Welcome to GlobalAir.com | 888-236-4309 |    | Please Register or Login
Aviation Articles
Home Aircraft For Sale  | Aviation Directory  |  Airport Resource  |   Blog  | My Flight Department  | MaxTrax
Aviation Articles

Keeping the FAA Happy When Registering an Aircraft Owned by an LLC

by Greg Reigel 6. July 2015 11:46
Share on Facebook

A Limited Liability Company ("LLC") provides personal liability protection to its owners, as well as the tax and management flexibility. Both of these advantages have resulted in the increased use of LLC's for aircraft ownership. However, in order for the FAA to accept an application for aircraft registration submitted by an LLC, the aircraft owner needs to comply with the registration requirements of 14 C.F.R. Part 47.

One of those requirements is that the LLC must meet the U.S. citizenship requirements of 14 C.F.R. § 47.3. One of the ways to prove to the FAA that the LLC does, in fact, satisfy those requirements is to submit a "Statement in Support of Registration by a Limited Liability Company" ("LLC statement"). Although this isn't the only way to prove citizenship to the FAA, it is one of the most common methods.

In the LLC statement, the LLC must identify its members and confirm whether each of its members is a U.S. citizen. However, if one of the members is another LLC, the FAA will require an additional LLC statement for that member LLC identifying its members and confirming that those members are also U.S. citizens. The idea is that the FAA wants to drill down to identify which of the individuals involved are U.S. citizens and then determine whether the LLC qualifies as a U.S. citizen under 14. C.F.R. § 47.2. If that second (or third, if necessary) LLC statement isn't filed, the FAA will not register the aircraft until it either receives the LLC statement(s) or it receives other proof (usually organizational documents for the LLC) showing the citizenship of the members.

When all of the LLC's individual or entity members are U.S. citizens, then the LLC will be considered a U.S. citizen. If all of the individuals or entity members are not U.S. citizens, in order for the LLC to be satisfy the citizenship requirement, 2/3 of its officers/managers satisfy U.S. citizenship AND whether 75% of the voting interest of the LLC is controlled by individuals or entities meeting U.S. citizenship requirements.

Another item on the LLC statement indicates whether the LLC is managed by its members or managers. Whatever answer is provided, that information needs to match the information provided by the LLC on the application for registration. For example, if the LLC statement indicates that the LLC is managed by its members, then the individual who signs the application for registration should indicate his or her title as "member" or "managing member." On the other hand, if the LLC statement indicates that the LLC is managed by managers, then the individual signing the application should indicate his or her title as "manager" or some variant that includes the word manager (e.g. chief manager, chief financial manager etc.). If the LLC statement and the application for registration do not match, the FAA will reject the application.

Additionally, although an LLC may also be managed by officers, if the individual signs the application for registration as an officer (e.g. president, vice-president, treasurer etc.) the LLC statement will not be sufficient for the FAA to determine whether that individual has the appropriate authority. In that case, the FAA will reject the application unless it also receives the LLC's operating agreement or some other documentation evidencing the officer's authority to sign on behalf of the LLC.

Applying for registration of an aircraft with the FAA on behalf of an LLC can be tricky. The aircraft owner(s) using an LLC to own an aircraft need to carefully dot the "i's" and cross the "t's" to ensure that the FAA will accept the LLC's application and register the aircraft. Understanding the LLC statement and the FAA's requirements can help you avoid some of the "gotcha's" that can cause problems for an aircraft owner trying to register an aircraft with the FAA using an LLC.

Tags: , , ,

Greg Reigel

May A Pilot Continue to Act as Pilot in Command Despite a Lapse in § 61.58 Currency?

by Greg Reigel 2. June 2015 17:42
Share on Facebook

If you fly an aircraft that is type certificated for more than one required pilot flight crewmember or is turbojet-powered, you know that 14 C.F.R. § 61.58(a) requires that you have regular proficiency checks. Specifically, within the preceding 12 calendar months you need to have completed a proficiency check in an aircraft that is type certificated for more than one required pilot flight crewmember or is turbojet-powered, and within the preceding 24 calendar months you must have completed a proficiency check in the particular type of aircraft in which you will serve as PIC that is type certificated for more than one required pilot flight crewmember or is turbojet-powered.

So, when do you actually need to complete each proficiency check? Well, if you complete the proficiency check in the calendar month before or the calendar month after the month it is due, Section 61.58(i) states that "the pilot is considered to have taken it in the month in which it was due for the purpose of computing when the next pilot-in-command proficiency check is due." This means you have a "grace month" within which to complete the 12- and 24-month proficiency check requirements. But, are you permitted to continue to act as a PIC in an aircraft that is type certificated for more than one required pilot flight crewmember or is turbojet-powered during the grace month after the proficiency check has lapsed?

The answer is "Yes." According to the FAA in a recent Legal Interpretation, a pilot may continue to act as pilot in command of an aircraft that is type certificated for more than one required pilot flight crewmember or is turbojet-powered during the month after a Section 61.58 proficiency check is due. But keep in mind that when a pilot completes a Section 61.58 proficiency check during the grace month (either before or after the proficiency check is due) he or she is considered to have completed the proficiency check during the month it was due for the purpose of calculating the due date for the next Section 61.58 proficiency check.

Also, pilots and operators shouldn't use the grace month as a way to regularly extend a 12-month proficiency check to a 13-month proficiency check. However, this interpretation is certainly helpful to those pilots who are unable to complete their recurrent training/proficiency check requirements in the month in which they are due.

Tags: , ,

Greg Reigel

More Safety Pilot Questions Answered

by Greg Reigel 30. April 2015 15:00
Share on Facebook

This month I thought I would answer some of the questions I routinely hear in connection with operations involving safety pilots, other than questions relating to how to log safety pilot time which was discussed in my January article Logging Safety Pilot Time.


Does a safety pilot need a current medical certificate? Yes. Section 91.109(b) requires a safety pilot for operations in simulated instrument conditions. And since 14 C.F.R. § 61.3(c) requires a person to hold a valid medical certificate in order to act in any capacity as a required pilot flight crewmember, a safety pilot must therefore hold a current, appropriate airman medical certificate.


Does a safety pilot need an instrument rating? No, an airman acting as a safety pilot under Section 91.109(b) does not need an instrument rating as long as the flight is being conducted in visual meteorological conditions. Additionally, an airman who possesses an instrument rating does not need to be instrument current under 14 C.F.R. § 61.57(c)(1) in order to act as a safety pilot because that section only applies to an airman acting as pilot in command, not an airman acting as a safety pilot.


Does a safety pilot need a high-performance endorsement prior to acting as safety pilot in a high-performance aircraft? Currently the regulations do not require a safety pilot to have a high-performance endorsement when acting as a safety pilot in a high-performance aircraft. However, the FAA does encourage those airman who act as safety pilots to be thoroughly familiar and current in the aircraft that is used. Presumably this would include operation of the components that make the aircraft a high-performance aircraft.


Does a safety pilot need a current flight review? No. The requirement in 14 C.F.R. §61.56(c) that a flight review be accomplished within the preceding 24 months only applies to airmen who act as pilot in command. As along as the safety pilot is not acting as pilot in command for any portion of the flight then he or she does not need a current flight review.


May a safety pilot log cross country time for a flight? A pilot only acts as a safety pilot during the time in which the other pilot is engaged in simulated instrument flight (e.g. wearing a view limiting device). Since simulated instrument flight does not include take-off and landing, a safety pilot is not a required crewmember during that portion of the flight. As a result, the safety pilot is not acting as a safety pilot for the entire flight and, thus, may not log cross country time for any portion of the flight.


Is a safety pilot a "second in command" for the flight? It is not uncommon for airmen to refer to their safety pilot as being "second in command." However, unless the aircraft being used is type certificated for operation by more than one pilot or the operation conducted by the pilots requires a designated second in command (e.g. an operation conducted under 14 C.F.R. 135.101 which requires a second in command for IFR operations), the designation of a safety pilot as an acting second in command crewmember is not accurate.


Under the regulations, an airman may "log" SIC time for the portion of the flight during which he or she was "acting" or "serving" as safety pilot because the safety pilot was a required flight crewmember for that portion of the flight under 14 C.F.R. § 91.109(b). In that situation, assuming neither the aircraft nor the operation requires two pilots, the airman is only "acting" or "serving" as a safety pilot, not as second in command for the flight.


Is a safety pilot required to share expenses with a private pilot for a simulated instrument flight? 14 C.F.R. § 61.113(c) provides that a private pilot may not pay less than his or her pro-rata share of the expenses of a flight with passengers. However, under Section 91.109(b), both the private pilot and the safety pilot are required crewmembers for the simulated instrument flight and neither is considered a passenger for the flight. As a result, assuming the only individuals on board the aircraft for the simulated instrument flight are the private pilot and the safety pilot, then Section 61.113(c)'s pro-rata expense sharing requirement does not apply to that flight.

As always, fly safe and fly smart.

Tags:

aircraft instruments, IFR, IMC, safety | Greg Reigel

Equal Access To Justice Act: When Are Fees "Incurred"?

by Greg Reigel 1. April 2015 17:14
Share on Facebook

As you may recall from previous articles, if the FAA pursues an enforcement or civil penalty action and then loses, the Equal Access to Justice Act (“EAJA”) allows a certificate holder or target of the civil penalty action to seek reimbursement from the FAA for the attorney’s fees and expenses incurred by the certificate holder or target of the civil penalty action to defend against the claims asserted by the FAA. The EAJA is found at 5 U.S.C. 504 and is implemented in 49 CFR 826.

According to 49 CFR 826.1,

The Equal Access to Justice Act, 5 U.S.C. 504 (the Act), provides for the award of attorney fees and other expenses to eligible individuals and entities who are parties to certain administrative proceedings (adversary adjudications) before the National Transportation Safety Board (Board). An eligible party may receive an award when it prevails over the Federal Aviation Administration (FAA), unless the Government agency's position in the proceeding was substantially justified or special circumstances make an award unjust.

In order to award EAJA fees to a certificate holder or target of a civil penalty action who is requesting reimbursement of fees (the “Applicant”), one of the issues an administrative law judge ("ALJ") must decide is whether the fees were actually “incurred” by the Applicant. In a situation where the Applicant has paid an attorney for representation throughout the enforcement process out of the Applicant’s own pocket, this is easy. Conversely, when an Applicant’s employer or union pays the fees then the Applicant did not incur the fees for purposes of EAJA. However, if the employer advances the fees and the Applicant is obligated to repay those fees regardless of the outcome of the action, then the Applicant would also be considered to have incurred the fees.

Also, it may be possible for an Applicant to incur fees by retaining an attorney on a contingent fee basis under which the attorney would only receive payment in the event of an EAJA recovery. However, this type of arrangement must be documented at the time the attorney is retained in order for it to qualify under EAJA. In general, documentation of the payment of, or obligation for, the fees is critical to recovery under EAJA.

But what if an applicant doesn't have documentation to show an agreement to pay or be responsible for payment to the attorney who represented the Applicant before the Board? Well, a recent decision by the United States Court of Appeals in the District of Columbia addressed this very issue.

In Roberts v. National Transportation Safety Board the Court was asked to review a decision by the Board affirming an ALJ's rejection of Mr. Roberts' EAJA application on the basis that Mr. Roberts had not actually "incurred" attorney's fees. The ALJ found that Mr. Roberts' attorney also represented his employer and, in the absence of any written agreement between Mr. Roberts and either his employer or the attorneys to the contrary, the ALJ concluded that Mr. Roberts' employer had paid the attorneys. As a result, the ALJ held that Mr. Roberts had not personally incurred the attorney's fees as required by EAJA. The Board then affirmed the ALJ's decision, even though it reversed the ALJ's earlier finding that the employer had agreed to pay for Mr. Roberts' attorney's fees.

On appeal to the Court of Appeals, Mr. Roberts argued that the Board's determination that he had not personally incurred the fees was arbitrary and capricious. The Court agreed and found that the Board's refusal to consider that Mr. Roberts may have been obligated to pay attorney's fees under a quantum meruit theory (also called an implied contract theory) was arbitrary and capricious. The Court observed that Alabama law (the state law applicable to any relationship Mr. Roberts had with his attorney) implies a promise to pay compensation for services rendered to another that are knowingly accepted even in the absence of a valid written contract. The Court went on to observe that the Board's conclusion that Mr. Roberts had not proven that he was responsible for attorney's fees because the attorney's invoices didn't clearly say so defied logic. And the Court determined the Board's reliance upon the absence of an express contract as dispositive was in error.

However, although the Court held that Mr. Roberts had incurred attorney's fees, it noted that all of the fees and expenses claimed by Mr. Roberts may not necessarily be eligible for reimbursement. The Court remanded the case back to the NTSB for it to consider which submitted fees and expenses were supported by sufficient documentation and whether any reduction in award is appropriate.

Conclusion

This decision will certainly help anyone applying for an EAJA award after having to defend themselves against an unjustified certificate or civil penalty action. However, properly documenting both the obligation to pay fees, as well as the amount of the fees is still recommended. But at least the Court's decision provides the opportunity for an applicant to claim fees have been incurred even in the absence of a written agreement. And that's a "win" in my book.

Logging Safety Pilot Time

by Greg Reigel 5. January 2015 17:43
Share on Facebook

In order to operate an aircraft in simulated instrument conditions, certain requirements must be met. 14 C.F.R. § 91.109(b) allows this type of operation in an aircraft equipped with fully functioning dual controls as long as "(1) the other control seat is occupied by a safety pilot who possesses at least a private pilot certificate with category and class ratings appropriate to the aircraft being flown; and (2) the safety pilot has adequate vision forward and to each side of the aircraft, or a competent observer in the aircraft adequately supplements the vision of the safety pilot." Unfortunately, Section 91.109(b) doesn't address the logging of flight time in connection with operations involving a safety pilot.

In order to understand how a pilot may "log" his or her flight time, it is important to keep in mind that "acting" or "serving" as a pilot in command ("PIC") or second in command ("SIC") during a flight is different than "logging time" for that flight. 14 C.F.R. 61.51(e) states that a pilot may log PIC time when (i) the pilot is the sole manipulator of the controls of an aircraft for which the pilot is rated; (ii) when the pilot is the sole occupant in the aircraft; or (iii) when the pilot acts as pilot in command of an aircraft for which more than one pilot is required under the type certification of the aircraft or the regulations under which the flight is conducted. Section 61.51(f) states that a pilot may log SIC time only for that flight time during which that person: (1) Is qualified in accordance with the second-in-command requirements of § 61.55 of this part, and occupies a crewmember station in an aircraft that requires more than one pilot by the aircraft's type certificate; or (2) Holds the appropriate category, class, and instrument rating (if an instrument rating is required for the flight) for the aircraft being flown, and more than one pilot is required under the type certification of the aircraft or the regulations under which the flight is being conducted.

Under these regulations, it is not possible for two pilots to "act" or "serve" as PIC simultaneously during a flight. However, it is possible for two pilots to log PIC flight time simultaneously. PIC flight time may be logged by both the PIC responsible for the operation and safety of the aircraft during flight time in accordance with 14 C.F.R. § 1.1 (e.g. the pilot "acting" or "serving" as PIC), and by the pilot who acts as the sole manipulator of the controls of the aircraft for which the pilot is rated.

So, in a typical simulated instrument flight, the pilot under the hood may log PIC time for that time in which he or she is the sole manipulator of the controls of the aircraft, provided that he or she is rated for that aircraft. The safety pilot may concurrently log as SIC time that time during which he or she is "acting" or "serving" as safety pilot (e.g. when the other pilot is actually under the hood) because the safety pilot is a required crewmember for operations under Section 91.109(b).

However, the two pilots may, prior to initiating the flight, agree that the safety pilot will be the PIC responsible for the operation and safety of the aircraft during the flight (e.g. the safety pilot will "act" or "serve" as PIC). In this situation, the safety pilot may log all the flight time as PIC time under Section 61.51(e)(iii), provided he or she is otherwise qualified to "act" or "serve" as a PIC (e.g. having a current flight review, appropriate ratings and endorsements etc.) and the pilot under the hood may log, concurrently, all of the flight time during which he or she is the sole manipulator of the controls as PIC time in accordance with Section 61.51(e)(i).

So you can see, depending upon the circumstances, a safety pilot may be able to both "act" as second in command or pilot in command and "log time" as second in command or pilot in command. In other situations, he or she may only be able to do one or the other. Although it can be tricky, airmen need to make sure they understand the distinction to ensure that they are logging their time accurately and in compliance with the regulations.

Tags: ,

Greg Reigel





GlobalAir.com on Twitter