FR Doc 05-18176

[Federal Register: September 14, 2005 (Volume 70, Number 177)]
[Proposed Rules]
[Page 54453-54458]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14se05-35]

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Part III

Department of Transportation

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Federal Aviation Administration

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14 CFR Parts 121, 125, and 135

Service Difficulty Reports; Proposed Rule

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Parts 121, 125, and 135

[Docket No. FAA-2000-7952]
RIN 2120-AI08

Service Difficulty Reports

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The Federal Aviation Administration is proposing to withdraw a
final rule published on September 15, 2000 that would have amended the
reporting requirements for certificate holders concerning failures,
malfunctions, and defects of aircraft, aircraft engines, systems, and
components. The effective date of this final rule has been delayed
several times and is now January 31, 2006. We are proposing to withdraw
this rule to allow the FAA time to re-examine the service difficulty
report (SDR) program based on comments received and other developments
since the final rule was published. We are also proposing several
amendments that improve the existing SDR program because they did not
receive significant comment when proposed in the final rule.

DATES: Send your comments on or before October 14, 2005.

ADDRESSES: You may send comments [identified by Docket Number FAA-2000-
7952] using any of the following methods:
DOT Docket Web site: Go to http://dms.dot.gov and follow

the instructions for sending your comments electronically.
Government-wide rulemaking Web site: Go to http://www.regulations.gov
and follow the instructions for sending your

comments electronically.
Mail: Docket Management Facility; U.S. Department of
Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401,
Washington, DC 20590.
Fax: 1-202-493-2251.
Hand Delivery: Room PL-401 on the plaza level of the
Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Emilio Estrada, Flight Standards
Service, Aircraft Maintenance Division (AFS-300), Federal Aviation
Administration, 800 Independence Avenue, SW., Washington, DC 20591,
telephone (202) 267-5571.

SUPPLEMENTARY INFORMATION:

Comments Invited

The FAA invites interested persons to participate in this
rulemaking by submitting written comments, data, or views. We also
invite 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. We ask that you send us two copies of written
comments.
We will file in the docket all comments we receive, as well as a
report summarizing each substantive public contact with FAA personnel
concerning this proposed rulemaking. The docket is available for public
inspection before and after the comment closing date. If you wish to
review the docket in person, go to the address in the ADDRESSES section
of this preamble between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays. You may also review the docket using the
Internet at the Web address in the ADDRESSES section.
Privacy Act: Using the search function of our docket Web site,
anyone can find and read the comments received into any of our dockets,
including the name of the individual sending the comment (or signing
the comment on behalf of an association, business, labor union, etc.).
You may review DOT's complete Privacy Act Statement in the Federal
Register published on April 11, 2000 (65 FR 19477-78) or you may visit
http://dms.dot.gov.

Before acting on this proposal, we will consider all comments we
receive on or before the closing date for comments. We will consider
comments filed late if it is possible to do so without incurring
expense or delay. We may change this proposal in light of the comments
we receive.
If you want the FAA to acknowledge receipt of your comments on this
proposal, include with your comments a pre-addressed, stamped postcard
on which the docket number appears. We will stamp the date on the
postcard and mail it to you.

Availability of Rulemaking Documents

You can get an electronic copy of rulemaking documents using the
Internet by:
(1) Searching the Department of Transportation's electronic Docket
Management System (DMS) Web site (http://dms.dot.gov/search); (2) Visiting the Office of Rulemaking's Web site at http://

http://www.faa.gov/regulations_policies/; or

(3) Accessing the Government Printing Office's Web site at http://www.gpoaccess.gov/fr/index.html
.

You can also get a copy by submitting a request to the Federal
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence
Avenue SW., Washington, DC 20591, or by calling (202) 267-9680. Make
sure to identify the docket number, notice number, or amendment number
of this rulemaking.

Statutory Authority

Title 49, 44701 of the United States Code, authorizes the
Administrator of the Federal Aviation Administration to prescribe
regulations for practices the Administrator finds necessary for safety
in air commerce [49 U.S.C. 44701(a)(5)]. Pursuant to that statutory
authority, the Administrator has prescribed regulations for certificate
holders on the reporting of failures, malfunctions, and defects of
aircraft, aircraft engines, systems, and components (commonly called
Service Difficulty Reports). These regulations are found at 14 CFR
121.703, 121.704, 121.705, 125.409, 125.410, 135.415, and 135.416. This
action proposes amendments to those regulations.

Background

On September 15, 2000, the FAA published a final rule (65 FR 56191)
entitled, ``Service Difficulty Reports,'' Amendment Numbers 121-279,
125-35, 135-77, and 145-22. That final rule, applicable to air carriers
and certificated domestic and foreign repair station operators, amended
the requirements for reporting failures, malfunctions, and defects of
aircraft, aircraft engines, systems, and components. In the final rule,
the FAA also sought comments on the impact of paperwork and other
information collection burdens imposed on the public. The comment
period closed on November 14, 2000, and the effective date was
scheduled for January 16, 2001.
The FAA received extensive written comments raising concerns with
many of the provisions of the new SDR requirements. In response, the
FAA held a public meeting about the final rule on December 11, 2000.
Participants at that public meeting also raised significant issues
concerning the implementation of the final rule.
As a result of the concerns raised at the public meeting and during
the comment period, the FAA delayed the effective date of the final
rule to July 16, 2001. This effective date was subsequently delayed
four more times (66 FR 21626, April 30, 2001/66 FR 58912, November 23,
2001/67 FR 78970,

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December 27, 2002/68 FR 75116, December 30, 2003). The current
effective date is January 31, 2006. The purpose of these delays was to
provide us more time to consider industry's concerns and to revise the
final rule where necessary.
Since the publication of the final rule, the FAA amended the SDR
requirements for repair stations (66 FR 41117, August 6, 2001). Among
other things, this amendment addressed one of the causes of potential
duplicate reporting, as a part 145 certificate holder no longer has an
independent reporting provision when performing work for a part 121,
125, or 135 certificate holder.
The FAA has also made improvements to the computer software and
hardware that monitors SDRs. These changes are designed to facilitate
searches of the SDR database and result in more useful results.

The Proposal To Withdraw the Final Rule

The intent of the final rule was to improve the existing SDR
program without having a significant adverse impact on industry. The
new SDR requirements were designed to correct deficiencies in the SDR
program and improve the quality of the data in the SDR database.
However, based on the comments received and information gathered at the
public meeting and during the comment period, we now realize the final
rule may not meet these goals. The concerns raised by industry also
highlighted the need to resolve problems with the existing SDR program
before increasing the amount and type of data recorded.
The topic that received the most comments was the FAA's economic
analysis for the final rule. The commenters are uniform in their
contention that the new reporting requirements will greatly increase
the costs of the SDR program. The FAA received cost estimates from
industry which considerably exceed our own estimates based, in part, on
the wide disparity between the industry's and the FAA's evaluation of
the number of SDRs resulting from the rulemaking.
While not completely agreeing with the industry's estimate of the
increase in the number of reports or the significant increase in costs,
we have determined that some of the assumptions we used to predict the
number of additional reports could have led industry to overestimate
the costs of compliance with this rulemaking. We have reevaluated the
final rule in light of the data provided in the comments and have
determined that the costs of this rulemaking may be higher than
projected. In addition, we acknowledge that populating data collection
systems with inappropriate data could have a negative impact on the
FAA's ability to identify and collect meaningful safety data on the
operation of aircraft.
Since the public meeting, we have considered ways to fix the final
rule to maintain its original intent while addressing the concerns
raised by industry. During this time period, the Commercial Airplane
Certification Process Study (CPS) also issued its findings about the
SDR program. The CPS was chartered by the FAA's Associate Administrator
for Regulation and Certification in January 2001 to conduct a
comprehensive review of the processes and procedures associated with
aircraft certification, operations and maintenance. The CPS identified
certain underlying deficiencies in the SDR program that should be
corrected so data collected may provide the maximum safety benefit. A
copy of the CPS report has been placed in the docket for this
rulemaking.
Based on the comments received and the CPS findings, the FAA has
determined there is a need to enhance the SDR program so it meets the
needs of the FAA and industry more efficiently and effectively. Rather
than continuing to delay the effective date of the final rule while we
address this issue, we believe it is prudent to withdraw the final
rule. This approach will prevent uncertainty about the final rule's
status and allows us time to thoroughly evaluate and improve the
existing SDR program. The effect of a withdrawal will be the retention
of the regulation currently in effect.

The Proposal for Amending the Current Rule

The FAA is also proposing to make several minor changes to the
existing SDR program. Most of these changes were already incorporated
in the final rule we are now proposing to withdraw; we are proposing to
proceed with these changes because they did not receive significant
comment and will improve the SDR program.

Sections 121.703, 125.409, and 135.415

The FAA is proposing to rename the titles of Sec. Sec. 121.703,
125.409, and 135.415 to ``Service Difficulty Reports.'' The existing
titles reflect the fact that these reports have been called various
names over the years by different parties, resulting in some confusion.
This proposed change would reflect the most common industry term for
SDRs and result in the eventual use of only one consistently used term
when referring to them.

Sections 121.703(d), 125.409(b), and 135.415(d)

The FAA is proposing three changes to improve the process of
submitting SDRs to the FAA under these sections:
(1) Replacing the terms ``send,'' ``mailed,'' or ``delivered'' with
the term ``submit.'' This change would allow for the use of other
means, such as electronic transmission, to submit SDRs to the FAA.
(2) Increasing the time for submitting an SDR from 72 hours to 96
hours after an event occurs that requires an SDR. The increased
reporting time gives certificate holders additional time to prepare the
SDR and should reduce the number of supplemental SDRs that need to be
filed. A reduction of supplemental SDRs should reduce the
administrative burden on both the FAA and industry.
(3) Changing the location to which the certificate holder must send
SDRs. The current rule requires SDRs to be sent directly to the
Certificate Holding District Office (CHDO). There, the SDRs are
reviewed by the assigned Principal Maintenance Inspector (PMI) and then
forwarded to the FAA offices in Oklahoma City, Oklahoma, where all SDRs
are entered into the SDR database. The proposal would require the
certificate holder to send SDRs directly to our Oklahoma City offices.
The PMI would be instructed by internal agency procedures to review the
individual SDR for their assigned certificate holder through an
internal FAA computer system that would access the SDR database. This
proposal would remove the intermediate step of processing SDRs through
the PMI, but not relieve the PMI of the responsibility for reviewing
them. The proposed change would also facilitate electronic reporting by
eliminating the necessity of delivering a copy to the PMI. The
certificate holder would retain the option of submitting paper SDRs
should it so choose, although the FAA strongly encourages electronic
reporting.
Finally, for only Sec. 135.415, the FAA is proposing to remove the
provision for aircraft operated where mail is not collected. This was
an old provision that was rarely used by the industry. Mail service is
available now in most locations and various alternatives to the U.S.
Mail exist.

Section 121.703(e)

The proposal would require certificate holders to submit SDRs in a
form or format acceptable to the Administrator. Many operators have
voluntarily adopted reporting formats compatible with the FAA's
electronic systems to simplify their reporting under the

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current rule. Electronic submission of SDRs through the FAA Web site is
an acceptable format. This provision is intended to assure that,
regardless of the method and format chosen for use, the information we
receive is readable. However, when using electronic technology, the
electronic language used must be one the FAA is capable of reading.

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. Information collection
requirements associated with this NPRM have been approved previously by
the Office of Management and Budget (OMB) under the provisions of the
Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) and have been
assigned OMB Control Number 2120-0663. The proposals in this NPRM do
not impose new information collection requirements on certificate
holders.

International Compatibility

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

Regulatory Evaluation Summary

Changes to Federal regulations must undergo several economic
analyses. First, Executive Order 12866 directs that each Federal agency
shall propose or adopt a regulation only upon a reasoned determination
that the benefits of the intended regulation justify its costs. Second,
the Regulatory Flexibility Act of 1980 requires agencies to analyze the
economic impact of regulatory changes on small entities. Third, the
Trade Agreements Act (19 U.S.C. 2531-2533) 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, to be the basis of U.S. standards. Fourth, the Unfunded
Mandates Reform Act of 1995 (Public Law 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 $120.7 million or more
annually (adjusted for inflation.)
In conducting these analyses, FAA has determined this proposed
rule: (1) Has benefits that justify its costs, is not a ``significant
regulatory action'' as defined in section 3(f) of Executive Order
12866, and is not ``significant'' as defined in Department of
Transportation Regulatory Policies and Procedures; (2) would not have a
``significant economic impact on a substantial number of small
entities;'' (3) would reduce barriers to international trade; and (4)
would not impose an unfunded mandate on state, local, or tribal
governments, or on the private sector. These analyses, available in the
docket for this rulemaking, are summarized below.

Purpose of This Rulemaking

This proposed rulemaking would withdraw a delayed final rule on
Service Difficulty Reports (SDR), but retain several relieving items
from that delayed final rule. The FAA is proposing to withdraw the
delayed final rule because, after receipt of public comments on that
action, the FAA has determined that its cost impact is greater than
originally projected.

Total Costs and Benefits of This Rulemaking

Costs

This proposed rule imposes minimal new costs on industry, and
results in cost-savings ranging from $16.13 million ($11.33 million,
discounted) to $38.96 million ($27.36 million, discounted). This
results in a net cost savings to industry ranging from $15.98 million
($11.23 million, discounted) to $38.97 million ($27.37 million,
discounted). The impact to the FAA are additional costs of $145,200
($102,000, discounted) and savings of $9,300 ($6,500, discounted). The
FAA has determined this rule to be cost beneficial.

Benefits

Currently, a significant effort is underway to improve the quality
of aviation safety data identification and collection. This rulemaking
is a component of this effort and proposes changes to improve the
existing SDR program. These changes include:
Extending the reporting time to submit SDRs from 72 hours
to 96 hours,
Requiring certificate holders to submit SDRs directly to a
centralized collection point, thus allow the reports to be entered into
the SDR database quicker and reduce the administrative workload of the
certificate-holding district office (CHDO), and
Allowing electronic submission of SDR reports.

Regulatory Flexibility Determination

The Regulatory Flexibility Act of 1980 (RFA) establishes ``as a
principle of regulatory issuance that agencies shall endeavor,
consistent with the objective of the rule and of applicable statutes,
to fit regulatory and informational requirements to the scale of the
business, organizations, and governmental jurisdictions subject to
regulation.'' To achieve that principle, the RFA requires agencies to
solicit and consider flexible regulatory proposals and to explain the
rationale for their actions. The RFA covers a wide-range of small
entities, including small businesses, not-for-profit organizations and
small governmental jurisdictions.
Agencies must perform a review to determine whether a proposed or
final rule will have a significant economic impact on a substantial
number of small entities. If the agency determines that it will, the
agency must prepare a regulatory flexibility analysis as described in
the Act.
However, if an agency determines that a proposed or final rule is
not expected to have a significant economic impact on a substantial
number of small entities, section 605(b) of the 1980 RFA provides that
the head of the agency may so certify and a regulatory flexibility
analysis is not required. The certification must include a statement
providing the factual basis for this determination, and the reasoning
should be clear.
For this rule, the small entity group is considered to be part 121,
125, and 135 certificate holders (North American Industry
Classification System [NAICS] 481111). For this analysis, the FAA
considers each part 125 and 135 certificate holder to be a small
entity, and some of the part 121 and 121/135 certificate holders are
also small entities.
These regulations result in cost savings for all certificate
holders of between $16.13 million ($11.33 million, discounted) to
$38.96 million ($27.36 million, discounted) over the next ten years or,
on average, between $1.61 million to $3.90 million per year. Assuming
that the cost savings is spread among the types of certificate holders
in proportion to the number of SDRs each type generated from January 1,
2002 through August 31, 2004, the average part 121 certificate holder
would save between $13,010 and $31,424 a year, the average part 121/135
certificate holder would save between $3,511 and $8,479

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a year, the average part 125 certificate holder would save between $16
and $39 a year, and the average part 135 certificate holder would save
between $68 and $165 a year. Thus, the economic impact is minimal.
Therefore, we certify that this action would not have a significant
economic impact on a substantial number of small entities.

International Trade Impact Assessment

The Trade Agreement Act of 1979 prohibits Federal agencies from
establishing any standards or engaging in related activities that
create unnecessary obstacles to the foreign commerce of the United
States. Legitimate domestic objectives, such as safety, are not
considered unnecessary obstacles. The statute also requires
consideration of international standards and, where appropriate, that
they be the basis for U.S. standards. The FAA has assessed the
potential effect of this NPRM and has determined that it would have
only a domestic impact and therefore no affect on any trade-sensitive
activity.

Unfunded Mandates Assessment

The Unfunded Mandates Reform Act of 1995 (the Act) is intended,
among other things, to curb the practice of imposing unfunded Federal
mandates on State, local, and tribal governments. Title II of the Act
requires each Federal agency to prepare a written statement assessing
the effects of any Federal mandate in a proposed or final agency rule
that may result in an expenditure of $100 million or more (adjusted
annually for inflation) in any one year by State, local, and tribal
governments, in the aggregate, or by the private sector; such a mandate
is deemed to be a ``significant regulatory action.'' The FAA currently
uses an inflation-adjusted value of $120.7 million in lieu of $100
million.
This proposed rule does not contain such a mandate. The
requirements of Title II do not apply.

Executive Order 13132, Federalism

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

Environmental Analysis

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

Regulations That Significantly Affect Energy Supply, Distribution, or
Use

The FAA has analyzed this NPRM under Executive Order 13211, Actions
Concerning Regulations that Significantly Affect Energy Supply,
Distribution, or Use (May 18, 2001). We have determined that it is not
a ``significant energy action'' under the executive order because it is
not a ``significant regulatory action'' under Executive Order 12866,
and it is not likely to have a significant adverse effect on the
supply, distribution, or use of energy.

International Compatibility

List of Subjects

14 CFR Part 121

Air carriers, Aircraft, Aviation safety, Reporting and
recordkeeping requirements, Safety, Transportation.

14 CFR Part 125

Aircraft, Aviation safety, Reporting and recordkeeping
requirements.

14 CFR Part 135

Air taxis, Aircraft, Aviation safety, Reporting and recordkeeping
requirements.

The Proposed Amendment

In consideration of the foregoing, the Federal Aviation
Administration proposes to amend 14 CFR parts 121, 125, and 135, 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), 40113, 40119, 41706, 44101, 44701-
44702, 44705, 44709-44711, 44713, 44716-44717, 44722, 44901, 44903-
44904, 44912, 45101-45105, 46105, 46301.

2. Amend Sec. 121.703 to revise the heading and paragraphs (d) and
(e) to read as follows:

Sec. 121.703 Service difficulty reports.

* * * * *
(d) Each certificate holder shall submit each report required by
this section, covering each 24-hour period beginning at 0900 local time
of each day and ending at 0900 local time on the next day, to the FAA
offices in Oklahoma City, Oklahoma. Each report of occurrences during a
24-hour period shall be submitted to the collection point within the
next 96 hours. However, a report due on Saturday or Sunday may be
submitted on the following Monday, and a report due on a holiday may be
submitted on the next work day.
(e) The certificate holder shall submit the reports required by
this section on a form or in another format acceptable to the
Administrator. The reports shall include the following information:
* * * * *
3. Amend Sec. 121.705 to revise the introductory text to read as
follows:

Sec. 121.705 Mechanical interruption summary report.

Each certificate holder shall submit to the Administrator, before
the end of the 10th day of the following month, a summary report for
the previous month of:
* * * * *

PART 125--CERTIFICATION AND OPERATIONS: AIRPLANES HAVING A SEATING
CAPACITY OF 20 OR MORE PASSENGERS OR A MAXIMUM PAYLOAD CAPACITY OF
6,000 POUNDS OR MORE; AND RULES GOVERNING PERSONS ON BOARD SUCH
AIRCRAFT

4. The authority citation for part 125 continues to read as
follows:

Authority: 49 U.S.C. 106(g), 40113, 44701-44702, 44705, 44710-
44711, 44713, 44716-44717, 44722.

5. Amend Sec. 125.409 to revise the heading and paragraph (b) to
read as follows:

Sec. 125.409 Service difficulty reports.

* * * * *
(b) Each certificate holder shall submit each report required by
this section, covering each 24-hour period beginning at 0900 local time
of each day and ending at 0900 local time on the next day, to the FAA
offices in Oklahoma City, Oklahoma. Each report of occurrences during a
24-hour period

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shall be submitted to the FAA within the next 96 hours. However, a
report due on Saturday or Sunday may be submitted on the following
Monday, and a report due on a holiday may be submitted on the next
workday.
* * * * *

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

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

Authority: 49 U.S.C. 106(g), 41706, 44113, 44701-44702, 44705,
44709, 44711-44713, 44715-44717, 44722.
7. Amend Sec. 135.415 to revise the heading and paragraph (d) to
read as follows:

Sec. 135.415 Service difficulty reports.

Issued in Washington, DC, on September 8, 2005.
James J. Ballough,
Director, Flight Standards Service.
[FR Doc. 05-18176 Filed 9-13-05; 8:45 am]

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