2014-04330. Changes to Production Certificates and Approvals

AGENCY:

Federal Aviation Administration (FAA), DOT.

ACTION:

Notice of proposed rulemaking (NPRM).

SUMMARY:

The FAA is proposing changes to its certification procedures and identification requirements for aeronautical products and articles. The proposed changes would: require production approval holders to identify an accountable manager who would be responsible for, and have authority over, their production operations and serve as the primary contact with the FAA; allow production approval holders to issue authorized release documents for aircraft engines, propellers, and articles; permit production certificate holders to manufacture and install interface components; require production approval holders to ensure that each supplier-provided product, article, or service conforms to the production approval holder's requirements and establish a supplier-reporting process for products, articles, or services that have been released from or provided by the supplier and subsequently found not to conform to the production approval holder's requirements; and remove the requirement that fixed-pitch wooden propellers be marked using an approved fireproof method. This proposal is necessary to update our regulations by revising certification and marking requirements to reflect the current global aeronautical manufacturing environment, thereby promoting aviation safety.

DATES:

Send comments on or before May 28, 2014.

ADDRESSES:

Send comments identified by docket number [Insert docket number from heading] using any of the following methods:

• Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for sending your comments electronically.
• Mail: Send comments to Docket Operations, M-30; U.S. Department of Transportation (DOT), 1200 New Jersey Avenue SE., Room W12-140, West Building Ground Floor, Washington, DC 20590-0001.
• Hand Delivery or Courier: Take comments to Docket Operations in Room W12-140 of the West Building Ground Floor at 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.
• Fax: Fax comments to Docket Operations at 202-493-2251.

Privacy: The FAA will post all comments it receives, without change, to http://www.regulations.gov,, including any personal information the commenter provides. Using the search function of the docket Web site, anyone can find and read the electronic form of all comments received into any FAA dockets, including the name of the individual sending the comment (or signing the comment for an association, business, labor union, etc.). DOT's complete Privacy Act Statement can be found in the Federal Register published on April 11, 2000 (65 FR 19477-19478), as well as at http://DocketsInfo.dot.gov.

Docket: Background documents or comments received may be read at http://www.regulations.gov at any time. Follow the online instructions for accessing the docket or Docket Operations in Room W12-140 of the West Building Ground Floor at 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT:

For technical questions concerning this action, contact Priscilla Steward or Robert Cook, Aircraft Certification Service, Production Certification Branch, AIR-220, Federal Aviation Administration, 800 Independence Avenue SW., Washington, DC 20591; telephone: [phone]; email: [e-mail] or telephone: [phone]; email: [e-mail].

For legal questions concerning this action, contact Paul Greer, AGC-210, Office of the Chief Counsel, International Law, Legislation, and Regulations Division, Federal Aviation Administration, 800 Independence Avenue SW., Washington, DC 20591; telephone: [phone]; email: [e-mail].

SUPPLEMENTARY INFORMATION:

Authority for This Rulemaking

The Department of Transportation (“the Department) has the responsibility to develop transportation policies and programs that contribute to providing fast, safe, efficient, and convenient transportation under Title 49, United States Code (49 USC), Subtitle 1, § 101. The Federal Aviation Administration (FAA or “we/us/our”) is an agency of the Department. The FAA has general authority to issue rules regarding aviation safety, including minimum standards for articles and for the design, material, construction, quality of work, and performance of aircraft, aircraft engines, and propellers under 49 U.S.C. 106(g) and 44701. We may also prescribe regulations in the interest of safety for registering and identifying an aircraft engine, propeller, or article under 49 U.S.C. 44104.

The FAA is proposing to amend its regulations governing the certification procedures for products and articles and its requirements for identification and registration marking. These changes would improve the quality standards applicable to manufacturers, which would help ensure that products and articles are produced as designed and are safe to operate. For these reasons, this proposed rule would be a reasonable and necessary exercise of our rulemaking authority and obligations.

List of Acronyms Used in This Proposed Rule

BAA—Bilateral Airworthiness Agreement

BASA—Bilateral Aviation Safety Agreement

CFR—Code of Federal Regulations

EASA—European Aviation Safety Agency

FAA—Federal Aviation Administration

IC—Interface Component

ICAO—International Civil Aviation Organization

NPRM—Notice of Proposed Rulemaking

PAH—Production Approval Holder

PC—Production Certificate

PLR—Production Limitation Record

PMA—Parts Manufacturer Approval

STC—Supplemental Type Certificate

TC—Type Certificate

TSO—Technical Standard Order

I. Overview of the Proposed Rule

In this NPRM, we are proposing changes to certification and marking requirements for products and articles. Regulations pertaining to certification requirements for products and articles are in Title 14, Code of Federal Regulations (14 CFR) part 21. Marking requirements are in part 45.

The regulations in part 21 do not require applicants for, or holders of, a production approval to identify an accountable manager. This proposal would require applicants and PAHs to identify an accountable manager. This individual would be responsible for, and have authority over, a PAH's production operations. This individual would also serve as a PAH's primary contact with the FAA. Additionally, the FAA proposes to amend part 21 to require applicants and PAHs to amend, where applicable, the documents required by §§ 21.135, 21.305 and 21.605 to reflect the appointment of an accountable manager. This proposal would adopt the requirement for an accountable manger currently contained within part 145 and harmonize part 21 with EASA regulations.

Currently, part 21 allows for an amendment to a PC holder's PLR so the PC holder can add a type-certificated product or article. The FAA proposes to amend part 21 to allow a PC holder to manufacture and install interface components (IC), under certain conditions and limitations. An IC would be defined as an article that serves as a functional interface between an aircraft and an aircraft engine, an aircraft engine and a propeller, or an aircraft and a propeller. An interface component would be designated by the holder of the type certificate (or the supplemental type certificate) who controls the approved design data for that article.

Additionally, regulations currently specify that a PAH must have procedures that ensure each supplier-furnished product or article conforms to its approved design. The regulations also require that when a nonconforming product or article is released from the supplier, the supplier must report the nonconformance to the PAH. The FAA proposes to amend part 21 to clarify that each supplier-provided product, article, or service would be required to conform to the PAH's requirements. Production approval holders would also have to establish a supplier-reporting process for products, articles, or services released from or provided by the supplier and subsequently found not to conform to their requirements.

Currently, a person may obtain an airworthiness approval for an aircraft engine, propeller, or article only from the FAA for a new or used aircraft engine, propeller, or article. Production approval holders may not issue these airworthiness approvals under current regulations. The FAA proposes to amend part 21 to allow PAHs to issue authorized release documents (using FAA Form 8130-3) for new and used aircraft engines, propellers, and articles. This will provide PAHs with privileges similar to those afforded European- and Canadian-approved manufacturers.

The regulations in part 45 require a propeller, propeller blade, or propeller hub to be marked using an approved fireproof method. The FAA proposes to amend part 45 to exclude fixed-pitch wooden propellers from the requirement that such markings be fireproof. This exclusion would allow manufacturers to mark their products in a practical manner that fully considers the inherent nature of wooden propellers.

II. Background

To date, part 21 has been amended numerous times since it was codified in 1964. Additionally, the origins of many regulations in part 21 can also be traced to the Civil Air Regulations codified in 1937.

Formerly, most manufacturers of aviation products and articles had a small, local supplier base. Production certificate holders oversaw the manufacture of replacement parts, and the international market for aviation products was relatively small. As a result, for many years the U.S. had few bilateral agreements with other countries for the export and import of aviation products, and these agreements were limited in scope.

Today, aviation products are manufactured world-wide. The number of suppliers has increased dramatically, and they manufacture a greater percentage of a given aircraft. Due to the global nature of manufacturing, forming business partnerships and agreements are common approaches to lower costs, share risks, and expand reachable markets. Manufacturers collaborate globally to reduce duplicate requirements for shared suppliers. The production of replacement parts under PMAs and the international market for aviation products have also increased dramatically. In recognition of global considerations regarding trade, commerce, and other matters, the U.S. has entered into over 30 bilateral agreements with foreign aviation authorities. These agreements are broad in scope and establish the framework for the international market.

A. Statement of the Problems

We are proposing changes to regulations governing the certification procedures for products and articles and part-marking requirements. These changes would improve the quality standards applicable to manufacturers, which would help to ensure that products and articles are produced as designed and are safe to operate. These changes would also make it easier for manufacturers to produce, obtain, and export products and articles while continuing to ensure their safety and quality.

1. Accountable Manager

Under current regulations, a PAH is not required to identify an accountable manager to serve as the primary contact with the FAA. The lack of having a primary contact identified often results in schedule delays and uncertainty for the FAA when conducting oversight activities. The FAA proposes to have PAHs identify an accountable manager who would serve as the primary contact with the FAA. Having an accountable manager would provide a single individual who would facilitate communication between the PAH and FAA.

Additionally, this best practice is currently required by part 145 for certificated repair stations and is also used within certain other segments of the industry. In order to obtain a production approval within EASA countries, a production organization is required to identify an accountable manager. This proposal continues the FAA's efforts to harmonize its regulations with standards that have been adopted by foreign authorities.

2. Interface Components

Manufacturers cannot currently manufacture and install certain articles certificated as part of the airframe onto their type-certificated engines without an exemption. Engine manufacturers have petitioned for exemptions from the FAA to produce and install these articles on their type-certificated engines. These articles and other articles that serve a functional interface between an aircraft and an aircraft engine, and also between an aircraft engine and a propeller, or an aircraft and a propeller, are known as interface components (IC).

The FAA has found that a safety benefit exists by allowing the installation of airframe components onto an engine during production of the engine. The safety benefit occurs as a result of avoiding the disassembly of portions of the engine at the airframe manufacturing facility, or at an air carrier's maintenance facility, in order to attach airframe parts to the engine. Accordingly, engine manufacturers have been granted the authority to produce and install these articles under the provisions of exemptions. The FAA recognizes the safety benefit of this procedure and is therefore proposing to codify the relief provided by these exemptions and expand that relief to address ICs that have a functional interface between aircraft engines and propellers, and aircraft and propellers.

This proposal would permit a PC holder to manufacture and install ICs listed on its production limitation record (PLR) onto its type-certificated products under specified conditions and limitations.

3. Supplier Control

Supplier control continues to be a significant issue due to the increasing use of suppliers, both globally and domestically. Additionally, PAHs are using suppliers to manufacture a greater percentage of their products and articles. Production approval holders are using suppliers as assembly providers or as integrators of products, articles, and services provided by multiple suppliers. These practices have the effect of necessitating that quality control procedures be used more extensively throughout the supply chain, thereby complicating communication and oversight.

Due to the extensive use of suppliers in all phases of the production process, this proposal would require that each supplier-provided product, article, or service conform to the PAH's requirements and not necessarily to an approved design. This proposal would also require the PAH to establish a supplier-reporting process for products, articles, or services that have been released from or provided by the supplier and subsequently found not to conform to the PAH's requirements.

4. Issuance of Authorized Release Documents for Aircraft Engines, Propellers, and Articles

Presently, only the FAA can issue an airworthiness approval (e.g., FAA Form 8130-3). Industry has requested that a PAH for an aircraft engine, propeller, or article have the privilege of issuing this document for items produced under its production approval. The FAA agrees that significant benefits can be achieved by permitting a PAH to issue an authorized release document for aircraft engines, propellers, and articles it has manufactured since the PAH is responsible for ensuring that each product and article conforms to its approved design and is in a condition for safe operation. European and Canadian manufacturers currently may issue such documents. This proposal would further harmonize our regulations with those of foreign civil aviation authorities.

5. Marking of Wooden Propellers

Under current regulations, propellers, propeller blades, and hubs must be marked using an approved fireproof method. Due to the flammability properties of a solid wooden propeller, mounting a metal tag may be the only way to provide fireproof identification that would not likely be lost or destroyed in an accident. However, attaching a metal tag can break the moisture seal of a propeller, which could increase the potential for cracking and deterioration of the wood. For this reason, the FAA proposes to exclude fixed-pitch wooden propellers from the requirement that these markings be fireproof. All other aspects of the marking requirements would remain unchanged.

B. Related Actions

The FAA has proposed revisions to Advisory Circulars (AC) 21-43, Production Under 14 CFR Part 21, Subparts F, G, K, and O; AC 21-44, Issuance of Export Airworthiness Approvals Under 14 CFR Part 21 Subpart L; and AC 45-2, Identification and Registration Marking, to include the provisions of this proposal. Copies of these revised ACs are included in the docket.

III. Discussion of the Proposal

A. Accountable Manager

As noted, the FAA determined in a previous rulemaking, “Repair Stations” (66 FR 41088, August 6, 2001), that it was necessary for a repair station to have one individual, an accountable manager, who is responsible for ensuring repair station operations are conducted in accordance with part 145. Similarly, under this proposal, the FAA would require each applicant for, or holder of, a PC, PMA, or TSO authorization to identify an accountable manager.

In conducting our oversight activities, we have experienced delays and uncertainty by not knowing who at the PAH's organization has the authority to represent the PAH. There have been cases where persons have represented themselves to have authority to act on behalf of the PAH when, in fact, they did not. Such cases have occurred, for example, when a person has submitted a response to a letter of investigation, and that person did not have authority from the PAH to provide that response. Identification of an accountable manager would eliminate the problems presented by such a situation.

The proposal would require the accountable manager to confirm that the procedures described in the quality manual are in place and meet the requirements of the applicable regulations. Evidence of this confirmation can be shown by signing the quality manual before submitting it to the FAA. The FAA would not mandate that an individual in a specific position be identified as the accountable manager. However, the organization would have to identify a single point of contact who is knowledgeable of, and accountable for, maintaining the organization's FAA-approved production operations. This requirement is not intended to force the PAH to hire a new person to fill this position within its organization, but rather to identify a person to serve as the accountable manager.

As also clarified in the 2001 “Repair Stations” final rule, it is not the FAA's intent to impose personal liability on the accountable manager; that liability will remain with the PAH. The FAA notes that the term “accountable manager” is consistent with EASA terminology and would continue our harmonization efforts with foreign civil aviation authorities. The applicant or PAH would identify the accountable manager by providing that person's name and contact information to the FAA. Should a new accountable manager be identified by the PAH, the PAH would have to amend the document required by §§ 21.135, 21.305, and 21.605, as appropriate, to reflect this change, and notify the FAA of this amendment, in accordance with §§ 21.146(a), 21.316(a), or 21.616(a).

The FAA understands the need for various business models and organizational structures. Currently, §§ 21.135(a), 21.305(a), and 21.605(a) require a PAH to provide the FAA with a document describing assigned responsibilities and delegated authority, and the functional relationship of those responsible for quality to management and other organizational components. This proposal would also revise the language in the second sentence of the referenced sections from “At a minimum” to “In addition.” This change is being made to avoid any misinterpretation as to what the document must include, specifically a description of how the organization will ensure compliance with the provisions of the subparts referenced in §§ 21.135, 21.305, and 21.605.

B. Interface Components

Engine manufacturers have petitioned for exemptions from the FAA to manufacture and install ICs on their type-certificated engines. In granting exemptions to General Electric (Exemption No. 10079) and Pratt & Whitney (Exemption No. 10531) to manufacture and install certain articles certificated as part of an airframe onto their engines, the FAA found that a safety benefit exists for the installation of airframe components onto an engine during production of the engine. Copies of these exemptions are included in the docket.

Aircraft manufacturers and air carriers frequently seek delivery of engines as a “complete propulsion system,” consisting of an engine and aircraft kits/parts associated with an aircraft from the engine manufacturer. Delivering a complete propulsion system makes engine installation safer and more efficient. This pre-installation delivery prevents redundant disassembly, torque breaks, handling damage, and additional retesting after the engine ships from the manufacturing facility.

Under current regulations, a PC holder is allowed to manufacture a product if it holds for the product a current TC, rights to the benefits of a TC under a licensing agreement, or an STC as specified in § 21.132. A manufacturer of a product currently cannot manufacture and install an IC on that type-certificated product when the IC is not part of that product's type design. This proposal would define an IC as an article that serves a functional interface between an aircraft and an aircraft engine, and also between an aircraft engine and a propeller, or an aircraft and a propeller. Examples of ICs consist of articles such as engine mounts; various electrical, hydraulic, and drain brackets; and environmental control system and anti-ice ducts, along with their associated hardware.

This proposal would also permit a PC holder to manufacture and install ICs onto its products. Although this proposal would revise § 21.147 to allow a PC holder for a product to receive an amendment to its production limitation record (PLR) to permit the manufacture and installation of ICs, the FAA notes that the holder of design data identifying the IC installed on the PC holder's product under the privileges of § 21.147(c) retains all of the continuing airworthiness responsibilities for the IC. If the PC holder is not the owner of the IC design or installation data, the PC holder has no authority to amend the design or installation data of the IC. All changes to the design or installation data would be made by the design approval holder. The PC holder would be responsible for all issues related to quality, manufacturing, and installation of the IC by the PC holder.

A PLR is issued as part of a PC. Current § 21.142 states that a PLR lists the TC number and the model of every product that the PC holder is authorized to manufacture. The PLR does not provide for the listing of ICs. This proposal would therefore revise § 21.142 to specify that the PLR would also identify every IC that the PC holder is authorized to manufacture and install.

The TC holder would work with the PC holder to identify ICs. Once identified, the PC holder would apply for an amendment of its PLR.

The FAA would develop guidance for PC holders and TC holders to comply with any conditions and limitations necessary for the individual PC holder in order to exercise this privilege. Section 21.147(c) would not place a requirement that all ICs manufactured by a PC holder be installed prior to shipping. Having these items listed on the PLR would allow a PC holder to both ship the ICs loose with its product or individually as spares.

The intent of this proposal is to enhance safety and facilitate global manufacturing. With this proposed rule change, product customers may no longer need to partially disassemble a supplied product, thereby decreasing potential installation errors. The FAA acknowledges that the benefits of streamlining manufacturing and eliminating duplicative processes may reduce costs.

C. Supplier Control

The aviation business model has significantly evolved in recent decades. Production approval holders are increasingly using suppliers to supplement their activities. Many PAHs no longer manufacture complete products or articles, but rather assemble aircraft systems and components produced by their suppliers into a complete product or article.

As the aviation business model has changed, first-tier suppliers have functioned more as integrators of major sub-assemblies (such as wings, nose sections, and complete fuselage sections) than as manufactures of smaller assemblies or parts (such as altimeters, brake assemblies, and build-to-print parts). Accordingly, the manufacture of articles and assemblies has been shifted further down the supply chain.

Another result of the change in the aviation business model is the increased use of suppliers located in countries outside the U.S. The demands of customers and the economy have caused production to move outside the U.S. to accommodate agreements and utilize low-cost labor. The FAA seeks to clarify its regulations to reflect the modern manufacturing environment and to reinforce that it is a PAH's responsibility to ensure that its requirements are communicated throughout its supply chain.

The term `supplier' is mentioned throughout 14 CFR part 21, and the term is commonly used within industry. However, there is no definition of supplier in the current regulations. This proposal would define the term supplier in proposed § 21.1(b) as a person that provides a product, article, or service at any tier of the supply chain that is used or consumed in the design or manufacture of, or installed on, the product or article. Industry has requested that the FAA provide a definition of the term `supplier' to clarify those entities the FAA recognizes as suppliers. Defining supplier should provide PAHs with a clear understanding of the term and, therefore, better ensure regulatory compliance.

Currently, § 21.137(c)(1) requires a PAH to have procedures that ensure each supplier-furnished product or article conforms to its approved design. This proposal would specify that a supplier must comply with a PAH's requirements. The FAA recognizes that many supplier-furnished products do not, in fact, conform to an approved design when provided to a PAH, and that a supplier may also provide a PAH with a service. This proposal would allow a PAH to accept products, articles, or services from its suppliers that do not meet the approved design, yet conform to the PAH's requirements.

Current industry practice is for a PAH to submit a purchase order to a supplier with the PAH's specific requirements outlined for manufacturing a product or article, or for providing a service. In many cases, a PAH does not require a supplier to provide a product, article, or service that conforms to the approved design requirements for the finished product or article. For example, the design data for a skin section of an aircraft may show the final rivet hole dimension, but a PAH will require a supplier to provide pilot holes of a smaller diameter. The final diameter of the holes will be achieved during assembly when the skin is joined to the aircraft.

Another example is when a PAH contracts for a machined part that requires additional processing that the supplier is not capable of performing, such as heat treating or plating. In such a case, a PAH's contract would reflect that it wants the article to conform to the design data without the additional processing. A PAH would then need to contract with another supplier for these processes.

In addition, this proposal would require a PAH to establish a supplier-reporting process for products, articles, or services that have been released from a supplier and subsequently found not to conform (hereafter referred to as a quality escape) to the PAH's requirements. Currently, § 21.137(c)(2) requires each supplier, at any tier, to report to the PAH if there has been a quality escape. Except for first-tier suppliers who report directly to the PAH, this section does not require suppliers within the supply chain to report to the next higher tier if there has been a quality escape. This proposal would require the PAH to define and establish, as part of its quality system, a process for supplier-reporting of quality escapes. This process should ensure that those individuals who need to know when a quality escape has occurred be informed in a timely manner.

The FAA determined it was necessary to clarify § 21.137(c)(2) because it currently requires each supplier to report to the PAH if a product or article has been released from that supplier and subsequently found not to conform to the applicable design data. The FAA recognizes that such a requirement can impose a significant burden on PAHs. Although the FAA has proposed to include a definition of the term `supplier' that would include all suppliers within the supply chain, the proposal would provide PAHs with the ability to develop procedures to identify those suppliers that would be required to report quality escapes and to whom they must report. Such procedures would not necessarily require all suppliers within the supply chain to make such reports to the PAH. The proposal would permit PAHs to establish a means of supplier reporting that is more appropriate to its particular production process. These procedures would be required to be approved as part of the PAH's quality system.

To comply with proposed § 21.137(c)(2), the FAA expects the PAH's quality system to specify which suppliers must report, and to whom, when, and how those reports must be provided. In some cases, the PAH would want the supplier of certain products, articles, or services to report a quality escape to both its immediate customer and directly to the PAH. This reporting could continue up through the supply chain to the tier where the quality escape has been resolved. A PAH could communicate its quality escape reporting requirement as a flow-through requirement to its first-tier suppliers and subsequently through the supply chain on a purchase order (or equivalent) document.

D. Authorized Release Documents for Aircraft Engines, Propellers, and Articles

An airworthiness approval is a document issued by the FAA for an aircraft, aircraft engine, propeller, or article which certifies that the aircraft, aircraft engine, propeller, or article conforms to its approved design and is in a condition for safe operation. This proposal would revise the definition of airworthiness approval in § 21.1(b) to indicate that an airworthiness approval document may also be issued for an aircraft, aircraft engine, propeller, or article when those products or articles may not necessarily conform to their approved designs. Accordingly, the FAA has added the phrase “unless otherwise specified” because under part 21, subpart L, for example, export airworthiness approvals can be issued for aircraft, aircraft engines, propellers, and articles that do not conform to their approved designs when such discrepancies are made known to, and accepted by, the importing country or jurisdiction.

The FAA believes a PAH should be permitted to issue authorized release documents since the PAH is responsible for ensuring the airworthiness of each product and article it manufactures. This proposal would amend § 21.137 by adding a new paragraph (o) to allow PAHs to issue authorized release documents for new aircraft engines, propellers, and articles; and for used aircraft engines, propellers, and articles when rebuilt or altered in accordance with § 43.3(j).

Production approval holders that intend to issue these documents must include procedures in their quality systems that provide for the selection, appointment, training, recordation, removal, and management of the individuals authorized by the PAH to issue authorized release documents. The intent of this proposed requirement is to ensure that only qualified personnel issue these documents. An evaluation of these individuals' qualifications would need to include an assessment of their knowledge, background, experience, and training. Qualifications should be commensurate with the complexity and type of product or article for which the PAH issues the authorized release documents. When an authorized release document is being used for the purpose of export, the production approval holder would be required to comply with the procedures applicable to the export of new and used aircraft engines, propellers, and articles specified in § 21.331 and the responsibilities of exporters specified in § 21.335 of this part.

Including procedures in a PAH's quality system is a conditional requirement that only applies to a PAH that wants to issue an authorized release document. Production approval holders not issuing these documents can continue to obtain approvals from the FAA. The FAA plans to place guidance regarding the qualifications of the individuals allowed to issue an authorized release document in guidance material if this proposal is adopted. This proposal is modeled after the European Commission Regulation (EU) No. 748/2012, Annex I, Part 21, Certification of Aircraft and Related Products, Parts, and Appliances, and of Design and Production Organizations.

The intent of this proposal is to recognize a practice permitted by other authorities and give PAHs in the U.S. the same flexibility and responsiveness available to their European and Canadian manufacturing counterparts who already issue authorized release documents. The proposed changes would harmonize the CFR with regulations of foreign civil aviation authorities and facilitate the global movement and acceptance of aircraft engines, propellers, and articles.

All airworthiness certificates would continue to be issued by the FAA. Production approval holders would not be permitted to issue airworthiness certificates under the provisions of this proposal.

E. Marking of Wooden Propellers

Currently, § 45.11(c) requires each person who produces a propeller, propeller blade, or propeller hub under a TC or PC to mark each product or part using an approved fireproof method. The regulation does not take into account the inherent difficulty of marking a wooden propeller with a fireproof method. Under this proposal, § 45.11(c) would continue to require a fixed-pitch wooden propeller to be marked; however, the marking would no longer be required to be fireproof. This relief is not necessary for variable-pitch wooden propellers, as they are constructed with a metal hub which can be marked with a fireproof method.

In 2000, 2003, and 2008, the FAA granted Exemptions Nos. 7559, 8394, and 9800 (and an extension with an amendment to Exemption No. 9800 in 2013) to Sensenich Wood Propeller Company, Inc. (“Sensenich”). These exemptions permitted Sensenich to place the required identification marking directly on the hub of a wooden propeller instead of attaching a metal tag with that information. (Copies of these exemptions are included in the docket.) In its petition for exemption, Sensenich reported that in accidents involving damage to wooden propellers, the hub remains intact, thus preserving the stamped identification. The FAA also noted that because of the flammability properties of a solid wooden propeller, mounting a metal tag may be the only way to provide a fireproof identification that will not likely be lost or destroyed in an accident.

The FAA further noted the possible safety risks inherent in attaching a metal tag. Attaching a metal tag could: (1) Affect the environmental resistance of a wooden propeller because the screws would break the moisture seal, which would increase the potential for cracking and deterioration of the wooden propeller; (2) increase the difficulty in attaining propeller balance; and (3) become ineffective because the metal tag could become loose and fall off, leaving the propeller with no identification. Therefore, in granting the exemption, the FAA found that stamping the hub of the propeller with the identification marks would achieve a level of safety equivalent to that of the rule. Stamping has been the industry's standard for marking wooden propellers. Additionally, the FAA recognizes that engravings and etchings are acceptable methods for marking identification.

IV. Regulatory Notices and Analyses

A. Regulatory Evaluation

Changes to Federal regulations must undergo several economic analyses. First, Executive Order 12866 and Executive Order 13563 direct that each Federal agency shall propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs. Second, the Regulatory Flexibility Act of 1980 (Public Law 96-354) requires agencies to analyze the economic impact of regulatory changes on small entities. Third, the Trade Agreements Act (Pub. L. 96-39) prohibits agencies from setting standards that create unnecessary obstacles to the foreign commerce of the United States. In developing U.S. standards, the Trade Act requires agencies to consider international standards and, where appropriate, that they be the basis of U.S. standards. Fourth, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more annually (adjusted for inflation with base year of 1995). This portion of the preamble summarizes the FAA's analysis of the economic impacts of this proposed rule.

Department of Transportation Order DOT 2100.5 prescribes policies and procedures for simplification, analysis, and review of regulations. If the expected cost impact is so minimal that a proposed or final rule does not warrant a full evaluation, this order permits that a statement to that effect and the basis for it be included in the preamble if a full regulatory evaluation of the costs and benefits is not prepared. Such a determination has been made for this proposed rule. The reasoning for this determination follows.

Discussion of Costs and Benefits

Overview of Costs and Benefits of This Proposed Rule

Provision	Costs/benefits
Require Identification of Accountable Manager	Minimal costs—requires identification of an existing manager who would be responsible for, and have authority over, a PAH's operations, and who would serve as a PAH's primary contact with the FAA.
Allow PC Holders to Manufacture and Install Interface Components	Codifying the practice, currently allowed by exemption, would reduce regulatory compliance costs.
Clarify Supplier Control Requirements	No additional cost. Proposal clarifies existing requirements that PAHs are responsible for conformity throughout their supply chains and gives PAHs flexibility in establishing a supplier-reporting process for nonconforming releases.
Allow PAHs to Issue Authorized Release Documents for Aircraft Engines, Propellers and Articles	Voluntary, so inherently cost-beneficial.
Exclude Fixed-Pitch Wooden Propellers from Fireproof Marking Requirements	The FAA found the exemption provides an equivalent level of safety. Codifying the practice currently allowed by exemption would reduce regulatory compliance costs.

Who is potentially affected by this proposed rule?

Production approval holders (PAHs) and TC (type certificate) holders are potentially affected.

Costs and Benefits of This Proposed Rule

1. Require Identification of an Accountable Manager

Under this proposal, the FAA would require each applicant for, or holder of, a Production Certificate (PC), PMA (Parts Manufacturer Approval), or TSO (Technical Standard Order) authorization to identify an accountable manager, who would be responsible for, and have authority over, a PAH's operations, and who would serve as a PAH's primary contact with the FAA. This proposal is not intended to require the PAH to create a new position within its organization and would not mandate that an individual in a specific position be identified as the accountable manager. Consequently, the costs, if any, associated with this requirement are minimal.

2. Allow Production Certificate Holders To Manufacture and Install Interface Components

PC holders currently cannot install interface components (ICs) on their type-certificated products without an exemption. Current regulations governing the production limitation record and the amendment of PCs restrict the PC holder to the manufacture of products only (aircraft, aircraft engines, or propellers) and do not authorize installation.^[1] The FAA has granted exemptions to engine manufacturers, allowing them to manufacture and install airframe components that interface between the engine and the airframe provided they own or are licensed to use the IC type design and installation data. In granting these exemptions, the FAA found that allowing engine manufacturers to produce and install ICs improved safety and efficiency by eliminating disassembly, reassembly and retesting, as well as related scoring of fatigue sensitive parts; damage to critical parts; and air/fuel/oil leaks.^[2]

This provision would codify the practice, currently allowed by exemption, of allowing PC holders to manufacture and install ICs, and would apply to any articles designated by the TC holder that interface between products, therefore including the interface between propeller and aircraft engine and between propeller and aircraft, as well as between aircraft engine and aircraft. Codifying the practice of allowing PC holders to manufacture and install ICs implies no change in safety or efficiency benefits already implied by the practice. Codifying the practice, however, would reduce regulatory costs since paperwork requirements involved in periodic application for and granting of exemptions would be eliminated.

3. Supplier Control

With this proposal the FAA intends to clarify existing requirements that the PAH is responsible for (1) conformity throughout the supply chain and (2) establishing a supplier reporting process for nonconforming releases. As there is no definition of supplier in the current regulations, the proposed rule would define supplier as “a person that provides a product, article, or service at any tier in the supply chain that is used or consumed in the design or manufacture of, or installed on, a product or article.”

The proposed rule would change the language to § 21.137(c) as shown in the following table:

Current language	Proposed language
Supplier Control. Procedures that—	Supplier Control. Procedures that—
(1) Ensure that each supplier-furnished product or article conforms to its approved design; and	(1) Ensure that each supplier-provided product, article, or service conforms to the production approval holder's requirements; and
(2) Require each supplier to report to the production approval holder if a product or article has been released from that supplier and subsequently found not to conform to the applicable design data.	(2) Establish a supplier-reporting process for products, articles, or services that have been released from the supplier and subsequently found not to conform to the production approval holder's requirements.

As provision (1) just clarifies the FAA's intent, while provision (2) gives the PAHs greater flexibility, any additional costs would be minimal.

4. Allow Production Approval Holders To Issue Authorized Release Documents for Aircraft Engines, Propellers, and Articles

This proposal would allow, but not require, PAHs to issue authorized release documents using FAA Form 8130-3, “Authorized Release Certificate,” for aircraft engines, propellers, and articles for which the PAH has a production approval. FAA Form 8130-3 is the preferred method for issuing an export airworthiness approval documenting that an aircraft engine, propeller, or article conforms to its approved design and is in a condition for safe operation. PAHs choosing not to issue these authorized release documents would continue to obtain approvals from the FAA. For aircraft, an export airworthiness approval would continue to be issued only by the FAA, using Form 8130-4, “Export Certificate of Airworthiness.”

Although export airworthiness approvals are required only when requested by a foreign civil aviation authority, they have become increasingly valued in the aviation industry. Several U.S. manufacturers have requested the privilege of issuing authorized release documents, which is already enjoyed by their European and Canadian counterparts. As issuance of authorized release documents is voluntary, this provision would be inherently cost beneficial.

5. Marking of Fixed-Pitch Wooden Propellers

As noted in the preamble above, the FAA granted an exemption to Sensenich Wood Propeller Company from the regulations requiring that a propeller, propeller blade, or propeller hub be marked using an approved fireproof method. In granting the exemption, the FAA found that stamping the hub of the propeller with the identification marks would achieve a level of safety equivalent to the rule. The FAA maintains that finding in this proposal and, in any case, codifying the practice, currently allowed by exemption, implies no change in safety benefits.^[3] Codifying the practice, however, would reduce regulatory compliance costs since the costs of fireproof stamping and the costs of paperwork requirements involved in periodic application for and granting of the exemption would be eliminated.

B. Regulatory Flexibility Determination

The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) (RFA) establishes “as a principle of regulatory issuance that agencies shall endeavor, consistent with the objectives of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the businesses, organizations, and governmental jurisdictions subject to regulation.” To achieve this principle, agencies are required to solicit and consider flexible regulatory proposals and to explain the rationale for their actions to assure that such proposals are given serious consideration.” The RFA covers a wide-range of small entities, including small businesses, not-for-profit organizations, and small governmental jurisdictions.

Agencies must perform a review to determine whether a rule will have a significant economic impact on a substantial number of small entities. If the agency determines that it will, the agency must prepare a regulatory flexibility analysis as described in the RFA.

However, if an agency determines that a rule is not expected to have a significant economic impact on a substantial number of small entities, section 605(b) of the RFA provides that the head of the agency may so certify and a regulatory flexibility analysis is not required. The certification must include a statement providing the factual basis for this determination, and the reasoning should be clear.

The provisions of this proposed rule (1) are minimal cost, (2) would impose no additional costs because the provisions would clarify only or are current practice, or (3) are voluntary and therefore inherently cost-beneficial.

If an agency determines that a rulemaking will not result in a significant economic impact on a substantial number of small entities, the head of the agency may so certify under section 605(b) of the RFA. Therefore, as provided in section 605(b), the head of the FAA certifies that this rulemaking will not result in a significant economic impact on a substantial number of small entities. The FAA solicits comments regarding this determination. Specifically, the FAA requests comments on whether the proposed rule creates any specific compliance costs unique to small entities. Please provide detailed economic analysis to support any cost claims. The FAA also invites comments regarding other small-entity concerns with respect to the proposed rule.

C. International Trade Impact Assessment

The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal agencies from establishing standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. Pursuant to these Acts, the establishment of standards is not considered an unnecessary obstacle to the foreign commerce of the United States, so long as the standard has a legitimate domestic objective, such as the protection of safety, and does not operate in a manner that excludes imports that meet this objective. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards.

The FAA has assessed the potential effect of this proposed rule and determined that the rule's provision allowing PAHs to issue authorized release documents would be in accord with the Trade Agreements Act as this provision uses European standards as the basis for United States regulation. The remaining provisions have a minimal domestic impact only and therefore no effect on international trade.

D. Unfunded Mandates Assessment

Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in an expenditure of $100 million or more (in 1995 dollars) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector; such a mandate is deemed to be a “significant regulatory action.” The FAA currently uses an inflation-adjusted value of $143.1 million in lieu of $100 million. This proposed rule does not contain such a mandate; therefore, the requirements of Title II of the Act do not apply.

E. 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. The FAA has determined that there would be no new requirement for information collection associated with this proposed rule.

F. International Compatibility and Cooperation

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

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 would have no effect on international regulatory cooperation.

G. Environmental Analysis

FAA Order 1050.1E identifies FAA actions that are categorically excluded from preparation of an environmental assessment or environmental impact statement under the National Environmental Policy Act in the absence of extraordinary circumstances. The FAA has determined this rulemaking action qualifies for the categorical exclusion identified in paragraph 312f and involves no extraordinary circumstances.

V. Executive Order Determinations

A. Executive Order 12866

See the “Regulatory Evaluation” discussion in the “Regulatory Notices and Analyses” section elsewhere in this preamble.

B. Executive Order 13132, Federalism

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

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

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

VI. Additional Information

A. Comments Invited

The FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views. The agency also invites comments relating to the economic, environmental, energy, or federalism impacts that might result from adopting the proposals in this document. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should send only one copy of written comments, or if comments are filed electronically, commenters should submit only one time.

The FAA will file in the docket all comments it receives, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, the FAA will consider all comments it receives on or before the closing date for comments. The FAA will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. The agency may change this proposal in light of the comments it receives.

Proprietary or Confidential Business Information: Commenters should not file proprietary or confidential business information in the docket. Such information must be sent or delivered directly to the person identified in the FOR FURTHER INFORMATION CONTACT section of this document, and marked as proprietary or confidential. If submitting information on a disk or CD ROM, mark the outside of the disk or CD ROM, and identify electronically within the disk or CD ROM the specific information that is proprietary or confidential.

Under 14 CFR 11.35(b), when the FAA is aware of proprietary information filed with a comment, the agency does not place it in the docket. It is held in a separate file to which the public does not have access, and the FAA places a note in the docket that it has received it. If the FAA receives a request to examine or copy this information, it treats it as any other request under the Freedom of Information Act (5 U.S.C. 552). The FAA processes such a request under Department of Transportation procedures found in 49 CFR Part 7.

B. Availability of Rulemaking Documents

An electronic copy of rulemaking documents may be obtained from the Internet by—

1. Searching the Federal eRulemaking Portal (http://www.regulations.gov);

2. Visiting the FAA's Regulations and Policies Web page at http://www.faa.gov/​regulations_​policies or

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

Copies may also be obtained by sending a request to the Federal Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence Avenue SW., Washington, DC 20591, or by calling [phone]. Commenters must identify the docket or notice number of this rulemaking.

All documents the FAA considered in developing this proposed rule, including economic analyses and technical reports, may be accessed from the Internet through the Federal eRulemaking Portal referenced in item (1) above.

List of Subjects

14 CFR Part 21

• Amendment of production certificates
• Issuance of export airworthiness approvals for aircraft engines, propellers, and articles
• Organization and Quality system

14 CFR Part 45

• Marking of products

The Proposed Amendment

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

PART 21—CERTIFICATION PROCEDURES FOR PRODUCTS AND PARTS

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

Authority: 42 U.S.C. 7572; 49 U.S.C. 106(g), 40105, 40113, 44701-44702, 44704, 44707, 44709, 44711, 44713, 44715, 45303.

2. Amend § 21.1 by revising paragraph (b)(1), redesignating paragraphs (b)(5) through (8) as (b)(6) through (9), and adding new paragraph (b)(5) and paragraph (b)(10) to read as follows:

§ 21.1

Applicability and definitions.

* * * * *

(b) * * *

(1) Airworthiness approval means a document issued by the FAA for an aircraft, aircraft engine, propeller, or article which certifies that the aircraft, aircraft engine, propeller, or article conforms to its approved design, unless otherwise specified, and is in a condition for safe operation.

* * * * *

(5) Interface component means an article that serves as a functional interface between an aircraft and an aircraft engine, an aircraft engine and a propeller, or an aircraft and a propeller. An interface component is designated by the holder of the type certificate or the supplemental type certificate who controls the approved design data for that article.

* * * * *

(10) Supplier means a person that provides a product, article, or service at any tier in the supply chain that is used or consumed in the design or manufacture of, or installed on a product or article.

3. Revise § 21.135 to read as follows:

§ 21.135

Organization.

(a) Each applicant for or holder of a production certificate must provide the FAA with a document describing how its organization will ensure compliance with the provisions of this subpart. In addition, the document must identify an accountable manager and describe assigned responsibilities, delegated authorities, and the functional relationship of those responsible for quality to management and other organizational components.

(b) The accountable manager specified in paragraph (a) of this section is responsible for, and has the authority over, all production operations that are conducted under this part. The production approval holder must ensure that the accountable manager confirms the procedures described in the quality manual are in place and the requirements of the applicable regulations are met. The accountable manager serves as the primary contact with the FAA.

4. Amend § 21.137, by revising paragraphs (c)(1) and (2) and adding paragraph (o) to read as follows:

§ 21.137

Quality system.

* * * * *

(c) * * *

(1) Ensure that each supplier-provided product, article, or service conforms to the production approval holder's requirements; and

(2) Establish a supplier-reporting process for products, articles, or services that have been released from or provided by the supplier and subsequently found not to conform to the production approval holder's requirements.

* * * * *

(o) Issuing authorized release documents. Procedures for issuing authorized release documents for aircraft engines, propellers, and articles if the production approval holder intends to issue those documents. These procedures must provide for the selection, appointment, training, management, and removal of individuals authorized by the production approval holder to issue authorized release documents. These documents may be issued for new aircraft engines, propellers, and articles; and for used aircraft engines, propellers, and articles when rebuilt, or altered, in accordance with § 43.3(j) of this chapter. When an authorized release document is being used for the purpose of export, the production approval holder must comply with the procedures applicable to the export of new and used aircraft engines, propellers, and articles specified in § 21.331 and the responsibilities of exporters specified in § 21.335 of this part.

5. Revise § 21.142 to read as follows:

§ 21.142

Production limitation record.

The FAA issues a production limitation record as part of a production certificate. The record lists the type certificate number and model of every product that the production certificate holder is authorized to manufacture, and identifies every interface component that the production certificate holder is authorized to manufacture and install.

6. Revise § 21.147 to read as follows:

§ 21.147

Amendment of production certificates.

(a) The holder of a production certificate must apply for an amendment to a production certificate in a form and manner prescribed by the FAA.

(b) The applicant for an amendment to a production certificate to add a type certificate or model, or both, must comply with the applicable requirements of §§ 21.137, 21.138, and 21.150.

(c) The applicant for an amendment to a production certificate may have its production limitation record amended to allow the manufacture and installation of an interface component, provided—

(1) The design and installation data for the interface component is owned by, or licensed to, the applicant and made available to the FAA upon request;

(2) The interface component is manufactured by the applicant;

(3) The applicant's product conforms to its approved type design and the interface component conforms to its approved type design data;

(4) The assembled product with the installed interface component is in a condition for safe operation; and

(5) The applicant complies with any other conditions and limitations the FAA considers necessary.

7. Revise § 21.305 to read as follows:

§ 21.305

Organization.

(a) Each applicant for or holder of a PMA must provide the FAA with a document describing how its organization will ensure compliance with the provisions of this subpart. In addition, the document must identify an accountable manager and describe assigned responsibilities, delegated authorities, and the functional relationship of those responsible for quality to management and other organizational components.

(b) The accountable manager specified in paragraph (a) of this section is responsible for, and has the authority over, all production operations that are conducted under this part. The production approval holder must ensure that the accountable manager confirms the procedures described in the quality manual are in place and the requirements of the applicable regulations are met. The accountable manager serves as the primary contact with the FAA.

8. Revise § 21.605 to read as follows:

§ 21.605

Organization.

(a) Each applicant for or holder of a TSO authorization must provide the FAA with a document describing how its organization will ensure compliance with the provisions of this subpart. In addition, the document must identify an accountable manager and describe assigned responsibilities, delegated authorities, and the functional relationship of those responsible for quality to management and other organizational components.

(b) The accountable manager specified in paragraph (a) of this section is responsible for, and has the authority over, all production operations that are conducted under this part. The production approval holder must ensure that the accountable manager confirms the procedures described in the quality manual are in place and the requirements of the applicable regulations are met. The accountable manager serves as the primary contact with the FAA.

PART 45—IDENTIFICATION AND REGISTRATION MARKING

9. The authority citation for part 45 continues to read as follows:

Authority: 49 U.S.C. 106(g), 40103, 40113-40114, 44101-44105, 44107-44111, 44504, 44701, 44708-44709, 44711-44713, 44725, 45302-45303, 46104, 46304, 46306, 47122.

10. Amend § 45.11 by revising paragraph (c) introductory text to read as follows:

§ 45.11

Marking of products.

* * * * *

(c) Propellers and propeller blades and hubs. Each person who produces a propeller, propeller blade, or propeller hub under a type certificate or production certificate must mark each product or part. Except for a fixed-pitch wooden propeller, the marking must be accomplished using an approved fireproof method. The marking must—

* * * * *

Issued under authority provided by 49 U.S.C. 106(f), 44701(a), and 44703 in Washington, DC, on January 23, 2014.

Frank P. Paskiewicz,

Deputy Director, Aircraft Certification Service.

Footnotes

1.  These regulations were § 21.151 (production limitation record) and § 21.153 (amendments of production certificates) before the 2010 changes in the part 21 rule and § 21.142 and § 21.147 in 2012, after the 2010 changes.

2.  The production and installation of ICs by engine manufacturers also increase efficiency by allowing delivery of quick-change replacement engines to end users such as air carriers and charter operators. Some piece parts (or kits), such as the engine buildup unit (EBU), rather than being installed by the PC holder may be shipped separately to an aircraft manufacturer for the purpose of just-in-time manufacturing operations, or to an airline that may want kits on hand for routine maintenance operations or to replace hardware damaged during operations.

3.  Since variable-pitch wooden propellers have metal hubs, a metal tag is not necessary.