[Federal Register Volume 71, Number 170 (Friday, September 1, 2006)]
[Rules and Regulations]
[Pages 52250-52259]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-7355]



[[Page 52249]]

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Part III





Department of Transportation





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Federal Aviation Administration



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14 CFR Parts 21 and 91



Standard Airworthiness Certification of New Aircraft; Final Rule

Federal Register / Vol. 71, No. 170 / Friday, September 1, 2006 / 
Rules and Regulations

[[Page 52250]]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Parts 21 and 91

[Docket No. FAA-2003-14825; Amendment No. 21-88]
RIN 2120-AH90


Standard Airworthiness Certification of New Aircraft

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: This final rule amends FAA regulations for issuing 
airworthiness certificates to certain new aircraft manufactured in the 
United States. These changes are necessary because under the current 
regulations, certain new aircraft are eligible for a standard 
airworthiness certificate without meeting the requirements of a type 
certificate (TC) and without having been manufactured under an FAA 
production approval. These changes are intended to ensure that new 
aircraft manufactured in the United States and issued a standard 
airworthiness certificate are type certificated and manufactured under 
an FAA production approval. This final rule also incorporates 
requirements contained in laws recently passed by Congress. These 
changes ensure that any person who manufactures or alters an aircraft, 
aircraft engine, or propeller based on a TC or supplemental type 
certificate (STC) either holds the certificate or has permission from 
the certificate holder. This amendment also includes language that 
allows a person to manufacture one new aircraft based on a TC without 
holding the TC or having a licensing agreement from the TC holder, 
provided manufacture of the aircraft began before August 5, 2004.

DATES: These amendments become effective October 2, 2006.

FOR FURTHER INFORMATION CONTACT: Dan Hayworth, Airworthiness 
Certification Branch, AIR-230, Federal Aviation Administration, 800 
Independence Avenue, SW., Washington, DC 20591, telephone (202) 267-
8449.

SUPPLEMENTARY INFORMATION:

Availability of Rulemaking Documents

    You can get an electronic copy using the Internet by:
    (1) Searching the Department of Transportation's electronic Docket 
Management System (DMS) Web page (http://dms.dot.gov/search);
    (2) Visiting the FAA's Regulations and Policies Web page at http://www.faa.gov/regulations_policies/; or
    (3) Accessing the Government Printing Office's Web page at http://www.gpoaccess.gov/fr/index.html.
    You can also get a copy by sending a request to the Federal 
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence 
Avenue, SW., Washington, DC 20591, or by calling (202) 267-9680. Make 
sure to identify the amendment number or docket number of this 
rulemaking.
    Anyone is able to search the electronic form of all comments 
received into any of our 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.). You may review DOT's 
complete Privacy Act statement in the Federal Register published on 
April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit 
http://dms.dot.gov.

Small Business Regulatory Enforcement Fairness Act

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

Authority for This Rulemaking

    The FAA's authority to issue rules regarding aviation safety is 
found in Title 49 of the United States Code (49 U.S.C.). Subtitle I, 
Sec.  106 describes the authority of the FAA Administrator. Subtitle 
VII, Aviation Programs, describes in more detail the agency's 
authority. This rulemaking is promulgated under the authority described 
in Subtitle VII, Part A, Subpart III, Sec.  44701(a)(5). Under that 
section the FAA is charged with promoting safe flight of civil aircraft 
in air commerce by prescribing regulations and minimum standards for 
practices, methods, and procedures that the Administrator finds 
necessary for safety in air commerce.
    Additionally, Sec.  44704(a)(3) specifically mandates that ``if the 
holder of a TC agrees to permit another person to use the certificate 
to manufacture a new aircraft, aircraft engine, propeller, or 
appliance, the holder shall provide the other person with written 
evidence, in a form acceptable to the FAA, of that agreement. Such 
other person may manufacture a new aircraft, aircraft engine, 
propeller, or appliance based on a TC only if such other person is the 
holder of the TC or has permission from the holder.'' Paragraph (a)(4) 
of that section includes a limitation for aircraft manufactured before 
August 5, 2004 and states that ``paragraph (3) shall not apply to a 
person who began the manufacture of an aircraft before August 5, 2004, 
and who demonstrates to the satisfaction of the Administrator that such 
manufacture began before August 5, 2004.'' That paragraph further 
states ``a person is permitted to invoke this exception with regard to 
the manufacture of one aircraft.''
    Similarly, Sec.  44704(b)(3) mandates that if the holder of an STC 
agrees to permit another person to use the certificate to modify a 
product, the holder must provide the person with written evidence 
acceptable to the FAA of that agreement. That paragraph also mandates 
that a person may only change a product based on an STC if the person 
requesting the change is the holder of the STC or has permission for 
the holder to make the change.
    By prescribing requirements for manufacturers of new aircraft, 
aircraft engines, and propellers, and for persons altering any product, 
this regulation is within the scope of the Administrator's general 
authority and fulfills the statutory mandates set forth in Sec.  
44704(a) and (b).

Background

FAA Concerns Regarding Standard Airworthiness Certification of Certain 
New Aircraft

    This final rule responds to a concern that under the current 
regulations, certain new aircraft are eligible for standard 
airworthiness certification without meeting the requirements of a TC 
and without having been manufactured under an FAA production approval. 
The issuance of a standard airworthiness certificate for a particular 
aircraft indicates that the FAA has made a finding that the aircraft 
conforms to its type design and is in condition for safe operation. The 
FAA relies heavily on a manufacturer's production certificate (PC) 
quality control system.
    The vast majority of aircraft issued standard airworthiness 
certificates have been produced in accordance with the FAA's system of 
type certification, production certification, and airworthiness 
certification. This system ensures an aircraft conforms to a type

[[Page 52251]]

design and is in condition for safe operation. It also helps to ensure 
the accurate production of multiple aircraft of the same design in 
accordance with applicable airworthiness standards. Through type 
certification, the FAA examines the basic design of the aircraft 
against the applicable airworthiness standards. The FAA issues a type 
certificate (TC) for an aircraft only after it has determined that the 
aircraft design meets applicable airworthiness standards. A PC is 
issued after the FAA has made a finding that the quality control system 
of a manufacturer will permit it to produce duplicate versions of an 
aircraft that conform to an approved type design.
    The certification process provides numerous benefits. Any deviation 
from the approved type design that is found during a conformity 
inspection can be evaluated by comparison to TC data. This evaluation 
can readily determine whether an individual aircraft meets all the 
airworthiness standards identified by the TC. Additionally, PC holders 
can evaluate the cumulative effect of design changes over time and 
determine whether a changed aircraft presented for original 
airworthiness certification continues to comply with the airworthiness 
standards identified in the TC.
    Currently, new aircraft presented for standard airworthiness 
certification under Sec.  21.183(d) do not have the same level of 
production oversight as newly manufactured aircraft produced under the 
FAA's system of type and production certification.\1\ An applicant for 
an airworthiness certificate under Sec.  21.183(d) must make a detailed 
aircraft-by-aircraft showing to support the entitlement to an 
individual airworthiness certificate. This places a great burden on 
both the applicant and the FAA.
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    \1\ Until recently, only a few newly manufactured aircraft have 
been issued standard airworthiness certificates without beging 
manufactured under a production approval.
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    Recently, some manufacturers have engaged in the serial production 
of new aircraft and obtained standard airworthiness certification of 
these aircraft under Sec.  21.183(d) without holding either a TC or PC. 
Frequently these manufacturers do not have authorization from the 
original TC holder to use the TC to manufacture the aircraft. These 
aircraft have been built to match a type design under a previously 
approved TC; however, since these builders do not hold a TC, they may 
not have access to the supporting data originally used to show 
compliance to the airworthiness standards. In addition, the FAA does 
not have any assurance preceding issuance of the standard airworthiness 
certificate that an individual aircraft conforms to a type design since 
it was not produced under a PC. Each aircraft produced must therefore 
be individually evaluated, compared to type design data, and determined 
to be in condition for safe operation. This process is frequently 
difficult, labor intensive, and time consuming.
    Building new aircraft intended for standard airworthiness 
certification under Sec.  21.183(d) is not consistent with the current 
regulatory framework for obtaining standard airworthiness certificates 
for new aircraft. This rule will ensure the proper assignment of type 
certificate and production approval holder responsibilities to 
manufacturers of new aircraft. Type and production certificates for 
manufacturing new products are fundamental to the regulatory framework 
for the issuance of a standard airworthiness certificate.

Congressional Action Regarding the Use of TCs and STCs

    This rule also incorporates new requirements regarding the use of 
TCs and STCs mandated by Congress in the Federal Aviation 
Reauthorization Act of 1996 (Pub. L. 104-264; 110 Stat. 3213); Vision 
100--Century of Aviation Reauthorization Act of 2003 (Vision 100) (Pub. 
L. 108-176; 117 Stat 2490); and the Safe, Accountable, Flexible, 
Efficient Transportation Equity Act: A Legacy for Users (SAFTEA-LU) 
(Pub. L. 109-59; 119 Stat. 11441).
    Congress enacted these statutes in response to the concerns of TC 
and STC holders that persons were manufacturing and altering products 
based on the data contained in these certificates without possessing 
any rights to the use of the certificates. The FAA historically has not 
inquired whether an applicant for an airworthiness certificate has the 
rights to the use of the type certificate on which the aircraft's 
design was based. Additionally, the agency has not inquired whether an 
applicant for an STC has the rights to the technical data used to 
obtain an STC or to alter a product.
    Congress first addressed the issue of STC use in the Federal 
Aviation Reauthorization Act of 1996 by adding paragraph (b)(3) to 49 
U.S.C. 44704(b)(3). That action requires holders of STCs to provide 
persons permitted to use those certificates to modify a product with 
written evidence acceptable to the FAA of that agreement. To preclude 
persons from performing alterations on products using STC data that 
they did not have rights to, Congress also imposed a requirement 
mandating that a person may only change a product based on an STC if 
the person requesting the change is the holder of the STC or has 
permission from the holder to make the change. Congress, at the time, 
did not specifically address the issue of whether one must possess 
rights to a TC in order to manufacture a product.
    As a result of concerns that persons were manufacturing new 
aircraft for certification based on data contained in TCs to which they 
did not have rights, Congress again revised Sec.  44704 in 2003. In 
Vision 100 Congress added paragraph (a)(3) to Sec.  44704 specifically 
mandating that ``if the holder of a TC agrees to permit another person 
to use the certificate to manufacture a new aircraft, aircraft engine, 
propeller, or appliance, the holder shall provide the other person with 
written evidence, in a form acceptable to the FAA, of that agreement. 
Such other person may manufacture a new aircraft, aircraft engine, 
propeller, or appliance based on a TC only if such other person is the 
holder of the TC or has permission from the holder.''
    In response to subsequent concerns that this action would preclude 
the certification of aircraft currently manufactured by individuals who 
did not have rights to the TCs on which their aircraft were based, 
Congress, in SAFETEA-LU, enacted an exception for aircraft whose 
manufacture began before August 5, 2004. The new provision provides a 
limited exception to the earlier statutory requirement and permits ``a 
person who began the manufacture of an aircraft before August 5, 2004, 
and who demonstrates to the satisfaction of the FAA that such 
manufacture began before August 5, 2004'' to manufacture a new aircraft 
without holding the rights to its TC. That paragraph further limited 
the exception by stating that ``a person is permitted to invoke this 
exception with regard to the manufacture of one aircraft.''

Prior Proposals

    This amendment is based on a notice of proposed rulemaking (NPRM) 
published in the Federal Register on February 15, 2005 (70 FR 7829) and 
a supplemental notice of proposed rulemaking (SNPRM) published in the 
Federal Register on November 10, 2005 (70 FR 68374).
    In the NPRM we proposed to revise our regulations to:
    <bullet> Prohibit the manufacture of new aircraft, aircraft 
engines, and propellers based on a TC unless the person

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manufacturing the product holds the TC for the product (or has a 
licensing agreement) and an FAA production approval.
    <bullet> Prohibit the issuance of standard airworthiness 
certificates for new aircraft that have not been manufactured under an 
FAA production approval or type certificated under Title 14 of the Code 
of Federal Regulations (CFR), Sec.  21.29.
    <bullet> Require TC holders who allow persons to manufacture 
products based on those certificates to provide the manufacturers with 
written licensing agreements.
    <bullet> Require STC holders who allow persons to alter products 
based on those certificates to provide those persons with written 
evidence of the agreements.
    These changes reflect the FAA's intent to preclude the issuance of 
standard airworthiness certificates for new aircraft that have not been 
produced under an FAA production approval or an approval issued by a 
foreign Civil Aviation Authority (CAA). They also reflect the statutory 
mandates set forth in Vision 100 and the Federal Aviation 
Reauthorization Act of 1996 regarding the use of TCs and STCs.
    In the SNPRM we proposed to revise our original proposal to include 
an exception to the statutory mandate contained in Vision 100 requiring 
persons who manufacture a new aircraft based on a TC to hold the TC for 
the aircraft or have a licensing agreement to use the TC. This 
exception is set forth in section 811 of SAFTEA-LU. This law was 
enacted on August 10, 2005, approximately six months after publication 
of our original proposal. In the SNPRM we specifically revised our 
proposal to conform to the new law and included a provision to permit a 
person to manufacture one new aircraft for certification without 
holding the type certificate for the product (or a licensing agreement) 
and an FAA production approval. The person must, however, have begun 
the manufacture of the aircraft before August 5, 2004 to obtain 
airworthiness certification of the aircraft.
    Both notices contain explanatory material describing the basis and 
rationale for this rule. The discussion in the NPRM specifically 
addresses three topic areas: the issuance of standard airworthiness 
certificates to used aircraft and surplus military aircraft; the use of 
TCs to manufacture new aircraft, aircraft engines, and propellers; and 
the use of STCs as the basis for alterations. The SNPRM discusses our 
proposed exception from the requirement that the manufacturer of a new 
aircraft based on a TC be the holder of the TC, or have the permission 
of the TC holder. Except where we have modified the proposal in this 
rule or specifically expanded on the background elsewhere in this 
preamble, the material contained in the NPRM and SNPRM supports this 
final rule.
    The comment period for the NPRM closed on April 18, 2005, and we 
received comments from 46 commenters. Most of the commenters had 
objections to at least one of the proposed changes. Four commenters 
were opposed to the entire proposal and five commenters supported the 
proposal. A number of commenters also suggested rulemaking actions not 
addressed by the proposal.
    The comment period for the SNPRM closed on December 12, 2005. We 
received no comments on that SNPRM.

Manufacture of New Aircraft, Aircraft Engines, and Propellers

    Section 21.6 is a new section that sets forth restrictions on the 
manufacture of new aircraft, aircraft engines, and propellers. That 
section has been adopted as proposed, except that a revision was made 
to clarify that the rule does not require imported products to be 
produced under an FAA production approval.
    As adopted, Sec.  21.6(a) prohibits a person from manufacturing a 
new aircraft, aircraft engine, or propeller based on a TC unless the 
person--
    <bullet> Is the holder of the TC, or has a licensing agreement from 
the holder of the TC to manufacture the product; and
    <bullet> Meets the requirements of subpart F or G of part 21.
    Our reference to subparts F and G in the regulation means that the 
person manufacturing the product has to comply with our regulations 
governing production under a TC only or a PC, respectively, when 
manufacturing a new aircraft, aircraft engine, or propeller based on a 
TC. Although not specifically discussed in the NPRM, we note that this 
requirement applies to all type-certificated aircraft regardless of the 
category of TC issued. This requirement therefore applies to type-
certificated aircraft that may be issued other than standard 
airworthiness certificates (e.g., aircraft with primary or restricted 
category TCs).
    There are two exceptions to the general requirement set forth in 
Sec.  21.6(a). The first exception is set forth in Sec.  21.6(b) and 
allows a person to manufacture one new aircraft without meeting the 
requirements of paragraph (a), provided that person can provide 
evidence acceptable to the FAA that he or she began manufacturing the 
aircraft before August 5, 2004. As proposed in the SNPRM, Sec.  21.6(b) 
addressed the manufacturing of these ``grandfathered'' aircraft, but 
did not provide a means for them to be certificated. To correct this 
oversight and permit those aircraft to be certificated, we have added 
new paragraph (h) to Sec.  21.183. That paragraph permits these 
aircraft to receive a standard airworthiness certificate subject to 
conditions that mirror those of Sec.  21.183(d).
    We note that the exception for a person who began to manufacture an 
aircraft before August 5, 2004 applies only to aircraft, not to 
aircraft engines or propellers. This provision is based on the language 
of section 811 of SAFETEA-LU, which refers only to aircraft.
    A person seeking to manufacture a new aircraft under this exception 
will have to demonstrate to the FAA that manufacturing began before 
August 5, 2004. Documents that could prove manufacturing began before 
August 5, 2004 include items such as receipts for the purchase of parts 
or materials, dated photographs, and dated information received from 
the FAA related to the manufacturing or certification process for the 
specific aircraft. This information must be provided to the FAA no 
later than the time of application for an original airworthiness 
certificate.
    The second exception to Sec.  21.6(a) is contained in paragraph (c) 
which states that the requirements of Sec.  21.6 do not apply to new 
aircraft imported under the provisions of Sec. Sec.  21.183(c), 
21.184(b), or 21.185(c); and new aircraft engines or propellers 
imported under the provisions of Sec.  21.500. These products are 
manufactured under the regulatory authority of countries other than the 
United States. Although the FAA did not propose this exception in the 
NPRM or SNPRM, its inclusion is necessary to clarify the FAA's intent 
not to change existing requirements for new aircraft, aircraft engines, 
and propellers imported to the United States. This exception is 
discussed in detail in the section below.

Imported Aircraft, Aircraft Kits, and Major Assemblies

    The Aircraft Owners and Pilots Association (AOPA) and Monocoupe 
Club (MCC) were concerned that the proposed rule was unclear as to 
whether foreign manufacturers who hold a TC for imported products under 
Sec.  21.29 would be required to hold a U.S. PC. These commenters 
believe that manufacturers who assemble foreign-made aircraft kits or 
major assemblies in the United States, in some instances, without a PC, 
would now be required to

[[Page 52253]]

hold a U.S. PC. Such a requirement could increase the cost of an 
aircraft to purchasers. Commenters requested that the FAA clarify that 
the practice of assembling imported aircraft kits and major assemblies, 
without necessarily holding a PC, will be allowed to continue.
    The FAA concurs with the comment and has added Sec.  21.6(c) to 
clarify our intent. Foreign manufacturers holding a Sec.  21.29 TC for 
the import of their products into the United States are not required to 
hold any form of FAA production approval (i.e., PC or Approved 
Production and Inspection System (APIS)). The regulatory responsibility 
for the fabrication, assembly, test, and final determination of 
airworthiness of product issued a TC under Sec.  21.29 rests with the 
Civil Aviation Authority (CAA) of the country in which the product was 
manufactured, not the FAA.
    In some instances, the CAA of the country of manufacture may allow 
these production activities to occur outside their country (i.e., even 
within the United States, when agreed to by the FAA), but only under a 
production approval issued and overseen by that responsible CAA. 
Completed products are then exported to the United States with an 
Export Certificate of Airworthiness attesting to their conformity to 
the Sec.  21.29 TC, that they are in a condition for safe operation, 
and are eligible for a standard airworthiness certificate. The FAA did 
not intend to impose additional requirements on foreign manufacturers 
of aircraft imported into the United States under Sec.  21.183(c).

Manufacture of Older Aircraft Based on ``Orphaned'' TCs

    Three individual commenters believe this proposal fails to address 
and make allowance for the manufacture of older aircraft based on an 
``orphaned'' TC.\2\
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    \2\ The term ``orphaned,'' with respect to a TC or STC, is not 
found in our regulations. We believe that commenters are using the 
term to refer to the situation where a TC or STC holder no longer 
exists or cannot be located.
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    The commenters are correct that a person may not ``manufacture'' an 
aircraft, as opposed to ``restoring'' or ``remanufacturing'' an 
aircraft (discussed below), unless the person holds a TC or license to 
it. Under the final rule, new aircraft may receive a standard 
airworthiness certificate under existing Sec.  21.183(a), (b), or (c) 
and the limited circumstances in new paragraph (h).
    The FAA recognizes that a person wishing to manufacture a new 
aircraft based on an ``orphaned'' TC may be unable to locate the holder 
of the TC to obtain a licensing agreement. However, the statute clearly 
prohibits the manufacture of any new aircraft based on an existing TC 
without obtaining permission of the TC holder and makes no provision 
for the inability of the potential manufacturer to locate the TC 
holder.

TC and STC Holder Responsibilities

    Section 21.55 requires a TC holder who agrees to permit another 
person to use that TC to manufacture a new aircraft, aircraft engine, 
or propeller to provide that person with a written licensing agreement 
acceptable to the FAA. Section 21.120 requires an STC holder who allows 
another person to use that STC to alter an aircraft, aircraft engine, 
or propeller to provide that person with written permission acceptable 
to the FAA. Both of these sections were adopted in response to 
Congressional mandates and have been adopted as proposed.
    The Aircraft Industries Association (AIA), Aeronautical Repair 
Station Association (ARSA), and General Aviation Manufacturers 
Association (GAMA) believe that the language in proposed Sec. Sec.  
21.6 and 21.55 should be synchronized with the language in proposed 
Sec.  21.120. The commenters asserted that the proposed language, which 
currently refers to ``licensing agreement'' and ``written permission,'' 
should be consistent with the language used in the legislation. The 
commenters believe the language used in the proposed regulations should 
be identical regardless of the type of design approval (TC or STC).
    In addition, General Electric Transportation Aircraft Engines (GE) 
believes that the focus in the NPRM on the term ``licensing agreement'' 
was inappropriate because a licensing agreement is a business 
arrangement that does not have an impact on operational safety. GE 
recommended the FAA focus on ensuring a link between production and 
design organizations to document responsibilities for transfer of up-
to-date airworthiness data and operational safety.
    The FAA notes that 49 U.S.C. 44704(a)(3) states that ``if the 
holder of a TC agrees to permit another person to use the certificate 
to manufacture a new aircraft, aircraft engine, propeller, or 
appliance, the holder shall provide the person with written evidence, 
in a form acceptable to the Administrator, of that agreement.'' Current 
FAA regulations require persons who exercise the rights to the benefits 
of a TC to either hold the TC or have a licensing agreement from the TC 
holder. The FAA considers the requirement for a person to have a 
licensing agreement to manufacture an aircraft based on a TC to be 
consistent with the language of the statute.
    The FAA considers use of the term ``licensing agreement'' 
appropriate to maintain consistency with existing regulations that 
specify the privileges of TC holders and their licensees. With respect 
to STCs, the FAA believes use of the less formal term ``written 
permission'' provides the flexibility necessary to accommodate the wide 
variability in the type of work undertaken when altering a product. For 
these reasons, the FAA is not changing the proposal in response to 
these comments.
    The FAA notes that an acceptable written licensing agreement should 
contain: A statement of the agreement specifying the product(s) to be 
manufactured; the model number; and the name of the person(s) who is 
being given consent to use the type certificate. The TC holder may 
include more information, such as the effective date of the agreement, 
how long the TC may be used, or other terms and conditions to ensure 
compliance with part 21.
    The FAA also notes that an acceptable permission statement should 
contain: A statement specifying the product(s) to be altered; the STC 
number; and the name of the person(s) to whom consent is being given to 
use the STC. The STC holder may also include more information, such as 
the effective date of the permission and how many times the STC may be 
used.

Standard Airworthiness Certification of Used Aircraft and Surplus 
Aircraft of the U.S. Armed Forces

    Section 21.183 currently establishes four methods to obtain a 
standard airworthiness certificate, the first three of which are not 
affected by this final rule.\3\ The fourth method to obtain a standard 
airworthiness certificate applies to existing aircraft, including those 
manufactured from spare and surplus parts, and is set forth in Sec.  
21.183(d).
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    \3\ Currently, Sec.  21.183 (a) and (b) apply to manufacturers 
of new aircraft produced under a PC or TC only, respectively. 
Section 183(c) applies to importers of aircraft that are type 
certificated under Sec.  21.29 and imported from the country in 
which they were manufactured. The FAA did not propose to revise 
these paragraphs.
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    In the NPRM the FAA proposed that paragraph (d) be revised to apply 
only to used aircraft and surplus military aircraft. That paragraph has 
been revised in this final rule to apply only to used aircraft and 
surplus aircraft of the U.S. Armed Forces. As adopted, this section 
precludes standard

[[Page 52254]]

airworthiness certification of new aircraft manufactured in the U.S. by 
persons who do not hold a TC (or license to it) and a production 
approval. Aside from those aircraft that can be certificated under the 
limited exception of Sec.  21.183(h), aircraft manufactured from spare 
and surplus parts must now be manufactured in accordance with the 
requirements of Sec.  21.183(a), (b) or (c) in order to receive a 
standard airworthiness certificate.
    The FAA has replaced the term ``surplus military aircraft'' with 
``surplus aircraft of the U.S. Armed Forces'' to clarify our original 
intent to preclude the standard airworthiness certification of foreign 
surplus military aircraft under the provisions of this paragraph.

Classification of New and Used Aircraft

    ARSA and the Professional Airways Systems Specialists-Manufacturing 
Inspection District Office (PASS-MIDO) requested the FAA clarify how we 
make a distinction between ``new'' and ``used'' aircraft in proposed 
Sec.  21.183(d).
    For the purpose of issuing a standard airworthiness certificate 
under Sec.  21.183, the FAA interprets ``used aircraft'' to mean 
aircraft with time in service for other than production flight testing, 
including aircraft type certificated under Sec.  21.29, but not 
eligible for certification under Sec.  21.183(c), and U.S.-manufactured 
civil aircraft that were exported and later returned to the United 
States for FAA certification. Except for surplus aircraft of the U.S. 
Armed Forces, aircraft that do not meet the definition of ``used 
aircraft'' specified above are considered ``new aircraft.''

Classification of Destroyed and Demolished Aircraft

    The Experimental Aircraft Association (EAA), International Birddog 
Association (IBDA), GAMA, AAA, AOPA, MCC, and ten individual commenters 
believe that if the FAA excludes aircraft classified as destroyed or 
demolished by the National Transportation Safety Board (NTSB) from the 
term ``used aircraft,'' they would no longer be eligible for a standard 
airworthiness certificate. The commenters stated that there have been 
many aircraft that insurance companies or the NTSB have identified as 
destroyed or demolished that were later reassembled or rebuilt using 
spare and surplus parts. This is particularly true for antique and 
surplus military aircraft. Commenters recommended that the FAA modify 
the proposed rule by adding language that protects the legitimate 
restoration of used aircraft that may have been classified as destroyed 
or demolished by the NTSB.
    Based on the number of comments, the FAA has reconsidered its 
position of excluding aircraft identified as destroyed or demolished 
from the term ``used aircraft.'' All previous references to aircraft 
identified by the NTSB as destroyed, and references to aircraft damaged 
to the extent that it would be impracticable or unsafe to repair, are 
not included in this final rule. At this time the FAA will continue to 
rely on the existing process for deregistering totally destroyed or 
scrapped aircraft found in Sec.  47.41. This section requires the 
holder of the Certificate of Aircraft Registration to return it to the 
FAA Aircraft Registry when an aircraft is totally destroyed or 
scrapped. This action terminates the aircraft airworthiness certificate 
in accordance with the requirements of existing Sec.  21.181(a)(1). 
That section specifies that an aircraft's standard airworthiness 
certificate is effective only if the aircraft is registered in the 
United States.

Effect of the Proposal on Persons Currently Manufacturing New Aircraft 
for Certification Under Sec.  21.183(d)

    Although the FAA received no comments on the November 10, 2005 
SNPRM that proposed to include a provision from the recently enacted 
SAFETEA-LU, an individual commenter on the NPRM believes that the 
proposed rule would adversely affect many individuals who began 
building aircraft from spare and surplus parts as allowed by FAA 
regulations before enactment of Vision 100. He stated that individuals 
are currently in the process of building aircraft based on TCs, without 
the TC holders' permission, using new and approved parts and that they 
have a considerable amount of time and money invested in these 
aircraft. The commenter believes these aircraft meet and exceed all 
applicable safety standards. The commenter further believes that 
changing the rules without a ``grandfather clause'' to protect those 
working on their projects is unfair treatment under the law.
    As discussed above, Sec.  21.6(b) provides an exception from the 
requirement to have written permission from the TC holder. That 
paragraph allows a person to manufacture one new aircraft based on a TC 
without holding the TC or having a licensing agreement from the TC 
holder provided the manufacturing began before August 5, 2004. The 
exception contained in Sec.  21.6(b) was proposed in the November 10, 
2005 SNPRM and incorporates the statutory provision from SAFETEA-LU 
that specifically addresses the commenter's concern. Additionally, the 
FAA has added new Sec.  21.183(h) to provide a means for these aircraft 
to be eligible for the issuance of a standard airworthiness certificate 
in accordance with provisions largely identical to those found in 
existing Sec.  21.183(d).

Airworthiness Certification of Manned Free Balloons Under Sec.  
21.183(d)

    PASS-MIDO believes the proposed regulation would prevent an owner 
of a manned free balloon from presenting the balloon to the FAA for 
standard airworthiness certification under Sec.  21.183(d) whenever the 
owner replaces the balloon envelope. This would result in a loss of 
approximately one million dollars a year in balloon envelope 
production. The commenter believes that this impact was not factored 
into the economic assessment of the NPRM. Although each manned free 
balloon component is produced under an FAA production approval, the 
owner completes the final assembly of the balloon basket, envelope, and 
burner without a PC and prior to obtaining a standard airworthiness 
certificate. The commenter asserted that, under this proposal, balloons 
assembled in this manner could not receive a standard airworthiness 
certificate.
    The FAA recognizes that manufacturers have been directed in the 
past to ship balloon envelopes to owners with an Airworthiness Approval 
Tag (FAA Form 8130-3), but without a standard airworthiness 
certificate. To address this practice and misunderstanding of current 
regulations and policy, the FAA issued an Information Memorandum dated 
August 5, 2005 on the subject. The memorandum clarified the policy for 
certification of manned free balloons and the delivery of a balloon 
envelope when the balloon envelope is the only component ordered from a 
manufacturer. Under current FAA policy a manned free balloon may be 
issued a standard airworthiness certificate under existing Sec.  
21.183(a) or (b) after the envelope has been flight-tested with a 
burner and basket. The envelope, along with the standard airworthiness 
certificate and the logbook, may be shipped without the burner and 
basket. The envelope may then be assembled to a different burner and 
basket in accordance with the TC. An appropriately certificated person 
may accomplish the interchange of the basket and burner as a preventive 
maintenance task. Balloons assembled with imported envelopes may obtain 
standard airworthiness certification under existing Sec.  21.183(c).

[[Page 52255]]

Performance of Aircraft Maintenance and Alterations Based on TCs and 
STCs

    In the NPRM the FAA proposed to revise Sec.  91.403(d) to preclude 
a person from altering an aircraft based on an STC unless the owner or 
operator of the aircraft is the holder of the STC or has written 
permission from the holder. This change was made in response to a 
Congressional mandate and has been adopted as proposed. Additionally, 
the FAA proposed to require any owner or operator of an aircraft who 
receives written permission to alter an aircraft based on an STC to 
retain that written permission until the alteration is superseded and 
to transfer the document with the aircraft at the time the aircraft is 
sold. Based on the concerns of commenters and a review of the costs of 
compliance with the proposal, the FAA has chosen not to adopt that 
proposed requirement.

STC Record Retention and Transfer Requirements

    The ARSA and GE, as well as two individual commenters, were opposed 
to proposed Sec.  91.403(d). These commenters stated that the proposal 
is unmanageable, cost prohibitive, and of questionable value.
    The FAA agrees with the commenters in part and is therefore not 
including the proposed record retention and transfer requirements in 
this final rule. However, Sec.  91.403(d) retains language based on the 
statutory requirement that persons altering an aircraft based on an STC 
must ensure that the owner or operator of the aircraft holds the STC or 
has written permission from the STC holder.

``Remanufacture,'' ``Restoration,'' Maintenance, and Alteration of 
Older Aircraft Based on ``Orphaned'' TCs and STCs

    The Aviation Foundation of America (AFA), AOPA, and MCC as well as 
seven individual commenters believe this proposal fails to address and 
make allowance for the ``remanufacture,'' ``restoration,'' and 
maintenance of older aircraft based on an ``orphaned'' TC or STC. 
Commenters recommended that the FAA revise proposed Sec. Sec.  21.6(a) 
and 91.403(d) to allow for the ``remanufacture,'' ``restoration,'' and 
maintenance of older aircraft based on orphaned TCs and STCs.
    Similarly, the AAA, AOPA, and MCC, as well as six individual 
commenters believe this proposal fails to address and make allowance 
for the alteration of older aircraft based on ``orphaned'' STCs.
    There are a number of issues raised by these comments. The first 
concerns the meaning of the terms ``remanufacture'' and 
``restoration.'' The second concerns obtaining permission from the TC 
or STC holder for performing maintenance or preventive maintenance. The 
third is availability of data for use during maintenance and preventive 
maintenance.
    In addressing the first issue, the FAA notes that the commenters 
use the terms ``remanufacture'' and ``restoration,'' which are not 
found in our regulations. Based on the agency's understanding of the 
common usage of these terms, the FAA considers ``remanufacture'' and 
``restoration'' to be included under the terms maintenance, preventive 
maintenance, or rebuilding.
    Section 1.1 states ``Maintenance means inspection, overhaul, 
repair, preservation, and the replacement of parts, but excludes 
preventive maintenance.'' It also states ``Preventive maintenance means 
simple or minor preservation operations and the replacement of small 
standard parts not involving complex assembly operations.'' Preventive 
maintenance tasks are listed in paragraph (c) of Appendix A to 14 CFR 
part 43.
    To be considered rebuilt, Sec.  43.2(b) requires that the product, 
appliance or component part be ``disassembled, cleaned, inspected, 
repaired as necessary, reassembled, and tested to the same tolerances 
and limits as a new item, using either new or used parts that conform 
to new part tolerances and limits or to approved oversize or undersized 
dimensions.'' We note that under existing Sec.  43.3, only the 
manufacturer may rebuild an aircraft, aircraft engine, propeller or 
appliance it manufactured under a TC, PC, Parts Manufacturer Approval 
(PMA), Technical Standard Order Authorization (TSOA), or Product and 
Process Specification.
    To address the second issue, the FAA notes that once a product has 
been manufactured and has received its original airworthiness approval, 
permission from the owner to use TC or STC data is not required for 
maintenance, preventive maintenance, or rebuilding of the product under 
our regulations. For this reason, neither the final rule nor the 
underlying statute affects persons performing these actions. Therefore, 
based on the agency's understanding of the common usage of these terms, 
this rule does not affect the re-manufacture, rebuilding, or 
restoration of an aircraft.
    Third, the FAA recognizes that a person performing maintenance or 
preventive maintenance has a need for TC or STC data to support the 
continued airworthiness of a product. The FAA agrees that the inability 
to locate the holder of a TC or STC may adversely affect a person's 
ability to obtain the necessary TC or STC data. This final rule does 
not address this issue as it is beyond the scope of both the original 
and supplemental proposals.
    Under the statute, a person must hold an STC or have written 
permission from the holder of the STC in order to alter a product based 
on that STC. This requirement is specified in Sec.  91.403(d). The FAA 
recognizes that a person wishing to alter a product based on an 
``orphaned'' STC may be unable to locate the holder of the STC to 
obtain written permission from the holder.

Intellectual Property Rights

    One individual commenter believes that the proposed requirements 
pertaining to the use of TCs and STCs do not have a safety purpose. The 
commenter believes that the proposed changes address intellectual 
property rights which are protected in the commercial code through 
patents, trademarks, and copyrights. The commenter believes that the 
proposed changes are unnecessary because an owner of a TC or STC can 
seek satisfaction through the existing legal system if his rights to 
the TC or STC are violated.
    In response to the commenter's concerns the FAA notes that the 
changes made in this rule reflect statutory changes mandated by 
Congress in The Federal Aviation Reauthorization Act of 1996, Vision 
100, and SAFETEA-LU. In those statutes, Congress specifically revised 
the provisions of 49 U.S.C. 44704 that address the use of TCs and STCs. 
This rule does not alter the property rights of the holders of those 
certificates or the remedies they may seek for violation of those 
rights. The rule serves only to codify statutory mandates.
    The FAA has historically not inquired into whether a person has 
permission to use specific data to certificate an aircraft under Sec.  
21.183(d), and we recognize that this policy may have facilitated the 
use of data by persons who did not have legitimate rights to its use. 
Recent revisions by Congress to the U.S. Code have attempted to remedy 
this situation. These statutory revisions, however, have not altered 
the property rights of the owners of the technical data or other 
information that forms a part of these certificates. This data and 
information could never be used without the permission of the TC or STC 
holder, however there was no statutory requirement for a person to 
receive evidence of this permission from the TC holder. The enactment 
of the regulations

[[Page 52256]]

contained in this rule reflects current statutory mandates, and serves 
to carry out the clear intent of Congress.
    The MCC, AOPA, AAA, and AFA, as well as eleven individual 
commenters believe there are hundreds of TCs and STCs that no longer 
have owners and are, thus, considered ``orphaned'' and in the public 
domain. In their opinion, the public owns these TCs and STCs, and 
anyone should be able to use them.
    The fact that the original holder of a TC or STC no longer exists, 
or that the FAA may not be able to locate the holder, does not 
automatically sever the rights of that certificate holder with regard 
to the contents of the TC or STC. These TCs and STCs, including their 
supporting technical data, are not automatically transferred into the 
public domain. Absent a surrender, suspension, or revocation of the 
certificate, the FAA cannot sever the rights of a holder to the 
privileges of a TC or STC, and the FAA cannot unilaterally extinguish 
any intellectual property rights that a person may have to the 
technical data or other contents of a certificate.
    Although the original holder of a certificate may no longer exist, 
the holder's intellectual property rights are not automatically 
extinguished, but rather are passed to the legitimate successors or 
heirs of the holder by operation of law. They do not automatically 
revert to the public domain. The holder of a TC or STC, or its 
legitimate successors or heirs, may choose to make the technical data 
or other contents of a certificate available to the public, however a 
person may neither infringe upon, nor otherwise exercise, the rights of 
the owner of this property without that person's consent.

Miscellaneous Issues

Continued Airworthiness

    An individual commenter believes that Sec.  1.1 should be amended 
to include a definition of ``Instructions for Continued 
Airworthiness.'' The commenter also recommends that the FAA amend Sec.  
21.50(b) to include a clause that manufacturers' maintenance documents 
will be made available to anyone needing access for safety purposes and 
that the manufacturer cannot charge more than the cost of reproduction 
for these documents.
    The FAA did not propose a definition of ``Instructions for 
Continued Airworthiness,'' nor did the agency propose a revision to 
Sec.  21.50(b) to address the availability of manufacturers' 
maintenance manuals. Taking such action in this final rule would not 
afford affected parties an opportunity to effectively comment on the 
changes and would be beyond the scope of the notice. The FAA notes that 
14 CFR part 11 provides the commenters with a mechanism for 
recommending that such changes be made to the regulations.

Quality Assurance Systems

    An individual commenter believes that the FAA should adopt a policy 
where the complexity of the required quality assurance system is 
commensurate with the level of production. The commenter stated that 
current FAA guidance allows production for a 6-month period under an 
approved production inspection system (APIS), after which an applicant 
must meet the requirements for the issuance of a PC. The commenter 
believes the FAA should base quality system requirements on the 
applicant's number of employees, number of units, or sales, rather than 
a period of time.
    This comment is outside the scope of the proposal. Possession of an 
APIS or PC is based on the ability to replicate an aircraft to its type 
design. The complexity of the quality control system is determined by 
the facility, products, processes, and procedures required to replicate 
these aircraft.
    Additionally, the FAA notes that a person may produce a product 
under an APIS for a period longer than six months. In accordance with 
existing Sec.  21.123 processes are in place to extend an APIS for more 
than six-months after the date of issuance of a TC in cases where a 
production inspection system cannot be established due to the 
complexity of a product.

Harmonization With European Aviation Safety Agency Regulations

    The AIA and GE recommended FAA take an approach similar to that 
used by the European Aviation Safety Agency (EASA) for establishing 
production approval requirements.
    The commenters recommended that the FAA consider harmonization of 
the proposed rule language with existing EASA regulations 21A.131 and 
21A.133. They noted that both regulations consistently use the word 
``design'' with respect to obtaining a Production Organization 
Approval, the EASA equivalent of a PC. Further, EASA Acceptable Means 
of Compliance for 21A.131 and 21A.133 consistently refers to the 
applicable design data when formulating an agreement between the design 
approval holder and the production organization.
    Although the FAA recognizes the benefits that may be obtained as a 
result of harmonization, the FAA did not propose any such requirements 
in the NPRM. The FAA considers such changes to be outside the scope of 
the NPRM and therefore inappropriate for inclusion in the final rule. 
However, we may consider this comment in a future rulemaking.

FAA Resources and Delegation

    Two commenters asserted the FAA's reliance on ``limited resources'' 
as a justification for revising the rules is inappropriate. One 
commenter urged the FAA to rely more on designees for certification 
projects under Sec.  21.183(d) to reduce the FAA's workload.
    The FAA often considers the level of agency resources available to 
conduct oversight in establishing regulatory requirements. In an effort 
to conserve resources, the FAA has relied extensively on the use of 
designees for standard airworthiness certification of used aircraft 
under Sec.  21.183(d).
    Before this final rule, new aircraft could be presented for 
airworthiness certification under Sec.  21.183(d) without the benefit 
of being manufactured under a production quality system. These aircraft 
did not have the same level of production oversight as newly 
manufactured aircraft certificated under Sec.  21.183(a), (b), or (c), 
and a finding of accurate reproduction to a type design was difficult. 
An increased level of delegation would not address this underlying 
problem.

Comments on the Initial Economic Assessment

    GE believes that the Initial Economic Assessment in the NPRM is 
inconsistent with current 14 CFR part 21 and other language in the NPRM 
discussion. The Assessment states that the proposed rule would require 
airplane manufacturers to hold both a TC and a production approval for 
all airplanes produced that are issued a standard airworthiness 
certificate.
    The commenter is correct, and we have revised the economic analysis 
of the final rule to reflect that the type certificate and production 
approval holder do not have to be the same person.
    Additionally PASS-MIDO recommended that the FAA Civil Aircraft 
Registry begin tracking the number of ``new'' aircraft certificated 
under Sec.  21.183(d) to understand the scope of the number of aircraft 
presently certificated under these rules. This commenter believes that 
more than 100 aircraft a year are certificated under this regulation, 
and the economic impact of not being able to certificate these aircraft 
under this regulation would have a large impact on the flying 
community.

[[Page 52257]]

    The FAA notes that its Aircraft Registry does not track the number 
of aircraft certificated under Sec.  21.183(d). Since there is no data 
in the Aircraft Registry that indicates if an aircraft was certificated 
under Sec.  21.183(d) and the commenter provided no data to 
substantiate its claim, we have no empirical basis for revising the 
economic analysis to reflect the commenter's concerns.

Regulatory Notices and Analyses

Paperwork Reduction Act

    Information collection requirements in this rule have previously 
been approved by the Office of Management and Budget (OMB) under the 
provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), 
and have been assigned OMB Control Number 2120-0005.

International Compatibility

    In keeping with U.S. obligations under the Convention on 
International Civil Aviation, it is FAA policy to comply with 
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 regulations.

Final Economic Assessment

    Changes to Federal regulations must undergo several economic 
analyses. First, Executive Order 12866 directs 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 requires agencies to analyze the 
economic effect of regulatory changes on small entities. Third, the 
Trade Agreements Act (19 U.S.C. 2531-2533) prohibits agencies from 
setting standards that create unnecessary obstacles to the foreign 
commerce of the United States. In developing U.S. standards, this Trade 
Act also requires the consideration of international standards and, 
where appropriate, that they be the basis of U.S. standards. And 
fourth, the Unfunded Mandates Reform Act of 1995 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).
    The FAA has determined that this final rule has minimal costs, and 
that it is neither ``a significant regulatory action'' as defined in 
Executive Order 12866, nor ``significant'' as defined in DOT's 
Regulatory Policies and Procedures. Further, this rule will not have a 
significant economic impact on a substantial number of small entities, 
will not impact international trade, and will not impose an Unfunded 
Mandate on State, local, or tribal governments, or on the private 
sector.
    DOT Order 2100.5 prescribes policies and procedures for 
simplification, analysis, and review of regulations. If it is 
determined the expected impact is so minimal that a rule does not 
warrant a full evaluation, a statement to that effect and the basis for 
it is included in the regulation.
    The FAA has evaluated each section of the rule and its relation to 
current public law and current industry practice. Section 21.6 does not 
impose a cost to the industry because it is a current statutory 
requirement that a person manufacturing a new aircraft, aircraft 
engine, or propeller based on a TC do so only if that person is the 
holder of the TC or has permission from the holder (except for those 
aircraft manufactured under the limited exception of 49 U.S.C. 
44704(a)(4) as set forth in Sec.  21.6(b)). Sections 21.55 and 21.120 
also do not impose costs on the industry because it is a current 
statutory requirement for TC and STC holders to provide written 
evidence in a form acceptable to the FAA of an agreement to use those 
certificates. Additionally, Sec.  91.403 does not impose costs on the 
industry because it is a current statutory requirement that persons may 
not alter an aircraft based on an STC unless the owner or operator 
holds the STC or has the written permission of the holder. Furthermore, 
the revisions to Sec.  21.183(d) also will not result in significant 
additional cost to the industry. Current industry practice shows that 
TC holders or licensees of TC holders who are involved in the serial 
production of aircraft also hold production approval. We note that the 
economic evaluation for the NPRM stated that only one company was 
engaged in the serial production of new aircraft intended for standard 
airworthiness certification without holding either a TC or PC. Since 
the publication of that NPRM, this company has obtained a TC for the 
aircraft.
    The FAA believes the economic impacts of this final rule are 
minimal because this final rule codifies common industry business 
practices, and conforms to an existing statutory requirement. 
Accordingly, the FAA has determined the expected impact of this final 
rule is so minimal the rule does not warrant a full evaluation.

Final Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (RFA) establishes ``as a 
principle of regulatory issuance that agencies shall endeavor, 
consistent with the objective of the rule and of applicable statutes, 
to fit regulatory and informational requirements to the scale of the 
business, organizations, and governmental jurisdictions subject to 
regulation.'' To achieve that principle, the Act requires agencies to 
solicit and consider flexible regulatory proposals and to explain the 
rationale for their actions. The Act 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 proposed or 
final rule will have a significant economic impact on a substantial 
number of small entities. If the determination is that it will, the 
agency must prepare a regulatory flexibility analysis as described in 
the Act.
    However, if an agency determines that a proposed or final rule is 
not expected to have a significant economic impact on a substantial 
number of small entities, section 605(b) of the Act 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 changes contained in this rule codify industry practices for 
the manufacture of new aircraft that are issued standard airworthiness 
certificates. Current industry practice shows that a TC holder or 
licensee, involved in the serial production of aircraft issued standard 
airworthiness certificates, also holds a production approval. Because 
all new aircraft intended for standard airworthiness certification are 
type certificated and are manufactured under a production approval, 
there are no resulting costs.
    Individuals and firms affected by this rule will include applicants 
for standard airworthiness certificates for new aircraft, STC holders, 
TC holders, licensees of TC holders, manufacturers, and maintenance 
providers. Many of these qualify as small businesses. Although the rule 
could affect a substantial number of small entities, the FAA believes 
there will be no small entity impact because the rule will establish a 
regulatory framework to ensure that the existing statutory

[[Page 52258]]

requirements are met. Consequently, I certify that this final rule will 
not have a significant economic impact on a substantial number of small 
entities.

International Trade Impact Assessment

    The Trade Agreement Act of 1979 prohibits Federal agencies from 
engaging in any standards or 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.
    This rule incorporates existing public laws and common industry 
practices and thus imposes no additional cost to industry. This final 
rule will not create obstacles to international trade.

Unfunded Mandates Assessment

    The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) (the Act) 
is intended, among other things, to curb the practice of imposing 
unfunded Federal mandates on State, local, and tribal governments. 
Title II of the Act 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 rule does not contain such a mandate. Therefore, the 
requirements of Title II of the Unfunded Mandates Reform Act of 1995 do 
not apply.

Executive Order 13132, Federalism

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

Regulations Affecting Intrastate Aviation in Alaska

    Section 1205 of the FAA Reauthorization Act of 1996 (110 Stat. 
3213) requires the Administrator, when modifying 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. We 
believe that the relief provided to manufactures of new aircraft as 
specified in Sec. Sec.  21.6(b) and 21.183(h) sufficiently address the 
concerns of persons currently manufacturing new aircraft in Alaska for 
certification under Sec.  21.183. We have determined that there is no 
need to make any regulatory distinctions applicable to intrastate 
aviation in Alaska.

Environmental Analysis

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

Regulations That Significantly Affect Energy Supply, Distribution, or 
Use

    The FAA has analyzed this final rule under Executive Order 13211, 
Actions Concerning Regulations that Significantly Affect Energy Supply, 
Distribution, or Use (May 18, 2001). We have determined that it is not 
a ``significant energy action'' under the executive order because it is 
not a ``significant regulatory action'' under Executive Order 12866, 
and it is not likely to have a significant adverse effect on the 
supply, distribution, or use of energy.

List of Subjects in 14 CFR Part 21

    Aircraft, Aviation safety, Exports, Imports, Reporting and 
recordkeeping requirements.

The Amendment

0
In consideration of the foregoing, the Federal Aviation Administration 
amends Chapter I of Title 14, Code of Federal Regulations as follows:

PART 21--CERTIFICATION PROCEDURES FOR PRODUCTS AND PARTS

0
1. The authority citation for part 21 is revised to read as follows:

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


0
2. Add new Sec.  21.6 to read as follows:


Sec.  21.6  Manufacture of new aircraft, aircraft engines, and 
propellers.

    (a) Except as specified in paragraphs (b) and (c) of this section, 
no person may manufacture a new aircraft, aircraft engine, or propeller 
based on a type certificate unless the person--
    (1) Is the holder of the type certificate or has a licensing 
agreement from the holder of the type certificate to manufacture the 
product; and
    (2) Meets the requirements of subpart F or G of this part.
    (b) A person may manufacture one new aircraft based on a type 
certificate without meeting the requirements of paragraph (a) of this 
section if that person can provide evidence acceptable to the FAA that 
the manufacture of the aircraft by that person began before August 5, 
2004.
    (c) The requirements of this section do not apply to--
    (1) New aircraft imported under the provisions of Sec. Sec.  
21.183(c), 21.184(b), or 21.185(c); and
    (2) New aircraft engines or propellers imported under the 
provisions of Sec.  21.500.


0
3. Add new Sec.  21.55 to read as follows:


Sec.  21.55  Responsibility of type certificate holders to provide 
written licensing agreements.

    A type certificate holder who allows a person to use the type 
certificate to manufacture a new aircraft, aircraft engine, or 
propeller must provide that person with a written licensing agreement 
acceptable to the FAA.


0
4. Add new Sec.  21.120 to read as follows:


Sec.  21.120  Responsibility of supplemental type certificate holders 
to provide written permission for alterations.

    A supplemental type certificate holder who allows a person to use 
the supplemental type certificate to alter an aircraft, aircraft 
engine, or propeller must provide that person with written permission 
acceptable to the FAA.


0
5. Amend Sec.  21.183 by revising the introductory text of paragraph 
(d) and adding paragraph (h) to read as follows:


Sec.  21.183  Issue of standard airworthiness certificates for normal, 
utility, acrobatic, commuter, and transport category aircraft; manned 
free balloons; and special classes of aircraft.

* * * * *
    (d) Used aircraft and surplus aircraft of the U.S. Armed Forces. An 
applicant for a standard airworthiness certificate for a used aircraft 
or surplus aircraft of the U.S. Armed Forces is entitled to a standard 
airworthiness certificate if--
* * * * *

[[Page 52259]]

    (h) New aircraft manufactured under the provisions of Sec.  
21.6(b). An applicant for a standard airworthiness certificate for a 
new aircraft manufactured under the provisions of Sec.  21.6(b) is 
entitled to a standard airworthiness certificate if--
    (1) The applicant presents evidence to the FAA that the aircraft 
conforms to a type design approved under a type certificate or 
supplemental type certificate and to applicable Airworthiness 
Directives;
    (2) The aircraft has been inspected in accordance with the 
performance rules for a 100-hour inspections set forth in Sec.  43.15 
of this chapter and found airworthy by a person specified in paragraph 
(d)(2) of this section; and
    (3) The FAA finds after inspection, that the aircraft conforms to 
the type design, and is in condition for safe operation.

PART 91--GENERAL OPERATING AND FLIGHT RULES

0
6. The authority citation for part 91 is revised to read as follows:

    Authority: 49 U.S.C. 106(g), 1155, 40103, 40113, 40120, 44101, 
44111, 44701, 44704, 44709, 44711, 44712, 44715, 44716, 44717, 
44722, 46306, 46315, 46316, 46504, 46506-46507, 47122, 47508, 47528-
47531, articles 12 and 29 of the Convention on International Civil 
Aviation (61 Stat. 1180).


0
7. Add new paragraph (d) to Sec.  91.403 to read as follows:


Sec.  91.403  General.

* * * * *
    (d) A person must not alter an aircraft based on a supplemental 
type certificate unless the owner or operator of the aircraft is the 
holder of the supplemental type certificate, or has written permission 
from the holder.

    Issued in Washington, DC, on August 18, 2006.
Marion C. Blakey,
Administrator.
[FR Doc. 06-7355 Filed 8-31-06; 8:45 am]
BILLING CODE 4910-13-P