the docket number listed 
above. A copy of this final rule will be placed in the docket. 
Electronic retrieval help and guidelines are available on the website. 
It is available 24 hours each day, 365 days each year. An electronic 
copy of this document may also be downloaded from the Office of the 
Federal Register's website at www.federalregister.gov and the 
Government Publishing Office's

[[Page 81312]]

website at www.govinfo.gov. A copy may also be found at the FAA's 
Regulations and Policies website at www.faa.gov/regulations_policies.
    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) 267-9677. 
Commenters must identify the docket or notice number of this 
rulemaking.
    All documents the FAA considered in developing this final rule, 
including economic analyses and technical reports, may be accessed in 
the electronic docket for this rulemaking.

B. Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 
1996 requires the FAA to comply with small entity requests for 
information or advice about compliance with statutes and regulations 
within its jurisdiction. A small entity with questions regarding this 
document may contact its local FAA official, or the person listed under 
the FOR FURTHER INFORMATION CONTACT heading at the beginning of the 
preamble. To find out more about SBREFA on the internet, visit 
www.faa.gov/regulations_policies/rulemaking/sbre_act/.

List of Subjects in 14 CFR Part 3

    Aircraft, Aviation safety, U.S. agent for service.

The Amendment

    For reasons discussed in the preamble, the Federal Aviation 
Administration amends title 14, Code of Federal Regulations as follows:

PART 3--GENERAL REQUIREMENTS

0
1. Effective October 8, 2024, the authority citation for part 3 is 
revised to read as follows:

    Authority:  49 U.S.C. 106(f), 106(g), 40113, 44701, 44704, 
46111, and 46103.


0
2. Effective October 8, 2024, add subpart C to read as follows:

Subpart C--Designated U.S. Agents for Service

Sec.
3.301 Applicability.
3.302 Definitions.
3.303 Designation of a U.S. agent for service.


Sec.  3.301  Applicability.

    This subpart applies to individuals who:
    (a) Do not have a U.S. physical address of record on file with the 
FAA;
    (b) Have a foreign address of record on file with the FAA; and
    (c) Hold or apply for certificates, ratings, or authorizations 
under part 47, 61, 63, 65, 67, or 107 of this chapter.


Sec.  3.302  Definitions.

    U.S. agent address is an address in the States of the United 
States, the District of Columbia, or any U.S. territory or possession. 
If the U.S. agent is an entity, the address must be the U.S. agent's 
office address. If the U.S. agent is an individual, the address must be 
the U.S. agent's usual place of residence or, if applicable, the 
individual's U.S. military office address. If the U.S. agent is serving 
as a U.S. agent in their official capacity with the military, the 
address may be a military office address. A U.S. agent address may not 
be a post office box, military post office box, or a mail drop box.
    U.S. agent for service (U.S. agent) is an entity or an adult 
(individual who is 18 or older) with a U.S. address who a certificate, 
rating, or authorization holder or applicant designates to receive FAA 
service on their behalf.
    U.S. physical address is an address in the States of the United 
States, the District of Columbia, or any U.S. territory or possession, 
but excludes post office boxes, military post office boxes, mail drop 
boxes, and commercial addresses that are not also residential 
addresses.


Sec.  3.303  Designation of a U.S. agent for service.

    (a) Individuals must designate a U.S. agent for service within the 
U.S. in writing to the FAA in a form and manner prescribed by the 
Administrator. Individuals designating a U.S. agent must ensure that 
the U.S. agent understands the requirements for receiving FAA service 
on behalf of the individual and is competent to perform that 
responsibility.
    (b) The designation must include the U.S. agent's full name, U.S. 
agent address, email address, and certification by the individual that 
the U.S. agent has accepted responsibility for receiving FAA service on 
behalf of the individual. It may also include the U.S. agent's fax 
number and phone number.
    (c) Individuals must notify the FAA in a form and manner prescribed 
by the Administrator of any change to their U.S. agent designation or 
the U.S. agent's contact information within 30 days of the change.
    (d) Individuals must comply with the requirements listed in this 
subpart no later than:
    (1) July 7, 2025, for holders of any certificate, rating, or 
authorization issued under part 47, 61, 63, 65, 67, or 107. These 
individuals who fail to timely designate a U.S. agent for service and 
comply with the requirements under this subpart may not exercise the 
privileges of any certificate, rating, or authorization issued under 
part 47, 61, 63, 65, 67, or 107, and an individual aircraft owner's 
aircraft registration certificate will be considered ineffective; and
    (2) January 6, 2025, for applicants of any certificate, rating, or 
authorization issued under part 47, 61, 63, 65, 67, or 107. An 
applicant who fails to designate a U.S. agent for service and comply 
with the requirements under this subpart shall not be issued a 
certificate, rating, or authorization under part 47, 61, 63, 65, 67, or 
107.
0
3. Effective January 6, 2025, amend Sec.  3.303 by revising paragraph 
(d) and adding paragraph (e) to read as follows:


Sec.  3.303  Designation of a U.S. agent for service.

* * * * *
    (d) Individuals holding any certificate, rating, or authorization 
issued under part 47, 61, 63, 65, 67, or 107 must comply with the 
requirements listed in this subpart no later than July 7, 2025. These 
individuals who fail to timely designate a U.S. agent for service and 
comply with the requirements under this subpart may not exercise the 
privileges of any certificate, rating, or authorization issued under 
part 47, 61, 63, 65, 67, or 107, and an individual aircraft owner's 
aircraft registration certificate will be considered ineffective.
    (e) No individual shall be issued a certificate, rating, or 
authorization under parts 47, 61, 63, 65, 67, or 107 of this chapter 
unless the individual has designated a U.S. agent as required under 
this subpart.
0
4. Effective July 7, 2025, amend Sec.  3.303 by revising paragraph (d) 
to read as follows:


Sec.  3.303  Designation of a U.S. agent for service.

* * * * *
    (d) No individual shall exercise the privileges of any certificate, 
rating, or authorization issued under part 47, 61, 63, 65, 67, or 107 
of this chapter unless the individual has designated a U.S. agent as 
required under this subpart. Aircraft registration certificates issued 
to individuals who fail to designate a U.S. agent as required under 
this subpart will be ineffective.
* * * * *

[[Page 81313]]

    Issued under authority provided by 49 U.S.C. 106(f), 44701(a), and 
44703 in Washington, DC.

Michael Gordon Whitaker,
Administrator.
[FR Doc. 2024-22000 Filed 10-7-24; 8:45 am]
BILLING CODE 4910-13-P