All posts tagged 'FAR' - Page 2

Understanding The FAA's New Aircraft Re-Registration And Renewal Requirements



On July 20, 2010 the FAA published a Final Rule amending the FAA's regulations regarding aircraft registration. As a result, if you own an aircraft that is registered with the FAA's Aircraft Registry (the "Registry") you are going to have to renew the registration for your aircraft.

Background

The Registry is responsible for developing and maintaining the system of registration for United States civil aircraft. One of the Registry's primary responsibilities is to maintain an electronic database for all U.S. registered aircraft. The database identifies each registered aircraft by its registration number (N- number), its complete description, and the name and address of its registered owner.

According to the FAA, "approximately one-third of the 357,000 registered aircraft records it maintains are inaccurate and that many aircraft associated with those records are likely ineligible for United States registration." Although the current regulations require aircraft owners to report the sale of an aircraft, the scrapping or destruction of an aircraft, or a change in the aircraft owner's mailing address, apparently many aircraft owners have not complied with these requirements. As a result, the FAA has implemented its Final Rule to improve the currency and accuracy of the Registry's database.

The Final Rule requires re-registration of all U.S. civil aircraft over a 3 year period in order to update the Registry's database and to enable the Registry to cancel the registrations of those aircraft that are not re-registered. Thereafter, aircraft owners will need to renew their aircraft registrations every 3 years.

The Re-Registration/Renewal Process

Under the Final Rule, aircraft registrations will now be limited to a 3-year period. At the end of each 3-year interval, an aircraft's registration will expire and the aircraft will need to be re-registered. This rule establishes the expiration of registration for all aircraft registered before October 1, 2010, and provides for the re- registration of all aircraft over a 3-year period according a schedule contained in the rule.

For aircraft registered on or after October 1, 2010, the aircraft registration's expiration date will be printed on the registration certificate and will be 3 years from the last day of the month in which registration or re-registration occurred. Once renewed, an aircraft's registration will expire 3 years from the previous expiration date. Replacement registration certificates issued on or after October 1, 2010, will display the same expiration date that was shown on the replaced registration certificate. If the replaced registration certificate did not display an expiration date, the replacement certificate will display an expiration date from the above-schedule based on the month of issue of the replaced registration certificate.

The FAA will issue replacement certificates after an address update, an N-number change, or when a certificate is reported as lost or mutilated. However, it is important to note that a replacement registration certificate will not constitute re-registration or renewal. Similarly, the replacement certificate will not change the registration expiration date applicable to the aircraft at the time the replacement registration certificate is issued.

When an aircraft's registration is approaching expiration, the Registry will send an aircraft owner two reminder notices. The first reminder notice will be sent 180 days before an aircraft's registration is scheduled to expire. This notice will identify the aircraft, its expiration date, and the 3-month filing window during which a registration or renewal application should be submitted. It will also provide instructions for completing the registration or renewal process.

In order to receive a new registration certificate before the old certificate expires, an aircraft owner will need to file the re-registration or renewal application within the assigned window. However, once an aircraft has completed re-registration and is approaching a required renewal, the aircraft owner may submit the required renewal information as soon as the first reminder notice is received.

The Registry will send a second reminder notice at the end of the 3-month filing window if the aircraft owner has not yet re-registered or renewed the aircraft's registration. The 3- month filing window will close 2 months prior to the scheduled expiration date for the aircraft's registration to allow the Registry sufficient time to process the application and mail the new certificate. If an aircraft owner files an applications after the filing window has closed, the application will still be processed; however, the new certificate may not arrive until after the current certificate has expired.

To avoid confusion between the normal registration process and the re-registration process, the Aircraft Registration Application, AC Form 8050-1, will not be used for re-registration. The Registry has created a separate application form that will be available online, here. Aircraft owners should be aware that the re-registration/renewal application does not grant any temporary authority for operation of an aircraft, unlike that provided by retaining the pink copy of Form 8050-1. As a result, if a re-registration/renewal application is filed late and a new registration certificate is not received by the time the current registration certificate expires, the aircraft owner would not be able to operate the aircraft between the time when the current certificate expires and when the new certificate is received.

The Final Rule provides for both online re-registration and renewal when no changes are required. However, if changes to the registration are required (e.g. address change, etc.), then the re-registration/renewal application may not be submitted online and must be mailed to the Registry. According to the Final Rule, the Registry will post information on its website identifying aircraft as they move through the various stages of re-registration and renewal so aircraft owners and other interested parties can track the process.

Aircraft owners will need to pay $5.00 to re-register their aircraft and then another $5.00 each time the aircraft's registration is renewed. (Although this doesn't seem like a lot of money, unfortunately the registration and administrative fees may increase over time, depending upon whether the latest version of the FAA reauthorization bill passes. Under that bill, the FAA would be required to increase fees to $130 for initial registration and $45 for renewals.)

Consequences For Failure To Re-Register/Renew

If an aircraft owner fails to re-register or renew an aircraft's registration, the registration will not end immediately. Rather, the Registry will wait 30 days to ensure that any late filed requests from the aircraft owner have been processed. In the absence of such requests, and assuming the Registry has a good address on file for the aircraft owner, the Registry will then send a letter to the aircraft owner providing notice of the pending cancellation of the aircraft's registration. The aircraft owner will then have 60 days within which to reserve the N-number or register the aircraft. If the Registry does not receive a reply within 60 days, the aircraft's registration will then be cancelled. If the Registry does not have a good address for the aircraft owner, cancellation of the aircraft's registration will be scheduled for no sooner than 90 days from the date of expiration. Once an aircraft's registration is cancelled, the N-number will be unavailable for assignment for a period of 5 years.

Conclusion

The Final Rule is effective October 1, 2010. Thus, all aircraft owners will need to comply. How can you minimize the hassle associated with the Final Rule? First, since the re-registration notice will be sent to the address on file with the Registry, verify now that your address in the Registry is correct. If you need to update the information, you can do that directly with the Registry or through an aviation attorney. Second, submit your application as early as possible once you receive your first reminder notice to allow the Registry time to process and mail your new registration.

If you follow these steps, hopefully the re-registration/renewal process will be nothing more than a minor inconvenience. And, as always, if you have problems contact an aviation attorney for help.

4th Circuit Court Of Appeals Affirms NTSB's "Congested Area" Determination


In my article, Identification Of A "Congested Area" Under FAR § 91.119: Hindsight Is 20/20, I discussed an NTSB decision, Administrator v. Folk, in which the primary issue was whether the airmen's low-level flights occurred over a "congested area" as referenced in FAR § 91.119. In a recent unpublished decision, Folk v. Sturgell, the United States Court of Appeals, Fourth Circuit has affirmed the NTSB's determination that the area in question was in fact a "congested area."

The Case

In the Folk case, the FAA alleged that the airmen had both engaged in agricultural aircraft operations in violation of 14 C.F.R. §§ 137.51(b)(1) through (3)2 ( agricultural operations over congested areas); 91.119 (minimum safe altitudes); and 91.13(a) (careless and reckless). One of the main disputes in the case was whether the area over which the airmen had flown was a "congested area." At the hearing, the FAA argued that its case-by-case analysis of the facts and circumstances supported the conclusion that the area was indeed a "congested area." One of the airmen's arguments in response to the FAA's position was that the logical extension of the FAA's position that congested area determinations are made on a case-by-case basis is that nobody can know whether or not an area is congested until after their case has been decided.

During the hearing, the FAA inspector who investigated the allegations regarding the airmen testified that "if an operator conducts an application in an area the FAA might later determine to be a congested area, the operator ignores that potentiality at his or her peril." The inspector went on to say that he had warned the airmen that the area around their farm could be considered a congested area. When the airmen requested a definition of "congested area," the inspector told them there was no definition, and referred the airmen to FAA guidance, including an inspectors’ handbook. After studying the regulations and, apparently, finding no examples in the handbook that applied to their operations, the airmen then decided the area around their farm was not congested.

Unfortunately for the airmen, the ALJ agreed with the FAA. He concluded that the area over which the airmen had flown contained upwards of 30 homes, buildings, and structures and, as a result, was a "congested area." The ALJ also rejected a number of other defenses raised by the airmen and held that the airmen violated the regulations as alleged.

On appeal, the airmen renewed their argument that the area over which they had flown was not a "congested area." Initially, the Board observed that the FAA "has not pronounced a precise definition that includes the factors of the density of the population in an area; whether there is surface traffic in the vicinity; or the numbers and proximity of residences, buildings, or structures." It went on to note that "it is clear that the intent of the regulations is to protect persons and property on the ground and to fairly apply the rules to operators of aircraft, and, in the case of Part 137, to operators of agricultural aircraft." The Board then affirmed the ALJ's determination that the area over which the airmen had operated was a "congested area."

The Fourth Circuit's Decision

In their appeal of the NTSB's decision to the Fourth Circuit, the airmen argued that "the term 'congested area' violates the vagueness doctrine under the Due Process Clause (an argument the airmen were not able to make to the NTSB because the Board lacks jurisdiction to consider constitutional challenges), and that substantial evidence does not support the determination that they flew over a congested area."

With respect to the due process argument, the Court initially noted that a "statute is impermissibly vague if it either (1) fails to provide people of ordinary intelligence a reasonable opportunity to understand what conduct it prohibits or (2) authorizes or even encourages arbitrary and discriminatory enforcement." The Court then held that the airmen failed to show that they lacked a reasonable opportunity to understand what conduct FAR 137.51 prohibits. Rather, the Court found that the inspector's warnings put the airmen on notice that the area could be considered congested and the airmen could have resolved any doubt by filing a congested area plan and waited for the inspector's response.

Additionally, the Court determined that the airmen had not shown that FAR 137.51 "authorizes or even encourages arbitrary and discriminatory enforcement," or that the enforcement action against them was arbitrary. As a result, the Court concluded that FAR 137.51 was not unconstitutionally vague under the Due Process Clause.

Next, the Court reviewed the record to determine whether substantial evidence supported the NTSB's determination that the area was congested. The Court observed that approximately thirty houses are located in the general vicinity of the area and that the airmen's flights passed over corner sections of that area. Based upon that review, the Court concluded "that the area over which [the airmen] flew could reasonably be considered congested based on substantial evidence in the record."

Conclusion

Unfortunately, the Court's decision doesn't shed much light on the "congested area" issue nor does it provide any meaningful clarification. Because this type of case is decided on a "case by case" basis, I think the Court's decision relied heavily on the ALJ's and NTSB's factual findings. As a result, we still do not have a clear definition of what constitutes a "congested area."

The due process argument was an interesting defense. If the airmen hadn't been warned by the inspector or if the airmen had submitted a congested area plan but received not response from the FAA, perhaps then the Court may have been more sympathetic. On a positive note, it appears this argument could still be successful given the right set of facts.

In the meantime, make sure you are familiar with area over which you fly if you want to push the limits of 91.119 and remember that the FAA, NTSB and the Court will judge your flight using 20/20 hindsight.

The information contained in this article is intended for your education and benefit and should not be relied upon as advice to help you with your specific issue. Each case is unique and must be analyzed by an attorney licensed to practice in your area with respect to the particular facts and applicable current law before any advice can be given. Posting a comment to this article does not create an attorney-client relationship and advice will not be given until an attorney-client relationship has been established.

Off-Shore Aircraft Registration

In the maritime world, a ship is said to be "flying a flag of convenience" if it is registered in a foreign country "for purposes of reducing operating costs or avoiding government regulations." The country of registration determines the laws under which the ship is required to operate under and also that which are to be applied in any relevant maritime legal cases that might come about.

In aviation there are a multitude of reasons why you might choose to register your aircraft off-shore under the flag of a foreign country. Some of these include:

Complete Anonymity, i.e. if you suffer from celebrity notoriety; or you are a powerful corporate leader who relies on discreet and untracked movement within the territory of your competitors; or simply for personal reasons requiring anonymity. When your aircraft has been registered off-shore your privacy protection begins. If a journalist, corporate competitor or other interested party seeks the registered owner of your aircraft; their search will end with the contact details of your registered agent or trustee, and not with you.

Sales Tax or other Tax Avoidance, i.e. generally speaking, it is fairly simple for you to avoid a multitude of forms of taxation that are normally associated with the ownership and operation of a private or business aircraft, by registering it off-shore. Neutral Nationality Registration, i.e. this issue has become very prominent since we have moved into the new age of terrorism and unrest. By registering off-shore, you can fly internationally without instant recognition as being from the U.S.A.

Most foreign registries require that the registrant be a citizen of that country. The United States is the same: A U.S. citizen by definition of 14 Code of Federal Regulations (CFR) section 47.2 can be an individual, or partnership where each individual is a U.S. citizen, or a corporation organized under the laws of the United States, state, territory, or possession of the United States of which the president and at least two-thirds of the board of directors are U.S. citizens and 75 percent of the voting interest is owned or controlled by U.S. citizens. A resident alien is considered to be a corporation other than classified as a U.S. citizen, lawfully organized and doing business under the laws of the United States or of any state thereof, if the aircraft is based and used primarily in the United States; or a government entity (federal, state, or local). How then do these off-shore registries allow a foreigner to register with them? This is allowed by the employment of a native 'Trustee' or 'Agent' who acts on-behalf for the foreign ownership entity, under the auspices of a formal 'Trust Agreement.' In all cases there are annual fees that are payable to the agent. The U.S.A. aircraft registration branch is the only authority that I know of, that does not charge any annual registration fees.

Internationally, the most popular off-shore countries of registration are Bermuda, the United States of America, and now the relatively new player: the Isle of Mann. The "M" Registration was first introduced in 2007 by the government of this small island tax-haven which is located in the North Sea between England and Northern Ireland; it is probably better known for its T.T. motorcycle racing history rather than for its aviation industry.

Even though the aircraft eligible for entry onto the "M" or "Manx" registration must all be Type Certificated by the European Aviation Safety Agency (EASA), the Isle of Mann has chosen to more closely mimic the Federal Aviation Regulations of the United States rather than the bureaucratic tangles and inconsistencies that are normally found within the rules established by the European Aviation Authorities. Interestingly though, no non-resident islander can register any aircraft that is non-turbine powered and below 12,500 lbs MGTOW, or in the case of Helicopters, a non-twin-turbine powered machine.

Since a convenient loophole in the Value Added Tax (VAT) Regulations was recently exorcised by the European Union from the Danish Ministry of Taxations' rolls, whereby a 'flat-tax' was charged for an aircraft run through their tax-registration system, instead of the normal 25% or so, being charged like everyone else. The Isle of Man registry has quickly taken the lead largely because of its zero tax ratings for both corporations and inheritances, and depending on an aircraft owner's tax domicile, the Manx government provides a pathway for owners to either significantly reduce or even eliminate the VAT charge on their aircraft purchase.

By the beginning of November, 2009 almost 180 business jets and turbo-props had already been enrolled onto the Manx aircraft register. I am certain that this number shall continue climbing at a high rate. How do you or your company handle the Registration of you aircraft? Please click on the link below which states "Reply to this Article", your thoughts and comments would be very much appreciated. Be funny, be inspired, but most importantly of all, please be nice.

Have you had any experience with this topic? If so, Discuss it with us by clicking "Reply"

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