Federal Register / Vol. 83, No. 166 / Monday, August 27, 2018 / Proposed Rules 43561 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2018–0737; Product 

Identifier 2017–SW–096–AD] 

RIN 2120–AA64 

Airworthiness Directives; Leonardo 

S.p.A. Helicopters 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Notice of proposed rulemaking 

(NPRM). 

SUMMARY: We propose to adopt a new 

airworthiness directive (AD) for 

Leonardo S.p.A. (Type Certificate 

Previously Held by Finmeccanica 

S.p.A., AgustaWestland S.p.A.) Model 

AW139 helicopters. This proposed AD 

would require inspecting and altering 

the number 1 driveshaft (driveshaft). 

This proposed AD is prompted by 

reports of scratches that were found on 

the driveshaft. The actions of this 

proposed AD are intended to prevent an 

unsafe condition on these products. 

DATES: We must receive comments on 

this proposed AD by October 26, 2018. 

ADDRESSES: You may send comments by 

any of the following methods: 

• Federal eRulemaking Docket: Go to 

http://www.regulations.gov. Follow the 

online instructions for sending your 

comments electronically. 

• Fax: 202–493–2251. 

• Mail: Send comments to the U.S. 

Department of Transportation, Docket 

Operations, M–30, West Building 

Ground Floor, Room W12–140, 1200 

New Jersey Avenue SE, Washington, DC 

20590–0001. 

• Hand Delivery: Deliver to the 

‘‘Mail’’ address between 9 a.m. and 5 

p.m., Monday through Friday, except 

Federal holidays. 

Examining the AD Docket 

You may examine the AD docket on 

the internet at http://

www.regulations.gov by searching for 

and locating Docket No. FAA–2018– 

0737; or in person at Docket Operations 

between 9 a.m. and 5 p.m., Monday 

through Friday, except Federal holidays. 

The AD docket contains this proposed 

AD, the European Aviation Safety 

Agency (EASA) AD, the economic 

evaluation, any comments received, and 

other information. The street address for 

Docket Operations (telephone 800–647– 

5527) is in the ADDRESSES section. 

Comments will be available in the AD 

docket shortly after receipt. 

For service information identified in 

this proposed rule, contact Leonardo 

S.p.A. Helicopters, Matteo Ragazzi, 

Head of Airworthiness, Viale G. Agusta 

520, 21017 C. Costa di Samarate (Va) 

Italy; telephone +39–0331–711756; fax 

+39–0331–229046; or at http://

www.leonardocompany.com/-/bulletins. 

You may review the referenced service 

information at the FAA, Office of the 

Regional Counsel, Southwest Region, 

10101 Hillwood Pkwy, Room 6N–321, 

Fort Worth, TX 76177. 

FOR FURTHER INFORMATION CONTACT: 

David Hatfield, Aviation Safety 

Engineer, Safety Management Section, 

Rotorcraft Standards Branch, FAA, 

10101 Hillwood Pkwy., Fort Worth, TX 

76177; telephone (817) 222–5110; email 

david.hatfield@faa.gov. 

SUPPLEMENTARY INFORMATION: 

Comments Invited 

We invite you to participate in this 

rulemaking by submitting written 

comments, data, or views. We also 

invite comments relating to 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. To ensure the docket 

does not contain duplicate comments, 

commenters should send only one copy 

of written comments, or if comments are 

filed electronically, commenters should 

submit only one time. 

We will file in the docket all 

comments that we receive, as well as a 

report summarizing each substantive 

public contact with FAA personnel 

concerning this proposed rulemaking. 

Before acting on this proposal, we will 

consider all comments we receive on or 

before the closing date for comments. 

We will consider comments filed after 

the comment period has closed if it is 

possible to do so without incurring 

expense or delay. We may change this 

proposal in light of the comments we 

receive. 

Discussion 

EASA, which is the Technical Agent 

for the Member States of the European 

Union, has issued EASA AD No. 2017– 

0011, dated January 25, 2017, to correct 

an unsafe condition for certain serialnumbered Leonardo S.p.A. (formerly 

Finmeccanica S.p.A, AgustaWestland 

S.p.A.) Model AW139 helicopters. 

EASA advises of several helicopters 

found with scratches on the driveshaft 

part-number (P/N) 3G6510A01132 and 

that an investigation determined only 

helicopters equipped with rear exhaust 

module assembly P/N 3G7810A00431 

and tunnel assembly P/N 

3G7130A13431 are affected. According 

to EASA, the scratches resulted from 

insufficient clearance between the 

driveshaft and the rear exhaust module 

and tunnel assemblies. EASA further 

advises that if not corrected, these 

scratches could lead to a crack in the 

driveshaft, failure of the tail rotor drive 

system, and subsequent reduced control 

of the helicopter. To prevent this 

potential unsafe condition, the EASA 

AD requires repetitive inspections of the 

driveshaft for a crack until the exhaust 

module and tunnel assembly are 

modified to increase the clearance. 

FAA’s Determination 

These helicopters have been approved 

by the aviation authority of Italy and are 

approved for operation in the United 

States. Pursuant to our bilateral 

agreement with Italy, EASA, its 

technical representative, has notified us 

of the unsafe condition described in its 

AD. We are proposing this AD because 

we evaluated all known relevant 

information and determined that an 

unsafe condition is likely to exist or 

develop on other products of the same 

type design. 

Related Service Information Under 

1 CFR Part 51 

We reviewed Leonardo Helicopters 

Bollettino Tecnico No. 139–465, 

Revision A, dated January 25, 2017, 

which contains procedures for visual 

and eddy-current inspections of the 

driveshaft. This service information also 

contains procedures for modifying the 

exhaust module and tunnel assemblies. 

This service information is reasonably 

available because the interested parties 

have access to it through their normal 

course of business or by the means 

identified in the ADDRESSES section. 

Proposed AD Requirements 

This proposed AD would require, 

within 30 hours time-in-service (TIS) 

and thereafter at intervals not exceeding 

100 hours TIS, inspecting the driveshaft 

tube P/N 3G6510A00832 for a scratch 

and indentation. If there is a scratch or 

indentation, the proposed AD would 

require, before further flight, repairing 

the driveshaft tube and performing a 

depth check of the repaired area. If the 

repaired area depth is more than 0.2 

mm, the proposed AD would require 

replacing the driveshaft tube and 

altering the rear exhaust module and 

tunnel assembly before further flight. If 

the depth of the repaired area of the 

tube is 0.2 mm or less, the proposed AD 

would require, before further flight, 

performing an eddy current inspection 

of the tube for a crack. If there is a crack, 


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43562 Federal Register / Vol. 83, No. 166 / Monday, August 27, 2018 / Proposed Rules 

the proposed AD would require 

replacing the driveshaft tube and 

altering the rear exhaust module and 

tunnel assembly before further flight. 

This proposed AD would also require, 

within 300 hours TIS, altering the rear 

exhaust module and tunnel assembly, if 

not previously done as a result of the 

inspections. Because this proposed AD 

would also require re-identifying the 

tunnel assembly part number after it is 

altered, this would be terminating 

action for the repetitive inspections. 

Costs of Compliance 

We estimate that this proposed AD 

would affect 55 helicopters of U.S. 

Registry. 

We estimate that operators may incur 

the following costs in order to comply 

with this AD, based on an average labor 

rate of $85 per work-hour. Inspecting, 

repairing, and eddy-current inspecting 

the driveshaft tube would require about 

6 work-hours, and required parts cost 

would be minimal, for a cost of $510 per 

helicopter and $28,050 for the U.S. fleet 

per inspection cycle. Altering the rear 

exhaust module and tunnel assembly 

would require about 20 work-hours, and 

required parts would cost $1,500, for a 

cost of $3,200 per helicopter and 

$176,000 for the U.S. fleet. 

If required, replacing a driveshaft tube 

would require 1 work-hour, and 

required parts would cost $6,500, for a 

cost per helicopter of $6,585. 

According to Leonardo Helicopter’s 

service information some of the costs of 

this proposed AD may be covered under 

warranty, thereby reducing the cost 

impact on affected individuals. We do 

not control warranty coverage by 

Leonardo Helicopters. Accordingly, we 

have included all costs in our cost 

estimate. 

Authority for This Rulemaking 

Title 49 of the United States Code 

specifies the FAA’s authority to issue 

rules on aviation safety. 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. 

We are issuing this rulemaking under 

the authority described in ‘‘Subtitle VII, 

Part A, Subpart III, Section 44701: 

General requirements.’’ Under that 

section, Congress charges the FAA with 

promoting safe flight of civil aircraft in 

air commerce by prescribing regulations 

for practices, methods, and procedures 

the Administrator finds necessary for 

safety in air commerce. This regulation 

is within the scope of that authority 

because it addresses an unsafe condition 

that is likely to exist or develop on 

products identified in this rulemaking 

action. 

Regulatory Findings 

We determined that this proposed AD 

would not have federalism implications 

under Executive Order 13132. This 

proposed AD would not have a 

substantial direct effect on the States, on 

the relationship between the national 

Government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. 

For the reasons discussed, I certify 

this proposed regulation: 

1. Is not a ‘‘significant regulatory 

action’’ under Executive Order 12866; 

2. Is not a ‘‘significant rule’’ under the 

DOT Regulatory Policies and Procedures 

(44 FR 11034, February 26, 1979); 

3. Will not affect intrastate aviation in 

Alaska to the extent that it justifies 

making a regulatory distinction; and 

4. Will not have a significant 

economic impact, positive or negative, 

on a substantial number of small entities 

under the criteria of the Regulatory 

Flexibility Act. 

We prepared an economic evaluation 

of the estimated costs to comply with 

this proposed AD and placed it in the 

AD docket. 

List of Subjects in 14 CFR Part 39 

Air transportation, Aircraft, Aviation 

safety, Incorporation by reference, 

Safety. 

The Proposed Amendment 

Accordingly, under the authority 

delegated to me by the Administrator, 

the FAA proposes to amend 14 CFR part 

39 as follows: 

PART 39—AIRWORTHINESS 

DIRECTIVES 

■ 1. The authority citation for part 39 

continues to read as follows: 

Authority: 49 U.S.C. 106(g), 40113, 44701. 

§ 39.13 [Amended] 

■ 2. The FAA amends § 39.13 by adding 

the following new airworthiness 

directive (AD): 

Leonardo S.p.A. (Type Certificate Previously 

Held by Finmeccanica S.p.A, 

AgustaWestland S.p.A.): Docket No. 

FAA–2018–0737; Product Identifier 

2017–SW–096–AD. 

(a) Applicability 

This AD applies to Model AW139 

helicopters, serial numbers 31499, 31504, 

31507, 31509, 31512, 31518, 31519, 31524, 

31529, 31533, 31535 through 31564, 31567, 

31569, 31570, 31589, 41363, 41368 through 

41370, 41372 through 41375, 41378, 41381, 

and 41384, with a tunnel assembly part 

number 3G7130A13431 installed, certificated 

in any category. 

(b) Unsafe Condition 

This AD defines the unsafe condition as a 

crack in a tail rotor driveshaft, which could 

result in failure of the tail rotor drive system 

and subsequent loss of control of the 

helicopter. 

(c) Comments Due Date 

We must receive comments by October 26, 

2018. 

(d) Compliance 

You are responsible for performing each 

action required by this AD within the 

specified compliance time unless it has 

already been accomplished prior to that time. 

(e) Required Actions 

(1) Within 30 hours time-in-service (TIS) 

and thereafter at intervals not to exceed 100 

hours TIS, inspect the number 1 driveshaft 

tube shaft, P/N 3G6510A00832, for a scratch 

and indentation in the area depicted in 

Figure 1 of Leonardo Helicopters Bollettino 

Tecnico No. 139–465, Revision A, dated 

January 25, 2017 (BT 139–465). If there is a 

scratch or indentation, before further flight: 

(i) Repair the tube shaft in accordance with 

the Compliance Instructions, Part I, 

paragraphs 7.1 through 7.3, of BT 139–465. 

(ii) Measure the depth of the repaired areas 

as depicted in Figure 2 of BT 139–465. 

(A) If the depth of the reworked area is 0.2 

mm (0.079 inch) or less, eddy-current inspect 

the driveshaft for a crack as described in the 

Compliance Instructions, Annex A, of BT 

139–465. If there is a crack, before further 

flight, replace the driveshaft, alter the rear 

exhaust module, and alter and re-identify the 

tunnel assembly in accordance with the 

Compliance Instructions, Part II, paragraphs 

7 through 12, of BT 139–465. 

(B) If the depth of the reworked area is 

more than 0.2 mm (0.079 inch), before further 

flight, replace the driveshaft, alter the rear 

exhaust module, and alter and re-identify the 

tunnel assembly in accordance with the 

Compliance Instructions, Part II, paragraphs 

7 through 12, of BT 139–465. 

(2) Within 300 hours TIS, unless already 

accomplished as required by paragraph 

(e)(1)(ii) of this AD, alter the rear exhaust 

module and alter and re-identify the tunnel 

assembly in accordance with the Compliance 

Instructions, Part II, paragraphs 7 through 12, 

of BT 139–465. 

(f) Special Flight Permits 

Special flight permits are prohibited. 

(g) Alternative Methods of Compliance 

(AMOCs) 

(1) The Manager, Safety Management 

Section, Rotorcraft Standards Branch, FAA, 

may approve AMOCs for this AD. Send your 

proposal to: David Hatfield, Aviation Safety 

Engineer, Safety Management Section, 

Rotorcraft Standards Branch, FAA, 10101 

Hillwood Pkwy., Fort Worth, TX 76177; 

telephone (817) 222–5110; email 9-ASWFTW-AMOC-Requests@faa.gov. 

(2) For operations conducted under a 14 

CFR part 119 operating certificate or under 

14 CFR part 91, subpart K, we suggest that 


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you notify your principal inspector, or 

lacking a principal inspector, the manager of 

the local flight standards district office or 

certificate holding district office before 

operating any aircraft complying with this 

AD through an AMOC. 

(h) Additional Information 

The subject of this AD is addressed in 

European Aviation Safety Agency (EASA) AD 

No. 2017–0011, dated January 25, 2017. You 

may view the EASA AD on the internet at 

http://www.regulations.gov in the AD Docket. 

(i) Subject 

Joint Aircraft Service Component (JASC) 

Code: 6510 Tail Rotor Driveshaft. 

Issued in Fort Worth, Texas, on August 10, 

2018. 

Lance T. Gant, 

Director, Compliance & Airworthiness 

Division, Aircraft Certification Service. 

[FR Doc. 2018–18472 Filed 8–24–18; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–112176–18] 

RIN 1545–BO89 

Contributions in Exchange for State or 

Local Tax Credits 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Notice of proposed rulemaking 

and notification of public hearing. 

SUMMARY: This document contains 

proposed amendments to regulations 

under section 170 of the Internal 

Revenue Code (Code). The proposed 

amendments provide rules governing 

the availability of charitable 

contribution deductions under section 

170 when a taxpayer receives or expects 

to receive a corresponding state or local 

tax credit. This document also proposes 

amendments to the regulations under 

section 642(c) to apply similar rules to 

payments made by a trust or decedent’s 

estate. This document provides 

notification of a public hearing on these 

proposed regulations. 

DATES: Written and electronic comments 

must be received by October 11, 2018. 

Requests to speak and outlines of topics 

to be discussed at the public hearing 

scheduled for November 5, 2018, must 

be received by October 11, 2018. 

ADDRESSES: Send submissions to 

Internal Revenue Service, 

CC:PA:LPD:PR (REG–112176–18), Room 

5203, P.O. Box 7604, Ben Franklin 

Station, Washington, DC 20044. 

Submissions may be hand-delivered 

Monday through Friday between the 

hours of 8:00 a.m. and 4:00 p.m. to 

CC:PA:LPD:PR (REG–112176–18), 

Courier’s Desk, 1111 Constitution 

Avenue NW, Washington, DC 20224, or 

sent electronically, via the Federal 

eRulemaking Portal at 

www.regulations.gov (indicate IRS and 

REG–112176–18). The public hearing 

will be held in the IRS Auditorium, 

Internal Revenue Building, 1111 

Constitution Avenue NW, Washington, 

DC 20224. 

FOR FURTHER INFORMATION CONTACT: 

Concerning the proposed regulations, 

Merrill D. Feldstein and Mon Lam at 

(202) 317–4059; concerning submission 

of comments and requests for a public 

hearing, Regina Johnson at (202) 317– 

6901 (not toll-free numbers). 

SUPPLEMENTARY INFORMATION: 

Background 

Section 170(a)(1) generally allows an 

itemized deduction for any ‘‘charitable 

contribution’’ paid within the taxable 

year. Section 170(c) defines ‘‘charitable 

contribution’’ as a ‘‘contribution or gift 

to or for the use of’’ any entity listed in 

that subsection. Section 170(c)(1) 

includes a contribution or gift to or for 

the use of a State, a possession of the 

United States, or any political 

subdivision of the foregoing, but only if 

the contribution or gift is made 

exclusively for public purposes. Section 

170(c)(2) includes, in general, a 

contribution or gift to or for the use of 

certain corporations, trusts, or 

community chests, funds, or 

foundations, organized and operated 

exclusively for religious, charitable, 

scientific, literary, or educational 

purposes, or to foster national or 

international amateur sports 

competition, or for the prevention of 

cruelty to children or animals. 

Section 164 generally allows an 

itemized deduction for the payment of 

certain taxes, including state and local, 

and foreign, real property taxes; state 

and local personal property taxes; and 

state and local, and foreign, income, war 

profits, and excess profits taxes. Section 

164(b)(6), as added by section 11042 of 

‘‘An Act to provide for reconciliation 

pursuant to titles II and V of the 

concurrent resolution on the budget for 

fiscal year 2018’’ (the Act), Public Law 

115–97, limits an individual’s 

deduction for the aggregate amount of 

state and local taxes paid during the 

calendar year to $10,000 ($5,000 in the 

case of a married individual filing a 

separate return). This new limitation 

applies to taxable years beginning after 

December 31, 2017, and before January 

1, 2026. 

I. The Charitable Contribution 

Deduction 

In 1986, the Supreme Court 

interpreted the phrase ‘‘charitable 

contribution’’ in section 170. See United 

States v. American Bar Endowment, 477 

U.S. 105, 116–118 (1986). The Court 

held that the ‘‘sine qua non of a 

charitable contribution is a transfer of 

money or property without adequate 

consideration’’—that is, without the 

expectation of a quid pro quo. Id. at 118. 

A ‘‘payment of money generally cannot 

constitute a charitable contribution if 

the contributor expects a substantial 

benefit in return.’’ Id. at 116. The Court 

recognized that some payments may 

have a ‘‘dual character’’—part charitable 

contribution and part quid pro quo— 

whereby the taxpayer receives some 

‘‘nominal benefit’’ of lesser value than 

the payment. Id. at 117. In such cases, 

the Court reasoned, ‘‘it would not serve 

the purposes of § 170 to deny a 

deduction altogether.’’ Id. Instead, the 

Court held, the charitable contribution 

deduction is allowed, but only to the 

extent the amount donated or the fair 

market value of the property transferred 

by the taxpayer exceeds the fair market 

value of the benefit received in return, 

and only if the excess amount was 

transferred with the intent of making a 

gift. Id. 

For the benefit received in return to 

reduce the allowable charitable 

contribution deduction under section 

170, the benefits received, or expected 

to be received, by a donor need only be 

greater than those benefits that inure to 

the general public from transfers for 

charitable purposes. See, e.g., Singer Co. 

v. United States, 449 F.2d 413, 422–423 

(Ct. Cl. 1971); American Bar 

Endowment, 477 U.S. at 116–17 (citing 

Singer); Hernandez v. Commissioner, 

490 U.S. 680 (1989). In addition, the 

benefits received need not come directly 

from the donee to reduce the allowable 

deduction, nor do they need to be 

specifically quantifiable at the time of 

transfer. See, e.g., Singer, 449 F.2d at 

422. The Treasury Department and the 

IRS have incorporated many of these 

principles into regulations under 

section 170. Section 1.170A–1(h)(1) of 

the Income Tax Regulations provides, 

for example, that no part of a payment 

that a taxpayer makes to or for the use 

of an organization described in section 

170(c) that is in consideration for (as 

defined in § 1.170A–13(f)(6)) goods or 

services (as defined in § 1.170A– 

13(f)(5)) is a contribution or gift within 

the meaning of section 170(c) unless the 

taxpayer (i) intends to make a payment 


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