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U.S. Department of

Transportation

**FEDERAL AVIATION**

**ADMINISTRATION**

> **REGULATORY EVALUATION, REGULATORY FLEXIBILITY DETERMINATION,
> INTERNATIONAL TRADE IMPACT ASSESSMENT, AND UNFUNDED MANDATES
> ASSESSMENT**

Modification of Certain Medical Standards and Procedures and Duration of
Certain Medical Certificates

######## 

######## 

######## NOTICE OF PROPOSED RULEMAKING

**(14 CFR Parts 61, 65, 67 and 183)**

Office of Aviation Policy and Plans

####### Operations Regulatory Analysis Branch, APO-310

November 2006

**TABLE OF CONTENTS**

**[Section]{.underline}** **[Page No.]{.underline}**

Executive Summary i

I. Introduction 1

II\. Assumptions 1

III\. Costs 3

> A. Cost to reprint back of form 8500-8/9 3
>
> B. Cost to mail the reprinted 8500-8/9 forms 3

IV\. Cost-Savings 4

> A. Extend the duration of first and third-class medical certificates
> for individuals under age 40 4
>
> B. Improve the efficiency of the medical certification program for
> medical certificate holders under the age of 40 5

V. Benefits 5

VI\. Conclusion 6

VII\. Regulatory Flexibility Determination 7

VIII\. International Trade Impact Assessment 8

IX\. Unfunded Mandates Assessment 9

# EXECUTIVE SUMMARY

This proposal would extend the duration of first- and third- class
medical certificates for medical certificate holders under the age of 40
and make certain editorial amendments to the medical certification
regulations. The proposal is estimated to generate \$85.0 million
(\$59.7 million, discounted) of cost savings while only imposing
\$123,000 (\$115,000, discounted) of costs over 10 years.

[]{.mark}

The FAA conducted the required review of this proposed rule and
determined that it would not have a significant economic impact on a
substantial number of small entities. This proposed rule would have only
a domestic impact and therefore it would not affect any trade-sensitive
activity. This proposed rule does not contain an unfunded mandate.

# I. INTRODUCTION

This proposed rule would extend the duration of first- and third- class
medical certificates for medical certificate holders under the age of 40
and make certain editorial amendments to the medical certification
regulations. The intent of this proposal is to allow the FAA to dedicate
agency resources to the more safety-critical medical certification
cases.

# II. ASSUMPTIONS

-   Monetary values are expressed in 2005 dollars.

-   The FAA would revise Form 8500-8/9 at an estimated cost of \$40 per
    box.

-   The cost of a distribution clerk's time (employees who handle Form
    8500-8/9) is \$15.99[^1] an hour.

-   A distribution clerk would spend approximately 5 minutes per box to
    oversee the reprinting of Form 8500-8/9.

-   A distribution clerk would spend approximately 30 minutes to mail
    each box to the regional offices.

-   The postage rate is \$12.29 per box.

-   The current cost of a pilot medical exam is \$71.[^2]

-   1^st^ class medical certificate holders would have to renew
    175,000[^3] fewer certificates over 10 years if the FAA extended the
    duration of 1^st^ class medical certificates from 6 months to 1
    year.

-   3^rd^ class medical certificate holders would have to renew
    90,000[^4] fewer certificates over 10 years if the FAA extended the
    duration of 3^rd^ class medical certificates from 3 years to 5
    years.

-   The FAA used a weighted average wage of \$75.12 for the cost of time
    of 1^st^ class and 3^rd^ class pilots. Table 1 explains how this
    value was calculated.

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-   For 1^st^ class and 3^rd^ class pilots, travel cost is \$113,[^5]
    the cost of the exam is \$75,[^6] and the cost to fill out the form
    is \$38.[^7]

-   Each employee would spend approximately 30 minutes to review the
    medical certificates.

-   We estimate a blended wage of \$48.58 for the cost of time of
    employees that would review the medical. Table 2 explains how we
    calculated this value.

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# 

# III. COSTS

From 2007 to 2016, the total costs of the rule would be approximately
\$123,000 (\$115,000, discounted). The total cost of the proposed rule
includes the cost to reprint the back of Form 8500-8/9 and the cost to
mail the reprinted 8500-8/9 Forms.

**A. Cost to reprint back of Form 8500-8/9.**

§ 61.23(d) would extend the duration of first- and third-class medical
certificates for individuals under age 40. This change would result in
costs to the FAA to reprint the back of Form 8500-8/9 to include the new
duration extensions. We estimate that we need to reprint 2,000 boxes at
\$40 per box for a cost of \$80,000. A distribution clerk, with an
hourly cost of time of \$15.99, would spend about 5 minutes per box to
oversee the reprinting for a cost of \$2,600 per box. From 2007 to 2016,
the total costs to the FAA would be approximately \$83,000.

**B. Cost to mail the reprinted 8500-8/9 Forms.**

The FAA would have to mail the reprinted 8500-8/9. We need to mail 2,000
boxes at \$12.29 per box for a cost of approximately \$25,000. A
distribution clerk, with a cost of time of \$15.99, would spend 30
minutes per box mailing the 2,000 boxes for a cost of approximately
\$16,000. From 2007 to 2016, we estimate a total cost to the FAA of
approximately \$41,000.

**IV. COST-SAVINGS**

From 2007 to 2016, the total cost-savings of the rule would be
approximately \$85.0 million (\$59.7 million, discounted). Table 3
illustrates these cost-savings.

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A.  **Extend the duration of first and third-class medical certificates
    for individuals under age 40.**

Section, § 61.23(d) would extend the duration of first- and third-class
medical certificates for individuals under age 40. This change would
result in cost savings to airmen who would not have to renew their 1^st^
and 3^rd^ class medical certificates as often. Over a ten-year period,
we estimate that 1^st^ class pilots would renew 175,000 fewer times at a
cost of \$297[^8] per medical certificate exam and that 3^rd^ class
pilots would renew 90,000 fewer times at a cost of \$297 per medical
certificate exam for a total cost-saving of approximately \$78.6
million[^9].

B.  **Improve the efficiency of the medical certification program for
    medical certificate holders under the age of 40.**

This proposal would result in cost savings to the FAA from processing
fewer 1^st^ and 3^rd^ class medical certificates. We estimate that it
takes 30 minutes to process each certificate and that the FAA would
process 175,000 fewer 1^st^ class certificates and 90,000 fewer 3^rd^
class certificates at a cost of time of \$48.58 per hour for a total
cost-saving of approximately \$6.4 million over 10 years.

#### V. BENEFITS

There would be no degradation in safety as a result of this proposed
rule. The FAA believes that extending the duration of first-class
medical certificates to 1 year and third-class medical certificates to 5
years for individuals under age 40 would maintain an equivalent level of
safety for the following reasons:

-   Certification trends consistently indicate no significant increase
    either in undetected pathology between required medical examinations
    or in medical disability among applicants under 40 years.

-   Existing part 67 medical standards would remain unchanged.
    Therefore, under-age-40 individuals manifesting medical conditions
    that represent a risk to safety would continue to be denied
    certification.

-   Individuals who apply for and receive a special issuance of a
    medical certificate would continue to be restricted in their flying
    activities and would continue to be examined more thoroughly and
    more frequently compared to other airmen.

-   Section 61.53, which prohibits individuals from exercising pilot
    privileges during periods of medical deficiency, would continue to
    apply to under-age-40 pilots.

-   Considering these factors, there is no increased risks associated
    with extending the duration of medical certificates, especially
    given that existing safeguards would continue to apply. Adopting
    these extended validity periods for under age-40 medical certificate
    holders also would conform with International Civil Aviation
    Authority standard under Annex 1, 1.2.5.2.

# VI. CONCLUSION

This proposal results in an estimated net cost savings of \$84.9 million
(\$59.6 million, discounted), over the next ten years, as shown in the
next table. The FAA invites public comments and requests that all
comments be accompanied with clear and detailed supporting
documentation.

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# VII. REGULATORY FLEXIBILITY DETERMINATION

The Regulatory Flexibility Act of 1980 (Public Law 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.

This proposal would not impact small entities. It would only impact
1^st^ class and 3^rd^ class pilots who are expected to save about \$300
for each time that they do not have to renew their medical certificates.
Therefore, the FAA certifies that this proposed rule would not have a
significant economic impact on a substantial number of small entities.

# VIII. INTERNATIONAL TRADE IMPACT ASSESSMENT

The Trade Agreements Act of 1979 (Public Law 96-39) prohibits Federal
agencies from establishing any standards or engaging in related
activities that create unnecessary obstacles to the foreign commerce of
the United States. Legitimate domestic objectives, such as safety, are
not considered unnecessary obstacles. The statute also requires
consideration of international standards and, where appropriate, that
they be the basis for U.S. standards. The FAA has assessed the potential
effect of this proposed rule and has determined that it would have only
a domestic impact and therefore no affect on international trade.

# IX. UNFUNDED MANDATES ASSESSMENT

Title II of the Unfunded Mandates Reform Act of 1995 (Public Law 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 (adjusted
annually for inflation with the base year 1995) 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 \$128.1
million in lieu of \$100 million. This proposed rule does not contain
such a mandate.

[^1]: \$12.95 per hour x 1.2345 for fringe benefits. Source for the
    \$12.95: AAM-400, Aerospace Medical Education Division.

[^2]: We assume the same cost for the medical exams of 1^st^ class and
    3^rd^ class applicants under the age of 40 because the medical exam
    for the former has similar requirements to the medical exam for the
    latter, except that under 67.111 (b) 1^st^ class applicants must
    have an electrocardiographic examination.

[^3]: 35,000 1^st^ class medical certificates x 0.5 year x 10 years =
    175,000 fewer certificates.

[^4]: 15,000 3^rd^ class medical certificates x (3 years/ 5 years) x 10
    years = 90,000 fewer certificates.

[^5]: \$75.12 per hour x 1.5 hours.

[^6]: \$75.12 per hour x 1 hour.

[^7]: \$75.12 per hour x 0.5 hours.

[^8]: \$297 = \$71 price of medical exam + \$113 for travel time + \$75
    time for the exam + \$38 time to fill out form.

[^9]: Because AME's would renew fewer pilot certificates, we estimate a
    potential loss of income of \$400 per year for each AME.
    Calculation:
    $\frac{(\text{35},\text{000}_{1}\text{stClass}_{\text{pilots}} \times 0\text{.}5 \times \$\frac{\text{71}}{\text{certificate}}) + (\text{15},\text{000}_{3}\text{rdClass}_{\text{pilots}} \times 0\text{.}6 \times \$\frac{\text{71}}{\text{certificate}})}{4,\text{500}\text{AME}'s} \approx \$\text{400}\text{.}$