[Federal Register Volume 71, Number 231 (Friday, December 1, 2006)]
[Proposed Rules]
[Pages 70254-70273]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-9479]



[[Page 70253]]

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Part III





Department of Transportation





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Federal Aviation Administration



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14 CFR Part 145



Repair Stations; Proposed Rule

Federal Register / Vol. 71 , No. 231 / Friday, December 1, 2006 / 
Proposed Rules

[[Page 70254]]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 145

[Docket No. FAA-2006-26408]
RIN 2120-AI53


Repair Stations

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The FAA proposes to amend the regulations for repair stations 
by revising the system of ratings and requiring repair stations to 
establish a quality program. The FAA also proposes additional changes 
critical to maintaining safety. These include requiring a repair 
station to maintain a capability list, designating a chief inspector, 
and having permanent housing for its facilities, equipment, materials, 
and personnel. In addition, this proposal also specifies those 
instances when the FAA may deny a repair station certificate. The 
proposal looks at the particular cases where a previously held 
certificate has been revoked. Lastly, the FAA proposes to clarify 
recent revisions to the repair station regulations. This action is 
necessary to reflect changes in aviation technology and repair station 
business practices.

DATES: Send your comments on or before March 1, 2007.

ADDRESSES: You may send comments identified by Docket Number FAA-2006-
26408 using any of the following methods:
    <bullet> DOT Docket Web site: Go to http://dms.dot.gov and follow 
the instructions for sending your comments electronically.
    <bullet> Government-wide rulemaking Web site: Go to http://www.regulations.gov and follow the instructions for sending your 
comments electronically.
    <bullet> Mail: Docket Management Facility; U.S. Department of 
Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, 
Washington, DC 20590-001.
    <bullet> Fax: 1-202-493-2251.
    <bullet> Hand Delivery: Room PL-401 on the plaza level of the 
Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    For more information on the rulemaking process, see the 
SUPPLEMENTARY INFORMATION section of this document.
    Privacy: We will post all comments we receive, without change, to 
http://dms.dot.gov, including any personal information you provide. For 
more information, see the Privacy Act discussion in the SUPPLEMENTARY 
INFORMATION section of this document.
    Docket: To read background documents or comments received, go to 
http://dms.dot.gov at any time or to Room PL-401 on the plaza level of 
the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 
a.m. and 5 p.m., Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: George W. Bean, General Aviation and 
Repair Station Branch, AFS-340, Federal Aviation Administration, 800 
Independence Avenue, SW., Washington, DC 20591; telephone (202) 267-
3109; facsimile (202) 267-5115, e-mail <a href="/cdn-cgi/l/email-protection#9fd8faf0edf8fab1c8b1ddfafef1dff9fefeb1f8f0e9"><span class="__cf_email__" data-cfemail="2166444e5346440f760f6344404f614740400f464e57">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Comments Invited

    The FAA invites interested persons to take part in this rulemaking 
by sending written comments, data, or views. We also invite comments 
about the economic, environmental, energy, or federalism impacts that 
might result from adopting the proposals in this document. The most 
helpful comments reference a specific portion of the proposal, explain 
the reason for any recommended change, and include supporting data. We 
ask that you send us two copies of written comments.
    We will file in the docket all comments we receive, as well as a 
report summarizing each substantive public contact with FAA personnel 
about this proposed rulemaking. The docket is available for public 
inspection before and after the comment closing date. If you wish to 
review the docket in person, go to the address in the ADDRESSES section 
of this preamble between 9 a.m. and 5 p.m., Monday through Friday, 
except Federal holidays. You may also review the docket using the 
Internet at the web address in the ADDRESSES section.
    Privacy Act: Using the search function of our docket Web site, 
anyone can find and read the comments received into any of our dockets, 
including the name of the individual sending the comment (or signing 
the comment 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 (65 FR 19477-78) or you may visit 
http://dms.dot.gov.
    Before acting on this proposal, we will consider all comments we 
receive by the closing date for comments. We will consider comments 
filed late if it is possible to do so without incurring expense or 
delay. We may change this proposal because of the comments we receive.
    If you want the FAA to acknowledge receipt of your comments on this 
proposal, include with your comments a pre-addressed, stamped postcard 
on which the docket number appears. We will stamp the date on the 
postcard and mail it to you.

Proprietary or Confidential Business Information

    Do not file in the docket information that you consider to be 
proprietary or confidential business information. Send or deliver this 
information directly to the person identified in the FOR FURTHER 
INFORMATION CONTACT section of this document. You must mark the 
information that you consider proprietary or confidential. If you send 
the information on a disk or CD ROM, mark the outside of the disk or CD 
ROM and also identify electronically within the disk or CD ROM the 
specific information that is proprietary or confidential.
    Under 14 CFR 11.35(b), when we are aware of proprietary information 
filed with a comment, we do not place it in the docket. We hold it in a 
separate file to which the public does not have access, and place a 
note in the docket that we have received it. If we receive a request to 
examine or copy this information, we treat it as any other request 
under the Freedom of Information Act (5 U.S.C. 552). We process such a 
request under the DOT procedures found in 49 CFR part 7.

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 Office of Rulemaking's Web page at http://www.faa.gov/avr/arm/index.cfm; 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 docket number, notice number, or amendment number 
of this rulemaking.

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Authority for This Rulemaking

    The FAA's authority to issue rules regarding aviation safety is 
found in Title 49 of the United States Code. Subtitle I, section 106, 
describes the authority of the FAA Administrator. Subtitle VII, 
Aviation Programs, describes in more detail the scope of the agency's 
authority.
    This rulemaking is promulgated under the authority described in 
title 49, subtitle VII, part A, subpart III, section 44701, General 
requirements, and Section 44707, Examining and rating air agencies. 
Under section 44701, the FAA may prescribe regulations and standards in 
the interest of safety for inspecting, servicing, and overhauling 
aircraft, aircraft engines, propellers, and appliances. It may also 
prescribe equipment and facilities for, and the timing and manner of, 
inspecting, servicing, and overhauling. Under section 44707, the FAA 
may examine and rate repair stations.
    This regulation is within the scope of section 44701 since it 
establishes new regulations for a repair station to establish a quality 
program, requires a repair station to maintain a capability list, 
designate a chief inspector, and have permanent housing for all its 
facilities, equipment, materials, and personnel. This regulation is 
within the scope of section 44707 since it revises the system of 
ratings for repair stations and specifies those instances when the FAA 
may deny the issuance of a repair station certificate, especially when 
a previously held certificate has been revoked.

Background

    In 1975, industry participants in the FAA's First Biennial 
Operations Review recommended that the agency revise Title 14, Code of 
Federal Regulations (CFR) part 145, Repair Stations. The FAA 
subsequently adopted minor amendments to part 145; however, the FAA did 
not make any major revisions until November 22, 1988 (Amendment No. 
145-21, 53 FR 47376). In that amendment, the FAA expanded the scope of 
work that U.S.-certificated repair stations located outside the United 
States may perform. It also allowed certain repair stations to contract 
maintenance functions to noncertificated entities under specific 
conditions.
    The FAA held four public meetings in 1989 as part of a regulatory 
review of 14 CFR part 43, Maintenance, Preventive Maintenance, 
Rebuilding, and Alteration, 14 CFR part 65, Certification: Airmen Other 
than Flight Crewmembers, subpart E, Repairmen, and 14 CFR part 145. 
These meetings provided a forum for the public to comment on possible 
revisions to the rules governing repair stations. More than 500 
representatives of repair stations, airlines, unions, manufacturers, 
foreign governments, industry organizations, and individuals attended 
the meetings.
    The goal of the meetings was to gather enough factual information 
from the public to decide whether the FAA should revise the repair 
station regulations, and if so, to determine what revisions the FAA 
should make. To prepare for the meetings, the FAA identified several 
areas of the repair station rules that might need revision. These areas 
were:
    <bullet> Organization and format;
    <bullet> Ratings and classes;
    <bullet> Operations and inspection procedures;
    <bullet> Manufacturers' maintenance facilities;
    <bullet> Contracting of maintenance by repair stations;
    <bullet> Repair station privileges;
    <bullet> Facility, housing, and equipment requirements;
    <bullet> Recordkeeping and report requirements; and
    <bullet> Management, inspection personnel, and repairmen 
qualifications.
    Participants discussed these issues at the FAA public meetings and 
sent written comments to Docket No. 25965, which the FAA set up for the 
regulatory review. Responses from participants at the meetings and 
comments received in the docket showed a need to revise and update 
repair station regulations.
    After considering the comments and data collected, the FAA issued 
Notice of Proposed Rulemaking No. 99-09, ``Part 145 Review: Repair 
Stations'' (64 FR 33142, June 21, 1999). On July 30, 2001, the FAA 
issued ``Repair Stations; Final rule with request for comments and 
direct final rule with request for comments'' (66 FR 41088, August 6, 
2001). The FAA requested comments on removing appendix A from part 145, 
which the FAA had not proposed originally, and on the paperwork burden. 
In that final rule, the FAA:
    <bullet> Reorganized and clarified certain subparts and sections of 
part 145;
    <bullet> Removed limited ratings for manufacturers' maintenance 
facilities;
    <bullet> Changed repair station housing and equipment requirements;
    <bullet> Included rules for exchanging equipment among satellite 
repair stations and for leasing equipment;
    <bullet> Required repair stations to develop a repair station 
manual that prescribes its operating procedures;
    <bullet> Required repair stations to develop a quality control 
manual that is similar to the previously required inspection procedures 
manual;
    <bullet> Provided for the operation of satellite repair stations;
    <bullet> Expanded the scope of contract maintenance; and
    <bullet> Required repair stations to develop a training program.
    Although the FAA proposed a new system of ratings and classes in 
Notice No. 99-09, the FAA kept the existing system in the final rule.
    The FAA received a significant number of comments opposing the 
proposal. Commenters agreed the repair station industry needs new 
ratings, however, they opposed the FAA's proposed system of ratings and 
classes. Therefore, the FAA decided to seek advice and recommendations 
from the affected aviation community before developing new rules for 
ratings and classes.
    Also, the final rule did not include a quality assurance program, 
as proposed originally. Again, the FAA decided to seek advice and 
recommendations from the affected aviation community before developing 
new rules for quality assurance. The FAA also elected to use an 
established Federal advisory committee to gather information regarding 
ratings and quality assurance.
    On October 15, 2001, FAA tasked the Aviation Rulemaking Advisory 
Committee (ARAC) to address ratings and quality assurance for repair 
stations. (66, FR 53281, October 19, 2001) The FAA asked ARAC to 
recommend a system of ratings for repair stations that would mitigate 
problems associated with the existing system and allow for growth of 
the aviation industry. Also, the FAA tasked ARAC to recommend a quality 
assurance program that would reflect industry requirements and account 
for the varying scope of repair station operations. Specifically, under 
the ratings task, the FAA tasked ARAC to:
    <bullet> Review the existing system of ratings and classes 
contained in the current part 145 and in any other documents issued by 
the FAA pertaining to aeronautical repair stations.
    <bullet> Review comments submitted to the FAA in response to the 
public meetings held in 1989 and the system of ratings proposed in June 
1999 in Notice No. 99-09.
    <bullet> Review challenges reported by Aviation Safety Inspectors 
(ASIs) under the existing system of ratings.
    <bullet> Identify the challenges that aeronautical repair stations 
encounter under the existing system of ratings and classes, including 
those pertaining to:


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--Current business practices that are not regulated that may require 
some form of control;
--Provisions in the current regulation that prevent repair stations 
from performing desired business practices; and
--Enforcement problems associated with the current regulations.

    <bullet> Draft a Technical Report that:

--Presents a review of the existing system of ratings and classes;
--Identifies various choices for rating systems;
--Identifies the advantages and disadvantages of each option;
--Provides economic information for each of the alternative rating 
systems; and
--Recommends a preferred system of ratings.

    Under the quality assurance task, the FAA tasked ARAC to:
    <bullet> Review the discussion about quality assurance in the June 
1999 Notice of Proposed Rulemaking (Notice No. 99-09).
    <bullet> Review comments relating to quality assurance submitted to 
the FAA in response to the public meetings held in 1989 and the quality 
assurance program requirements proposed in Notice No. 99-09.
    <bullet> Review current industry practices relating to quality 
assurance issues to:

--Identify quality assurance systems currently used by some repair 
stations; and
--Analyze the elements of the systems used by the aviation industry.

    <bullet> Develop a Technical Report that:

--Presents a review of regulatory requirements that comprise a quality 
assurance program;
--Identifies various options for regulating quality assurance programs;
--Identifies the advantages and disadvantages of each option;
--Provides information on the economic impacts of applying a quality 
assurance system to various segments of the repair station industry; 
and
--Recommends a preferred quality assurance program or system.

    ARAC sent its technical reports and recommendations to the FAA on 
August 13, 2002. The technical reports and recommendations contain 
details about each of the various options. Information on ARAC is 
available on the ARAC Web site: http://www.faa.gov/avr/arm/arac.

Action

    In this rulemaking action, the FAA proposes a new rating system for 
repair stations and proposes requirements for a quality system. The FAA 
bases this proposed rule on the public meetings held in 1989, comments 
to Docket No. 25965, comments to Notice No. 99-09, and recommendations 
from ARAC. The FAA also proposes additional changes critical to 
maintaining safety. These include: requiring a repair station to 
maintain a capability list; designating a chief inspector; and having 
permanent housing for all its facilities, equipment, materials, and 
personnel. In addition, the proposal also specifies those instances 
when the FAA may deny a repair station certificate. The proposal looks 
at the particular cases where a previously held certificate has been 
revoked. Lastly, the FAA proposes several minor amendments to the July 
30, 2001 final rule. These amendments are necessary to clarify the 
rule.

Section-by-Section Analysis

Subpart B--Certification

Section 145.51 Application for Certificate

    The FAA proposes to add a provision to the application procedures 
that would require an applicant for a repair station certificate to 
provide the FAA with a letter explaining how the applicant intends to 
comply with the requirements of part 145. Under long-standing FAA 
policy and practice, repair station certificate applicants have 
provided this letter that the FAA refers to as a ``Letter of 
Compliance.'' Since the letter is an essential part of the application 
process, the FAA finds it appropriate to include a requirement to 
provide the letter in the regulations for application for a repair 
station certificate.
    The FAA proposes an editorial change to current Sec.  145.51(a)(2) 
(proposed Sec.  145.51(a)(3)) to make the wording consistent with 
proposed Sec.  145.211(d). It would refer to a ``quality system 
manual'' rather than a ``quality control manual.''
    The FAA proposes adding the words ``manufacturer'' and ``category'' 
to proposed Sec.  145.51(a)(4) to ensure consistency with the 
capability list requirements found in Sec.  145.215.
    The FAA proposes to clarify the text of Sec.  145.51(b) by removing 
the ambiguity in the relieving provision concerning the availability of 
the equipment at the time of certification. This ambiguity results from 
the phrase specifying that the equipment requirement of the paragraph 
could be met ``if the applicant has a contract acceptable to the FAA 
with another person to make the equipment available to the applicant at 
the time of certification. * * * '' The FAA believes that the phrase 
lacks clarity and could be subject to arbitrary application in 
individual cases; i.e., one inspector might require the contract to be 
executed and all the equipment brought to the premises for a pre-
certification inspection, while another inspector might only review the 
contract for the specified items. In the first example, the equipment 
could be returned to the supplier the next day, and not be returned to 
the repair station until the relevant work is being performed, as 
required by Sec.  145.109(a).
    Consistent with the requirement in Sec.  145.109(a), and as noted 
by some of the commenters to the proposal in Notice No. 99-09, it is 
important that the equipment be in place when the work is being 
performed. That is the safety basis for the equipment requirement. If, 
at the time of initial certification or rating approval, an applicant 
has a contract acceptable to the FAA to make the equipment available 
when the relevant work is being performed, the FAA will be able to 
determine that the repair station has assessed its relevant needs, and 
that it has the means to obtain the pertinent equipment, tools, and 
test apparatus when necessary. The applicant, of course, retains the 
option to have the equipment, tools, and test apparatus in place during 
the certification process. The requirement remains in Sec.  145.109(a) 
that those items be on the premises and under the repair station's 
control whenever the work is being performed.
    Additionally, the FAA notes that the text of existing Sec.  
145.109(a) contains a requirement to have ``tools,'' in addition to 
equipment and materials, whereas existing Sec.  145.51(b) does not 
refer to tools. Section 145.109(a) currently requires a repair station 
to ``have the equipment, tools, and materials necessary to perform the 
maintenance, preventive maintenance, or alterations. * * * '' [and 
that] The equipment, tools, and materials must be located on the 
premises and under the repair station's control when the work is being 
done.'' The FAA did not include the term ``tools'' in Sec.  145.51(b) 
because of possible uncertainty as to what tools should be required for 
an applicant to have on site or under contract at the time of 
certification. We did not believe that an applicant, in order to obtain 
a repair station certificate, should be required to have on site at the 
time of initial certification or rating approval all the particular 
hand tools, etc., that an individual repairman or mechanic might 
possess. The term ``equipment'' in Sec.  145.51(b) was meant to include 
items the FAA would consider to be ``tools''

[[Page 70257]]

of the repair station. For example, a repair station's equipment might 
include items such as machines, jigs, fixtures, basic shop tools and 
associated tooling, necessary for the repair station to perform the 
work for which it is rated, as reflected on its proposed operations 
specifications and capability list.
    We propose to clarify the scope of the kinds of items a repair 
station must have for initially obtaining certification by adding both 
tools and test apparatus to the list of items a repair station must 
have either on site or under contract. While the term equipment could 
be interpreted to include many examples of each, i.e., basic shop tools 
and test equipment, adding the term ``tools'' to the regulation would 
ensure that an applicant for a repair station certificate also includes 
on site, or in the contract, certain tools necessary for the rating 
sought that individual mechanics or repairmen might not possess. For 
example, this might include tools that are of a specialized nature for 
the rating or other tools that might be too large or expensive, or of a 
limited specialized nature. For the same reasons, and for consistency 
with the requirements in 14 CFR Sec.  43.13(a), we propose to add 
``test apparatus'' to the list of items a repair station must have in 
place for inspection or under contract at the time of initial 
certification or rating approval.
    The FAA also proposes to remove the modifier ``technical'' from the 
term ``data'' for consistency with the other sections of the rule that 
use the term ``data.''
    The FAA proposes to add a new paragraph (e) to Sec.  145.51 to 
detail conditions under which a person may not apply for a repair 
station certificate. Unless otherwise authorized by the FAA, the 
following persons could not apply for a repair station certificate (nor 
would the FAA accept such an application) for one year from the date a 
previously revoked certificate was surrendered pursuant to the FAA's 
order of revocation:
    <bullet> Any person who held a repair stations certificate that was 
revoked; and
    <bullet> Any person who had a substantial ownership interest or 
substantial control over the operations of a repair station that has 
had its certificate revoked and who materially contributed to the 
circumstances causing the revocation.
    The proposed rule would specify that the one-year period would 
begin to run on the date the certificate is surrendered to the FAA 
pursuant to the order of revocation. This proposed paragraph parallels 
Sec.  61.13(d)(2), which pertains to pilots being able to reapply for a 
certificate following revocation. Under the proposed text, a person 
whose certificate has been revoked needs prior authorization only if 
the person wishes to apply before the one-year term is up. The FAA 
revokes repair station certificates only for serious infractions of the 
regulations. The FAA believes that imposing a waiting period would 
serve as an additional deterrent against serious violations of the 
repair station regulations, thereby enhancing safety in the repair 
station industry.

Section 145.53 Issuance of certificate

    Section 145.53 identifies who is entitled to a repair station 
certificate and appropriate ratings. Specifically, the section states 
that a person who meets the requirements of part 145 is entitled to a 
repair station certificate and appropriate ratings. Section 145.53(b) 
states, ``if the person is located in a country with which the United 
States has a bilateral aviation safety agreement, the FAA may find that 
the person meets the requirements of this part based on certification 
from the civil aviation authority of that country.'' The FAA proposes 
to amend Sec.  145.53(b) to state that the FAA may also base such 
finding on certification from an authority acceptable to the FAA.
    This change permits the Administrator to base such a finding on a 
recommendation from a civil aviation authority that may not necessarily 
be the civil aviation authority of the country in which the repair 
station is located. Recent changes in Europe, for example, have led to 
the European Union forming the European Aviation Safety Agency (EASA). 
This new agency will carry out certain civil aviation safety functions 
for the European Community. The FAA must consider that over a period of 
time the United States may enter into aircraft maintenance agreements 
under which the FAA may base its actions on a certification made by a 
civil aviation authority other than a national aviation authority. 
Therefore, the proposal would revise the current regulation to allow 
for these different types of agreements. The FAA has determined that 
the change has no additional technical or economic impact on the 
regulation.
    Also, the FAA proposes to add a new paragraph to Sec.  145.53 
identifying reasons the FAA may use to deny the issuance of a repair 
station certificate. The FAA proposes to deny a person a repair station 
certificate if:
    <bullet> The applicant does not meet the eligibility requirements 
for the certificate sought, or does not complete the certification 
process.
    <bullet> The applicant previously held a repair station certificate 
that was revoked.
    <bullet> The applicant intends to fill or fills a key management 
position, (for example, accountable manager or chief inspector), with 
an individual who exercised control over or who held the same or a 
similar position with a repair station whose certificate was revoked, 
or was in the process of being revoked. That individual must have 
materially contributed to the circumstances causing the revocation or 
revocation process.
    <bullet> The applicant held a key management position with a repair 
station certificate holder whose certificate was revoked, or was in the 
process of being revoked. The applicant must have materially 
contributed to the circumstances causing the revocation or causing the 
revocation process.
    <bullet> An individual who will have control over or substantial 
ownership interest in the applicant had the same or similar control or 
interest in a repair station whose certificate was revoked, or is in 
the process of being revoked. That individual must have materially 
contributed to the circumstances causing revocation or causing the 
revocation process.
    The last four criteria for denial are necessary because the FAA is 
aware of recent instances where persons whose repair station 
certificates were revoked continued to operate by obtaining new repair 
station certificates shortly after the revocation process. In a similar 
situation, a key management official with decision-making authority 
(chief inspector) from a repair station that lost its certificate for 
serious maintenance-related safety violations applied for and received 
a new repair station certificate. That individual also became the chief 
inspector at the newly certificated repair station. While under the 
chief inspector's direction, employees of the newly certificated 
station performed improper maintenance on a number of propellers, one 
of which came apart in flight causing a fatal accident.
    As a result of this incident, the National Transportation Safety 
Board (NTSB), in a Safety Recommendation dated February 9, 2004 (A-04-
01 and A-04-02), expressed concern that the FAA did not have a 
mechanism for preventing individuals who were associated with a 
previously revoked repair station, such as the owner described above, 
from continuing to operate through a new repair station. The NTSB made 
a number of observations.

[[Page 70258]]

    The FAA has such a mechanism in place for air carriers and other 
commercial operators.
    14 CFR Sec.  119.39(b) allows the FAA to deny an application for a 
Part 121 or 135 air carrier or operating certificate. This can occur if 
the applicant previously held a certificate that was revoked or if a 
person who exercised control over (or held a key management position 
in) a previously revoked operator will be exercising control over (or 
hold a key management position in) the new operator.
    The Part 119 rule allows the FAA to deny certification to an 
applicant who is substantially owned by (or intends to fill a key 
management position with) an individual who had a similar interest in a 
certificate holder whose certificate was (or is being) revoked when 
that individual materially contributed to the circumstances causing the 
revocation.
    The NTSB, pointing out the safety concerns offered by the FAA when 
it issued the above-described rules for air carriers and commercial 
operators, believed the same reasoning should apply equally to Part 145 
certificate holders. The FAA agrees. The proposed language is 
consistent with other revocations that the FAA imposes. The changes 
that we propose are based to a large extent on the language contained 
in Sec.  119.39(b). In 1978, when the predecessor regulation to Sec.  
119.39(b) was published, the FAA stated:

    Noncompliance data is a significant factor to consider with an 
application for an ATCO [air taxi/commercial operator] operating 
certificate. Similar information has been helpful in evaluating air 
carrier applicants and the persons they propose for management 
positions. The FAA revokes an operating certificate only for a very 
serious infraction of the regulations. If a person contributes 
materially to that infraction, the fact should be considered as a 
factor in evaluating the new application. This does not mean the 
approval of the application or employment position will be 
automatically withheld, but that each situation will be carefully 
evaluated on its merits. (43 FR 46762, Oct. 10, 1978)

Section 145.59 Ratings

    The FAA proposes to revise the ratings and classes that may be 
issued to certificated repair stations. A comparison of the proposed 
ratings with the current ratings follows.

------------------------------------------------------------------------
             Current Rating                      Proposed Rating
------------------------------------------------------------------------
            Airframe Rating                      Aircraft Rating
------------------------------------------------------------------------
Class 1: Composite construction of       The Aircraft rating, which the
 small aircraft.                          FAA did not divide into
Class 2: Composite construction of        classes, would replace the
 large aircraft.                          Airframe rating and its
Class 3: All-metal construction of        associated classes. The FAA
 small aircraft.                          proposes to expand the current
Class 4: All-metal construction of        Airframe rating to include all
 large aircraft.                          articles except those for
                                          which a Powerplant, Propeller,
                                          or Avionics rating is
                                          required.
------------------------------------------------------------------------
           Powerplant Rating                    Powerplant Rating
------------------------------------------------------------------------
Class 1: Reciprocating engines of 400    Class 1: Reciprocating engines.
 horsepower or less.
Class 2: Reciprocating engines of more   Class 2: Turbine engines.
 than 400 horsepower.
Class 3: Turbine engines...............  Class 3: Auxiliary power units
                                          (APU).
------------------------------------------------------------------------
            Propeller Rating                     Propeller Rating
------------------------------------------------------------------------
Class 1: All fixed-pitch and ground-     This proposed Propeller rating
 adjustable propellers of wood, metal,    no longer includes classes.
 or composite construction.               This rating would not include
Class 2: All other propellers, by make.   the main and auxiliary rotors
                                          (airframe articles) or
                                          rotating airfoils of aircraft
                                          engines (powerplant articles).
                                          This rating would allow a
                                          repair station to remove and
                                          replace articles attached to
                                          the propeller and to remove
                                          and reinstall the propeller.
                                          Also, the rating would allow a
                                          repair station to remove,
                                          replace, install, and test the
                                          propeller.
------------------------------------------------------------------------
              Radio Rating                       Avionics Rating
------------------------------------------------------------------------
Class 1: Communication equipment.......  The Avionics rating would
Class 2: Navigational equipment........   combine the Radio, Instrument,
Class 3: Radar equipment...............   and parts of the Accessory
                                          ratings into a single rating.
                                          The proposed Avionics rating
                                          would group together items
                                          that operate electrically or
                                          electronically and that
                                          require a unique set of skills
                                          not associated with other
                                          ratings. In addition, this
                                          rating would allow repair
                                          stations to perform
                                          maintenance on in-flight
                                          entertainment units or other
                                          electronic units, as specified
                                          in their operations
                                          specifications.
------------------------------------------------------------------------
 
           Instrument Rating
------------------------------------------------------------------------
 
Class 1: Mechanical....................
Class 2: Electrical....................
Class 3: Gyroscopic....................
Class 4: Electronic....................
------------------------------------------------------------------------
            Accessory Rating                     Component Rating
------------------------------------------------------------------------
Class 1: Mechanical accessories that     The Component rating would
 depend on friction, hydraulics,          allow a repair station to
 mechanical linkage, or pneumatic         perform maintenance,
 pressure for operation.                  preventive maintenance, and
Class 2: Electrical accessories that      alterations on individual
 depend on electrical energy for their    component parts that are not
 operation..                              installed on or in aircraft,
Class 3: Electronic accessories that      powerplant, propeller, or
 depend on an electron tube,              avionics equipment. The
 transistor, or similar device..          Component rating would include
                                          any item that is not a
                                          complete aircraft, powerplant,
                                          propeller, or avionics
                                          article.
------------------------------------------------------------------------

[[Page 70259]]

 
     Limited Rating (Sec.   145.61)       Limitations to a Rating (Sec.
                                                      145.61)
------------------------------------------------------------------------
For airframes; engines; propellers;      In response to industry and
 instruments; radio equipment;            ARAC recommendations, the FAA
 accessories; landing gear; components;   would no longer issue limited
 floats; nondestructive inspection,       ratings. Instead, the FAA
 testing, and processing; emergency       would issue limitations to the
 equipment; rotor blades by make and      rating of a certificated
 model; aircraft fabric work; and other   repair station governing
 purposes.                                maintenance or alterations on
                                          a particular type of aircraft,
                                          powerplant, propeller,
                                          avionics, or component part
                                          thereof for which part 43
                                          applies.
------------------------------------------------------------------------
 Limited Rating for Specialized Service     Specialized Service Rating
            (Sec.   145.61)                       (Sec.   145.63)
------------------------------------------------------------------------
For example, landing gear components;    The proposed Specialized
 nondestructive inspection, testing,      Service rating is
 and processing; emergency equipment;     substantially the same as the
 aircraft fabric work; and any other      existing Limited Specialized
 specialized service the FAA finds        Service rating. The FAA would
 appropriate for this rating.             issue the Specialized Service
                                          rating to a repair station
                                          that performs only specific
                                          processes associated with the
                                          maintenance, preventive
                                          maintenance, and alterations
                                          of an aviation article.
------------------------------------------------------------------------

Aircraft Rating
    Currently, the FAA may issue a repair station an Airframe rating 
with any of four class ratings: Classes 1, 2, 3, and 4. These classes 
are based on aircraft weight (large or small as defined in 14 CFR Sec.  
1.1) and construction (composite or all-metal). The FAA finds that 
issuing ratings for aircraft based on their construction is no longer 
appropriate because modern aircraft are no longer built of either all 
composite material or all metal. Further, the FAA finds that 
classifying aircraft by weight is no longer appropriate. The FAA 
proposes to remove the Airframe rating and its associated class ratings 
and establish an Aircraft rating without classes.
    In its technical report, ARAC noted that in 1962, most aircraft had 
a dope and fabric or wood construction. The aviation industry commonly 
referred to aircraft made from a combination of wood, fabric, and metal 
materials as aircraft with a ``composite'' construction. ARAC noted 
that a better description of the term ``composite'' may have been 
``not-all metal.'' The term ``composite material'' also refers to 
carbon-carbon compounds and advanced polymers.
    Many modern aircraft have an airframe made of both metal and 
composite materials. The airframe is metal while certain portions, such 
as control surfaces and fairings, are composite materials. This causes 
confusion among FAA inspectors and the aviation industry over how much 
of an airframe must be of composite or metal construction for various 
class ratings within the Airframe category.
    Since defining ``composite'' is difficult and the current classes 
are no longer suitable for the repair station industry, the FAA has 
tentatively determined that a better approach is to adopt general 
ratings. ARAC found that a repair station rating based solely on the 
type or variety of material in aircraft construction is unduly 
restrictive. These factors no longer determine the scope of work repair 
stations are able to perform under the Airframe rating. ARAC found that 
airframe maintenance capabilities do not depend on the materials used 
in aircraft construction.
    Further, ARAC found that classification of ratings by weight is no 
longer appropriate. Historically, the FAA and the aviation industry 
used the weight classification of small and large aircraft to 
distinguish aircraft used in commercial air carrier service from 
general aviation aircraft. Commercial operations normally used aircraft 
over 12,500 pounds while general aviation typically used smaller 
aircraft. This distinction also reflected the relative complexity of 
the aircraft. Today, however, aircraft weight does not reflect the 
complexity or intended use of an aircraft.
    The Aircraft rating, which is not divided into classes, would 
replace the Airframe rating and its associated classes. Under the 
Aircraft rating, a repair station could perform maintenance, preventive 
maintenance, and alterations on the complete aircraft, except those 
articles for which a Powerplant, Propeller, or Avionics rating is 
required. Replacing the current Airframe rating with an Aircraft rating 
would allow for inclusion of future technological advancements in 
aircraft construction. The Aircraft rating would allow the repair 
station to work on the aircraft electrical distribution system external 
to avionics units. In addition, a repair station could remove, replace, 
install, and test any powerplant, propeller, or avionics equipment to 
perform its rated work on the complete aircraft and approve it for 
return to service if the repair station has the capabilities.
    At the time of application, the FAA would require an applicant for 
an Aircraft rating to identify the manufacturer, type, make, model, or 
series of aircraft on which the repair station intends to perform 
maintenance, preventive maintenance and alterations. The repair station 
must list the aircraft on its capability list, which would be required 
by Sec.  145.215. The FAA would require the repair station to 
demonstrate that it has on its premises and under its control the 
necessary housing, facilities, equipment, tools, test apparatus, 
trained personnel, and data to perform the maintenance, preventive 
maintenance, and alterations on the aircraft listed.
    After the FAA certificates a repair station, the repair station 
could add additional capabilities as needed. The repair station could 
change its capability list after performing a self-evaluation that is 
part of the repair station's quality system. This internal review would 
ensure that the FAA could evaluate the work being performed under the 
rating and confirm that a repair station has the capabilities to 
perform the specified maintenance, preventive maintenance, and 
alterations.
    It is not the FAA's intent to allow a repair station to change its 
ratings simply by performing the self-evaluation. The self-evaluation 
is used to add capabilities to its capability list that are within the 
scope of its rating. Aircraft-rated repair stations would be required 
to list the type, make, model, or series of aircraft on its capability 
list. The Aircraft rating, along with the types of aircraft the repair 
station may maintain, constitutes its rating. An Aircraft-rated repair 
station could not add different aircraft types to its capability list 
by performing the self-evaluation. For example, if its operations 
specifications authorize the repair station to maintain B-737 aircraft 
types, and it was currently maintaining only B-737-100-500 models, it 
could perform the self-evaluation to add other B-737 models to its 
capability list, but it could not add B-757 aircraft.

[[Page 70260]]

    The word ``aircraft type'' when used in the text associated with an 
Aircraft rating is defined in 14 CFR part 1 and means those aircraft 
that are similar in design. Examples include: DC-7 and DC-7C; 1049G and 
1049H; and F27 and F27F.
Powerplant Rating
    The current Powerplant rating has three classes: Class 1: 
Reciprocating engines of 400 horsepower or less, Class 2: Reciprocating 
engines of more than 400 horsepower, and Class 3: Turbine engines.
    When the FAA established the current Powerplant ratings, 
reciprocating radial engines that produced more than 400 horsepower 
powered nearly all large aircraft. In its report, ARAC noted that these 
engines differed substantially from the horizontally opposed 
reciprocating engines with less than 400 horsepower that manufacturers 
used to power general aviation aircraft. Distinguishing powerplant 
classes by horsepower was helpful considering the engines in use at 
that time. Today, however, it is possible for small horizontally 
opposed reciprocating engines to produce more than 400 horsepower. 
Further, most modern transport category aircraft have turbine engines, 
and manufacturers no longer produce high horsepower radial engines. 
ARAC determined, therefore, that separate classes for reciprocating 
engines are no longer useful.
    When the FAA established the current Powerplant rating, 
manufacturers were just beginning to use turbine engines on civil 
aircraft. Therefore, the FAA found it appropriate to establish a class 
for turbine engines.
    Unlike the other ratings, the FAA would retain classes for the 
Powerplant rating. The Powerplant rating still has natural and 
permanent divisions between reciprocating, turbine, and APU engines. 
Engines do not cross the boundaries between these classes. This would 
not be true for the other ratings, especially the Aircraft rating.
    Under the proposed rating system, a repair station holding a new 
Powerplant rating may perform maintenance, preventive maintenance, and 
alterations of the powerplant and all components necessary for the 
powerplant to work properly. The proposed Powerplant rating includes 
aircraft engines, as defined in 14 CFR 1.1, and auxiliary power units.
    An Auxiliary Power Unit (APU) refers to any gas turbine-powered 
unit delivering rotating shaft power or compressed air, or both, that 
is not intended for the propelling of an aircraft. APUs often drive 
aircraft generators and air-conditioning packs. In some cases APUs also 
can be used as an additional source of energy to start the primary 
aircraft engines. The design configurations of some aircraft rely on an 
APU for provisional back-up electrical power in flight in the event of 
a failure of the primary power sources. The APU has been included in 
the Powerplant rating due to its similarity to an aircraft turbine 
engine.
    The proposed rating, therefore, would still have 3 classes. 
However, the classes would be organized as follows:
    Class 1: Reciprocating engines, combining current Classes 1 and 2;
    Class 2: Turbine engines, encompassing current Class 3; and
    Class 3: Auxiliary power units (APU).
    This rating, like the Aircraft rating, would allow repair stations 
to remove and replace propellers and powerplant components, as needed, 
and to perform powerplant maintenance, preventive maintenance, and 
alterations. Powerplant-rated repair stations also could remove and 
replace nacelles and fairings because most engine work cannot be 
performed unless the repair station removes these items. However, this 
rating would not allow the repair station to remove or replace engines. 
To perform this function, the repair station would, at a minimum, have 
to hold an Aircraft rating with a limitation to remove and replace 
engines. Also, this rating would not allow a repair station to perform 
maintenance, preventive maintenance, and alterations on the aircraft or 
propeller.
    An application for the Powerplant rating must include a list of the 
make, model, or series of all powerplant articles that the repair 
station intends to maintain. The repair station must list these 
articles on its capability list. The repair station may add different 
makes and models of engines within its class rating to its capability 
list by following the self-evaluation procedures of the repair 
station's quality system. The FAA does not intend that a repair station 
alter its rating by adding powerplants outside the scope of the 
powerplant class the repair station is rated to maintain. This means a 
Class 1-rated repair station cannot add a Class 2 powerplant simply by 
performing a self-evaluation. This would be considered a change of 
rating, and must be handled through the certification process.
Propeller Rating
    Under the current regulations, a repair station holding a Class 1 
Propeller rating may perform maintenance, preventive maintenance, and 
alterations on all fixed-pitch and ground-adjustable propellers of 
wood, metal, or composite construction. A repair station holding a 
Class 2 Propeller rating may perform maintenance, preventive 
maintenance, and alterations on all other propellers by make.
    In its report, ARAC noted that this distinction is based on the 
different levels of complexity between a propeller with no moving parts 
and a propeller with a mechanical system that controls the pitch of the 
propeller while operating. ARAC also noted that aircraft with small 
reciprocating engines generally have fixed pitch propellers, while 
aircraft with high horsepower engines have variable pitch propellers. 
ARAC found that, although varying levels of complexity exist for 
propellers, most repair stations performing maintenance on propellers 
hold both class ratings. Therefore, ARAC recommended that the FAA 
eliminate class ratings that distinguish the types of propellers.
    The proposed Propeller rating would allow a repair station to 
perform maintenance, preventive maintenance, and alterations on 
propellers. This rating does not include the main and auxiliary rotors 
(airframe articles) or rotating airfoils of aircraft engines 
(powerplant articles). This rating would allow a repair station to 
remove and replace control components attached to the propeller. Also, 
the rating would allow a repair station to remove, replace, install, 
and test the propeller. However, it would not allow a repair station to 
perform installations that would constitute a major alteration to an 
aircraft or aircraft engine.
    An applicant for a Propeller rating must list the make, model, or 
series of propellers to be included on its capability list. The repair 
station could add makes or models of propellers to its capability list 
by following the self-evaluation procedures of the repair station's 
quality system. Although a repair station holding a Propeller rating 
could remove and install the propeller on an aircraft engine, it could 
not perform any maintenance, preventive maintenance, or alterations on 
the aircraft, aircraft engine, or airframe. For example, a repair 
station that intends to install propellers of a different make and 
model using a supplemental type certificate (STC) would be required to 
hold a Propeller rating and would need an Aircraft rating, with the 
necessary limitation.
Avionics and Component Ratings
    The proposed Avionics and Component ratings present different 
challenges to the rating system because of the sheer volume of articles 
that can be addressed by the ratings, the variety of these articles, 
and the number of

[[Page 70261]]

manufacturers of similar articles. Providing only the make, model, or 
series of these articles may not provide the necessary information to 
determine what requirements the repair station must meet in order to be 
eligible for a rating. As a result, the FAA must include a requirement 
for the name of the manufacturer of the articles to be included in the 
capability list. Also, the FAA proposes a requirement that the 
capability list for a repair station certificated to maintain avionics 
or component articles be separated by categories to make it easier for 
both the repair station's customers and the FAA to ascertain the 
capabilities of the repair station.
    The inclusion of the manufacturer on the capability list is 
necessary because, unlike the aircraft or powerplant manufacturers, 
there are several manufacturers who produce similar articles, such as 
radios, integrated electronic units, pumps, and actuators. Because the 
rule requires repair stations to use the data, tools, and equipment 
recommended by the manufacturer, these items will differ between 
manufacturers even though the articles may be similar in design. Also, 
since repair stations will be performing self-evaluations to add items 
to their capability lists, not identifying the different items required 
for articles produced by different manufacturers could make it 
difficult for a repair station to determine if it has the capability to 
maintain articles from various manufacturers.
    Identifying the manufacturer would assist the FAA in separating the 
capability list into categories. The category headings can be broad to 
encompass several similar articles, but should be detailed enough so 
that a cursory review can determine the types of articles maintained by 
the repair station. Examples of categories may include: radios, 
instruments, integrated modules, hydraulic pumps, fuel pumps, hydraulic 
actuators, brakes, integrated entertainment systems, cargo loading 
units/pallets, or cargo floor tracks and locks. Under these categories, 
the repair station would list each article by manufacturer, make, 
model, or series.
Avionics Rating
    The Avionics rating would combine the current Radio, Instrument, 
and parts of the Accessory ratings into a single rating. This rating 
would include all articles used for aircraft communication, navigation, 
and operation that operate electrically or electronically.
    The proposed Avionics rating groups together items that operate 
electrically or electronically and that require a unique set of skills 
not associated with other ratings. In addition, this rating would allow 
repair stations to perform work on in-flight entertainment units or 
other electronic units. The current rating and classification system 
does not have a rating or class that clearly includes in-flight 
entertainment electronics. In its report, ARAC stated that although the 
aviation industry typically does not consider these devices as avionics 
equipment, the FAA should include them with other electronic devices 
that require similar skills to maintain.
    The current Radio rating consists of three classes: Class 1: 
Communication equipment, Class 2: Navigation equipment, and Class 3: 
Radar equipment. In its report, ARAC indicated that technological 
advances in avionics have led to much controversy over this 
categorization of equipment. ARAC noted that modern avionics equipment 
typically integrates communication and navigation functions into a 
single avionics appliance. Radar and radio equipment that operate using 
pulse technology also serve communication and navigation functions. 
Therefore, repair stations performing work on avionics equipment often 
hold a Radio rating with all three of the classes.
    The current Instrument rating consists of four classes: Class 1: 
Mechanical, Class 2: Electrical, Class 3: Gyroscopic, and Class 4: 
Electronic. The FAA established these classes based on the technology 
available at the time. However, ARAC notes that today, most instruments 
operate using a combination of these principles. Therefore, class 
distinctions are no longer appropriate.
    The current Accessory rating has three classes. Class 1: Mechanical 
includes accessories that depend on friction, hydraulics, mechanical 
linkage, or pneumatic pressure for operation. Class 2: Electrical 
includes accessories that depend on electrical energy for their 
operation and generators. Class 3: Electronic includes accessories that 
depend on the use of an electron tube, transistor, or similar devices. 
Similar to the Instrument rating, the classes for the Accessory rating 
identify the article's principle of operation. Many articles maintained 
under this rating use a combination of principles, thus requiring 
repair stations to hold all the class ratings for an Accessory rating.
    The proposed Avionics rating would allow a repair station with the 
required capabilities to remove and reinstall access panels, brackets, 
or clamps in accordance with the manufacturer's instructions on 
aircraft, powerplants, or propellers, as needed, to gain access to 
avionics equipment or instruments. The repair station also could 
remove, replace, install, and test the avionics equipment on an 
aircraft, provided the repair station does not alter the aircraft. An 
Avionics-rated repair station would not be authorized to remove 
articles that it was not rated to reinstall. To perform a major or 
minor alteration to an aircraft, powerplant, or propeller, a repair 
station would be required to hold the appropriate additional ratings.
    As with the Aircraft, Powerplant, and Propeller ratings, a repair 
station with an Avionics rating would have to identify on its 
capability list the articles that it intends to maintain. Unlike the 
other ratings, in addition to identifying the article by make or model 
and series, the Avionics-rated repair station must also include the 
manufacturer and the category of the article, such as communication, 
navigation, pulsed (radar), mechanical, electric, gyroscopic, or 
electronic.
Component Rating
    The Component rating would allow a repair station to perform 
maintenance, preventive maintenance, and alterations on individual 
uninstalled component parts that are included on or in aircraft, 
powerplant, propeller, or avionics equipment. The Component rating 
would include any item that is not a complete aircraft, powerplant, 
propeller, or avionics article. However, a Component-rated repair 
station must have a limitation to an Aircraft, Powerplant, or Propeller 
rating to remove and install articles. A repair station with an 
Aircraft, Powerplant, Propeller, or Avionics rating would not need a 
Component rating to work on items associated with its respective rating 
and capabilities. For example, an Aircraft or Powerplant-rated repair 
station would not need a Component rating to perform work on an airfoil 
surface, engine case, or other parts of the aircraft or powerplant, as 
applicable.
    The capability list for this rating must provide enough detail to 
ensure that a repair station has the appropriate housing, facilities, 
equipment, tools, test apparatus, training, personnel, and data at 
certification and when the work is being performed. The FAA agrees with 
ARAC's recommendation that a repair station list the general part 
nomenclature of an item, and that it is unnecessary to list articles by 
part number. The capability list would have to identify each component 
by manufacturer, make, model, or other nomenclature as designated by 
the manufacturer.

[[Page 70262]]

Section 145.61 Limitations to Ratings

    In response to industry and ARAC recommendations, the FAA would no 
longer issue limited ratings. Instead, the FAA would issue limitations 
to the rating of a certificated repair station governing maintenance, 
preventive maintenance, or alterations on a particular type of 
aircraft, powerplant, propeller, avionics unit, or component part 
thereof. Currently, the rule allows for limited ratings based on the 
repair station performing maintenance, preventive maintenance, or 
alterations on particular makes or models of aircraft, powerplants, or 
propellers. However, as the repair industry has become more 
specialized, the concept of limited ratings had to be stretched to 
apply to repair stations performing only certain maintenance, 
preventive maintenance, or alteration functions on one or several 
makes/models of articles. Eliminating limited ratings would allow more 
flexibility in determining what rating an applicant or a repair station 
should obtain. For example, if a repair station intends to perform only 
a specific maintenance, preventive maintenance, or alteration function, 
such as interior configuration work or aircraft painting, the FAA would 
issue the repair station an Aircraft rating and list that function as a 
limitation on the repair station's operations specifications. The 
repair station's operations specifications would specify the rating to 
which the limitation applies and the limitation to that rating in 
sufficient detail to describe the maintenance capabilities of the 
repair station.

Section 145.63 Specialized Service Rating

    Currently, the FAA issues limited ratings to repair stations to 
perform maintenance, preventive maintenance, and alterations to 
airframes, engines, propellers, instruments, radio equipment, 
accessories, landing gear components, emergency equipment, rotor 
blades, and floats, and to perform specialized services.
    The proposed Specialized Service rating is substantially the same 
as the existing Limited Specialized Service rating. The Specialized 
Service rating would allow a repair station to perform a specific 
process associated with the maintenance, preventive maintenance, or 
alteration of an article; this work might not constitute a complete 
repair sufficient to approve an article for return to service. The 
repair station's operations specifications would contain the 
specification used in performing that specialized service. The 
specification could be a military-, industry-, or applicant-developed 
specification that was approved by the FAA. Examples of specialized 
services would include, but not be limited to, non-destructive testing 
or inspection, welding, heat treating, plating, and plasma spraying.
    There are three situations in which the FAA would issue a 
Specialized Service rating. The FAA would issue this rating to a repair 
station that:
    <bullet> Performs only a specific process;
    <bullet> Has in-house capabilities to perform the specific process 
but the work being requested is not within the scope of its rating; or
    <bullet> Performs a function not found in the manufacturer's data.
    If specialized service tasks are contained within a repair 
station's data for existing ratings, the repair station would not 
require an additional rating to perform that service. For example, if 
an Aircraft-rated repair station wants to perform plating on a 
propeller part, it would need a Specialized Service rating to perform 
the operation on the propeller part. If, however, a Powerplant-rated 
repair station has the in-house capability to perform x-ray 
inspections, it would not need to have a Specialized Service rating to 
perform that same maintenance for another repair station on powerplant 
articles for which it is already rated.
    The Specialized Service rating would require the repair station to 
have the housing, facilities, equipment, tools, test apparatus, trained 
personnel, and data to perform the process on an aviation article. The 
process specification on the operations specifications would set forth 
the minimum standards for performing the generic process (specialized 
service). For example, the process specification would include an 
explanation of the housing, facilities, equipment, tools, test 
apparatus, trained personnel, and data necessary to perform the overall 
process. The applicable manufacturer's maintenance manual, air carrier 
manual, or other data acceptable to or approved by the FAA would define 
the specific parameters associated with performing the process on the 
particular aviation article.

Section 145.101 General

    The current section states that a certificated repair station must 
provide housing, facilities, equipment, materials, and data that meets 
the applicable requirements for the issuance of the certificate and 
rating the repair station holds. The FAA proposes to revise this 
section specifically to require repair stations to provide tools and 
test apparatus as already required in Sec.  145.109 of this part.

Section 145.103 Housing and Facilities

    Paragraph (a)(1) of this section requires each certificated repair 
station to provide housing for the facilities, equipment, materials, 
and personnel consistent with its ratings. The FAA proposes to revise 
this section to require ``permanent'' housing. It has long been FAA 
policy that repair stations, unlike other certificate holders, have a 
permanent fixed location from which to operate. The proposed rule would 
not prohibit these certificate holders from having mobile capabilities. 
It would, however, reinforce the need for repair stations to provide 
adequate assurance that work is performed in the best of environments 
and to the best of standards. This means protection of workers from 
unfavorable weather conditions so that their performance and the 
airworthiness of the articles they are maintaining is not adversely 
affected by those weather conditions. Repair stations would be required 
to provide suitable housing to protect the articles being maintained 
from contamination, foreign object debris, or conditions that may 
promote corrosion or other deteriorating conditions.
    Further, the FAA is proposing to add new paragraph (d) to allow a 
repair station to use multiple fixed locations in performing 
maintenance, preventive maintenance, and alterations under its repair 
station certificate if the locations are within close proximity to the 
principal base of operations. These locations should be able to be 
reached in a reasonable amount of travel time so that FAA inspectors 
could provide the same level of surveillance at each fixed location. 
Such fixed locations should be located within the same geographic 
boundary of the FAA office with oversight responsibility for the repair 
station. Any fixed location outside of the geographic boundary of the 
FAA office with oversight responsibilities must either be certificated 
as a satellite repair station and meet the requirements of Sec.  
145.107, or it must obtain its own repair station certificate under the 
provisions of Sec.  145.51 and Sec.  145.53. Repair stations would be 
required to obtain a certificate for each fixed location outside of 
such boundaries as a satellite or stand-alone repair station.

Section 145.107 Satellite Repair Stations

    The FAA proposes to change paragraph (a) of this section to clarify 
the requirements for a satellite repair station. The FAA also proposes 
to remove the restriction that a satellite

[[Page 70263]]

repair station may not hold a rating not held by the certificated 
repair station with managerial control. The FAA would not impose 
additional restrictions on satellite repair stations that do not apply 
to other repair stations.
    Additionally, the FAA proposes to add a new paragraph stating that 
a satellite repair station may use the same repair station and quality 
system manuals as the repair station with managerial control. If a 
satellite repair station intends to use these manuals, it would have to 
identify any specific processes or procedures unique to the satellite 
repair station in appendices or sections of the manuals.
    Finally, the FAA proposes to change paragraph (b) to state that 
inspection personnel may be away from the premises, but must be readily 
available. This language eliminates the need to specify that personnel 
be available by telephone, radio, or other electronic means. They would 
have to be readily available regardless of the means of communication.

Section 145.109 Equipment, Tools, Test Apparatus, Materials, and Data 
Requirements

    The FAA proposes to amend this section to add the word ``tools'' to 
the heading to make it consistent with the requirement currently in the 
text of the section and to meet the agency's intent. The text of 
existing Sec.  145.109(a) requires that each repair station have on the 
premises and under its control the equipment, tools, and materials 
necessary to perform the requisite work when it is being performed. The 
requirement in this section to have on site the equipment and tools 
``necessary to perform the maintenance, preventive maintenance, or 
alterations * * *'' may in some instances be more comprehensive than 
the requirement in Sec.  145.51(b) for those items at the time of 
initial certification or rating approval. As explained previously in 
this preamble, an applicant for a repair station certificate does not 
have to have on site or under contract at the time of initial 
certification or rating approval all of the individual hand tools that 
its employees may possess and need when they are performing the work of 
the repair station.
    We propose to add test apparatus to the list of items that a repair 
station must have on the premises and under its control when it is 
performing work for the reasons previously stated in the Sec.  
145.51(b) discussion. This would remove potential uncertainty 
surrounding whether a necessary piece of test apparatus was considered 
to be ``equipment'' or ``tools'' or neither. In addition, including 
test apparatus would be consistent with the requirements in 14 CFR 
Sec.  43.13(a). Accordingly, we are revising the section heading to 
include test apparatus.
    Finally, we also propose to amend the text of Sec.  145.109(a) for 
clarification and ease of understanding.

Section 145.151 Personnel Requirements

    The FAA proposes to add the requirement that repair stations 
designate a chief inspector. Although this position was not previously 
required, prior to the 2001 amendments, former Sec.  145.43 required 
each repair station to have and maintain a roster listing, among other 
personnel, its ``inspection personnel, including the names of the chief 
inspector.'' Many repair stations already have or have previously had a 
chief inspector as part of their staff. The FAA has received numerous 
requests to add the chief inspector requirement to this rule. This 
position is considered a critical function and is necessary to ensure 
the airworthiness of the articles a repair station maintains. There 
needs to be a technical person with the responsibility for regulatory 
compliance as well as the quality control duties. This person may be 
required to make critical decisions or countermand an errant finding 
from a quality control inspector. The quality of a product is directly 
related to the safety of the product. Part 121 of 14 CFR requires air 
carriers to have a chief inspector. This rulemaking will help to 
harmonize parts 121 and 145.

Section 145.155 Inspection Personnel Requirements

    The FAA proposes to amend this section to set forth the experience 
requirements for the chief inspector position. Specifically, the FAA 
proposes to require the chief inspector of a repair station located 
within the United States be certificated under part 65. The FAA also 
proposes to add experience requirements for the chief inspector. Any 
person designated as a chief inspector for a repair station located 
either within or outside the United States must have at least 3 years 
of experience using the various types of inspection equipment and 
techniques appropriate for any article to be inspected. This includes 
the procedures, practices, inspection methods, materials tools, machine 
tools, and equipment generally used in the maintenance and alteration 
of articles for which the repair station is rated.
    Currently, before mechanics can obtain an inspection authorization, 
they must exercise the privileges of their certificate for a minimum of 
3 years to demonstrate the competency needed to make judgment calls 
necessary to sign off on certain aircraft inspections. The FAA believes 
a chief inspector should meet similar criteria since the types of 
decisions that a mechanic with an inspection authorization and a chief 
inspector make are frequently similar and often just as critical.
    The FAA proposes changes to Sec.  145.155(a)(2) to ensure 
consistency with proposed Sec.  145.155(d) by specifying that an 
inspector must be proficient in the use of ``inspection equipment and 
techniques'' rather than the more restrictive ``inspection equipment 
and visual inspection aids.''

Section 145.161 Records of Management, Supervisory, and Inspection 
Personnel

    The FAA proposes to amend this section to reflect proposed changes 
to Sec.  145.151 that require repair stations to designate a chief 
inspector. The proposed amendment would require that repair stations 
include the name of the chief inspector in the roster of inspection 
personnel required in paragraph (a)(2) of this section.
    In addition, the FAA proposes to remove the requirement to include 
the total years of experience in the summaries of employment required 
in current paragraph (a)(4)(ii) of this section. Current paragraphs 
(a)(4)(iii) and (iv) already require past relevant employment 
experience as well as the scope of present employment. The current 
separate requirement to maintain a record of total years of experience 
of an individual is therefore redundant. Additionally, proposed 
paragraph (a)(4)(ii) includes a requirement to list past relevant 
employment with ``position, and type of maintenance performed.'' It was 
necessary to include the word ``position'' since some management 
personnel may not have performed maintenance.

Section 145.203 Work Performed at Another Location

    After redesignating the introductory text of the section, the FAA 
proposes adding a new paragraph that would require a repair station to 
obtain approval in writing prior to conducting any maintenance, 
preventive maintenance, and alterations outside of its domicile 
country. The current rule authorizing work to be performed at another 
location does not include specific provisions for a repair station to 
perform work under its certificate at a location outside the geographic 
borders

[[Page 70264]]

of the country where the repair station is located or domiciled. The 
proposal would require the repair station to obtain authorization to 
perform the work from the country in which the work is to be performed. 
It would also require the repair station to submit evidence of that 
authorization and a description of the procedures to be used to the 
FAA.
    FAA policy currently allows an Aircraft-rated repair station 
located outside the United States that is also an operator holding an 
FAA Letter of Authorization per 14 CFR Sec.  129.14, to qualify for 
geographic authorization under its Aircraft rating. This authorization 
ensures that U.S.-registered aircraft are maintained in accordance with 
a program approved by the FAA. The proposal would standardize the 
practice used to permit repair stations to perform work outside the 
country in which they are domiciled.

Section 145.205 Maintenance, Preventive Maintenance, and Alterations 
Performed for Certificate Holders Operating Under Parts 121, 125, or 
135, or for Foreign Air Carriers or Foreign Persons Operating U.S.-
Registered Aircraft in Common Carriage Under Part 129

    The FAA proposes to clarify the requirements of the current 
section. Specifically, the FAA would add a requirement clarifying that 
certificated repair stations performing maintenance, preventive 
maintenance, and alterations for an air carrier or commercial operator 
conducting operations under parts 121 or 135, a certificate holder 
conducting operations under part 125, or a foreign air carrier or 
foreign person operating U.S.-registered aircraft under part 129 must 
comply with the applicable parts of this chapter. The FAA would also 
add the wording, ``appropriately rated,'' to Sec.  145.205(d) to ensure 
that a repair station would not perform line maintenance on articles 
that are outside the scope of its repair station certificate and 
ratings.

Section 145.211 Quality System

    The FAA proposes to expand the quality control system requirements 
in existing Sec.  145.211 to include elements of a more complete 
quality system for repair stations. While the FAA would keep the 
existing quality control elements, this proposal would add requirements 
for additional management oversight and follow-up. The FAA would also 
add a requirement for a repair station to establish an internal 
evaluation program. The FAA believes that if repair stations conduct 
periodic internal evaluations of their processes and procedures, they 
could discover problem areas and take corrective actions before 
improper maintenance, preventive maintenance, or alterations are 
performed. Aviation safety would be enhanced accordingly.
    Existing Sec.  145.211 requires a final inspection of maintained 
articles. However, if the underlying benchmark processes or procedures 
against which the articles are being evaluated are flawed, defective 
articles can be and sometimes are approved for return to service. Such 
defective articles installed on aircraft have resulted in accidents 
involving damage to or loss of aircraft, and personal injuries and loss 
of life. At a minimum, these errors are costly and require the parts to 
be reworked or scrapped.
    Under the proposed quality system requirements, a repair station 
would conduct internal evaluations of its operations and establish a 
management review and follow-up system. These two elements represent a 
significant part of the expansion the FAA would require of the existing 
quality control system.
    The addition of an internal evaluation requirement would help 
ensure that repair stations' manuals comply with FAA regulations and 
that their operations conform to their manuals. In addition, a 
meaningful internal evaluation should identify deficiencies and 
generate an action plan to correct the deficiencies. Internal 
evaluations would also provide the information required by management 
to answer the following questions:
    <bullet> Are our ongoing evaluations identifying and eliminating 
problems?
    <bullet> Are our processes effective?
    Management review and follow-up evaluations would determine the 
effectiveness of the internal evaluations. Management review and 
follow-up enhance the internal evaluation by--
    <bullet> Analyzing the action plans to ensure compliance with 
regulations and good repair station practices;
    <bullet> Conducting reviews to determine the extent to which the 
action plans are correcting problems identified by on-going internal 
evaluations;
    <bullet> Reviewing the over-all results of the internal evaluations 
to see if the on-going evaluations are identifying and correcting 
deficiencies before the deficiencies result in product returns.
    Below are two examples of FAA programs and procedures designed to 
identify and address problems that can occur. The illustrations are 
intended to show how a quality system with active management oversight 
and follow-up could prevent or limit the severity of these problems 
brought about in maintenance systems.
    The FAA's system of Airworthiness Directives (ADs) is the source of 
examples of defects that could lead to unsafe conditions. An AD is 
issued for a particular product when the FAA finds that an unsafe 
condition exists in that product and that the same unsafe condition is 
likely to exist or develop in other products of the same type design. 
Most ADs are issued to correct a design or a maintenance/inspection 
program deficiency. Sometimes, however, they are issued to correct an 
improper repair of a product if the improper repair was performed, or 
was likely to have been performed, on multiple units of the same 
product. An AD describes the unsafe condition and prescribes the 
actions required to correct it. Each AD specifies the models of the 
affected product to which it applies. ADs are legally enforceable 
rules. As such they are published in the Federal Register as amendments 
to 14 CFR 39.13. Below is an example of a corrective action taken 
through the FAA's AD program.
    In 1998, the FAA issued an AD directed at specific reciprocating 
engines with crankshafts that had been repaired by a particular repair 
station. The FAA's data indicated that deficient process controls 
existed at the repair station during a particular time period causing 
the improper repairs. The improper repairs resulted in heat check 
cracking of the nitrided bearing surfaces that led to crankshaft 
failure due to cracking. The AD required inspections for potentially 
affected engines to determine applicability, an additional inspection 
and dimensional check of the crankshaft journals of the affected 
engines, and, if necessary, rework or removal from service of the 
affected crankshafts and replacement with serviceable parts. These 
actions were necessary to prevent crankshaft failure due to cracking 
that, in turn, could lead to inflight engine failure and a possible 
forced landing.
    The FAA estimated the total cost of complying with the AD to be 
over $3 million. The FAA estimated that 10,000 engines would require at 
least the removal of the spinner, at a total cost of $600,000, to 
determine whether an unsafe condition existed. The remainder of the 
cost was for the necessary rework on the estimated 291 engines that had 
been returned to service with defective crankshafts repaired by the 
repair station.
    The FAA found that deficient process controls existed at the repair 
station. If a quality system had been in place, the internal evaluation 
could have revealed the deficient process controls. The

[[Page 70265]]

improper repair process could have been corrected immediately. The cost 
savings to U.S. operators would have been significant, and the FAA also 
could have avoided the costs associated with processing the AD.
    Sometimes, as in the examples above, parts maintained by a repair 
station are approved for return to service after passing a final 
inspection even though they are not airworthy. This could be due either 
to a hidden defect or to a faulty inspection procedure. It is important 
to prevent these types of situations from developing. Early detection 
and prevention can be accomplished with a quality system in place at 
each repair station. Important additions to the quality system, as 
proposed in this notice, would include requirements that a repair 
station conduct periodic internal evaluations of its operations. This 
internal evaluation would ensure that the repair station's manuals and 
procedures comply with applicable regulatory requirements. It would 
also ensure that procedures are in place for conducting follow-up 
evaluations to ensure that corrective actions bring any deficiencies 
into compliance. The quality system requirement would include:
    <bullet> A reporting system to record and maintain completed 
evaluations and corrective and preventive action plans,
    <bullet> A schedule for conducting annual quality system 
evaluations,
    <bullet> Corrective action procedures to ensure any deficiencies 
are corrected,
    <bullet> Procedures for conducting follow-up evaluations to ensure 
corrective action(s) bring any deficiencies into compliance,
    <bullet> Procedures for qualifying, training, and authorizing 
persons to perform internal evaluations, and
    <bullet> Procedures for revising the internal evaluation system as 
necessary.
    The internal evaluation would identify where additional quality 
standards are needed and validate the adequacy of existing standards 
and procedures. It also would help ensure that the procedures are being 
followed and achieve the desired results. Management review and follow-
up would help ensure that all findings and discrepancies found during 
the internal evaluations are corrected in a timely manner and that they 
are effectively prevented from recurring. With the proposed 
comprehensive quality system, a repair station could demonstrate that 
it is achieving quality performance that means fewer errors, fewer 
delays, and improved productivity.
    The FAA notes that a repair station could divide the internal 
evaluation into sections, provided the entire repair station operation 
is evaluated within the applicable interval. For example, if a repair 
station's quality system requires an internal evaluation of its 
operations once every year, the repair station could evaluate different 
divisions of its operations separately, provided it evaluates its 
entire operation within the 1-year timeframe.
    Quality systems with internal evaluations and management follow-up, 
such as the FAA is proposing here, have benefited manufacturers and 
service organizations that have adopted them. While initial costs are 
associated with adopting a quality system, organizations have realized 
long-term benefits. Such benefits have been in the form of reduced 
errors and delays that resulted in increased productivity. Requiring 
repair stations to adopt the additional quality system elements would 
increase their productivity, reduce errors and delays, and ultimately 
reduce the number of aircraft accidents and incidents.
    As with other regulatory requirements in this part, the expanded 
quality system could be tailored to meet the needs of individual repair 
stations. If a large complex repair station requires a comprehensive 
quality system including full-time auditors and an auditing schedule, 
the proposed requirements provide the flexibility for such 
individually-developed systems. If, however, a small repair station 
with few ratings or limited capabilities requires only internal 
management review of its procedures to verify compliance with the 
regulations, it will have the flexibility to do so. Whether an internal 
evaluation is done by a professional team or by a repair station 
manager, the goals are the same: to--
    <bullet> Ensure the repair station's procedures and data comply 
with applicable regulatory requirements,
    <bullet> Ensure the procedures are still effective and appropriate 
for the work performed,
    <bullet> Ensure the procedures are being followed, and
    <bullet> Verify that the desired level of quality is achieved.
    The FAA would further complement the proposed quality system by 
including a requirement that all repair stations maintain a suspected 
unapproved parts (SUP) program acceptable to the FAA. The FAA has a 
program to track SUP. Within the SUP program's parts reporting 
database, the FAA tracks parts that have been approved for return to 
service but that were subsequently found not to have been maintained in 
accordance with the current manufacturer's instructions or other data 
approved by the FAA. In a search of the SUP program database, the FAA 
found that from October 1998 to May 2004, there were 238 cases 
involving repair stations and suspect parts. Of those cases, 219 
involved parts that had not been maintained in accordance with the 
current manufacturer's instructions or other data approved by the FAA. 
Had these parts not been found and replaced by correctly maintained 
parts, those 219 cases of unapproved parts potentially could have 
resulted in accidents or incidents. It is likely that the more 
comprehensive quality system proposed here could have resulted in 
finding and correcting the underlying deficiencies before the parts 
were approved for return to service. Currently there is no rule 
requiring repair stations to participate in FAA's SUP program.
    The FAA's existing SUP program was established in 1993 to 
coordinate the agency's efforts to minimize safety risks posed by the 
entry of ``unapproved'' aircraft parts into the U.S. aviation inventory 
and their installation on aircraft. The program, established by FAA 
Order 8120.10: (Suspected Unapproved Part Program, September 23, 1993), 
provides for the reporting and investigating of suspected unapproved 
parts. The SUP office was created in 1995. FAA published guidance for 
this program in AC 21-29, Detecting and Reporting Suspected Unapproved 
Parts. As a result, most repair stations already maintain a SUP 
program. FAA proposes to formalize this current practice by 
incorporating it into the rule.
    As a matter of practice, the proposed additional quality elements 
are already being done by some repair stations. Most repair stations 
have incorporated a SUP program in accordance with current guidance for 
part 145 repair stations. Repair stations already implementing these 
features would incur no new costs. The FAA proposes to formalize a 
number of existing practices by making them part of the rule.

Section 145.215 Capability List

    Under the current rule, a certificated repair station with a 
Limited rating may perform maintenance, preventive maintenance, and 
alterations on an article if the article is listed on its current 
capability list acceptable to the FAA or on the repair station's 
operations specifications. Under the provisions of the current rule, 
use of a capability list is optional since repair stations can also 
maintain their capabilities on their operations specifications. 
However, the FAA finds that a mandatory capability list is

[[Page 70266]]

necessary to maintain safety under the system of ratings proposed in 
this notice. The capability list would now be referenced on the 
operations specifications under the applicable rating.
    The proposed rating system would not provide a separation between 
articles, such as large vs. small aircraft, or communication vs. 
navigation equipment. In addition, the proposed rating system would be 
more general, and new technologies could be encompassed under the 
rating system without requiring an amendment to the rule. It is 
imperative to maintain a document that identifies the actual 
capabilities of a repair station. To accomplish this, all FAA-
certificated repair stations would be required to maintain a capability 
list. The FAA further proposes that capability list revisions be 
available to the FAA within 30 business days of the revision.
    Further, FAA proposes to redesignate paragraphs (c) and (d) as (d) 
and (e) respectively and insert a new paragraph (c) to require the 
capability list for Avionics- and Component-rated repair stations be 
organized by category of article and identify the manufacturer. The 
inclusion of the manufacturer on these capability lists is necessary 
because, unlike the aircraft or powerplant manufacturers, there are 
several manufacturers who produce similar articles, such as radios, 
integrated electronic units, pumps, and actuators. Because the rule 
requires repair stations to use the data, tools, test apparatus, and 
equipment recommended by the manufacturer, it is easy for these items 
to differ among manufacturers even though the articles may be similar 
in design. Also, since repair stations will be performing self-
evaluations to add items to their capability lists, not identifying the 
different data, tools, test apparatus, and equipment among 
manufacturers could make it difficult for a repair station to determine 
if it indeed has the capability to maintain articles from various 
manufacturers.
    The FAA would also amend current requirements for a repair station 
to perform a self-evaluation by prohibiting a repair station with an 
Aircraft or Powerplant rating from performing a self evaluation to add 
a different type of aircraft or powerplant to their ratings, 
respectively. The FAA did not intend for a repair station to make such 
a change to its ratings through the self evaluation process.

Section 145.217 Contract Maintenance

    The FAA proposes revisions to this section to provide clarification 
of contract maintenance. The proposal would revise the current rule by 
removing the requirement in current paragraph (a)(1) that maintenance 
functions contracted to all outside sources be approved by the FAA. 
Only a maintenance function contracted to an outside source not 
certificated under part 145 would have to be approved. A repair station 
contracting a maintenance function to a repair station certificated 
under part 145 would not have to comply with the proposed requirements 
of paragraph (b).

Section 145.223 FAA Inspections

    Section 145.223 would be revised to prohibit a repair station from 
contracting for the performance of a maintenance function on an article 
with a non-FAA-certificated maintenance provider under the terms of an 
aviation safety agreement unless the contract specified that the FAA 
has the right to inspect and observe the performance of work. If the 
article is subject to the airworthiness regulations of another civil 
aviation authority the contract must specify that the FAA may inspect 
and observe the work on behalf of that civil aviation authority. A 
repair station would be prohibited from approving the article for 
return to service after the performance of the work unless these 
provisions were met.

Paperwork Reduction Act

    Under the procedures established by the Paperwork Reduction Act of 
1995 (44 U.S.C. 3507(d)), a person is not required to respond to a 
collection of information by a Federal agency unless the collection 
displays a valid OMB control number. This proposed rule contains a 
``collection of information'' as that term is defined by OMB at 5 CFR 
part 1320. As a result, the FAA proposes to review the currently 
approved collection of information (OMB Control Number: 2120-0682).
    Agency: Federal Aviation Administration (FAA).
    Title: Part 145--Repair Stations.
    Type of Request: Revision of Currently Approved Collection of 
Information.
    OMB Control Number: 2120-0682.
    Form Number: This collection of information will not use any 
standard forms.
    Requested Expiration Date of Clearance: At present Control Number 
2120-0682 is scheduled to expire on February 28, 2009. The FAA does not 
anticipate asking for an extension of this collection.

Summary of the Collection Information

    In the ``Paperwork Reduction Act'' section of the August 6, 2001 
Repair Station Final Rule (66 FR 41112), the FAA discussed the 
consequences of its proposed collection of information. Comments were 
invited on this proposal. As a result of this proposed rule, the FAA 
would amend its description of information in the 2001 final rule as 
follows. The final rule estimated the burden hours for a repair 
station's quality control manual and capability list requirements. The 
paperwork burden in the proposed rule was anticipated in the hours 
estimated in the 2001 final rule. This proposed rule would require 
repair stations to develop an internal evaluation program and a 
reporting system to record and maintain completed evaluations and 
corrective action plans. The FAA estimates that a small repair station 
would require 300 man-hours initially to establish a quality system. A 
large repair station would require 3 man-years initially. We estimate 
that the burden for developing the quality evaluation and reporting 
program would be less than that required to develop the entire quality 
system. Most of the paperwork involved is already part of the overall 
quality system. Furthermore, there is not requirement that any of the 
quality system reports be submitted to the FAA. The reporting and 
retention of evaluation and corrective action plans may be recorded and 
maintained electronically or in a format chosen by the individual 
repair station.
    The FAA estimates that the administrative burden to repair stations 
to prepare a capability list would require 4 hours of maintenance 
management time plus 4 hours of administrative support personnel time 
for small repair stations and corresponding times of 8 hours for large 
repair stations.

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 
reviewed the corresponding ICAO Standards and Recommended Practices and 
has identified no differences with these regulations.

Economic Assessment

    Proposed changes to Federal regulations must undergo several 
economic analyses. First, Executive Order 12866 directs each Federal 
agency

[[Page 70267]]

to 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 impact of regulatory changes on small entities. Third, the 
Trade Agreements Act (19 U.S.C. Sec. Sec.  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 agencies to consider 
international standards and, where appropriate, use them as the basis 
of U.S. standards. Fourth, the Unfunded Mandates Reform Act of 1995 
(Public Law 104-4) requires agencies to prepare a written assessment of 
the costs, benefits, and other effects of proposed or final rules that 
include a Federal mandate likely to result in the expenditure by State, 
local, or tribal governments, in the aggregate, or by the private 
sector, of $100 million or more annually (adjusted for inflation.)
    In conducting these analyses, FAA has determined this rule (1) 
would create a safer flying environment and is a ``significant 
regulatory action'' as defined in section 3(f)(4) of Executive Order 
12866 and is ``significant'' as defined in DOT's Regulatory Policies 
and Procedures; (2) will not have a significant economic impact on a 
substantial number of small entities; (3) will not affect international 
trade; and (4) does not impose an unfunded mandate on state, local, or 
tribal governments, or on the private sector. These analyses, available 
in the docket, are summarized below.

Total Costs and Benefits of This Rulemaking

    The estimated quantifiable net cost of this proposed rule for the 
period 2004-2013 is $144.8 million ($108.8 million, discounted) over 10 
years. The cost to a small repair station that currently does not have 
a quality system is estimated at $34,500 ($25,600 discounted) over 10 
years. The cost to the approximately half of the small repair stations 
that already have quality systems would be minimal.
    This proposal would require repair stations to conduct periodic 
internal evaluations that could discover problem areas and to take 
corrective actions before improper maintenance, preventive maintenance, 
or alterations are done. Such actions would result in both quantifiable 
and non-quantifiable benefits. If the rule prevents all the accidents 
or incidents that may be associated with repair station failure to take 
corrective actions, the potential benefits of the rule (based on the 
related accident or incident history) could be as much as $164.7 
million ($119.3 million, discounted) over 10 years. However, the FAA 
does not claim adoption of the proposed rule would result in the 
elimination of all repair station related accidents or incidents.

Who Is Potentially Affected by This Rulemaking

    All certificated repair stations would have to develop and follow a 
quality system and capability list. The FAA would issue new 
certificates to all repair stations to implement the proposed new 
rating system.

Our Cost Assumptions and Sources of Information

Discount rate--7%
Period of analysis--2004-2013
Monetary values expressed in 2003 dollars
Value of:
    fatality avoided--$3 million
    serious injury avoided--$580,700
    minor injury avoided--$42,900

Source: U.S. Department of Transportation, Federal Aviation 
Administration, Office of Aviation Policy, Plans, and Management 
Analysis Bulletin dated February 2002 (APO-02-1)
Labor rates:

                                       Table 1.--Personnel Cost Estimates
                                                 [2003 dollars]
----------------------------------------------------------------------------------------------------------------
                                                                   Small repair                    Large repair
                              Item                                    station         Average         station
----------------------------------------------------------------------------------------------------------------
Value of 1 hour of FAA administrative support personnel time (GS- ..............          $19.01  ..............
 5, Step 5).\1\.................................................
Value of 1 hour of FAA administrative support personnel time (GS- ..............           23.55  ..............
 7, Step 5)\1\..................................................
Value of 1 hour of FAA inspector personnel time (GS-13, Step      ..............           49.67  ..............
 5)\1\..........................................................
Value of 1 hour of FAA inspector personnel time (GS-14, Step      ..............           58.69  ..............
 5)\1\..........................................................
Value of 1 hour of Repair Station General Manager time \2\......          $38.96           58.50           90.27
Value of 1 hour of Repair Station 1st Line Supervisor time \2\..           25.56           33.25           42.22
Value of 1 hour of Repair Station Mechanic and Service                     20.25           24.95           30.59
 Technicians time \2\...........................................
Value of 1 hour of Repair Station Office Manager time \2\.......           16.20           21.07           27.50
Value of 1 hour of Repair Station Accounting Clerk time \2\.....           15.12           18.93          23.69
----------------------------------------------------------------------------------------------------------------
\1\ U.S. Office of Personnel Management, 2003 General Schedule Locality Rates of Pay for Washington-Baltimore
  hourly rate multiplied by 1.3245 for benefits. Benefit value from Table 4-5 U.S. DOT, FAA Office of Policy and
  Plans, Economic Analysis of Investment and Regulatory Decision--A Guide (FAA-APO-98-4: January 1996).
\2\ U.S. Dept. of Labor 2001 National Industry Specific Occupational Employment and Wage Estimates--SIC 372--
  Aircraft and Parts median hourly rate multiplied by 1.2345 for benefits and by 1.0239 for inflation. ``Small''
  and ``Large'' calculated by multiplying the 25th and 75th percentiles for total occupational title to average
  SIC 372 salary for that occupation. Benefit value from Table 4-5 FAA-APO-98-4.

Aircraft Values:

------------------------------------------------------------------------
                      Aircraft type                            Cost
------------------------------------------------------------------------
Population weighted replacement cost for Part 91, 133,          $582,030
 and 137 aircraft.......................................
Population weighted restoration cost for Part 91, 133,           148,295
 and 137 aircraft.......................................
Population weighted replacement cost for Part 135                741,475
 aircraft...............................................
Population weighted restoration cost for Part 135                159,445
 aircraft...............................................
Population weighted restoration cost for Scheduled Part       2,453,000
 121 aircraft...........................................
------------------------------------------------------------------------
Note: Cost is based on FAA, Office of Aviation Policy and Plans,
  Economic Values for Evaluation of FAA Investment and Regulatory
  Programs (FAA-APO-98-8: June 1998) pages E-4, E-5 adjusted to 2003
  cost using the PPI change of 11.5%.

Other References:

[[Page 70268]]

ARAC for Air Carrier and General Aviation Maintenance: ``A Report on 
requiring a Quality Assurance System in Part 145 of title 14, Code of 
Federal Regulations'' May 2002
ARAC for Air Carrier and General Aviation Maintenance: A Report on 
proposed rule changes to Sections 145.31 and 145.33 of title 14, Code 
of Federal Regulations'' May 2002

Alternatives We Considered

    New rating systems and a quality assurance program had been 
proposed in NPRM No. 99-09. The 2001 Final Rule did not include either 
proposal since the FAA received a significant number of comments 
opposing the proposals. FAA tasked ARAC to address these two issues. 
ARAC, after reviewing various alternatives, sent its technical reports 
and recommendations to FAA. The FAA is making this proposal based on 
recommendations from ARAC, and comments received from the public.

Benefits of This Rulemaking

    The additional management oversight and follow-up required by this 
proposed rule has potential benefits. These potential benefits include 
fostering an operating environment of constant awareness of potential 
sources of failure in repair processes and correction of deficient 
process controls. This awareness and corrective action could preclude 
in-flight failures and the possibility of accidents.
    An analysis of National Transportation Safety Board (NTSB) data 
from July 1997 through June 2003 indicated there were 1,762 accidents 
coded by the NTSB in the ``narrative'' or ``probable cause'' sections 
containing the word ``maintenance.'' The FAA determined that of these 
1,762 accidents, there were 58 over the six-year period that can be 
interpreted to mean a repair station accomplished the maintenance that 
may have caused or contributed to the accident. These 58 accidents 
resulted in a total of 19 fatalities, 17 serious injuries, and 27 minor 
injuries. 43 aircraft sustained substantial damage and 15 aircraft were 
destroyed. The average was used to estimate the potential values. In 
total, the FAA calculates the potential value of preventing all 
accidents that can be interpreted to mean a repair station accomplished 
the maintenance could be as high as $146.3 million, or $102.8 million 
discounted, over 10 years.
    Preventing Airworthiness Directives (ADs) that are issued to 
correct improper maintenance done on aircraft parts is another area 
where a quality system would be of benefit. Some ADs are issued to 
correct an improper repair of a product if the improper repair was 
performed, or was likely to have been performed, on multiple units of 
the same product. The FAA reviewed four AD cases attributable to repair 
station related quality problems that may have been prevented by a 
quality system. The total estimated cost to U.S. operators of these ADs 
is $18.4 million or $16.5 million, discounted. More importantly, if a 
quality system had been in place, internal evaluations could have 
revealed the deficient process controls. The improper repair process 
could have been corrected immediately and prevented possible in-flight 
mechanical failures and the resulting consequences.
    The potential discounted quantitative benefits of the rule could be 
as high as $119.3 million, if the rule were 100 percent effective in 
eliminating accidents that can be interpreted to mean a repair station 
accomplished the maintenance (at $102.8 million) and preventing AD 
cases attributable to repair station related quality problems 
(estimated to cost U.S. operators $16.5 million). However, it is 
unreasonable to assume the rule would eliminate all accidents or 
incidents that may be associated with repair station activity. Also, 
the FAA cannot determine at this time what portion of those accidents 
or incidents would be eliminated as a result of this rulemaking. 
Therefore, the FAA cannot quantify the benefits of this rulemaking.
    There would also be unquantified benefits. The proposed rating 
system and capability list would allow repair stations to incorporate 
future technological advancements in the aviation industry on its 
capability list as provided by Sec.  145.215. Additionally, it would 
provide the FAA with the tools necessary for uniform interpretation and 
enforcement of the requirements. Experience in other industries has 
shown that the establishment of a quality system could lead to cost 
savings and reductions in errors and customer complaints.

Costs of This Rulemaking

    From 2004 to 2013, the total cost of the proposed rule would be 
approximately $145.0 million before cost-savings of $0.2 million giving 
a net cost of $144.8 million ($108.8 million, discounted). The repair 
station industry would incur net costs of $136.6 million ($101.2 
million, discounted) and the FAA would incur costs of $8.2 million 
($7.6 million, discounted). The costs associated with the quality 
assurance program account for over 90 percent of the total costs of the 
proposed rule.

Regulatory Flexibility Determination

    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 agency determines that it will, the 
agency must prepare a regulatory flexibility analysis as described in 
the Regulatory Flexibility Act.
    In many cases, the Small Business Administration suggests that 
``small'' represents the impacted entities based on annual revenue. For 
this proposed rule, a small entity is defined as ``Other Support 
Activities for Air Transportation'' (North American Industrial 
Classification System 488190) with revenues of $6 million or less. 
Revenue data compiled by Dun and Bradstreet indicates that some 2,354-
repair stations have revenues of $6 million or less and that the 
average revenue per small entity is $1,272,500. The initial cost per 
small repair station to implement the quality system is estimated at 
$8,700 and this cost would not be incurred by approximately half of the 
small repair stations that already have voluntarily implemented quality 
systems. However, these repair stations would incur some additional 
minimal costs to comply with the proposed requirement. In addition, a 
small repair station would incur administrative costs of $490 to comply 
with the rating system and the capability list requirements. The $490 
consists of $325 for rating system costs, and $165 to prepare a 
capability list. The total initial cost for a small repair station 
without a quality system is $9,200 ($8,700 + $490) or approximately 
seven-tenths of one percent of the average small repair station's 
annual revenue. The annual cost for a small repair station to maintain 
the quality system is estimated at $2,900. The FAA does not find the 
costs associated with this proposal to be a significant burden.
    The FAA certifies that this proposed rule would not have a 
significant economic impact on a substantial number of small entities. 
The FAA seeks public comments regarding this finding and requests that 
all comments be accompanied with detailed supporting data.

Trade Impact Assessment

    The Trade Agreements Act of 1979 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

[[Page 70269]]

obstacles. The statute also requires consideration of international 
standards and, where appropriate, that they be the basis for U.S. 
standards.
    The proposed rule is not expected to affect trade opportunities for 
U.S. firms doing business overseas or for foreign firms doing business 
in the United States. Furthermore, the proposed rule is consistent with 
the terms of several trade agreements to which the United States is a 
signatory, such as the Trade Agreements Act of 1979 (19 U.S.C. 2501 et 
seq.), incorporating the Agreement on Trade in Civil Aircraft (31 
U.S.T. 619) and the Agreement on Technical Barriers to Trade 
(Standards) (19 U.S.C. 2531), as well as the General Agreement on Trade 
in Services (19 U.S.C. 3511). The proposed revision to part 145 is also 
consistent with 49 U.S.C. 40415, formerly 1102(a) of the Federal 
Aviation Act of 1958, as amended, which requires the FAA to exercise 
and perform its powers and duties consistently with any obligation 
assumed by the United States in any agreement that may be in force 
between the United States and any foreign country or countries.

Unfunded Mandates Assessment

    The Unfunded Mandates Reform Act of 1995 (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) 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 valued of $120.7 million in lieu of $100 
million.
    This proposed rule does not contain such a mandate. The 
requirements of Title II of the Act, therefore, do not apply.

Executive Order 3132, Federalism

    The FAA has analyzed this proposed rule under the principles and 
criteria of Executive Order 13132, Federalism. We 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.

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 proposed rulemaking action qualifies for the 
categorical exclusion identified in paragraph 312(d) and involves no 
extraordinary circumstances.

Energy Impact

    The energy impact of the notice has been assessed in accordance 
with the Energy Policy and Conservation Act (EPCA) Public Law 94-163, 
as amended (42 U.S.C. 6362) and FAA Order 1053.1. We have determined 
that the proposed rule is not a major regulatory action under the 
provisions of the EPCA.

List of Subjects in 14 CFR Part 145

    Air carriers, Air transportation, Aircraft, Aviation safety, 
Recordkeeping and reporting, Safety.

The Amendment

    In consideration of the foregoing, the Federal Aviation 
Administration proposes to amend Part 145 of Chapter I of Title 14, 
Code of Federal Regulations as follows:

PART 145--REPAIR STATIONS

    1. The authority citation for part 145 is revised to read as 
follows:

    Authority: 49 U.S.C. 106(g), 40113, 44701-44702, 44707, 44709, 
44717.

    2. Revise Sec.  145.51(a) and (b) and add new paragraph (e) to read 
as follows:


Sec.  145.51  Application for certificate.

    (a) An application for a repair station certificate and rating must 
be made in a format acceptable to the FAA and include the following:
    (1) A Letter of Compliance detailing how the applicant will comply 
with this chapter;
    (2) A repair station manual acceptable to the FAA as required by 
Sec.  145.207;
    (3) A quality system manual acceptable to the FAA as required by 
Sec.  145.211(d);
    (4) A list by manufacturer, type, make, model, or category, as 
appropriate, of each article for which the application is made;
    (5) An organizational chart of the repair station and the names and 
titles of managing and supervisory personnel;
    (6) A description of the housing and facilities, including the 
physical address, in accordance with Sec.  145.103;
    (7) A list of the maintenance functions, for approval by the FAA, 
to be performed for the repair station under contract by another person 
in accordance with Sec.  145.217; and
    (8) A training program for approval by the FAA in accordance with 
Sec.  145.163.
    (b) The equipment, tools, test apparatus, personnel, data, housing, 
and facilities required for the certificate and rating, or for an 
additional rating, must be in place for inspection at the time of 
certification or rating approval by the FAA. However, the requirement 
to have the equipment, tools, and test apparatus in place at the time 
of initial certification or rating approval may be met if the applicant 
has a contract acceptable to the FAA with another person to make the 
equipment, tools, and test apparatus available to the repair station at 
any time it is necessary when the relevant work is being performed. * * 
* * *
    (e) Unless otherwise authorized by the FAA, neither the holder of a 
repair station certificate that has been revoked, nor any person who 
had a substantial ownership interest or substantial control over the 
operations of a repair station that has had its certificate revoked and 
who materially contributed to the circumstances causing the revocation, 
may apply for a repair station certificate until one year after the 
date the certificate is surrendered to the FAA pursuant to the order of 
revocation.
    3. Revise Sec.  145.53 to read as follows:


Sec.  145.53  Issuance of certificate.

    (a) Except as provided in paragraph (c) of this section, a person 
who meets the requirements of this part is entitled to a repair station 
certificate with appropriate ratings prescribing such operations 
specifications and limitations as are necessary in the interest of 
safety.
    (b) If the person is located in a country with which the United 
States has a bilateral aviation safety agreement, the FAA may find that 
the person meets the requirements of this part based on a certification 
from the civil aviation authority of that country or an authority 
acceptable to the FAA. This certification must be made in accordance 
with implementation procedures signed by the Administrator or the 
Administrator's designee.
    (c) An application for a repair station certificate may be denied 
if the FAA finds that:
    (1) The applicant does not meet the eligibility requirements for 
the certificate sought, or does not complete the certification process;

[[Page 70270]]

    (2) The applicant previously held a repair station certificate that 
was revoked;
    (3) The applicant intends to fill or fills a key management 
position, including the position of accountable manager or chief 
inspector, with an individual who exercised control over or who held 
the same or a similar position with a repair station whose certificate 
was revoked, or was in the process of being revoked, and that 
individual materially contributed to the circumstances causing the 
revocation or causing the revocation process;
    (4) The applicant held a key management position, including the 
position of accountable manager or chief inspector, with a repair 
station whose certificate was revoked, or was in the process of being 
revoked, and the applicant materially contributed to the circumstances 
causing the revocation or causing the revocation process; or
    (5) An individual who will have control over or substantial 
ownership interest in the applicant had the same or similar control or 
interest in a repair station whose certificate was revoked, or was in 
the process of being revoked, and that individual materially 
contributed to the circumstances causing revocation or causing the 
revocation process.
    4. Revise Sec.  145.59 to read as follows:


Sec.  145.59  Ratings.

    The following ratings are issued under this subpart:
    (a) Aircraft rating. (1) A certificated repair station with an 
Aircraft rating listed on its operations specifications may perform 
maintenance, preventive maintenance, and alterations on complete 
aircraft that are listed on the repair station's capability list 
required by Sec.  145.215.
    (2) A certificated repair station with an Aircraft rating may not 
perform maintenance, preventive maintenance, and alterations on those 
articles for which a Powerplant, Propeller, or Avionics rating is 
required, unless the repair station possesses the appropriate rating.
    (3) A certificated repair station with an Aircraft rating is not 
required to obtain a separate Component rating to maintain articles 
associated with its rating and capabilities.
    (b) Powerplant rating. (1) A certificated repair station with a 
Powerplant rating listed on its operations specifications may perform 
maintenance, preventive maintenance, and alterations on a powerplant 
listed on the repair station's capability list required by Sec.  
145.215 under the following class ratings:
    (i) Class 1: Reciprocating engines.
    (ii) Class 2: Turbine engines.
    (iii) Class 3: Auxiliary Power Units (APU).
    (2) A certificated repair station with a Powerplant rating may not 
perform maintenance, preventive maintenance, and alterations on those 
articles associated with another rating, unless the repair station 
possesses the appropriate rating.
    (3) A certificated repair station with a Powerplant rating is not 
required to obtain a separate Component rating to maintain articles 
associated with its rating and capabilities.
    (c) Propeller rating. (1) A certificated repair station with a 
Propeller rating listed on its operations specifications may perform 
maintenance, preventive maintenance, and alterations on propellers that 
are listed on the repair station's capability list required by Sec.  
145.215, including individual component parts that are installed on or 
in those propellers.
    (2) A certificated repair station with a Propeller rating may not 
perform maintenance, preventive maintenance, and alterations on those 
articles associated with another rating, unless the repair station 
possesses the appropriate rating.
    (3) A certificated repair station with a Propeller rating is not 
required to obtain a separate Component rating to maintain articles 
associated with its rating and capabilities.
    (d) Avionics rating. (1) A certificated repair station with an 
Avionics rating listed on its operations specifications may perform 
maintenance, preventive maintenance, and alterations on aircraft 
electrical and electronic systems and components, instruments, radios, 
integrated modular systems, in-flight entertainment units, or other 
electrical and electronic articles that are listed on the repair 
station's capability list required by Sec.  145.215.
    (2) A certificated repair station with an Avionics rating may 
remove and reinstall access panels, brackets, or clamps in accordance 
with the applicable maintenance instructions on aircraft, powerplants, 
or propellers, as needed, to gain access to those articles authorized 
in Sec.  145.59 (d)(1).
    (3) A certificated repair station with an Avionics rating may 
remove, replace, install, and test the avionics equipment on an 
aircraft.
    (4) A certificated repair station with an Avionics rating must have 
a limitation in accordance with Sec.  145.61 to an Aircraft, 
Powerplant, or Propeller rating to perform a major or minor alteration.
    (e) Component rating. (1) A certificated repair station with a 
Component rating listed on its operations specifications may perform 
maintenance, preventive maintenance, and alterations on articles listed 
on the repair station's capability list required by Sec.  145.215 that 
are not installed on an aircraft, powerplant, propeller, or avionics 
article.
    (2) A certificated repair station with a Component rating must have 
a limitation in accordance with Sec.  145.61 to an Aircraft, 
Powerplant, or Propeller rating to remove or install articles on those 
products.
    5. Revise Sec.  145.61 to read as follows:


Sec.  145.61  Limitations to ratings.

    (a) The FAA may issue limitations to the ratings of a certificated 
repair station that maintains or alters only a particular type of 
aircraft, powerplant, propeller, avionics, component, or part thereof, 
that is listed on the repair station's capability list required by 
Sec.  145.215. A limitation to a rating may be issued for a:
    (1) Specific make and model aircraft, powerplant, or propeller.
    (2) Constituent part of any part.
    (3) Specific maintenance function or process.
    (b) The repair station's operations specifications must identify 
the rating in Sec.  145.59 to which the limitation applies and the 
limitation to that rating must describe the maintenance capabilities of 
the repair station in sufficient detail.
    6. Add Sec.  145.63 to read as follows:


Sec.  145.63  Specialized Service ratings.

    (a) The FAA may issue a Specialized Service rating to a 
certificated repair station that:
    (1) Performs a specialized maintenance function that requires 
equipment and skills not ordinarily performed under another repair 
station rating;
    (2) Performs a maintenance function on articles not covered by its 
rating; or
    (3) Performs a maintenance function that is not described in the 
manufacturer's data.
    (b) A specialized maintenance function must be performed in 
accordance with an FAA-approved process specification.
    (c) The repair station's operations specifications must contain the 
specification used to perform the specialized service. The 
specification may be:
    (1) A current industry or military specification approved by the 
FAA.
    (2) A specification developed by the applicant and approved by the 
FAA.
    (d) A certificated repair station may, under its Specialized 
Service rating, perform only the specialized services

[[Page 70271]]

that are listed on the repair station's capability list required by 
Sec.  145.215.
    7. Revise Sec.  145.101 to read as follows:


Sec.  145.101  General.

    A certificated repair station must provide housing, facilities, 
equipment, tools, materials, and data that meet the applicable 
requirements for the issuance of the certificate and any rating the 
repair station holds.
    8. Revise Sec.  145.103(a)(1), (b), and (c) and add new paragraph 
(d) to read as follows:


Sec.  145.103  Housing and facilities requirements.

    (a) * * *
    (1) Permanent housing for the facilities, equipment, materials, and 
personnel consistent with its ratings.
* * * * *
    (b) A certificated repair station with an Aircraft rating must 
provide suitable permanent housing to enclose the largest type and 
model of aircraft listed on its capability list.
    (c) A certificated repair station may perform maintenance, 
preventive maintenance, and alterations on articles outside of its 
permanent housing if it provides suitable facilities that are 
acceptable to the FAA and meet the requirements of Sec.  145.103(a) and 
part 43 of this chapter.
    (d) A certificated repair station may apply to use additional fixed 
locations within close proximity to the certificated repair station and 
to each other to perform the maintenance, preventative maintenance, 
alterations, for which it is rated.
    (1) The repair station's request must be approved by the FAA before 
exercising the privileges of its certificate and ratings at each 
additional fixed location.
    (2) Any fixed location outside of the geographic boundary of the 
FAA office with oversight responsibility for the repair station must 
either be certificated as a satellite repair station and meet the 
requirements of Sec.  145.107, or must obtain its own repair station 
certificate under the provisions of Sec.  145.51 and Sec.  145.53.
    9. Revise Sec.  145.107(a) and (b) to read as follows:


Sec.  145.107  Satellite repair stations.

    (a) A certificated repair station under the managerial control of 
another certificated repair station may operate as a satellite repair 
station with its own certificate issued by the FAA. A satellite repair 
station:
    (1) Must meet the requirements for each rating it holds;
    (2) Must submit a repair station manual acceptable to the FAA;
    (3) Must submit a quality system manual acceptable to the FAA; and
    (4) May submit the same repair station and quality system manuals 
as the repair station that exercises managerial control over the 
satellite repair station. The manuals must identify any specific 
processes or procedures unique to the satellite repair station in 
appendices or additional sections.
    (b) Unless the FAA indicates otherwise, personnel and equipment 
from the certificated repair station with managerial control and each 
satellite repair station may be shared. However, inspection personnel 
must be designated for each satellite repair station and be available 
at the satellite repair station any time a determination of 
airworthiness or an approval for return to service is made. In other 
circumstances, inspection personnel may be away from the premises but 
must be readily available.
* * * * *
    10. Revise Sec.  145.109, section heading, paragraph (a), and 
paragraph (d) introductory text to read as follows:


Sec.  145.109  Equipment, tools, test apparatus, materials, and data 
requirements.

    (a) Except as otherwise prescribed by the FAA, when a repair 
station is performing work under its repair station certificate and 
operations specifications, the repair station must have on the premises 
and under its control the equipment, tools, test apparatus, and 
materials necessary to perform the maintenance, preventive maintenance, 
or alterations in accordance with part 43.
* * * * *
    (d) A certificated repair station must maintain, in a format 
acceptable to the FAA, the documents and data required for the 
performance of maintenance, preventive maintenance, and alterations 
under its repair station certificate and operations specifications in 
accordance with part 43. The following documents and data must be 
current, available, and accessible when the relevant work is 
accomplished:
* * * * *
    11. Revise Sec.  145.151 to read as follows:


Sec.  145.151  Personnel requirements.

    Each certificated repair station must:
    (a) Designate a repair station employee as the accountable manager;
    (b) Designate a repair station employee as the chief inspector;
    (c) Provide qualified personnel to plan, supervise, perform, and 
approve for return to service the maintenance, preventive maintenance, 
and alterations performed under the repair station certificate and 
operations specifications;
    (d) Ensure it has a sufficient number of employees with the 
training, knowledge, and experience in the performance of maintenance, 
preventive maintenance, and alterations authorized by the repair 
station certificate and operations specifications to ensure all 
maintenance is performed in accordance with part 43; and
    (e) Determine the abilities of its noncertified employees 
performing maintenance, preventive maintenance, and alterations based 
on training, knowledge, experience, or practical tests.
    12. Revise Sec.  145.155 (a)(2) and add new paragraphs (c) and (d) 
to read as follows:


Sec.  145.155  Inspection personnel requirements.

    (a) * * *
    (1) * * *
    (2) Proficient in using the various types of inspection equipment 
and techniques appropriate for the article being inspected.
* * * * *
    (c) The chief inspector of a repair station located within the 
United States must be certificated under part 65.
    (d) Personnel designated as chief inspectors for certificated 
repair stations within and outside the United States must have at least 
three years experience using the various types of inspection equipment 
and techniques appropriate for the article being inspected.
    13. Revise Sec.  145.161(a)(2) and (a)(4)(i), (ii), (iii), and (iv) 
and remove paragraph (a)(4)(v) to read as follows:


Sec.  145.161  Records of management, supervisory, and inspection 
personnel.

    (a) * * *
    (2) A roster with the names of all inspection personnel, including 
the chief inspector;
* * * * *
    (4) * * *
    (i) Present title.
    (ii) Past relevant employment with names of employers, periods of 
employment, positions, and types of maintenance performed.
    (iii) Scope of present employment.
    (iv) The type of mechanic or repairman certificate held and the 
ratings on that certificate, if applicable.
* * * * *
    14. Amend Sec.  145.203 by redesignating the introductory text as 
paragraph (a), redesignating paragraphs (a) and (b) as paragraphs 
(a)(1) and (a)(2) respectively, and adding new paragraph (b) to read as 
follows:

[[Page 70272]]

Sec.  145.203  Work performed at another location.

* * * * *
    (b) A certificated repair station may not perform maintenance, 
preventive maintenance, or alterations outside its domicile country 
unless:
    (1) The repair station obtains authorization from the country where 
the work is to be performed;
    (2) The repair station submits a request to the FAA accompanied by:
    (i) A description of the procedures that will be used to ensure 
that repair station personnel adhere to the procedures identified in 
its manual;
    (ii) Evidence of authorization to perform the work from the country 
where that work is to be performed.
    (3) The performance of that work has been approved in writing by 
the FAA prior to its commencement.
    15. Revise Sec.  145.205(a), (b), (c), and (d) introductory text to 
read as follows:


Sec.  145.205  Maintenance, preventive maintenance, and alterations 
performed for certificate holders operating under parts 121, 125, or 
135, or for foreign air carriers or foreign persons operating U.S.-
registered aircraft in common carriage under part 129.

    (a) A certificated repair station that performs maintenance, 
preventive maintenance, or alterations for an air carrier or commercial 
operator that has a continuous airworthiness maintenance program under 
part 121 or part 135 must comply with the applicable parts of this 
chapter and follow the air carrier or commercial operator's program and 
applicable sections of its maintenance manual.
    (b) A certificated repair station that performs inspections for a 
certificate holder conducting operations under part 125 must comply 
with the applicable parts of this chapter and follow the operator's 
FAA-approved inspection program.
    (c) A certificated repair station that performs maintenance, 
preventive maintenance, or alterations for a foreign air carrier or 
foreign person operating a U.S.-registered aircraft under part 129 must 
comply with the applicable parts of this chapter and follow the 
operator's FAA-approved maintenance program.
    (d) Notwithstanding the housing requirement of Sec.  145.103(b), 
the FAA may grant approval for an appropriately-rated repair station to 
perform line maintenance for an air carrier or commercial operator 
conducting operations under part 121 or part 135, or a foreign air 
carrier or foreign person operating a U.S.-registered aircraft in 
common carriage under part 129, on any aircraft operated by that air 
carrier, commercial operator, or person, provided:
* * * * *
    16. Revise Sec.  145.211 to read as follows:


Sec.  145.211  Quality system.

    (a) A certificated repair station must establish and maintain a 
quality system acceptable to the FAA that ensures--
    (1) The maintenance, preventive maintenance, and alterations 
performed by the repair station and its contractors result in articles 
that are airworthy with respect to the work performed--
    (2) The repair station's procedures are complied with and are 
appropriate for the ratings it holds and the complexity and scope of 
the maintenance accomplished; and
    (3) The repair station remains in compliance with the applicable 
regulations of this chapter.
    (b) The quality system must include the following elements:
    (1) An inspection system and procedures for'
    (i) Inspecting incoming raw materials and articles to ensure 
acceptable quality;
    (ii) Performing preliminary inspection of all articles that are 
maintained;
    (iii) Inspecting all articles that have been involved in an 
accident or incident for hidden damage before maintenance, preventive 
maintenance, or alteration is performed; and
    (iv) Performing final inspection and approval for return to service 
of maintained articles.
    (2) An internal evaluation program to ensure the repair station's 
manuals and procedures comply with the requirements of this part.
    (3) A reporting system to record and maintain completed evaluations 
and corrective action plans.
    (4) A schedule for conducting annual quality system evaluations.
    (5) A corrective action procedure to ensure any deficiencies are 
corrected.
    (6) Procedures for conducting follow-up evaluations to ensure 
corrective action(s) bring any deficiencies into compliance.
    (7) Procedures for qualifying, training, and authorizing persons to 
perform quality system internal evaluations.
    (8) Procedures for revising the repair station's internal 
evaluation system as its ratings or capabilities change and for 
notifying the FAA certificate holding district office of revisions to 
its quality system.
    (9) Procedures for establishing and maintaining proficiency of 
inspection personnel.
    (10) Procedures for establishing and maintaining current data for 
maintaining articles.
    (11) Procedures for establishing and maintaining a suspected 
unapproved parts program.
    (12) Procedures for qualifying and surveilling noncertificated 
persons who perform maintenance, preventive maintenance, or alterations 
for the repair station.
    (13) Procedures for calibrating measuring and test equipment used 
in maintaining articles, including the intervals at which the equipment 
will be calibrated.
    (c) A certificated repair station must make its quality system 
evaluations and its corrective action plans available for inspection by 
the FAA.
    (d) A certificated repair station must prepare and keep current a 
quality system manual in a format acceptable to the FAA that includes 
the following:
    (1) A description of the elements defined in Sec.  145.211(b).
    (2) References, where applicable, to the manufacturer's or other 
applicable inspection standards for a particular article, including 
reference to any data specified in those standards.
    (3) A sample of the inspection and maintenance forms and 
instructions for completing such forms or a reference to a separate 
forms manual.
    (4) Procedures for revising the quality system manual required 
under this section.
    (5) Procedures for notifying its certificate holding district 
office of revisions to its quality system manual.
    (e) Repair station personnel must follow the quality system manual 
when performing maintenance, preventive maintenance, and alterations 
under the repair station certificate and operations specifications.
    17. Revise Sec.  145.215 to read as follows:


Sec.  145.215  Capability list.

    (a) Each certificated repair station must establish and maintain a 
capability list acceptable to the FAA that includes all the articles 
for which it is rated to perform maintenance, preventive maintenance, 
and alterations.
    (b) The capability list for each certificated repair station must 
identify each article by manufacturer and the type, make, model, 
category, or other nomenclature designated by the article's 
manufacturer and be available in a format acceptable to the FAA.
    (c) The capability list for a certificated repair station with an 
Avionics or Component rating must also be organized by category of 
article.
    (d) An article may be listed on the capability list only if the 
article is within the scope of the ratings of the repair station's 
certificate, and only after

[[Page 70273]]

the repair station has performed a self-evaluation in accordance with 
the procedures described in its repair station manual.
    (1) The repair station must perform this self-evaluation to 
determine that the repair station has the housing, facilities, 
equipment, tools, test apparatus, material, data, processes, and 
trained personnel in place to perform the work on the article in 
accordance with part 145.
    (i) A repair station with an aircraft rating may not perform a 
self-evaluation to add a different type of aircraft to its Aircraft 
rating.
    (ii) A repair station with a Powerplant rating may not perform a 
self-evaluation to add a different class powerplant to its Powerplant 
rating.
    (2) The repair station must retain the documentation of the self-
evaluation and ensure that completed self-evaluations are available to 
the FAA.
    (e) Within 30 business days of listing an additional article on its 
capability list, the repair station must provide its FAA certificate 
holding district office with a copy of the revised capability list in 
accordance with the procedures described in its repair station manual.
    18. Revise Sec.  145.217(a) and (b) and add new paragraph (d) to 
read as follows:


Sec.  145.217  Contract maintenance.

    (a) A certificated repair station may contract a maintenance 
function pertaining to an article to an outside source provided the 
repair station maintains and makes available to its certificate holding 
district office, in a format acceptable to the FAA:
    (1) The maintenance functions contracted to each outside facility; 
and
    (2) The name of each outside facility to which the repair station 
contracts maintenance functions and the type of certificate and 
ratings, if any, held by each facility.
    (b) A certificated repair station may contract a maintenance 
function pertaining to an article to a person not certificated under 
part 145 provided:
    (1) The FAA approves the maintenance function;
    (2) The noncertificated person follows a quality system equivalent 
to the system followed by the certificated repair station;
    (3) The certificated repair station remains directly in charge of 
the maintenance performed by the noncertificated person; and
    (4) The certificated repair station verifies, by test and/or 
inspection, that the maintenance, preventive maintenance, and 
alterations have been performed satisfactorily by the noncertificated 
person and that the article is airworthy before approving it for return 
to service.
* * * * *
    (d) A certificated repair station may not contract any maintenance 
functions for which it is not rated to a noncertificated person.
    19. Amend Sec.  145.223 by revising paragraph (c) and adding new 
paragraph (d) to read as follows:


Sec.  145.223  FAA inspections.

* * * * *
    (c) A certificated repair station may not contract for the 
performance of a maintenance function on an article with a 
noncertificated person when the maintenance function is to be performed 
under the terms of an aviation safety agreement and the article is 
subject to the airworthiness regulation of another civil aviation 
authority unless the contract with the noncertificated person specifies 
that the FAA may inspect and observe the performance of the work on 
behalf of that civil aviation authority.
    (d) A certificated repair station may not approve any article for 
return to service on which a maintenance function was performed by a 
noncertificated person if the noncertificated person does not permit 
the FAA to inspect and observe the performance of the work as described 
in paragraphs (b) and (c) of this section.

    Issued in Washington, DC on November 27, 2006.
James Ballough,
Director, Flight Standards Service.
[FR Doc. 06-9479 Filed 11-30-06; 8:45 am]
BILLING CODE 4910-13-P


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