[Federal Register Volume 80, Number 42 (Wednesday, March 4, 2015)]
[Rules and Regulations]
[Pages 11537-11547]
[FR Doc No: 2015-04179]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Parts 121 and 135

[Docket No.: FAA-2011-1136; Amdt. Nos. 121-371 and 135-132]
RIN 2120-AJ33

Air Carrier Contract Maintenance Requirements

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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

DATES: Effective May 4, 2015 except for Sec. Sec.  121.368 and 135.426
which contain information collection requirements that have not been
approved by the Office of Management and Budget (OMB). The FAA will
publish a document in the Federal Register announcing the effective
date.

ADDRESSES: For information on where to obtain copies of rulemaking
documents and other information related to this final rule, see ``How
To Obtain Additional Information'' in the SUPPLEMENTARY INFORMATION
section of this document.

FOR FURTHER INFORMATION CONTACT: For technical questions concerning
this action, contact Wende T. DiMuro, AFS-330, Federal Aviation
Administration, 800 Independence Avenue SW., Washington, DC 20591;
telephone<PHONE_NUMBER>; email<EMAIL_ADDRESS>    For legal questions concerning this action, contact Edmund Averman,
AGC-200, Federal Aviation Administration, 800 Independence Avenue SW.,
Washington, DC 20591; telephone<PHONE_NUMBER>, email
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Authority for This Rulemaking

    The FAA's authority to issue rules on aviation safety is found in
Title 49 of the United States Code. Subtitle I, Section 106 describes
the authority of the FAA Administrator. Subtitle VII, Aviation
Programs, describes in more detail the scope of the agency's authority.
    This rulemaking is promulgated under the authority described in
Subtitle VII, Part A, Subpart III, Section 447, Section 44701(a)(2)(A)
and (B) and (5). Under that section, the FAA is charged with
prescribing regulations and minimum standards in the interest of safety
for inspecting, servicing, and overhauling aircraft, aircraft engines,
propellers, and appliances, and equipment and facilities for, and the
timing of and manner of, the inspecting, servicing and overhauling the
FAA finds necessary for safety and commerce. This regulation is within
the scope of that authority.
    In addition, Public Law 112-95 (February 14, 2012), the ``FAA
Modernization and Reform Act of 2012'' (the Act), in section 319
(Maintenance providers), requires the FAA to issue regulations
``requiring that covered work on an aircraft used to provide air
transportation under part 121 . . ., be performed by persons in
accordance with subsection (b).'' Subsection (b), in addition to
listing persons authorized under existing regulations, referenced
additional terms and conditions in subsection (c) that would apply to
persons who provide contract maintenance workers, services, or
maintenance functions to a part 121 air carrier for covered work. The
Act mandates that the contracting part 121 air carrier be directly in
charge of covered work, as defined by the Act, being performed for the
carrier under contract, and that the work be done under the supervision
and control of the air carrier. These statutory requirements are
addressed in this rule.

I. Overview of Final Rule

    The FAA is amending Title 14, Code of Federal Regulations (14 CFR)
Sec. Sec.  121.368, 121.369, 135.426, and 135.427. These amendments
apply to certificate holders who conduct domestic, flag, or
supplemental operations under part 121, and to certificate holders who
conduct commuter operations or on-demand operations with aircraft type
certificated for a passenger seating configuration, excluding any pilot
seat, of ten seats or more \1\ under part 135, if the carriers contract
any of their maintenance, preventive maintenance, or alteration work to
an outside source.\2\ As required by the Act, this final rule addresses
the performance of ``covered work.'' It codifies the statutory
definition of the term, and includes requirements for the performance
of that work, to include that the certificate holder must be directly
in charge of it; the covered work must be carried out in accordance
with

the certificate holder's manual; and that work must be carried out
under the supervision and control of the certificate holder.
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    \1\ For brevity throughout this preamble, we will refer to these
aircraft as ``10 or more seats'' aircraft.
    \2\ For brevity throughout this preamble, we will refer to all
of these classes of certificate holders as ``air carriers.''
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    While the Act addresses only contracted work on aircraft operated
by part 121 certificate holders, the FAA is also applying the same
requirements to part 135 certificate holders who operate the larger
aircraft, those with 10 or more seats. As stated elsewhere in this
preamble, this rulemaking began before passage of the Act in 2012, and
the FAA had proposed amendments to both parts 121 and 135. After the
Act's passage, the FAA accommodated the new requirements. In addition
to including the requirements mandated by the Act, this final rule
requires that each certificate holder who contracts for such work must
first have developed policies, procedures, methods, and instructions
for the accomplishment of that work, and that if they are followed, the
work will be performed in accordance with the certificate holder's
maintenance program and maintenance manual. Each certificate holder
will be required to ensure that its system for the continuing analysis
and surveillance of that work contains procedures for its oversight.
All of these policies, procedures, methods, and instructions must be
acceptable to the FAA and be included in the certificate holder's
maintenance manual. In addition, each certificate holder who contracts
any of its maintenance, preventive maintenance, or alteration work to
an outside source will be required to provide to its local FAA
Certificate Holding District Office a list that includes the name and
address of each maintenance provider it uses, and a description of the
type of maintenance the contractor would perform.

II. Background

A. Statement of the Problem

    Air carrier maintenance has evolved from mostly an ``in-house''
operation to an extended network of maintenance providers that fulfill
contracts with air carriers to perform their aircraft maintenance.
Under Sec. Sec.  121.363 and 135.413 each air carrier remains primarily
responsible for the airworthiness of its aircraft regardless of whether
the maintenance is contracted to another person. Any person performing
maintenance for an air carrier must follow the air carrier's
maintenance manual. However, air carrier general maintenance manuals
often are geared toward in-house maintenance. They fail to provide the
necessary instructions to maintenance providers to enable them to
follow the air carrier's maintenance programs. This is exacerbated when
an air carrier's manual contains proprietary data or other confidential
information that an air carrier may not want to share with a
maintenance provider. Often, the maintenance provider may also work on
a competitor's aircraft. Consequently, air carriers often are reluctant
to share such information, and therefore, often do not.
    In addition, the FAA has found that, although an air carrier is
required to list its maintenance providers and a general description of
the work to be done in its maintenance manual, these lists are not
always kept up to date, are not always complete, and are not always in
a format that is readily useful for FAA oversight and analysis
purposes. The FAA needs this information to be complete and readily
available in order to plan surveillance of air carrier maintenance
programs and determine the extent to which maintenance providers are
performing their work according to the air carrier's maintenance
manual. Without accurate and complete information on the work being
performed for air carriers, the FAA cannot adequately target its
inspection resources for surveillance and make accurate risk
assessments.

B. Summary of the NPRM

    On November 13, 2012, the FAA published a Notice of Proposed
Rulemaking (NPRM), Notice No. 12-07, entitled ``Air Carrier Contract
Maintenance Requirements,'' 77 FR 67584. The NPRM proposed to amend the
maintenance regulations for domestic, flag, and supplemental
operations, and for commuter and on-demand operations for aircraft type
certificated with a passenger seating configuration of 10 seats or
more.
    In addition to proposing requirements pertaining to covered work as
required by the Act, the FAA proposed to require operators to develop
policies, procedures, methods, and instructions for performing contract
maintenance that are acceptable to the FAA and to include them in their
maintenance manuals. The NPRM also proposed to require the operators to
provide a list to the FAA of all persons with whom they contract their
maintenance. These lists would include the physical addresses where the
work would be carried out and a description of the type of work
performed at each location. The FAA proposed these changes because
contract maintenance has increased to over 70 percent of all air
carrier maintenance, and numerous investigations found deficiencies in
maintenance performed by contract maintenance providers. The proposed
changes were intended to help ensure consistency between contract and
in-house maintenance and to enhance the oversight capabilities of both
the operators and the FAA. The NPRM comment period closed on February
11, 2013.

C. General Overview of Comments

    The FAA received 43 comments. Twenty were from air carriers;
nineteen were from Associations that represent air carriers and repair
stations; and nine were from individuals involved in aviation. Several
commenters disagreed with some of the proposals, and some suggested
changes. These will be discussed more fully in the sections below.
    The FAA received comments on the following general areas of the
proposal:
     ``Supervision and Control'' and ``Directly in Charge'';
     Covered work;
     Redundancy in many areas;
     Exclusion of part 135 air carriers;
     Part 135 and Overall estimated costs;
     Reporting requirement.

III. Discussion of Public Comments and Final Rule

A. ``Supervision and Control'' and ``Directly in Charge''

    The FAA proposed definitions for ``directly in charge'' and
``supervision and control'' in new Sec. Sec.  121.368(a)(3) and (4),
and 135.426(a)(3) and (4), but is adopting only the former term. As
proposed in the NPRM, this new rule defines directly in charge to mean:
``having responsibility for covered work performed by a maintenance
provider. A representative of the certificate holder directly in charge
of covered work does not need to physically observe and direct each
maintenance provider constantly, but must be available for consultation
on matters requiring instruction or decision.'' The proposal would have
defined supervision and control to mean ``that a representative of the
certificate holder must be available to personally observe the covered
work being done to the extent necessary to ensure it is being done
properly; and when the representative was not physically present to
observe the work, the representative would have had to be available for
consultation on matters requiring instruction or decision.'' The FAA is
not adopting its proposed definition of ``supervision and control'' for
reasons discussed below.
    Several commenters--FEDEX, NetJets, Transportation Trades
Department (TTD), Aeronautical Repair Station Association (ARSA), and
others--

objected to the proposed definitions of ``directly in charge'' and
``supervision and control.'' They found the definitions confusing and
maintained they were not mandated by the Act. The commenters stated
they are confused as to whether and how the representative was required
to be ``available.'' The National Business Aviation Association (NBAA)
was concerned that some part 135 operators would be required to send
the operator's one and only maintenance person to be available on-site
anytime an aircraft of the operator was being repaired or undergoing
routine maintenance. Ameriflight stated that the term ``available'' is
vague, and may be interpreted as widely as ``in the immediate vicinity
of,'' ``by telephone,'' or ``by internet,'' etc. The Professional
Aviation Safety Specialists (PASS) stated that the proposed definitions
should be more stringent, and that air carriers should be physically
present to observe the work being performed. PASS believed that the
definitions proposed were contrary to the intent of the Act because,
without modification, there would be no change from current practices.
TTD expressed the same concerns.
    Aviation Technical Services (ATS) stated that the term ``to the
extent necessary'' is insufficient. It believed this term provides no
standards for an air carrier, but establishes that the amount of
supervision is at the air carrier's discretion until that supervision
proves inadequate and a noncompliance occurs. This commenter suggested
that this term should either be amended or deleted.
    Upon review, the FAA agrees that the proposed definition of
``supervision and control'' lacks clarity. Accordingly, we are
withdrawing this definition because it is not necessary in view of the
``directly in charge'' requirement, although the regulations will
contain the phrase consistent with the Act's use of it. Nearly constant
presence for personal observation of work by an air carrier would seem
to be required by the proposed ``supervision and control'' definition,
with unfettered discretion by the air carrier to determine the meaning
of ``to the extent necessary.'' Moreover, the last clause in the
definition is nearly identical to that in the proposed and adopted
definition of ``directly in charge.'' The FAA acknowledges that
physical presence at the maintenance site is unnecessary for two
reasons. One, with the state of information technology today, a person
can acquire sufficient data to make a reasonably accurate decision or
provide adequate instruction without having to be on site. Two, to
require the physical presence of an observer at all locations where
contracted covered work is performed would be extremely cost
prohibitive. As such, the commenters' concerns regarding confusion
between the two definitions, and over the interpretation of ``to the
extent necessary,'' are resolved.
    On the other hand, the FAA does not believe that the definition of
``directly in charge'' is confusing. A similar and consistent
definition is in Sec. Sec.  121.378 and 135.435(b) since at least 1966,
and in Sec.  145.3 since 2001. That phrase has not caused confusion in
all the years it has been in these regulations. Therefore, we believe
the definition proposed in the NPRM is clear.
    Finally, regarding possible meanings of the term ``available,'' the
FAA notes that Ameriflight is correct that the term could be broadly
interpreted. However, this term is not intended to be a limiting factor
of the rule. Broad interpretation of ``available'' allows an air
carrier the flexibility to use numerous information technology
methods--such as high resolution photographs, text messaging, or the
internet--to acquire the information necessary to make decisions and
provide instructions. Therefore, this term is retained in the
definition of ``directly in charge.''

B. Covered Work

    Until this rule, the FAA's maintenance regulations did not define
``covered work.'' With one change from what it proposed, the FAA now
defines ``covered work'' exactly as set forth in the Act \3\ in
Sec. Sec.  121.368(a)(2) and 135.426(a)(2). ``Covered work'' means any
of the following: ``(i) Essential maintenance that could result in a
failure, malfunction, or defect endangering the safe operation of an
aircraft if not performed properly or if improper parts or materials
are used; (ii) Regularly scheduled maintenance; or (iii) A required
inspection item on an aircraft.'' While it was the FAA's intent to
propose without change the definition in the Act, the term ``parts or''
was inadvertently omitted in front of the word ``materials'' in
subparagraph (i). This omission is corrected in this final rule.
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    \3\ The FAA's proposed, and final, definition contains one other
difference from that set forth in the Act. Sections
121.368(a)(2)(iii) and 135/426(a)(2)(iii) state: ``A required
inspection item on an aircraft,'' whereas the Act's definition
states ``A required inspection item (as defined by the
Administrator.'' The FAA's definition, however, comports with that
in the Act, because the agency has limited (e.g., in Operations
Specifications paragraph D-091 and Advisory Circular AC 120-16F) a
Required Inspection Item (RII) to encompass only ``on-wing''
maintenance or alterations. Accordingly, by including the phrase
``on an aircraft'' in the rule's definition, the Act's mandate of
``as defined by the Administrator'' is satisfied.
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    Several commenters requested clarity on two of the terms used in
the definition of ``covered work'': ``essential maintenance'' and
``regularly scheduled maintenance.'' With respect to essential
maintenance, ARSA stated that when terms are not defined in the
legislation, the agency must rely on current usage.
    Regarding ARSA's comment, we note that paragraph (d) of Operations
Specifications paragraph D-091. Requirements: Air Carrier Maintenance
Providers, provides that ``essential maintenance'' is ``on-wing''
maintenance. Nothing in this rule, or in the Act's definition of
``covered work'' expands essential maintenance to include ``off-wing''
maintenance. Therefore, the agency is relying on current usage for this
term. Paragraph d of Operations Specifications paragraph D-091 states:

    Essential maintenance encompasses any Required Inspection Item
on-wing accomplished after any maintenance or alteration. This
maintenance, if done improperly or if improper parts or materials
were used, would result in a failure effect that would endanger the
continued safe flight and landing of the airplane. Essential
maintenance is the accomplishment of the air carrier designated
inspection item on wing. Essential maintenance does not encompass
any off wing maintenance.

    We also note that neither the Act nor the FAA's proposed rule
attempted to define the term ``essential maintenance.'' When Congress
defined ``covered work'' in section 319(d)(1) of the Act, one of the
three items it included (in subparagraph (A)) was ``essential
maintenance.'' The modifying text limits the scope to maintenance that
``could result in a failure, malfunction, or defect endangering the
safe operation of an aircraft if not performed properly. . . .'' This
limiter was excerpted from the FAA's definition found in operations
specifications paragraph D-091 and in Advisory Circular AC 120-16F.
    Airbus, Airlines for America (A4A), Aerospace Industries
Association (AIA), United Parcel Service (UPS), and a private citizen
expressed concern over whether ``essential maintenance,'' as defined in
proposed Sec. Sec.  121.368(a)(2)(i) and 135.426(a)(2)(i), includes on-
wing maintenance but not off-wing maintenance. AIA stated that AC 120-
16F defined ``essential maintenance'' as not encompassing any off-wing
maintenance. A4A believes ``essential maintenance'' traditionally
excludes off-wing maintenance, and that expanding the scope to include
off-wing maintenance would significantly impact

air carriers, and requested the FAA to clarify that ``essential
maintenance'' applies only to on-wing maintenance. Southwest Airlines
stated that the lack of ``on an aircraft'' in the definition for
essential maintenance and regularly scheduled maintenance renders the
definition over-broad. In addition, various commenters stated there is
no justification for on-wing maintenance to be more stringent than off-
wing maintenance.
    The Act is silent as to whether the maintenance at issue was meant
to be restricted to on-wing maintenance or whether off-wing maintenance
was also contemplated. The Act's definition of ``covered work,''
especially in view of its inclusion in subparagraph (C) of: ``A
required inspection item (as defined by the Administrator),'' makes
clear that Congress did not intend to change the FAA's longstanding
definition of ``essential maintenance'' to include all off-wing
maintenance under the heading of covered work. The FAA's longstanding
guidance and practice has been that required inspection items (RII) are
safety of flight items on an aircraft that require a ``second set of
eyes,'' that is, an additional inspection and sign off for the item.
The provision that covered work includes RIIs ``as defined by the
Administrator'' contemplates continued consistency in this area.
Indeed, the NPRM proposed, and this final rule includes, in Sec. Sec.
121.368(a)(2)(iii) and 135.426(a)(2)(iii): ``A required inspection item
on an aircraft.'' Although this subparagraph is separate from and in
addition to the inclusion of ``essential maintenance'' in the Act's
subparagraph (A) of Sec.  319(d)(1), the overall context is clear that
essential maintenance is meant to continue to apply only to on-wing
maintenance.
    We agree with ARSA that that when terms are not defined in this
legislation, the agency should rely on current usage. Accordingly, the
term ``essential maintenance,'' as used both in the Act and in this
final rule, is restricted to on-wing maintenance. We note, however,
that covered work also includes ``Regularly scheduled maintenance.''
This term necessarily includes some ``off-wing'' maintenance. This
would occur, for example, in cases in which a component (e.g., an
engine, landing gear, etc.) is scheduled for removal and overhaul, or
when other off-wing maintenance is scheduled at some regular interval.
Covered work, for purposes of Sec. Sec.  121.368(b), (c), and (d) and
135.426(b), (c), and (d), does not include other non-scheduled or non-
routine off-wing maintenance.
    Several commenters stated that the proposed regulations do not
address non-scheduled maintenance. The FAA notes that covered work,
both as proposed and in this final rule, includes both essential
maintenance and required inspection items, both of which include non-
scheduled maintenance. In addition, the other new requirements that
address both covered work and all other contracted maintenance, such as
the requirements for air carriers to develop policies, procedures,
methods, and instructions for accomplishing all contracted maintenance,
necessarily include both scheduled and non-scheduled work.

C. Exclusion of Part 135 Air Carriers

    Part 135 contains nearly identical requirements to those in part
121 for maintenance performed on certificate holders' aircraft. For
example, similar to the authorizations in part 121, part 135 permits
persons other than the certificate holder to perform maintenance on
aircraft operated under that part. (See, e.g., Sec. Sec.  135.425 and
135.437.) Also similar to requirements in part 121, part 135 requires
that a certificate holder's manual contain the maintenance program that
must be followed when maintenance is performed on the certificate
holder's aircraft. (See Sec.  135.427(b).) Further, similar to the
requirement in Sec.  121.369(a), Sec.  135.427(a) requires each
certificate holder to put in its manual a list of persons with whom it
has arranged for the performance of its maintenance.
    Even though both parts 121 and 135 require that the certificate
holders' maintenance manuals and programs be followed for both in-house
and out-sourced maintenance, as we explained in the NPRM, both the FAA
and the Office of Inspector General found that too often certificate
holders' programs were not followed by contract maintenance providers.
The FAA is adopting this final rule in an attempt to close this gap.
The agency believes that by requiring certificate holders to develop
policies, procedures, methods, and instructions for the accomplishment
of contract maintenance in accordance with the certificate holders'
programs, contract maintenance providers will be better equipped to
more closely follow them. Moreover, by enhancing the existing
requirement that certificate holders provide a list of their
maintenance providers to the FAA, to now include each provider's
physical address where the work is being performed and a description of
the maintenance being done at each location, the FAA's ability to
provide meaningful surveillance will be enhanced. The need for these
enhancements applies equally to both part 121 and part 135 certificate
holders.

D. Estimated Costs

    Several commenters stated that the FAA erred in assuming the
estimated costs of compliance would be less for part 135 operators than
for part 121 operators. The FAA agrees, and to address this issue the
FAA is using the same cost estimating methodology for both part 121 and
part 135 air carriers. The cost estimates included in the regulatory
evaluation for this final rule are based on entity size (large vs.
small) rather than on whether a certificate holder operates under part
121 or part 135, because entity size is a more relevant parameter for
cost estimation than the part under which an air carrier operates.
    Several commenters believed the cost estimates for the proposal did
not take into consideration added administrative costs, people
resources, technology development, data systems, and publications
infrastructure. The FAA does not agree. The agency believes that
administrative costs, people resources, technology development, data
systems, and publications infrastructures should already be in place to
comply with current regulatory requirements. Therefore, these are not
additional costs of the rule.
    The agency estimated the costs associated with creating lists and
any changes to the manual.
    Several commenters stated that the FAA did not consider training
costs.
    The FAA agrees that additional costs would be incurred in training
personnel on the changes to the contract maintenance requirements.
These training costs have been captured in the ``familiarization cost''
section of the regulatory evaluation. The FAA believes the term
``familiarization'' is a more appropriate term than ``training'' to
describe these costs, not only because there is a difference in the
scope and extent of material covered in these two terms, but also
because familiarization-type training is given to individuals who are
already qualified; therefore, ``familiarization'' is a more appropriate
descriptive term.
    A few commenters stated that the FAA did not consider software and
auditor costs.
    This rule does not require development of new technology. Existing
software (e.g., any word processing software) can be used to make the
changes required by this final rule, so the cost for software is a sunk
cost. Regarding auditor costs, the FAA did capture these costs in the
NPRM, but for part 121 air carriers only,

believing at the time that auditor costs for part 135 air carriers
would be negligible. In view of the comments we received on this issue,
in this final rule, the FAA captured these costs for both part 121 and
135 air carriers.
    See the Regulatory Evaluation for more in-depth details.

E. Redundancy

    Southwest Airlines stated that the regulations proposed appear to
duplicate various existing regulations, and are therefore redundant.
The company stated that proposed Sec.  121.368(e) and (f) would seem to
duplicate the regulatory requirements currently found in Sec. Sec.
121.367 ``Maintenance, preventive maintenance, and alterations
programs,'' and 121.373 ``Continuing analysis and surveillance.'' The
company asserted that paragraph (h) of both proposed Sec. Sec.  121.368
and 135.426 would seem to duplicate current requirements in Sec. Sec.
121.369(a) and 135.427(a). And further, that Sec. Sec.  121.368(g) and
121.369(b)(10) appear to duplicate existing requirements in Sec. Sec.
121.133, 121.135, 121.361, 121.363, 121.365, 121.367, and 121.369.
    The FAA notes that while the amendments proposed may seem to
overlap some of the existing requirements in Sec. Sec.  121.361,
121.363, and 121.365, those regulations address different aspects of
maintenance, whereas Sec. Sec.  121.368, 121.369(b)(10), 135.426 and
135.427(b)(10) establish additional conditions for the arrangement of
maintenance and establish additional requirements for providing and
keeping an updated list of contract maintenance providers, including
the type of maintenance they are performing. For example, Sec.  121.367
requires each operator to have an inspection program that covers all
maintenance. Sections 121.369(b)(10) and 135.427(b)(10) require that
the new policies, procedures, methods, and instructions for
accomplishing contracted maintenance in accordance with the air
carriers' programs be included in the air carriers' manuals. In
addition, the new rules will require air carriers to provide the
necessary maintenance instructions to maintenance providers in order
for them to perform the air carriers' maintenance, whether or not their
maintenance manuals contain proprietary data, or other confidential
information that an air carrier may be reluctant to share.
    Finally, while Sec. Sec.  121.368 and 121.369 are similar in many
respects, they are different in their intent. Section 121.369 addresses
in-house maintenance performed by air carrier personnel, while Sec.
121.368 addresses contract maintenance. Their similarity reflects the
overall intent to standardize maintenance between in-house and contract
maintenance, and to ensure overall consistency and safety.
    Therefore, the FAA is not making any changes to these sections
based on the commenters' concerns about duplication.

F. Reporting Requirement

    Current Sec. Sec.  121.369(a) and 135.427(a) require each air
carrier to include in its manual a list of persons with whom it has
arranged for the performance of maintenance, preventive maintenance,
and alterations, including a general description of that work. As
proposed, and as adopted in this final rule, Sec. Sec.  121.368(h) and
135.426(h) will require each certificate holder who contracts for
maintenance, preventive maintenance, or alterations to provide to the
FAA a list that includes each contract maintenance provider's name and
physical address of where the work will be carried out, and a
description of the type of maintenance, preventive maintenance, or
alteration that is to be performed at each location.
    National Air Transportation Association (NATA) stated that the
proposed additional requirements pertaining to the listing of
maintenance providers would appear to create a new requirement that the
FAA would have to approve the addition of a maintenance provider on the
list before that provider could perform contract maintenance for the
certificate holder. NATA argues that, if this is the case, it would
create an undue burden for part 135 certificate holders, who operate on
an ad-hoc basis to locations that are unpredictable and often change,
so that they cannot account for those entities with whom they engage in
unplanned maintenance.
    The FAA believes the issue raised by NATA would not arise because
Sec.  135.426(h) does not require that a maintenance provider be on the
list and be pre-approved by the FAA before an air carrier may contract
with it to perform maintenance. Neither Sec.  121.368(h) nor Sec.
135.426(h) prohibit deletions or additions to the list--these rules
simply require that the updated list be provided to the FAA by the last
day of each calendar month. In the situation outlined by NATA, a part
135 operator would contract with maintenance providers to perform
maintenance, including unplanned maintenance, as provided in Sec.
135.413, then update its list and submit it to the FAA by the end of
the calendar month.

IV. Regulatory Notices and Analyses

A. Regulatory Evaluation Preamble Summary

    Changes to Federal regulations must undergo several economic
analyses. First, Executive Order 12866 and Executive Order 13563 direct
that each Federal agency shall propose or adopt a regulation only upon
a reasoned determination that the benefits of the intended regulation
justify its costs. Second, the Regulatory Flexibility Act of 1980 (Pub.
L. 96-354) requires agencies to analyze the economic impact of
regulatory changes on small entities. Third, the Trade Agreements Act
(Pub. L. 96-39) prohibits agencies from setting standards that create
unnecessary obstacles to the foreign commerce of the United States. In
developing U.S. standards, 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 final rule. We suggest readers
seeking greater detail read the full regulatory evaluation, a copy of
which we have placed in the docket for this rulemaking.
    In conducting these analyses, FAA has determined that this final
rule: (1) Has benefits that justify its costs, (2) is not an
economically ``significant regulatory action'' as defined in section
3(f) of Executive Order 12866, (3) is not ``significant'' as defined in
DOT's Regulatory Policies and Procedures; (4) will not have a
significant economic impact on a substantial number of small entities;
(5) will not create unnecessary obstacles to the foreign commerce of
the United States; and (6) will not impose an unfunded mandate on
state, local, or tribal governments, or on the private sector by
exceeding the threshold identified above. These analyses are summarized
below.
Total Benefits and Costs of This Rule
    This rule responds to a Congressional mandate and is expected to
prevent 2 accidents. The benefit for the rule is estimated to be $142.8
million or $92.0 million present value at 7% over 10 years. The
estimated cost for the rule is

$20.4 million ($14.1 million, present value). More detailed benefit and
cost information is presented below.
Who is potentially affected by this rule?
    Certificate holders who conduct domestic, flag, or supplemental
operations under part 121, and certificate holders who conduct commuter
operations or on-demand operations with aircraft type certificated for
a passenger seating configuration, excluding any pilot seat, of ten
seats or more under part 135.

Assumptions

     All monetary values were expressed in constant 2014
dollars. We calculated the present value of the potential benefit
stream by discounting the monetary values using a 7 percent interest
rate from 2015 to 2024.
     The rule is expected to take effect in 2015.
     The value of a statistical life (VSL) is $9.2 million.
     VSL in future years were estimated to grow by 1.18 percent
per year (the Congressional Budget Office estimated that there will be
an expected 1.18 percent annual growth rate in median real wages over
the next 30 years) before discounting to present value.
     The value of medical and legal costs associated with fatal
injuries was estimated at about $171,000.
     The value of a minor injury was $27,600.
     The value of medical and legal costs associated with minor
injuries was estimated at about $3,000.
     The FAA also estimates the cost of accident
investigations. Accidents reported by the NTSB incur investigation
costs from the NTSB, the FAA, and the private sector. The total
accident investigation cost per accident is assumed to be $570,968.
     As per DOT guidance, we assume that real wages increase at
1.2 percent per year.
Changes From the NPRM to the Final Rule
    For the benefits, we have made two significant changes to the final
rule regulatory analysis:
     Since the NPRM published, the FAA has identified 2
accidents which could have been prevented by this rule. We estimate the
benefit value for preventing similar future accidents will be about
$92.0 million present value over 10 years.
     In this final rule, we note this rule is Congressionally
mandated for part 121 air carriers.
    For the cost section, we have made three significant changes to the
final rule regulatory analysis, which have increased the costs from
about $1.6 million to $14.1 million present value over 10 years:
     The cost estimates included in the regulatory evaluation
for this final rule are based on entity size (large vs. small) rather
than on whether a certificate holder operates under part 121 or part
135, because entity size is a more relevant parameter for cost
estimation than whether the air carrier operates under part 121 or part
135.
     For this final rule, we used the commenters' estimates
(when they were available) rather than our own, which generally raised
the costs.
     We added familiarization costs.
Benefits of This Rule
    A significant part of this rule is Congressionally mandated for
part 121 air carriers.
    The FAA identified two accidents that could have been prevented by
this rule.
    One of the accidents was operated by Air Midwest (part 121/135
operator) under part 121 service at the time. This accident resulted in
21 fatalities and 1 minor injury. The other accident was operated by
Emery Worldwide Airlines, and resulted in 3 fatalities. The FAA
believes that the benefits justify the costs for part 121 and part 135
operators. In addition to the casualties, 2 aircraft were destroyed.
After factoring in the effectiveness of the rule to prevent these
accidents, the FAA estimates the benefit value to be $142.8 million, or
$92.0 million present value at 7% over 10 years.
Costs of This Rule
    From 2015 to 2024, the cost to air carriers and the FAA would be
approximately $20.4 million ($14.1 million, present value), as shown in
table below.
[GRAPHIC] [TIFF OMITTED] TR04MR15.000

B. Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) (RFA)
establishes ``as a principle of regulatory issuance that agencies shall
endeavor, consistent with the objectives of the rule and of applicable
statutes, to fit regulatory and informational requirements to the scale
of the businesses, organizations, and governmental jurisdictions
subject to regulation. To achieve this principle, agencies are required
to solicit and consider flexible regulatory proposals and to explain
the rationale for their actions to assure that such proposals are given
serious consideration.'' The RFA covers a wide-range of small entities,

including small businesses, not-for-profit organizations, and small
governmental jurisdictions.
    Agencies must perform a review to determine whether a rule will
have a significant economic impact on a substantial number of small
entities. If the agency determines that it will, the agency must
prepare a regulatory flexibility analysis as described in the RFA.
    However, if an agency determines that a rule is not expected to
have a significant economic impact on a substantial number of small
entities, section 605(b) of the RFA provides that the head of the
agency may so certify and a regulatory flexibility analysis is not
required. The certification must include a statement providing the
factual basis for this determination, and the reasoning should be
clear.
    The FAA identified a total of 222 operators with less than 1,500
employees--these are classified as small entities.
    The FAA believes that this final rule will not have a significant
economic impact on a substantial number of small entities for the
following reason:
    The FAA estimates that their ratio of annualized costs to annual
revenue is between 0.001% and 0.010%, which is not considered a
significant economic impact. Therefore, as provided in section 605(b),
the Administrator of the FAA certifies that this rulemaking will not
result in a significant economic impact on a substantial number of
small entities.

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 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 final rule and determined that it
improves safety and as a legitimate domestic objective therefore will
not create unnecessary obstacles to the foreign commerce of the United
States.

D. Unfunded Mandates Assessment

    Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4) requires each Federal agency to prepare a written statement
assessing the effects of any Federal mandate in a proposed or final
agency rule that may result in an expenditure of $100 million or more
(in 1995 dollars) in any one year by State, local, and tribal
governments, in the aggregate, or by the private sector; such a mandate
is deemed to be a ``significant regulatory action.'' The FAA currently
uses an inflation-adjusted value of $151.0 million in lieu of $100
million. This final 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. According to the 1995
amendments to the Paperwork Reduction Act (5 CFR 1320.8(b)(2)(vi)), an
agency may not collect or sponsor the collection of information, nor
may it impose an information collection requirement unless it displays
a currently valid Office of Management and Budget (OMB) control number.
    This final rule will impose the following amended information
collection requirements. As required by the Paperwork Reduction Act of
1995 (44 U.S.C. 3507(d)), the FAA has submitted these information
collection amendments to OMB for its review. Notice of OMB approval for
these information collections will be published in a future Federal
Register document.
    Summary: Each operator which seeks to obtain, or is in possession
of, an air carrier operating certificate must comply with the
requirements of 14 CFR part 121 in order to maintain data which is used
to determine if the air carrier is operating in accordance with minimum
safety standards. Original certification is completed in accordance
with part 119.
    Each operator which seeks to obtain, or is in possession of a
commuter or on-demand operating certificate must comply with the
requirements of 14 CFR part 135 in order to maintain data which is used
to determine if the air carrier is operating in accordance with minimum
safety standards. Original certification is completed in accordance
with part 119.
    Continuing certification is completed in accordance with part 121
and part 135. One form is used. The use of this form was taken into
account in estimating the burden for this section.
    Use: This information collection supports the Department of
Transportation's strategic goal of safety. Specifically, the goal is to
promote the public health and safety by working toward the elimination
of transportation-related deaths, injuries, and destruction of
property.
    Title 49 U.S.C. 44702, empowers the Secretary of Transportation to
issue air carrier operating certificates and to establish minimum
safety standards for the operation of the air carrier to whom such
certificates are issued. Under the authority of Title 49 CFR 44701,
Federal Aviation Regulations part 121 and part 135 prescribe the terms,
conditions, and limitations as are necessary to ensure safety in air
transportation.
    Respondents (including number of): There are 80 part 121 air
carriers and 168 part 135 operators affected by this rule.
    Frequency: The manual requirements will be submitted as part of the
submission of maintenance manuals to the FAA for acceptance.
    Annual Burden Estimate: This rule requires that the air carrier's
manual has all the policies, procedures, methods, and instructions for
the accomplishment of maintenance by another person to include the
information necessary for certificate holders to ensure all maintenance
is performed in accordance with its maintenance program. The rule also
requires that the air carrier provide a list with the name and address
of each maintenance provider used and the type of maintenance that is
to be performed.
Private Sector Costs
    This rule will require affected air carriers to develop policies,
procedures, methods, and instructions for performing contract
maintenance that are acceptable to the FAA and to include them in their
maintenance manuals. The rule also requires the air carriers to provide
a list to the FAA of all persons with whom they contract their
maintenance.
    To calculate the cost of revising and updating the manual and
revising and updating the list, the following assumptions were used,
paralleling those in the regulatory evaluation:
     222 small air carriers.
     26 large air carriers.
     Small air carriers: amount of time revising manual
(manager): 16 hours.
     Small air carriers: amount of time revising manual
(technical writer): 40 hours.
     Small air carriers: amount of time revising manual
(editor): 2 hours.

     Small air carriers: amount of time maintaining manual
(manager): 16 hours.
     Small air carriers: amount of time maintaining manual
(technical writer): 40 hours.
     Small air carriers: amount of time maintaining manual
(editor): 2 hours.
     Large air carriers: amount of time revising manual
(manager): 60 hours.
     Large air carriers: amount of time revising manual
(technical writer): 30 hours.
     Large air carriers: amount of time revising manual
(editor): 30 hours.
     Large air carriers: amount of time maintaining manual
(manager): 104 hours.
     Large air carriers: amount of time maintaining manual
(technical writer): 156 hours.
     Large air carriers: amount of time maintaining manual
(editor): 156 hours.
     Small air carriers: amount of time to provide the list
(manager): 10 hours.
     Small air carriers: amount of time to provide the list
(technical writer): 3 hours.
     Small air carriers: amount of time to provide the list
(auditor): 10 hours.
     Small air carriers: amount of time to maintain and update
the list (manager): 12 hours.
     Small air carriers: amount of time to maintain and update
the list (technical writer): 12 hours.
     Small air carriers: amount of time to maintain and update
the list (auditor): 12 hours.
     Large air carriers: amount of time to provide the list
(manager): 40 hours.
     Large air carriers: amount of time to provide the list
(technical writer): 20 hours.
     Large air carriers: amount of time to provide the list
(auditor): 20 hours.
     Large air carriers: amount of time to maintain and update
the list (manager): 104 hours.
     Large air carriers: amount of time to maintain and update
the list (technical writer): 156 hours.
     Large air carriers: amount of time to maintain and update
the list (auditor): 156 hours.
     For the wages, we assume that there will be a 1.2 percent
projected annual increase in real wages.
First Year Costs for Small Air Carriers
    Cost = 222 x ((16 hours x $66.08) + (40 hours x $40.02) + (2 hours
x $35.76) + (10 hours x $66.08) + (3 hours x $40.02) + (10 hours x
$41.28)) = $870,966.
    Time = 222 x (16 hours + 40 hours + 2 hours + 10 hours + 3 hours +
10 hours) = 17,982.
Second Year Costs for Small Air Carriers
    Cost = 222 x ((16 hours x $66.87) + (40 hours x $40.50) + (2 hours
x $36.19) + (12 hours x $66.87) + (12 hours x $40.50) + (12 hours x
$41.77)) = $1,010,576.
    Time = 222 x (16 hours + 40 hours + 2 hours + 10 hours + 3 hours +
10 hours) = 17,982.
Third Year Costs for Small Air Carriers
    Cost = 222 x ((16 hours x $67.68) + (40 hours x $40.99) + (2 hours
x $36.62) + (12 hours x $67.68) + (12 hours x $40.99) + (12 hours x
$42.27)) = $1,022,703.
    Time = 222 x (16 hours + 40 hours + 2 hours + 10 hours + 3 hours +
10 hours) = 17,982.
Fourth Year Costs for Small Air Carriers
    Cost = 222 x ((16 hours x $68.49) + (40 hours x $41.48) + (2 hours
x $37.06) + (12 hours x $68.49) + (12 hours x $41.48) + (12 hours x
$42.78)) = $1,034,976.
    Time = 222 x (16 hours + 40 hours + 2 hours + 10 hours + 3 hours +
10 hours) = 17,982.
Fifth Year Costs for Small Air Carriers
    Cost = 222 x ((16 hours x $69.31) + (40 hours x $41.98) + (2 hours
x $37.51) + (12 hours x $69.31) + (12 hours x $41.98) + (12 hours x
$43.29)) = $1,047,395.
    Time = 222 x (16 hours + 40 hours + 2 hours + 10 hours + 3 hours +
10 hours) = 17,982.
Sixth Year Costs for Small Air Carriers
    Cost = 222 x ((16 hours x $70.14) + (40 hours x $42.48) + (2 hours
x $37.96) + (12 hours x $70.14) + (12 hours x $42.48) + (12 hours x
$43.81)) = $1,059,964.
    Time = 222 x (16 hours + 40 hours + 2 hours + 10 hours + 3 hours +
10 hours) = 17,982.
Seventh Year Costs for Small Air Carriers
    Cost = 222 x ((16 hours x $70.98) + (40 hours x $42.99) + (2 hours
x $38.41) + (12 hours x $70.98) + (12 hours x $42.99) + (12 hours x
$44.34)) = $1,072,684.
    Time = 222 x (16 hours + 40 hours + 2 hours + 10 hours + 3 hours +
10 hours) = 17,982.
Eight Year Costs for Small Air Carriers
    Cost = 222 x ((16 hours x $71.84) + (40 hours x $43.51) + (2 hours
x $38.87) + (12 hours x $71.84) + (12 hours x $43.51) + (12 hours x
$44.87)) = $1,085,556.
    Time = 222 x (16 hours + 40 hours + 2 hours + 10 hours + 3 hours +
10 hours) = 17,982.
Ninth Year Costs for Small Air Carriers
    Cost = 222 x ((16 hours x $72.70) + (40 hours x $44.03) + (2 hours
x $39.34) + (12 hours x $72.70) + (12 hours x $44.03) + (12 hours x
$45.41)) = $1,098,583.
    Time = 222 x (16 hours + 40 hours + 2 hours + 10 hours + 3 hours +
10 hours) = 17,982.
Tenth Year Costs for Small Air Carriers
    Cost = 222 x ((16 hours x $73.57) + (40 hours x $44.56) + (2 hours
x $39.81) + (12 hours x $73.57) + (12 hours x $44.56) + (12 hours x
$45.95)) = $1,111,766.
    Time = 222 x (16 hours + 40 hours + 2 hours + 10 hours + 3 hours +
10 hours) = 17,982.
First Year Costs for Large Air carriers
    Cost = 26 x ((60 hours x $66.08) + (30 hours x $40.02) + (30 hours
x $35.76) + (40 hours x $66.08) + (20 hours x $40.02) + (20 hours x
$41.28)) = $273,193.
    Time = 26 x (60 hours + 30 hours + 30 hours + 40 hours + 20 hours +
20 hours) = 5,200.
Second Year Costs for Large Air carriers
    Cost = 26 x ((104 hours x $66.87) + (156 hours x $40.50) + (156
hours x $36.19) + (104 hours x $66.87) + (156 hours x $40.50) + (156
hours x $41.77)) = $1,006,396.
    Time = 26 x (104 hours + 156 hours + 156 hours + 104 hours + 156
hours + 156 hours) = 21,632.
Third Year Costs for Large Air carriers
    Cost = 26 x ((104 hours x $67.68) + (156 hours x $40.99) + (156
hours x $36.62) + (104 hours x $67.68) + (156 hours x $40.99) + (156
hours x $42.27)) = $1,018,473.
    Time = 26 x (104 hours + 156 hours + 156 hours + 104 hours + 156
hours + 156 hours) = 21,632.
Fourth Year Costs for Large Air Carriers
    Cost = 26 x ((104 hours x $68.49) + (156 hours x $41.48) + (156
hours x $37.06) + (104 hours x $68.49) + (156 hours x $41.48) + (156
hours x $42.78)) = $1,030,695.
    Time = 26 x (104 hours + 156 hours + 156 hours + 104 hours + 156
hours + 156 hours) = 21,632.
Fifth Year Costs for Large Air Carriers
    Cost = 26 x ((104 hours x $69.31) + (156 hours x $41.98) + (156
hours x $37.51) + (104 hours x $69.31) + (156 hours x $41.98) + (156
hours x $43.29)) = $1,043,063.
    Time = 26 x (104 hours + 156 hours + 156 hours + 104 hours + 156
hours + 156 hours) = 21,632.

Sixth Year Costs for Large Air Carriers
    Cost = 26 x ((104 hours x $70.14) + (156 hours x $42.48) + (156
hours x $37.96) + (104 hours x $70.14) + (156 hours x $42.48) + (156
hours x $43.81)) = $1,055,580.
    Time = 26 x (104 hours + 156 hours + 156 hours + 104 hours + 156
hours + 156 hours) = 21,632.
Seventh Year Costs for Large Air Carriers
    Cost = 26 x ((104 hours x $70.98) + (156 hours x $42.99) + (156
hours x $38.41) + (104 hours x $70.98) + (156 hours x $42.99) + (156
hours x $44.34)) = $1,068,247.
    Time = 26 x (104 hours + 156 hours + 156 hours + 104 hours + 156
hours + 156 hours) = 21,632.
Eight Year Costs for Large Air Carriers
    Cost = 26 x ((104 hours x $71.84) + (156 hours x $43.51) + (156
hours x $38.87) + (104 hours x $71.84) + (156 hours x $43.51) + (156
hours x $44.87)) = $1,081,066.
    Time = 26 x (104 hours + 156 hours + 156 hours + 104 hours + 156
hours + 156 hours) = 21,632.
Ninth Year Costs for Large Air Carriers
    Cost = 26 x ((104 hours x $72.70) + (156 hours x $44.03) + (156
hours x $39.34) + (104 hours x $72.70) + (156 hours x $44.03) + (156
hours x $45.41)) = $1,094,038.
    Time = 26 x (104 hours + 156 hours + 156 hours + 104 hours + 156
hours + 156 hours) = 21,632.
Tenth Year Costs for Large Air Carriers
    Cost = 26 x ((104 hours x $73.57) + (156 hours x $44.56) + (156
hours x $39.81) + (104 hours x $73.57) + (156 hours x $44.56) + (156
hours x $45.95)) = $1,107,167.
    Time = 26 x (104 hours + 156 hours + 156 hours + 104 hours + 156
hours + 156 hours) = 21,632.
Total over 10 years
    Cost = ($870,966 + $1,010,576 + $1,022,703 + $1,034,976 +
$1,047,395 + $1,059,964 + $1,072,684 + $1,085,556 + $1,098,583 +
$1,111,766 + $273,193 + $1,006,396 + $1,018,473 + $1,030,695 +
$1,043,063 + $1,055,580 + $1,068,247 + $1,081,066 + $1,094,038 +
$1,107,167) = $20,193,086
    Time = ((10 x 17,982 hours) + 5,200 hours + (9 x 21,632 hours)) =
379,708.
Average per Year
    Cost = $20,193,086/10 = $2,019,309.
    Time = 379,708/10 = 37,971 hours.
FAA Costs
    The FAA has to ensure that the air carriers' manuals are revised
and maintained.
    To calculate the cost of ensuring that the manuals are revised and
maintained, the following assumptions were used, paralleling those in
the regulatory evaluation:
     248 small and large air carriers.
     Amount of time to ensure that each manual is revised (FAA
inspector): 1 hour.
     Amount of time to verify manual maintenance (FAA
inspector): 1 hour.
     For the FAA inspector wage we assume that there will be a
1.2 percent projected annual increase.
First Year Costs for the FAA
    Cost = 248 x (1 hour x $64.05) = $15,884.
    Time = 248 x (1 hour) = 248.
Second Year Costs for the FAA
    Cost = 248 x (0.25 hour x $64.82) = $4,019.
    Time = 248 x (0.25 hour) = 62.
Third Year Costs for the FAA
    Cost = 248 x (0.25 hour x $65.59) = $4,067
    Time = 248 x (0.25 hour) = 62.
Fourth Year Costs for the FAA
    Cost = 248 x (0.25 hour x $66.38) = $4,116.
    Time = 248 x (0.25 hour) = 62.
Fifth Year Costs for the FAA
    Cost = 248 x (0.25 hour x $67.18) = $4,165.
    Time = 248 x (0.25 hour) = 62.
Sixth Year Costs for the FAA
    Cost = 248 x (0.25 hour x $67.98) = $4,215.
    Time = 248 x (0.25 hour) = 62.
Seventh Year Costs for the FAA
    Cost = 248 x (0.25 hour x $68.80) = $4,266.
    Time = 248 x (0.25 hour) = 62.
Eight Year Costs for the FAA
    Cost = 248 x (0.25 hour x $69.63) = $4,317.
    Time = 248 x (0.25 hour) = 62.
Ninth Year Costs for the FAA
    Cost = 248 x (0.25 hour x $70.46) = $4,369.
    Time = 248 x (0.25 hour) = 62.
Tenth Year Costs for the FAA
    Cost = 248 x (0.25 hour x $71.31) = $4,421.
    Time = 248 x (0.25 hour) = 62.
Total Over 10 Years
    Cost = ($15,884 + $4,019 + $4,067 + $4,116 + $4,165 + $4,215 +
$4,266 + $4,317 + $4,369 + $4,421) = $53,837.
    Time = (248 hours + (9 x 62 hours)) = 806.
Average per Year
    Cost = $53,837/10 = $5,384.
    Time = 806/10 = 81 hours.

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
determined that there are no ICAO Standards and Recommended Practices
that correspond to these proposed regulations.

G. Environmental Analysis

    FAA Order 1050.1E identifies FAA actions that are categorically
excluded from preparation of an environmental assessment or
environmental impact statement under the National Environmental Policy
Act in the absence of extraordinary circumstances. The FAA has
determined this rulemaking action qualifies for the categorical
exclusion identified in Chapter 3, paragraph 312d, and involves no
extraordinary circumstances.

H. Regulations Affecting Intrastate Aviation in Alaska

    Section 1205 of the FAA Reauthorization Act of 1996 (110 Stat.
3213) requires the FAA, when modifying its regulations in a manner
affecting intrastate aviation in Alaska, to consider the extent to
which Alaska is not served by transportation modes other than aviation,
and to establish appropriate regulatory distinctions. In the NPRM, the
FAA requested comments on whether the proposed rule should apply
differently to intrastate operations in Alaska. The agency did not
receive any comments, and has determined, based on the administrative
record of this rulemaking, that there is no need to make any regulatory
distinctions applicable to intrastate aviation in Alaska.

V. Executive Order Determinations

A. Executive Order 13132, Federalism

    The FAA has analyzed this final rule under the principles and
criteria of Executive Order 13132, Federalism. The agency determined
that this action will not have a substantial direct effect on

the States, or the relationship between the Federal Government and the
States, or on the distribution of power and responsibilities among the
various levels of government, and, therefore, does not have Federalism
implications.

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

    The FAA analyzed this final 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
is not a ``significant energy action'' under the executive order and it
is not likely to have a significant adverse effect on the supply,
distribution, or use of energy.

VI. How To Obtain Additional Information

A. Rulemaking Documents

    An electronic copy of a rulemaking document my be obtained by using
the Internet--
    1. Search the Federal eRulemaking Portal (http://www.regulations.gov);
    2. Visit the FAA's Regulations and Policies Web page at http://www.faa.gov/regulations_policies/ or
    3. Access the Government Publishing Office's Web page at http://www.gpo.gov/fdsys/.
    Copies may also be obtained by sending a request (identified by
notice, amendment, or docket number of this rulemaking) to the Federal
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence
Avenue SW., Washington, DC 20591, or by calling<PHONE_NUMBER>.

B. Comments Submitted to the Docket

    Comments received may be viewed by going to http://www.regulations.gov and following the online instructions to search the
docket number for this action. Anyone is able to search the electronic
form of all comments received into any of the FAA's dockets by the name
of the individual submitting the comment (or signing the comment, if
submitted on behalf of an association, business, labor union, etc.).

C. Small Business Regulatory Enforcement Fairness Act

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

List of Subjects

14 CFR Part 121

    Aircraft, Aviation safety, Life-limited parts, Reporting and
recordkeeping requirements.

14 CFR Part 135

    Aircraft, Aviation safety, Life-limited parts, Reporting and
recordkeeping requirements.

The Amendment

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

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

0
1. The authority citation for part 121continues to read as follows:

    Authority: 49 U.S.C. 106(f), 106(g), 40113, 40119, 41706, 44101,
44701-44702, 44705, 44709-44711, 44713, 44716-44717, 44722, 44732;
46105; Pub. L. 111-216, 124 Stat. 2348 (49 U.S.C. 44701 note); Pub.
L. 112-95, 126 Stat. 62 (49 U.S.C. 44732 note).

0
2. Add new Sec.  121.368 as follows:

Sec.  121.368  Contract maintenance.

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

0
3. Amend Sec.  121.369 by adding paragraph (b)(10) as follows:

Sec.  121.369  Manual requirements.

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

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

0
4. The authority citation for part 135 continues to read as follows:

    Authority: 49 U.S.C. 106(f), 106(g), 41706, 40113, 44701-44702,
44705, 44709, 44711-44713, 44715-44717, 44722, 45101-45105.

0
5. Add new Sec.  135.426 to read as follows:

Sec.  135.426  Contract maintenance.

    (a) A certificate holder may arrange with another person for the
performance of maintenance, preventive maintenance, and alterations as
authorized in Sec.  135.437(a) only if the certificate holder has met
all the requirements in this section. For purposes of this section--
    (1) A maintenance provider is any person who performs maintenance,
preventive maintenance, or an alteration for a certificate holder other
than a person who is trained by and employed directly by that
certificate holder.
    (2) Covered work means any of the following:
    (i) Essential maintenance that could result in a failure,
malfunction, or defect endangering the safe operation of an aircraft if
not performed properly or if improper parts or materials are used;
    (ii) Regularly scheduled maintenance; or
    (iii) A required inspection item on an aircraft.
    (3) Directly in charge means having responsibility for covered work
performed by a maintenance provider. A representative of the
certificate holder directly in charge of covered work does not need to
physically observe and direct each maintenance provider constantly, but
must be available for consultation on matters requiring instruction or
decision.
    (b) Each certificate holder must be directly in charge of all
covered work done for it by a maintenance provider.
    (c) Each maintenance provider must perform all covered work in
accordance with the certificate holder's maintenance manual.
    (d) No maintenance provider may perform covered work unless that
work is carried out under the supervision and control of the
certificate holder.
    (e) Each certificate holder who contracts for maintenance,
preventive maintenance, or alterations must develop and implement
policies, procedures, methods, and instructions for the accomplishment
of all contracted maintenance, preventive maintenance, and alterations.
These policies, procedures, methods, and instructions must provide for
the maintenance, preventive maintenance, and alterations to be
performed in accordance with the certificate holder's maintenance
program and maintenance manual.
    (f) Each certificate holder who contracts for maintenance,
preventive maintenance, or alterations must ensure that its system for
the continuing analysis and surveillance of the maintenance, preventive
maintenance, and alterations carried out by a maintenance provider, as
required by Sec.  135.431(a), contains procedures for oversight of all
contracted covered work.
    (g) The policies, procedures, methods, and instructions required by
paragraphs (e) and (f) of this section must be acceptable to the FAA
and included in the certificate holder's maintenance manual, as
required by Sec.  135.427(b)(10).
    (h) Each certificate holder who contracts for maintenance,
preventive maintenance, or alterations must provide to its FAA
Certificate Holding District Office, in a format acceptable to the FAA,
a list that includes the name and physical (street) address, or
addresses, where the work is carried out for each maintenance provider
that performs work for the certificate holder, and a description of the
type of maintenance, preventive maintenance, or alteration that is to
be performed at each location. The list must be updated with any
changes, including additions or deletions, and the updated list
provided to the FAA in a format acceptable to the FAA by the last day
of each calendar month.

0
6. Amend Sec.  135.427 by adding paragraph (b)(10) as follows:

Sec.  135.427  Manual requirements.

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

    Issued under authority provided by 49 U.S.C. 106(f), 44701(a),
and 44703 in Washington, DC, on February 9, 2015.
Michael P. Huerta,
Administrator.
[FR Doc. 2015-04179 Filed 3-3-15; 8:45 am]
BILLING CODE 4910-13-P