[Federal Register Volume 62, Number 135 (Tuesday, July 15, 1997)]
[Proposed Rules]
[Pages 38008-38013]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-18520]
[[Page 38007]]
_______________________________________________________________________
Part IV
Department of Transportation
Federal Aviation Administration
_______________________________________________________________________
14 CFR Part 187
Fees for Providing Production Certification-Related Services Outside
the United States; Proposed Rule
Proposed Advisory Circular 187-XX, Aircraft Certification Service Fees
for Providing Production Certification-Related Services Outside the
United States; Notice
Federal Register / Vol. 62, No. 135 / Tuesday, July 15, 1997 /
Proposed Rules
[[Page 38008]]
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 187
[Docket No. 28967; Notice No. 97-11]
RIN 2120-AG14
Fees for Providing Production Certification-Related Services
Outside the United States
AGENCY: Federal Aviation Administration (FAA), DOT.
ACTION: Notice of proposed rulemaking (NPRM).
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SUMMARY: This document proposes to establish fees by voluntary
agreement for production certification-related services pertaining to
aeronautical products manufactured or assembled outside the United
States (U.S.). In addition, the NPRM outlines the methodology for
determining the fees, describes how and when the FAA would provide
these services, and describes the method for payment of fees. This
proposed action, if adopted, would allow the FAA to recover certain
costs in providing requested production certification-related services
abroad and help to ensure that such services are provided in a
responsive and timely manner.
DATES: Comments must be received on or before August 14, 1997.
ADDRESSES: Comments on this proposal may be delivered or mailed, in
triplicate, to: Federal Aviation Administration, Office of the Chief
Counsel, Attention: Rules Docket (AGC-200), Docket No. 28967, Room
915G, 800 Independence Avenue, SW., Washington, DC 20591. Comments
submitted must be marked: ``Docket No. 28967.'' Comments may also be
sent electronically to the following Internet address cmts@faa.dot.gov. Comments may be examined in Room 915G on weekdays,
except Federal holidays, between 8:30 a.m. and 5:00 p.m.
FOR FURTHER INFORMATION CONTACT:
Ramona L. Johnson, Aircraft Certification Service, AIR-200, Federal
Aviation Administration, 800 Independence Avenue, SW., Washington, DC
20591, telephone: (202) 267-8361.
SUPPLEMENTARY INFORMATION:
Comments Invited
Interested persons are invited to participate in the making of the
proposed rule by submitting such written data, views, or arguments as
they may desire. Comments relating to the environmental, energy,
federalism, or economic impact that might result from adopting the
proposal in this notice are also invited. Substantive comments should
be accompanied by cost estimates. Comments must reference the
regulatory docket or notice number and be submitted in triplicate to
the Rules Docket address identified above.
All comments received, as well as a report summarizing each
substantive public contact with FAA personnel on this rulemaking, will
be filed in the docket. The docket is available for public inspection
before and after the comment closing date.
All comments received on or before the closing date will be
considered by the Administrator before proceeding with this proposed
rulemaking. Late-filed comments will be considered to the extent
practicable. The proposals contained in this notice may be changed as a
result of the comments received.
Commenters wishing the FAA to acknowledge receipt of their comments
submitted in response to this notice must include with those comments a
pre-addressed, stamped postcard on which the following statement is
made: ``Comments to Docket No. 28967.'' The postcard will be date
stamped and mailed to the commenter.
Availability of NPRMs
This document may be downloaded from the FAA regulations section of
the FedWorld electronic bulletin board (telephone: 703-321-3339), the
Federal Register's electronic bulletin board (telephone: 202-512-1661).
Internet users may access the FAA's web page at http://www.faa.gov
or the Federal Register web page at http://www.access.gpo.gov/su__docs
to download recently published rulemaking documents.
Any person may obtain a copy of this NPRM 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. Communications must reference the notice number or docket
number of this NPRM.
Persons interested in being placed on the mailing list for future
NPRMs should request a copy of Advisory Circular (AC) No. 11-2A, Notice
of Proposed Rulemaking Distribution System, which describes the
application procedure. This document can be obtained from the FAA
Office of Rulemaking.
Background
Under Title 49 U.S.C. Section 44701, the FAA is responsible for the
regulation and promotion of safety of flight. Title 49 U.S.C. Section
44704(b) authorizes the FAA Administrator to issue production
certificates. Section 44704(b) provides, in part, that:
The Administrator shall issue a production certificate
authorizing the production of a duplicate of any aircraft, aircraft
engine, propeller, or appliance for which a type certificate has
been issued when the Administrator finds the duplicate will conform
to the certificate. On receiving an application, the Administrator
shall inspect, and may require testing * * *.
The production certification-related services that the FAA provides
to fulfill its statutory responsibilities may be generally described as
follows:
1. Processing applications for the following: production under a
type certificate only, production under an approved production
inspection system, production under a production certificate or
extension of a production certificate, production under a technical
standard order authorization, and production under a parts manufacturer
approval. The processing of applications includes a review of data,
response to the applicant, and evaluation of the applicant's further
responses as necessary.
2. Certificate management of the manufacturing facility quality
assurance system.
3. Witnessing tests and performing conformity inspections of
articles.
4. Managing designees.
5. Investigating incidents, accidents, allegations and other
unusual circumstances.
These FAA services are provided to Production Approval Holders
(PAH). A person who holds a parts manufacturer approval (PMA), a
Technical Standard Order (TSO) authorization, or a production
certificate (PC), or who holds a type certificate (TC) and produces
under that TC, is referred to as a PAH. The regulatory services
provided to a PAH include: initial PAH qualification, ongoing PAH and
supplier surveillance, designee management, conformity inspections; as
well as initial PAH qualification and ongoing surveillance for
production certificate extensions outside the U.S. The specialists who
perform these functions on behalf of the FAA are Aviation Safety
Inspectors, Aviation Safety Engineers, and Flight Test Pilots.
Currently, the FAA performs production certification-related
services both domestically and internationally. It does not issue
production approvals
[[Page 38009]]
outside of the U.S. However, in some international situations, the FAA
allows PAH use of suppliers outside the U.S. if parts or sub-assemblies
can be 100% inspected by the PAH upon their receipt in the U.S. or if
parts or subassemblies are produced under a PAM's supplier control
system that has been accepted by the FAA. Under certain circumstances,
production outside the U.S. of complex parts, subassemblies, or
products is approved by the FAA on a case-by-case basis.
PAHs who choose to perform manufacturing outside the U.S. receive
significant and special benefits as a result of FAA's international
production oversight. By using manufacturing facilities located outside
the U.S., a PAH may benefit through lower labor costs, may increase its
market share, or may reap other benefits. Further, since it is FAA's
responsibility to prescribe and enforce standards in the interest of
safety for the design, materials, workmanship, construction, and
performance of civil aeronautical products, the FAA's oversight of
manufacturing facilities located outside the U.S. helps assure public
confidence in the products and parts manufactured there.
The Need for Rulemaking
Globalization of the aircraft manufacturing industry increases the
challenges to the FAA in carrying out its statutory mandate to ensure
that safety and airworthiness standards for civil aircraft are being
met during manufacture.
To be more competitive, production approval holders are requesting
approval from the FAA to expand their activities, to use more
facilities around the world, and to manufacture more complex
subassemblies, including complete aircraft.
Limited resources make it difficult for the FAA to support these
initiatives as international ventures by U.S. aircraft manufacturers
become more diverse and complex. Congress recognized the impact of
FAA's resource limitations in the Federal Aviation Administration
Authorization Act of 1994, P.L. 103-305 (108 State. 1569). As stated in
Conference Report No. 103-677 on H.R. 2739:
Safety regulatory efforts to keep pace with the trend of
globalization can be hampered by resource constraints * * * the
Aircraft Certification Service should be able to offset expenditures
made in support of aircraft or airline safety regulatory programs of
both U.S. and foreign owned companies outside the United States.
Therefore, in passing PL 103-305, Congress permitted the FAA to
recover its costs ``to provide safety regulatory services abroad in a
more responsive and timely manner.''
In addition, under Title V of the Independent Offices of
Appropriations Act of 1952 (IOAA), 31 U.S.C. 9701, the FAA is
authorized to establish a fair and equitable system for recovering the
cost for any service, such as the issuance of a certificate, that
provides a special benefit to an individual beyond those that accrue to
the general public. Title 31 U.S.C. 9701(a) provides, in part, as
follows:
It is the sense of the Congress that each service or thing of
value provided by an agency (except a mixed-ownership Government
corporation) to a person (except a person on official business of
the United States Government) is to be self-sustaining to the extent
possible.
Title 31 U.S.C. 9701(b) further provides:
The head of each Federal agency (except a mixed-ownership
Government corporation) may prescribe regulations establishing the
charge for a service or thing of value provided by the agency.
Regulations prescribed by the heads of executive agencies shall be
as uniform as practicable. Each charge shall be--
(1) Fair; and
(2) Based on--
(A) The costs to the Government;
(B) The value of the service or thing to the recipient;
(C) Public policy or interest served; and
(D) Other relevant facts.
The Proposed Rule
If adopted, the proposed rule allows PAHs to enter into a voluntary
agreement with the FAA for the provision of production certification-
related services outside the U.S. on mutually agreed terms and
conditions. This would include PAHs who elect to use organizations or
facilities outside the U.S. to manufacture, assemble, or test,
aeronautical products, after the effective date of a final rule. Since
not all members of the domestic aerospace industry choose to use
organizations or facilities outside the U.S., FAA oversight of these
activities outside of the U.S. is above and beyond the oversight
services regularly provided to PAHs.
An agreement for services between the PAHs and FAA for production
certification-related services for products manufactured, assembled, or
tested outside the U.S. would allow the FAA to provide services upon
request in a more responsive and timely manner. By charging for its
services outside the U.S., the FAA would be able to support more
complex manufacturing activities and provide acceptance of parts, sub-
assemblies, and products that would otherwise need to be disassembled
when received in the U.S. Under this proposal, when production
certification-related services are requested and provided outside the
U.S., no duplication of FAA work or reinspection of parts is
anticipated, except as otherwise required of domestic manufactured
parts during the PAH receiving inspection process.
Guidelines for Cost Recovery
The FAA has developed this proposed rule consistent with the IOAA
and with the Office of Management and Budget's (OMB) Circular A-25,
entitled ``User Charges.''
FAA fees may be assessed to persons who are recipients of special
benefits conferred by FAA's production certification-related services
outside the U.S. These special benefits would include services: (1)
Rendered at the request of an applicant; (2) for the issuance of a
required production approval; and (3) to assist an applicant or
certificate holder in complying with its regulatory obligations.
The FAA has determined that all services associated with the
issuance, amendment, or inspection of a production certificate or
approval as detailed in this NPRM would be subject to cost recovery.
All direct and indirect costs incurred by the FAA in providing special
benefits outside of the U.S. would be recovered. Each fee would not
exceed the FAA's cost in providing the service to the recipient.
Calculation of agency costs would be performed as accurately as is
reasonable and practical, and would be based on the specific expenses
identified to the smallest practical unit.
To determine the smallest practical unit for the various FAA
services covered, a letter of application would be made by the PAH to
the FAA requesting FAA production certification-related services
outside the U.S. The proposed application procedure would apply to any
PAH; i.e., holders or applicants for production under a type
certificate only, under an approved production inspection system, under
a production certificate or extension of a production certificate,
under a technical standard order authorization, or under a parts
manufacturer approval. Based on the details provided in the
application, the FAA would determine the cost and terms of providing
the requested services to the PAH outside the U.S. and detail those
costs to the applicant. The applicant would then request the provision
of those services from FAA.
[[Page 38010]]
Methodolgy for Fee Determination and Collection
Fee Determination
The FAA proposes to recover the full cost associated with providing
production certification-related services outside of the U.S. Costs to
be recovered include personnel compensation and benefits (PC&B), travel
and transportation costs, and other agency costs.
PC&B: For the purpose of these computations, average PC&B rates for
participating Aircraft Certification Service employees would be charged
per activity. PC&B charges would reflect the actual hours spent
participating in the activity as well as preparatory time, travel time,
and the time spent on follow-up activities.
Travel and transportation costs: These charges would include all
costs pertaining to domestic, local, and international transport of
persons and equipment. These costs may include fares, vehicle rental
fees, mileage payment, and any expenses related to transportation such
as baggage transfer, insurance for equipment during transport, and
communications. FAA personnel would adhere to all U.S. Government
travel regulations.
Fees would be charged for lodging, meals, and incidental expenses
in accordance with U.S. Government per diem rates, rules, and
regulations. Incidental expenses include fees, tips, and other
authorized expenses.
Other agency costs: Also included in these computations would be
other direct costs; for example, all printing and reproduction
services, supplies and materials purchased for the activity, conference
room rental, and other activity-related expenses. An additional
percentage charge, as established by the FAA in accordance with OMB
Circular A-25, would be added to the total cost of this activity to
compensate for agency overhead.
The Aircraft Certification Service of the FAA maintains a data
system to which employees submit periodic records identifying the
number of work hours used to provide service to customers. Travel
vouchers are also submitted and audited. This data would be maintained
for each applicant and project. The Aircraft Certification Service
tracks work hour records quarterly to determine the costs associated
with providing its services. This information would be used in
assessing and adjusting fees. In this manner, the FAA would be able to
assure applicants that they are paying only for expenses incurred in
connection with services provided to that specific applicant.
Fee Collection
All charges would be estimated and agreed upon between the FAA and
the applicant before the FAA provides services outside the U.S.
Under the proposal, payment would be made to the FAA in advance for
all production certification-related activities scheduled during the
upcoming 12-month period unless a shorter period is mutually agreeable
between the PAH and the FAA. The amounts set forth in the cost estimate
would be adjusted to recover the FAA's full costs. If cost are expected
to exceed the estimate by more than 10 percent, notification would be
made to the applicant as soon as possible. No services would be
provided until the FAA receives the full estimated payment for the
entire upcoming year. As activities are completed the full costs of the
activities would be charged against the advance account. Any remaining
funds would either be returned or applied to future activities as
requested by the applicant.
Payment for services rendered by the FAA would be in the form of a
check, money order, draft, or wire transfer, and would be payable in
U.S. currency to the FAA and drawn on a U.S. bank. Bank processing fees
would also be added to the fees charged to the applicants, where such
processing fees are charged to the U.S. Government.
In any case where an applicant has failed to pay the agreed fee for
FAA services, the FAA may suspend or deny any application for service
and may suspend or revoke any production-related approval granted.
In accordance with the agreement that would be signed by the FAA
and the applicant (Appendix C(d)(3)), this arrangement may be
terminated at any time by either party by providing 60 days written
notice to the other party. Any such termination would allow the FAA and
additional 120 days to close out its activities.
If this proposal is adopted, the FAA will issue an Advisory
Circular further detailing the requirements of the application. A
notice of availability will be published concurrently with this NPRM.
Section-by-Section Discussion of the Proposals
This NPRM contains proposals to amend sections of 14 CFR part 187.
Section 187.15 Payment of Fees
The FAA proposes to amend Sec. 187.15 to reference all fees under
part 187. In addition, charges would be made for banking services if
they are necessary to expedite the deposit of funds to the U.S.
Government.
Section 187.17 Failure by Applicant To Pay Prescribed Fees
The FAA proposes to add a new Sec. 187.17 that would detail FAA
actions in the event the applicant fails to pay the fee agreed to for
FAA services. The proposed actions range from not processing the
application to suspending or revoking any approval granted outside the
U.S.
Appendix C to Part 187--Fees for Providing Production
Certification-Related Services Outside the United States
The FAA proposes to add a new Appendix C to part 187 that would
contain the following:
1. The methodology for the calculation of fees for production
certification-related services outside the U.S. that are performed by
the FAA.
2. The applicability to certain manufacturers.
3. Definitions of terms associated with these fees: ``manufacturing
facility,'' ``production certification-related services,'' ``supplier
facility,'' and ``U.S. production approval holder.''
4. The process for obtaining FAA production certification-related
services outside the U.S.
5. The manner in which the FAA would review fees to ensure that the
fees will not exceed the full cost of providing the service.
International Compatibility
The FAA has reviewed corresponding International Civil Aviation
Organization international standards and recommended practices and
Joint Aviation Authorities requirements and has identified no
comparable requirements applicable to this proposed rule.
Paperwork Reduction Act
In this NPRM, proposed part 187, Appendix C contains information
collection requirements (basically application requirements). As
required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d), the
FAA has submitted a copy of these proposed sections to the Office of
Management and Budget (OMB) for its review.
The information to be collected is needed to allow the FAA to
understand the scope of production activities outside the U.S. that are
envisioned by an applicant.
The total annual reporting and recordkeeping burden on all the PAHs
[[Page 38011]]
is estimated to be 1,800 to 2,000 hours and is broken down as follows:
Preparation of the letter of application identifying the company,
the proposed location of manufacturing, a general description of the
product to be manufactured and the manufacturing activities to be
performed, estimated start and end dates, as well as unique
requirements (estimated at 2 to 20 hours for each application).
It is estimated that this proposal would affect 90 to 100
production approval holders annually.
Organizations and individuals desiring to submit comments on the
information collection requirements should direct them to the Office of
Information and Regulatory Affairs, OMB, Room 1235, New Executive
Office Building, Washington, DC 20503; Attention: Desk Officer for
Federal Aviation Administration. These comments should reflect whether
the proposed collection is necessary; whether the agency's estimate of
the burden is accurate; how the quality, utility, and clarity of the
information to be collected can be enhanced; and how the burden of the
collection can be minimized. A copy of the comments also should be
submitted to the FAA Rules Docket.
OMB is required to make a decision concerning the collection of
information contained in this NPRM between 30 and 60 days after
publication in the Federal Register. Thererfore, a comment to OMB is
best assured of having its full effect if OMB receives it within 30
days of publication. This does not affect the deadline for the public
to comment on the NPRM.
Regulatory Evaluation Summary
Proposed 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 the
costs. Second, the Regulatory Flexibility Act of 1980 requires agencies
to analyze the economic effect of regulatory changes on small entities.
Third, the Office of Management and Budget directs agencies to assess
the effect of regulatory changes on international trade. In conducting
these analyses, the FAA has determined that this proposed rule: (1)
Would generate benefits that justify its costs and is a non-significant
regulatory action as defined in the Executive Order; (2) is non-
significant as defined in the Department of Transportation's Regulatory
Policies and Procedures; (3) would not have a significant impact on a
substantial number of small entities; and (4) would not constitute a
barrier to international trade. These analyses, available in the
docket, are summarized below.
This proposed rule would not impose any additional costs on any
members of society other than those requesting FAA production
certification-related services for manufacturing facilities and
suppliers located outside the United States. The proposed rule would
allow the FAA to recover its full costs for providing certification-
related services requested by the users.
The FAA proposes to charge a fee to recover its costs for
production certification-related services provided to all PAHs: (1) Who
elect to use manufacturing facilities outside the U.S. and are not
currently receiving FAA services; or (2) who elect to expand their
current manufacturing facilities outside the U.S. or expand their
current manufacturing work outside the U.S.
As stated, actual fees to be charged as a result of this rulemaking
will be those fees necessary for the FAA to recover its full costs.
Since the FAA is not able at this time to state precisely what those
fees will be, it is, for the purpose of this proposal, assuming a wide
range from $80.00 to $200.00 per hour. The FAA estimates that if it
would charge an hourly rate of $80, the first year fees would total
about $2.876 million and if it would charge an hourly rate of $200, the
first year fees would total about $5.468 million. Due to an anticipated
increase in the number of requests for FAA production certification-
related services outside the U.S., these annual fees would increase to
between $4.211 million (based on $80 an hour fee) and $8.006 million
(based on a $200 an hour fee) in the fifth year, after which they would
remain stable.
The primary potential benefit would be that the proposed rule may
make it easier for PAHs to use organizations, facilities, and suppliers
outside the U.S. to: (1) Take advantage of lower manufacturing costs;
and (2) fulfill certain aircraft purchasing agreements that require a
PAH to produce a percentage of the aircraft within the purchasing
country.
Regulatory Flexibility Determination
The Regulatory Flexibility Act of 1980 (RFA) was enacted by
Congress to ensure that small entities are not unnecessarily and
disproportionately burdened by Federal regulations. The RFA requires a
Regulatory Flexibility Analysis if a proposed rule is expected to have
a significant (positive or negative) economic impact on a substantial
number of small entities.
The proposed rule would primarily affect PAHs and their facilities
and suppliers located outside the U.S. Although some small U.S.
companies may be indirectly affected, the FAA has determined that the
proposed rule would not have a significant impact on a substantial
number of small entities.
International Trade Impact
The globalization of aircraft manufacturing has increased
competition among manufacturers. In order for PAHs to remain
competitive, they need to have the flexibility to compete on an equal
footing with their competitors located around the world. Further, many
overseas purchasers of PAH products (particularly aircraft) now require
that some percentage of the product be produced in their own country.
The proposal would provide PAHs with more timely FAA service in
approving products manufactured outside the U.S. Consequently, it
should have a favorable competitive impact on PAHs. However, charging a
fee for the FAA's production certification-related services outside the
U.S. may raise slightly the costs of using a facility outside the U.S.
The FAA does not anticipate that the fee would be a significant
deterrent to a PAH's decision regarding whether or not to use a
facility or supplier outside the U.S.
Nevertheless, the proposal would reduce the PAHs' costs to use
facilities and suppliers outside the U.S. because the increased
coordination between the FAA and PAHs would result in reducing the
costs currently associated with FAA delays in performing the necessary
production certification-related services at a facility or supplier
located outside the U.S.
The effect of the anticipated cost reduction could be twofold.
First, any increased purchases of products made at facilities outside
the U.S. may result in a corresponding reduction in the purchases of
those products made in U.S. facilities, if there were to be no
subsequent overall increase in the number of aircraft and aircraft
engines manufactured. Second, using a less expensive facility and
supplier located outside the U.S. could produce a less expensive U.S.
aircraft, potentially resulting in new orders or an increase in
existing orders. The net effect could be an overall increase in the
amount of aircraft products manufactured within the U.S.
Therefore, although the proposed rule may adversely affect some
domestic product manufacturers, it could also positively affect other
domestic product manufacturers. The FAA anticipates
[[Page 38012]]
that the overall effect would be to encourage international trade and
to provide a mechanism that may assist U.S. civil aviation industry.
Federalism Implications
The proposed regulations herein would not have substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Therefore, in
accordance with Executive Order 12612, it is determined that this
proposal would not have sufficient federalism implications to warrant
the preparation of a Federalism Assessment.
Unfunded Mandates Reform Act
This proposed rule does not contain any Federal intergovernmental
or private sector mandate because all fees are entered into by
voluntary agreement. Therefore, the requirements of Title II of the
Unfunded Mandates Reform Act of 1995 do not apply.
Conclusion
For the reasons discussed above, and based on the findings in the
Regulatory Flexibility Determination and the International Trade Impact
Analysis, the FAA has determined that this proposal would be
nonsignificant under Executive Order 12866, Regulatory Planning and
Review, issued October 4 1993. In addition, the FAA certifies that this
proposal, if adopted, would not have a significant economic impact,
positive or negative, on a substantial number of small entities under
the criteria of the Regulatory Flexibility Act. This proposal is
considered nonsignificant under DOT Regulatory Policies and Procedures
(44 FR 11034, February 26, 1979) and Order DOT 2100.5, Policies and
Procedures for Simplification, Analysis, and Review of Regulations, of
May 22, 1980. Further, the requirements of Title II of the Unfunded
Mandates Reform Act of 1995 would not apply to this proposal. An
initial regulatory evaluation of the proposal, including a Regulatory
Flexibility Determination and International Trade Impact Analysis, has
been placed in the docket. A copy may be obtained by contacting the
person identified under FOR FURTHER INFORMATION CONTACT.
List of Subjects in 14 CFR Part 187
Administrative practice and procedures, Air transportation.
The Proposed Amendment
In consideration of the foregoing, the Federal Aviation
Administration proposes to amend part 187 of Title 14, Code of Federal
Regulations (14 CFR part 187) as follows:
PART 187--FEES
1. The authority citation for part 187 continues to read as
follows:
Authority: 31 U.S.C. 9701; 49 U.S.C. 106(g), 106(m), 40104-
40105, 40109, 40113-40114, 44702.
2. Section 187.15 (a) and (b) are revised to read as follows:
Sec. 187.15 Payment of fees.
(a) The fees of this part are payable to the Federal Aviation
Administration by check, money order, wire transfer, or draft, payable
in U.S. currency and drawn on a U.S. bank prior to the provision of any
service under this part.
(b) Applicants for the FAA services provided under this part shall
pay any bank processing charges on fees collected under this part, when
such charges are assessed on U.S. Government.
* * * * *
3. Section 187.17 is added to read as follows:
Sec. 187.17 Failure by applicant to pay prescribed fees.
If an applicant fails to pay fees agreed to under Appendix C of
this part, the FAA may suspend or deny any application for service and
may suspend or revoke any production certification-related approval
granted.
4. Appendix C is added to read as follows:
Appendix C to Part 187--Fees for Production Certification-Related
Services Performed Outside the United States
(a) Purpose. This appendix describes the methodology for the
calculation of fees for production certification-related services
outside the U.S. that are performed by the FAA.
(b) Applicability. This appendix applies to production approval
holders who elect to use manufacturing facilities or supplier
facilities located outside the U.S. to manufacture or assemble
aeronautical products after [effective date of the final rule].
(c) Definitions. For the purpose of this appendix, the following
definitions apply:
Manufacturing facility means a place where production of a complete
aircraft, aircraft engine, propeller, component, or appliance is
performed.
Production certification-related service means a service associated
with initial production approval holder qualification; ongoing
production approval holder and supplier surveillance; designee
management; initial production approval holder qualification and
ongoing surveillance for production certificate extensions outside the
U.S.; conformity inspections; and witnessing of tests.
Supplier facility means a place where production of a part,
component, or subassembly is performed for a production approval
holder.
U.S. production approval holder means a person who holds an FAA
approval for production under type certificate only, an FAA approval
for production under an approved production inspection system, a
production certificate, a technical standard order authorization, or a
parts manufacturer approval.
(d) Procedural requirements. (1) Applicants must apply for FAA
services provided outside the U.S. by a letter of application to the
FAA detailing the particular services required from the FAA.
(2) The FAA will notify the applicant in writing of the estimated
cost and schedule to provide the services.
(3) The applicant will review the estimated costs and schedule of
services. If the applicant agrees with the estimated costs and schedule
of services, the applicant will propose to the FAA that the services be
provided. If the FAA agrees, a written agreement will be executed
between the applicant and the FAA.
(4) The applicant must provide advance payment for each 12-month
period of requested FAA service unless a shorter period is agreed to
between the production approval holder and FAA.
(e) Fee determination. (1) Fees for FAA production certification-
related services will consist of: personnel compensation and benefit
(PC&B) for each participating FAA employee, actual travel and
transportation expenses incurred in providing the service, other agency
costs and an overhead percentage.
(2) Fees will be determined on a case-by-case basis according to
the following general formula:
W1H1+W2H2 etc., +T+O
where:
W1H1=hourly PC&B rate for employee 1, times
estimated hours
W2H2=hourly PC&B rate for employee 2, etc., times
estimated hours
T=estimated travel and transportation expenses
O=other agency costs related to each activity including overhead.
(3) In no event will the applicant be charged more than the full
FAA costs of providing production certification-related services.
[[Page 38013]]
(4) If the full FAA costs vary from the estimated fees by more than
10 percent, written notice by the FAA will be given to the applicant as
soon as possible.
(5) If FAA costs exceed the prepaid fees, the applicant will be
required to pay the difference prior to receiving further services. If
the prepaid fees exceed the FAA costs, the applicant may elect to apply
the balance to future agreements or receive a refund.
(f) Fees will be reviewed by the FAA each year, at the beginning of
the fiscal year, and adjusted either upward or downward in order to
reflect the current costs of performing production certification-
related services outside the U.S.
(1) Notice of any change to the elements of the fee formula will be
published in the Federal Register.
(2) Notice of any change to the methodology and other changes for
the fees will be published in the Federal Register.
Issued in Washington, DC, on July 9, 1997.
Thomas E. McSweeny,
Director, Aircraft Certification Service.
[FR Doc. 97-18520 Filed 7-14-97; 8:45 am]
BILLING CODE 4910-13-M
