[Federal Register Volume 70, Number 197 (Thursday, October 13, 2005)]
[Rules and Regulations]
[Pages 59932-59949]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-20470]



[[Page 59931]]

-----------------------------------------------------------------------

Part V





Department of Transportation





-----------------------------------------------------------------------



Federal Aviation Administration



-----------------------------------------------------------------------



14 CFR Parts 21, 121, 135, 145, and 183



Establishment of Organization Designation Authorization Program; Final 
Rule

Federal Register / Vol. 70, No. 197 / Thursday, October 13, 2005 / 
Rules and Regulations

[[Page 59932]]


-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Parts 21, 121, 135, 145, and 183

[Docket No. FAA-2003-16685; Amendment Nos. 21-86, 121-311, 135-97, 145-
23, and 183-12]
RIN 2120-AH79


Establishment of Organization Designation Authorization Program

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule establishes the Organization Designation 
Authorization (ODA) program. The ODA program expands the scope of 
approved tasks available to organizational designees; increases the 
number of organizations eligible for organizational designee 
authorizations; and establishes a more comprehensive, systems-based 
approach to managing designated organizations. This final rule also 
sets phaseout dates for the current organizational designee programs, 
the participants in which will be transitioned into the ODA program. 
This program is needed as the framework for the FAA to standardize the 
operation and oversight of organizational designees. The effect of this 
program will be to increase the efficiency with which the FAA appoints 
and oversees designee organizations, and allow the FAA to concentrate 
its resources on the most safety-critical matters.

DATES: This amendment becomes effective November 14, 2005. Affected 
parties, however, do not have to comply with the information collection 
requirements of Sec. Sec.  183.43, 183.45, 183.53, 183.55, 183.57, 
183.63, or 183.65 until the control number assigned by the Office of 
Management and Budget (OMB) for this information collection requirement 
is published in the Federal Register. Publication of the control number 
notifies the public that OMB has approved this information collection 
requirement under the Paperwork Reduction Act of 1995.

FOR FURTHER INFORMATION CONTACT: For technical issues, Ralph Meyer, 
Delegation and Airworthiness Programs Branch, Aircraft Engineering 
Division (AIR-140), Aircraft Certification Service, Federal Aviation 
Administration, 6500 S. MacArthur Blvd., ARB Room 308, Oklahoma City, 
OK, 73169; telephone (405) 954-7072; facsimile (405) 954-2209, e-mail 
<a href="/cdn-cgi/l/email-protection#f280939e829adc9f978b9780b2949393dc959d84"><span class="__cf_email__" data-cfemail="c0b2a1acb0a8eeada5b9a5b280a6a1a1eea7afb6">[email protected]</span></a>. For legal issues, Karen Petronis, Office of the 
Chief Counsel, Regulations Division (AGC-200), Federal Aviation 
Administration, 800 Independence Avenue, SW., Washington, DC 20591; 
telephone (202) 267-3073; facsimile (202) 267-7971; e-mail 
<a href="/cdn-cgi/l/email-protection#dcb7bdaeb9b2f2acb9a8aeb3b2b5af9cbabdbdf2bbb3aa"><span class="__cf_email__" data-cfemail="9ef5ffecfbf0b0eefbeaecf1f0f7eddef8ffffb0f9f1e8">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Availability of Rulemaking Documents

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

Small Business Regulatory Enforcement Fairness Act

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

Authority for This Rulemaking

    The FAA's authority to issue rules about 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 
Subtitle VII, Part A, Chapter 447--Safety Regulation, Section 44702--
Issuance of Certificates. Under paragraph 44702(d), the FAA 
Administrator may delegate to a qualified private person a matter 
related to issuing certificates, or related to the examination, 
testing, and inspection necessary to issue a certificate he is 
authorized by statute to issue under Sec.  44702(a). Under paragraph 
(d), the Administrator is empowered to prescribe regulations and other 
materials necessary for the supervision of delegated persons. This 
regulation is within the scope of that authority in that it establishes 
a comprehensive program for the designation of organizations in 14 CFR 
part 183.

Background

History of Designation Programs

    Since at least 1927, the federal government has used private 
persons to examine, test and inspect aircraft as part of the system for 
managing aviation safety. The current system of delegations has been 
evolving since the need for assistance by private persons was 
recognized over 70 years ago. Beginning in the 1940s, the FAA's 
predecessor agency, the Civil Aeronautics Administration (CAA) 
established programs to appoint designees to perform certain tasks for 
airman approvals, airworthiness approvals and certification approvals. 
These include the Designated Engineering Representative (DER), 
Designated Manufacturing Inspection Representative (DMIR), and 
Designated Pilot Examiner (DPE) programs.
    In the 1950s, the rapid expansion of the aircraft industry led to 
the adoption of the Delegation Option Authorization (DOA) program to 
supplement the agency's limited resources for certification of small 
airplanes, engines and propellers. As the first program that delegated 
authority to an organization rather than an individual, DOA was 
intended to take advantage of the experience and knowledge inherent in 
a manufacturer's organization. Currently, DOAs are authorized for 
certification and airworthiness approvals for the products manufactured 
by the authorization holder.
    The Federal Aviation Act of 1958 established the Federal Aviation 
Agency and codified the authority of the Administrator to delegate 
certain matters in section 314 of that Act. When that statute was 
recodified in the 1990s, the delegation authority was placed in 49 
U.S.C. 44702(d) without substantive change to the authority of the 
Administrator.
    The 1960s saw the creation of the Designated Alteration Station 
(DAS)

[[Page 59933]]

Program, which was intended to reduce delays in issuing supplemental 
type certificates (STCs) by allowing the approved engineering staffs of 
repair stations to issue STCs. As adopted, the DAS program allows 
eligible air carriers, commercial operators, domestic repair stations 
and product manufacturers to issue STCs and related airworthiness 
certificates.
    In the 1970s the FAA reviewed its delegated organization programs, 
which then allowed the approval of major alteration data by a delegated 
organization, but not approval of major repair data. This review lead 
to the adoption of Special Federal Aviation Regulation (SFAR) 36 in 
1978 to allow eligible air carriers, commercial operators, and domestic 
repair stations to develop and use major repair data without FAA 
approval of the data.
    In the 1980s, the FAA established the Designation Airworthiness 
Representative (DAR) program to expand the airworthiness certification 
functions that individual designees may perform. At the same time, we 
allowed for organizations to serve as DARs, in a program known as 
Organizational Designated Airworthiness Representatives (ODARs).
    Since the formation of the first organizational designee programs, 
organizational designees have gained significant experience in aircraft 
certification matters, and the FAA has gained significant experience in 
managing these designee programs. We have found that the quality of the 
approvals processed by these organizations equals those processed by 
the FAA. Delegation of tasks to these organizations has allowed the FAA 
to focus our limited resources on more critical areas.

Status of Designees

    In understanding these programs, we consider it essential to 
remember that designees have a unique status. While we refer to these 
persons and organizations informally as ``designees'', under part 183 
they are referred to as ``representatives of the Administrator.''
    When acting as a representative of the Administrator, these persons 
or organizations are required to perform in a manner consistent with 
the policies, guidelines, and directives of the Administrator. When 
performing a delegated function, designees are legally distinct from 
and act independent of the organizations that employ them. The 
authority of these representatives to act comes from an FAA delegation 
and not a certificate. As provided by statute, the Administrator may at 
any time and for any reason, suspend or revoke a delegation. This is 
true even though some parts of the delegation regulations in part 183 
and elsewhere refer to kinds of certificates that denote the authority 
granted.
    An ODA issued under this program is a delegation made under section 
44702(d), not a statutorily authorized certificate issued under section 
44702(a). The authority of the Administrator to suspend, revoke, or 
withhold ODA authorization is not subject to appeal to the National 
Transportation Safety Board.

ODA Program Overview

    The FAA is adopting the ODA program as a means to provide more 
effective certification services to its customers. This final rule 
adopts the regulatory basis of the ODA program. Companion FAA orders, 
similar to the draft Order made available for review, will describe the 
specifics of the program and provide guidance for FAA personnel and for 
organizations to which we grant an ODA. These orders will also provide 
information to FAA personnel on how to qualify, appoint, and oversee 
organizations in the ODA program.
    As aviation industry needs continue to expand at a rate exceeding 
that of FAA resources, the need for the ODA program has become more 
apparent. According to a 1993 report by the General Accounting Office 
(GAO/RCED-93-155), the FAA's certification work has increased five-fold 
over the last 50 years. The ODA program is a consolidation and 
improvement of the piecemeal organizational delegations that have 
developed on an ``as needed'' basis over the last half century. As the 
FAA's dependence on designees has increased, so has the need to oversee 
designated organizations using a single, flexible set of procedures and 
a systems approach to management. Using our experience with both 
individual and organizational designees, we have designed the ODA 
program with these criteria in mind.
    The ODA program improves the FAA's ability to respond to our 
steadily increasing workload by expanding the scope of authorized 
functions of FAA organizational designees, and by expanding eligibility 
for organizational designees. One way this program expands eligibility 
is by eliminating the requirement that an organization hold some type 
of FAA certificate before it would qualify for designation 
authorization.
    The ODA program also allows the FAA to delegate any statutorily 
authorized functions to qualified organizations. Expansion of the 
available authorized functions will reduce the time and cost for these 
certification activities.
    While our current delegations are limited to such organizations as 
manufacturers, air carriers, commercial operators, and repair stations, 
this rule formalizes the delegation of functions to any qualified 
organization. Accordingly, an organization with demonstrated 
competence, integrity, and expertise in aircraft certification 
functions is eligible to apply for an ODA.
    Creation of the ODA program aids the expansion of the designee 
system by addressing the delegation of more functions related to 
aircraft certification, and new functions pertaining to certification 
and authorization of airmen, operators, and air agencies. For general 
aviation operations, the rule allows an ODA Unit member to issue airman 
certificates or authorizations under 14 CFR parts 61, 63, or 91. 
Additionally, the rule allows designated organizations to find 
compliance or conduct functions leading to the issuance of certificates 
or authorizations for any statutorily authorized function, including--
    <bullet> Rotorcraft external load operations under 14 CFR part 133;
    <bullet> Agricultural operations under 14 CFR part 137;
    <bullet> Air agencies operations under 14 CFR part 141; and
    <bullet> Training centers operators under 14 CFR part 142 (air 
carrier functions excluded).
    Nothing in the establishment of the ODA program changes any 
authority or responsibility for compliance with the certification, 
airworthiness or operational requirements currently in place, such as 
part 21 or part 121. No current safety requirements are being removed 
or relaxed. The ODA program does not introduce any type of self-
certification.
    An Organization Designation Authorization includes both an ODA 
Holder and an ODA Unit. The ODA Holder is the parent organization to 
which the FAA grants an ODA Letter of Designation. The ODA Unit is an 
identifiable unit of two or more individuals within the ODA Holder's 
organization that performs the authorized functions. The regulations 
specify separate requirements for the ODA Holder and the ODA Unit.
    Because the ODA program eliminates the requirement that an 
applicant hold an FAA certificate, organizations consisting of 
consultant engineering and inspection personnel could be eligible for 
an ODA. Under such circumstances, it is possible the ODA Holder would

[[Page 59934]]

have the same composition as the ODA Unit.

ODA Program Policy

    As noted earlier in this preamble, FAA orders will outline the 
specifics of the ODA program and provide guidance for both FAA 
personnel and for organizations that obtain an ODA. These orders will 
describe the authorized functions for aircraft-related approvals, such 
as type certificates and airworthiness certificates, and certain 
operations-related approvals like airman certificates. While the 
regulations contain the general requirements of the ODA program, the 
orders will provide the administrative details. Providing the specifics 
in orders allows for flexibility to expand or revise the details of the 
ODA program without further rulemaking, especially since every type of 
delegated function that may be appropriate for an ODA Unit cannot be 
foreseen.
    In addition to approved delegated functions and the eligibility 
requirements for delegated functions, the orders address the specific 
selection, appointment, and oversight procedures the FAA will follow in 
managing ODA Holders. Additional ODA program details may be described 
in other FAA orders or policies.

Application for ODA and Transition of Existing Delegation Holders

    This rule provides that existing Designated Alteration Station 
(DAS), Delegation Option Authorization (DOA) and Special Federal 
Aviation Regulation 36 (SFAR 36) authorization programs will be phased 
out over three years beginning November 14, 2006. Additionally, 
Organizational Designated Airworthiness Representatives (ODARs) will no 
longer be appointed under part 183 subpart A, and will have to apply 
for an ODA within the three-year phaseout period. The FAA's priority 
during the phaseout period will be the transition of existing 
organizations to ODA.
    The FAA intends to appoint new ODA applicants based on the need for 
their services. The ability of a particular FAA field office to appoint 
new ODA Holders will depend on the number of existing delegated 
organizations in an office's jurisdiction. During the three-year 
phaseout period of the current delegated organization programs, the 
only new applicants (those with no existing organizational delegation) 
the FAA expects to appoint are those with a significant history of 
certification work and whose workload could be better managed under an 
ODA.
    FAA Offices that manage existing delegated organizations will 
oversee the transition of those organizations using the following 
criteria:
    <bullet> A need to delegate the authorized functions.
    <bullet> An organization's level of certification activity.
    <bullet> The number and need for new ODA organizations.
    Priority will be given to existing delegated organizations that 
have and are expected to maintain a significant workload in new areas 
authorized under the ODA regulations. For example, an existing DAS that 
desires to have both STC and Parts Manufacturer Approval (PMA) 
functions under an ODA would be a higher transition priority than a DAS 
that would not be adding any new functions. Similarly, the FAA may find 
it of greater benefit to appoint a new ODA with a heavier workload than 
transition of an existing organization with a lighter workload.
    Based on these considerations, each FAA field office will develop a 
strategy for managing the ODA applications it receives. We expect that 
existing delegated organizations will cooperate with their managing 
offices in submission of their ODA applications. The FAA managing 
offices will, to the extent possible, develop a transition schedule 
that meets the organization's needs. The FAA will not accept ODA 
applications until November 14, 2006 in order to establish a smooth 
transition in prioritizing and processing applications. We are not able 
to predict how long it will take the agency to act on an individual 
application. Existing delegated organizations should apply for ODA as 
requested by their managing office, but not later than 18 months after 
the application period begins to ensure that its application may be 
processed and fully considered before the end of the three-year 
phaseout period.
    The FAA will provide transition training for existing DAS, DOA, and 
SFAR 36 administrators to address the differences between ODA and 
existing programs. This training is required for these organizations' 
administrators before they may be appointed under ODA. The FAA is 
planning similar training for new ODA applicants that will more 
comprehensively address all aspects of the ODA program. Because of the 
substantial differences between ODA and ODAR requirements, ODAR 
administrators will have to complete this more comprehensive training 
prior to appointment as an ODA.
    It is expected that DAS, DOA and SFAR 36 organizations will be able 
to transition to an ODA program with minimal changes to their existing 
procedures. These organizations will have to submit an application and 
make minimal changes to their procedures manuals in order to receive an 
ODA. The certification activity of existing organizations will also be 
reviewed to determine whether it is still in the FAA's interest to 
appoint the organization as an ODA. We expect that there will be 
greater impact to existing ODAR organizations, which will have to 
develop new procedures, such as internal evaluations and in-house 
training, which are not current ODAR requirements. Existing authorized 
representatives for all types of delegated organizations will be 
granted the same level of authority under the ODA program without 
additional review of their qualifications.

Impact on Individual Designee Programs

    As noted in the NPRM, the FAA expects that a significant number of 
individual designees who work for larger organizations will become 
members of an ODA Unit and give up their individual designee status. 
The FAA may allow an ODA Unit staff member to remain a designee 
provided that there is a sufficient amount of designee work outside of 
his ODA activity to warrant continuation of the designee authority. The 
FAA applies this same philosophy to existing designees that are staff 
members for DAS, DOA, or SFAR 36 organizations. As commenters to the 
NPRM note, we do not expect that the ODA program will significantly 
reduce the number of consultant DERs, and the need for consultant DERs 
will remain dependent on their level of activity.

ODA Program Final Rule

    In addition to establishing the ODA program, this final rule also 
includes revisions that standardize the duration of certificates for 
aircraft certification and flight standards individual designees; the 
designation of these individuals continues under part 183, subparts B 
and C. This final rule creates a new subpart D in part 183 that 
contains the regulations applicable to all types of organizational 
designees. This rule replaces existing DAS, DOA, SFAR 36, and ODAR 
delegation programs with a single delegation program for organizations. 
The regulations governing those other programs, subparts J and M of 
part 21, and SFAR 36, are being phased out under this rule by placing a 
suspension date of (Insert date 4 years after the effective date of 
this rule) for functions performed under those programs.

[[Page 59935]]

Disposition of Comments

    The FAA received 40 comments to the NPRM from 36 commenters. Eleven 
of the 36 commenters, including the General Aviation Manufacturers 
Association (GAMA), Gulfstream Aerospace Corporation (Gulfstream 
Aerospace), the Aerospace Industries Association (AIA), and 
International Aero Engines (IAE), express general support for the rule. 
Fourteen commenters oppose the rule in general, with three of them 
adding specific comments, addressed below. Comments in opposition were 
received from United Airlines, the Professional Airways Systems 
Specialists, and the National Air Traffic Controllers Association. This 
discussion of comments is organized by each proposed rule topic or 
section for which we received comments.
    Many of the general comments raise issues with material in the 
agency order that specifies certain details of the ODA program and 
application process. Most of those comments are considered outside the 
scope of this rulemaking since they do not address any part of the 
proposed rule language. A few of the comments regarding material in the 
draft order are addressed later in this section, but most will be 
addressed in the final version of the Order.
    Similarly, some comments make suggestions beyond the scope of FAA 
authority, such as an investigation of designee fees by the Internal 
Revenue Service. While we have reviewed all of the material submitted, 
comments such as these that transcend FAA authority and the issues of 
the proposed rule will not be addressed individually.

General Comments

    Commenters that support the ODA rule state that it will result in 
more efficient and effective use of industry and FAA resources. They 
state that the ODA rule would lighten some of the FAA workload and 
allow the FAA to better meet industry demand for certification 
activities. General Electric Aircraft Engines (GE Aircraft Engines), a 
member of the Aviation Rulemaking Advisory Committee (ARAC) that 
developed recommendations for an ODA rule, noted that it was 
particularly satisfying to see that the FAA had left intact the spirit 
of the recommendations developed by the ARAC. Other commenters affirm 
that the ODA program will reduce the amount of FAA oversight needed for 
individual designees, while increasing the FAA's capacity to issue 
approvals. Commenters also note that an expected benefit is the 
increased flexibility that will allow the FAA to establish additional 
delegation programs without needing to amend the rule.
    Several opposing commenters assert that previous problems with 
designees or delegated organizations indicate that delegation is not 
beneficial. They state general opposition to the idea of delegation, or 
of expanding delegation to make it available to more organizations, and 
they generally do not think it is the most efficient use of FAA 
resources. Most commenters expressing opposition did not provide 
comments to any specific part of the proposed rule.
    More than one commenter states that the FAA should be hiring more 
inspectors, not spending its limited resources creating an 
organizational designee system. Another common objection is that the 
proposed rule seeks to increase the number of designees used by the 
FAA.
    In proposing this program, the FAA is not spending money that could 
be transferred to other unspecified programs such as `hiring more 
inspectors', as suggested by commenters. The proposed ODA program is, 
at its simplest, a restatement of how we will be approving and 
overseeing organizational designees. The ODA program was not designed 
to increase the overall number of designees, but to increase the 
functions available to organizational designees. By doing so, the FAA 
hopes to reduce the number of individual designees and concentrate its 
oversight resources more effectively.
    Many of the general opposing comments note a few specific instances 
in which the designee programs have experienced problems or been the 
subject of investigation. While the FAA does not dispute that some 
designee programs have experienced problems, we believe that the 
commenters are overstating their breadth because they are unfamiliar 
with the extent of the designee programs already in use compared to the 
number of problems reported. Today's rule phases out the assortment of 
delegated organization programs we currently manage in favor of a 
single system, and both the FAA and the affected organizations will be 
operating under organizational procedures that are familiar and 
effective. This rule will make the benefits of organizational 
delegation available to more types of organizations. Further, the FAA 
is always seeking to improve its designee programs, an example of which 
is the August 2002 implementation of new oversight processes that 
outline the participation of FAA offices involved in the oversight of 
delegated organizations. Included in the oversight program are routine 
evaluations of the delegated organization's performance by FAA managing 
offices. This oversight feature is included in the ODA program.
    The FAA continues to seek input on improvements in oversight and 
management procedures for all of its designee programs. The Government 
Accountability Office (GAO) completed a review of the FAA designee 
system (GAO 05-40, ``FAA Needs to Strengthen the Management of its 
Designee Programs'') in October 2004. The FAA is taking steps to 
address the GAO's recommended means of improving the designee programs.
    Additionally, the FAA is implementing an internal quality 
management system that will help assess the performance of the 
delegation programs and implement any needed corrective action.

Specific Comments

    Comment: Chromalloy Gas Turbine Corporation opposes the rule 
because it has not been coordinated with foreign aviation authorities. 
The commenter notes that it worked with foreign authorities for years 
to gain acceptance of FAA-approved data (from designated engineering 
representatives (DERs)). Other commenters agree that it is important 
that foreign airworthiness authorities recognize approvals made by a 
designee. One commenter states that the FAA should pursue bilateral 
agreements to ensure mutual acceptance of FAA ODA and European Aviation 
Safety Agency Design Organization Approval (EASADOA) systems.
    Response: Bilateral agreements are negotiated with individual 
countries, and an agreement may or may not provide for mutual 
acceptance of designee programs. The creation of ODA should not change 
acceptance of designee approvals where they already exist in a 
bilateral agreement. Nor does the ODA system prevent the use of DER 
approvals for organizations that prefer the DER system to support their 
certification activity. The FAA expects that, at a minimum, foreign 
authorities will be more accepting of ODA-approved repair data than 
they are of data developed under SFAR 36 since SFAR 36 data is not 
considered ``FAA-approved.''
    Changing a domestic regulatory program is not, however, a means to 
presume acceptance of approved data under bilateral airworthiness 
agreements. Coordination and acceptance of such issues is neither 
simple nor accomplished quickly. The FAA has determined that it is 
better to put the ODA program in place for use

[[Page 59936]]

now and work out the more complex international acceptance issues over 
time.
    As noted, we expect no impact to existing agreements regarding 
approvals performed by an ODA Holder. However, we do not currently plan 
to allow approvals issued by an EASADOA holder to be used within an ODA 
Holder's system (or vice-versa) without authority-to-authority 
coordination and agreement. No change to the rule has been made based 
on this comment.
    Comment: One commenter does not support the rule because it is too 
costly to maintain and that the cost to the public is ``double 
taxation.'' Another commenter notes that the public deserves the safest 
and not the cheapest service.
    Response: Neither commenter was specific in its criticism of the 
costs of the ODA program; most costs associated with the program will 
be borne by the ODA Holder, and may be passed on to its customers. No 
one is required to use the services of an ODA Holder; the FAA will 
continue to do approvals directly if requested. Nor is the goal of the 
ODA program to seek out the low bidder for services. The FAA will not 
make a decision to approve an ODA Holder simply because the applicant 
claims it can do the work cheaper. Those who use the services of an ODA 
Holder may incur costs that would not occur if the FAA did the 
approval. A user may nonetheless feel justified in incurring the cost 
of the service from the ODA Holder if, for example, the Holder can do 
it faster. The existence of ODA Holders is expected to free up more FAA 
resources by allowing non-critical tasks to be accomplished by the 
designee. None of the commenters gave any specific example of why the 
ODA program would be more costly to the agency than any of the current 
designee programs, and we have no reason to think it will be so. No 
change to the rule has been made based on this comment.
    Comment: One commenter says the proposed ODA program significantly 
modifies the current regulatory oversight system, deteriorating the 
established technical FAA oversight by going to a ``systems'' oversight 
approach that would provide less specific and technical FAA oversight 
and would, in time, reduce safety.
    Response: The FAA disagrees that a systems approach will provide 
less specific technical oversight, and believes it will increase 
safety. A systems approach is currently being used successfully to 
manage DAS and DOA organizations. The FAA has found that management of 
these organizations, rather than a number of individual employees that 
they might employ, is more efficient for both the FAA and industry and 
results in approvals that comply with the regulations. The FAA 
anticipates that these more effective delegation programs will increase 
safety by freeing up FAA resources for tasks more critical to safety. 
Additionally, Congress has shown support for system-based certification 
programs by mandating the issuance of Design Organization Certificates 
in the 2003 reauthorization of the FAA. Design organization 
certificates would give the certificate holder privileges similar to 
delegated organizations, but would have the authority of a certificate 
rather than a delegation. No change to the rule has been made based on 
this comment.
    Comment: One commenter asserts that while the quality of approvals 
by designees may be comparable for aircraft certification functions, it 
is not true for designees such as examiners. The commenter points out 
problems with specific examiner programs, which resulted in the re-
examination of a number of airmen.
    Response: The FAA acknowledges that problems have been identified 
in some designee programs. However, the FAA does not agree that this 
necessarily indicates that these approvals are not, as a whole, 
comparable to those performed by the FAA. Additionally, the FAA has 
taken steps to improve the oversight of its individual and 
organizational designees; the ODA program is expected to result in 
further improvements. By restructuring delegation programs toward 
organizations, oversight of individuals is reduced, allowing the FAA 
workforce to focus on individual designee oversight when needed. No 
change to the rule has been made based on this comment.
    Comment: Many of the commenters, including Piper Aircraft, AIA, and 
Boeing Commercial Airplanes (Boeing) say FAA review of individual ODA 
Unit members contradicts the intent of a systems approach. They also 
note current delegation rules are not based on a systems approach 
because the FAA must approve the individuals within the organization.
    Response: The FAA intends to allow ODA Holders that have had 
significant experience as a delegated organization to appoint ODA Unit 
members with a minimum level of FAA involvement. The process will 
require an ODA Holder to notify the FAA of the names of proposed staff 
members before the ODA Holder conducts a full internal evaluation. If 
the FAA has reason to object to the appointment of an individual, we 
will do so before the organization does its full evaluation. The FAA 
anticipates that at some point experienced organizations may be able to 
select staff members without FAA review of the staff members' 
qualifications and authority. However, the FAA will review the ODA Unit 
member selection decisions made by ODA Holders until they demonstrate 
that they are capable of selecting qualified personnel for the ODA 
Unit. No change to the rule has been made based on this comment.
    Comment: Several commenters, including IAE and United Technologies 
Corporation (United Technologies), recommend an additional ODA program 
type for airworthiness approvals. The commenters state that the 
programs, as defined, could restrict the ability of existing ODARs to 
obtain an ODA without obtaining additional engineering functions.
    Response: We do not plan to have an ODA program specifically 
identified for airworthiness approvals. Although this specific program 
was not described in the draft order, the proposed functions will 
continue to be available as a delegated function under the ODA program. 
The ODA program structure allows an existing ODAR to obtain an ODA 
without requiring the addition of new functions or capabilities. No 
change to the rule has been made based on this comment.
    Comment: IAE and United Technologies Corporation recommend that the 
FAA either set up an audit program that does not require an ODA Holder 
to report deficiencies that will result in enforcement actions, or 
create criteria for ``safety-related'' and ``non-safety related'' audit 
findings. Under such a proposal, the organization would only have to 
report safety-related findings.
    Response: Under the FAA's compliance and enforcement program, 
voluntarily disclosed violations may not be subject to legal 
enforcement action. Requiring periodic audits by an organization is 
consistent with similar requirements imposed on certificate holders. 
The FAA expects ODA Holders to take an active role in the 
identification and resolution of deficiencies, including, non-
compliances. No change to the rule has been made based on this comment.
    Comment: GAMA, IAE, and United Technologies, among others, 
recommend that the FAA provide the public a chance to comment on 
whether a specific function should be delegated, and state that changes 
to the ODA program should be noted in the Federal Register. One 
commenter suggests that the public also be invited to comment on each 
applicant's qualifications.

[[Page 59937]]

    Response: The FAA agrees that the public should be notified and 
given opportunity to provide input on proposed ODA programs. The FAA 
plans to continue its practice of publishing notice of proposed 
policies that implement new or changed programs such as ODA.
    The FAA does not agree that it is appropriate to publish the names 
of applicants and request public comment on their qualifications. We do 
not have such a process for other designee programs, and decisions are 
based on the FAA's expertise and experience working with individual 
organizations. Public comment raises issues of bias against individuals 
and organizations and we would have to determine whether the person 
providing the comment was qualified to assess the applicant. The FAA is 
comfortable with its experience regarding determinations of an 
applicant's qualifications. No change to the rule has been made based 
on this comment.
    Comment: IAE and United Technologies note that it would be a burden 
to industry if DMIRs and ODA Holders can't perform functions on the 
same project. They reference language in the NPRM preamble, which 
states that organizations that currently have individual designees 
could operate under both systems (but not on the same project or 
program).
    Response: The FAA acknowledges that the NPRM language may have been 
confusing. The referenced language specifically applies to design 
approval projects, such as Type Certificate (TC) programs, issuing 
STCs, and developing PMA design approvals. For these types of projects, 
it is expected that all engineering and inspection functions related to 
the project would be performed under the ODA authority, rather than 
another designee program.
    ODA Holders with DMIRs could continue to use both ODA and DMIR 
approvals on FAA-managed projects. All authorities and capabilities 
available in the ODAR system are available under the ODA program. The 
FAA anticipates that the need for separate DMIRs will decrease, since 
all delegated inspection and production functions are available under 
the ODA program. No change to the rule has been made based on this 
comment.
    Comment: The United States Parachute Association (USPA) comments 
that parachute operations functions are not mentioned in the draft ODA 
order, but are provided for in the proposed rule language. The USPA 
fears that if the authority to issue parachute operations approvals is 
delegated, it could be held liable for issuing certificates of 
authorization currently issued by the FAA. The USPA does not believe 
this delegation is appropriate.
    Response: The FAA agrees that a delegation of the approvals could 
negatively impact the long-standing safety record of parachute 
operations by introducing less-experienced third parties into the 
process. Accordingly, the FAA has determined that authorizations or 
waivers related to parachute operations will not be delegated at this 
time. Based on this comment, we have changed the rule language to 
remove all references to part 105 or parachute operations.

Comments on Specific Proposed Rule Language

    Section titles are those from the proposed rule, and may differ 
from those in the final rule.
Section 183.1 Scope
    Comment: Several commenters request clarification of the term 
``private organization'' as used in Sec.  183.1(b), since the 
introductory text of that section uses the term ``private persons.'' 
One commenter suggests including a definition of ``private 
organization'' in the introductory text of Sec.  183.1 or in Sec.  
183.41 (Applicability and definitions).
    Response: As defined in 14 CFR part 1, ``person'' includes both an 
individual and an organization. Section 183.1 seeks to distinguish an 
individual from an organization for purposes of designation under part 
183. Both individuals and organizations may receive a designation, but 
the ODA rule only applies to organizations. No change to the rule has 
been made based on this comment.
Section 183.15 Duration of Certificates
    Comment: Two commenters, including IAE and United Technologies, ask 
if the duration and renewal of certificates as proposed under this 
section are applicable to individual ODA Unit members.
    Response: The language in Sec.  183.15 only applies to individual 
designees under other programs, not to the individuals within the ODA 
Unit. ODA Unit members are not considered appointed by the FAA and 
their appointment is not subject to renewal by the FAA. However, the 
ODA Holder will have to periodically assess the individuals within 
their ODA Unit. No change to the rule has been made based on this 
comment.
Section 183.41 Applicability and Definitions
    Comment: IAE and United Technologies state that the current ODAR 
program only requires one focal point. They propose that ODA should 
also allow a single focal point.
    Response: The commenters misunderstood the proposed rule. Proposed 
Sec.  183.41(b)(1) defines the authorized representatives within the 
ODA Unit. While there must be at least two authorized individuals 
within an ODA Holder's organization, only one ODA administrator is 
required. No change to the rule has been made based on this comment. 
Section 183.41 has been reformatted, and the definition of ``ODA Unit'' 
in paragraph (b) has been clarified.
Section 183.47 Eligibility (Now Titled Qualifications)
    Comment: Many commenters, including GE Aircraft Engines, Gulfstream 
Aerospace, and Raytheon Aircraft Company (Raytheon Aircraft) recommend 
that the FAA permit foreign organizations located in foreign countries 
to obtain ODAs. They note that the FAA could use its ``no undue 
burden'' concept to determine eligibility for foreign organizations, 
and that such organizations would help enhance the relationship between 
the United States and foreign countries.
    Response: The FAA agrees in part. Although DERs currently must be 
located within the United States, the FAA has appointed a limited 
number of airworthiness and manufacturing designees that are located in 
foreign countries. We agree that the regulatory language should not 
prevent foreign eligibility, and we have removed the phrase, ``located 
within the United States'', from proposed Sec.  183.47(a)(1). The 
regulations for the individual designee programs do not restrict 
eligibility to persons in the United States. The limitations for each 
designee type are included in the policies for managing these programs. 
Similarly, the FAA might place a limitation on appointing ODA Holders 
in foreign countries in the associated FAA policy. The rule has been 
changed as noted to reflect this comment.
    Comment: Texas Air Composites states that the FAA should revise 
Sec.  183.47(a) to state that the applicant has ``personnel with 
sufficient experience'', rather than the organization. Otherwise, it 
could be misconstrued that the organization must have the experience. 
This could result in start-up or recently formed companies with 
qualified personnel not being granted an ODA because the organization 
is new.
    Response: The experience requirement is meant to apply to the 
organization. Although an organization may have experienced 
individuals, that

[[Page 59938]]

group of individuals must have experience working with each other and 
with the FAA as an organization. This is the only way for the FAA to 
determine that they are qualified, and whether there is a need for the 
authorization. Recently formed companies would not be eligible until 
they gain the necessary experience and demonstrate that, historically, 
they have sufficient workload to justify the authorization. No change 
to the rule has been made based on this comment.
    Comment: IAE and United Technologies state that the FAA must 
identify the criteria the agency will use to determine when a qualified 
organization will not be granted an ODA. Texas Air Composites further 
notes that not granting an ODA to a qualified applicant could result in 
a financial disadvantage.
    Response: A fundamental principle of delegation is the FAA's 
discretion in appointing designees and delegated organizations. Even if 
qualified, an organization is not entitled to an authorization, and the 
FAA does not make delegation decisions based solely on an applicant's 
desire to have an authorization. Authorizations will be based on the 
need for the functions requested. Thus, we expect to give priority to 
organizations with demonstrated expertise and a large workload. In some 
cases, we expect it may be beneficial for the FAA to manage an 
organization's activity using individual designees. It is not possible 
to state all the reasons that the FAA might have to deny an 
application. The primary considerations will always be the need for the 
authorization and the ability of the FAA to oversee the organization's 
activity. No change to the rule has been made based on this comment.
    Comment: Regarding proposed Sec.  183.47(b)(1), IAE and United 
Technologies state the FAA should include Production Certificate and 
Technical Standard Order Authorization to the list of certificates used 
to establish eligibility. Also, regarding proposed Sec.  183.47(d), a 
commenter believes the proposed regulatory language could be 
interpreted to deny an ODA to a company that holds a type certificate 
that was transferred into the company. The commenter suggests the FAA 
revise the language to clarify that those companies holding a 
transferred type certificate are eligible for an ODA.
    Response: The FAA agrees that the proposed language of this section 
could be misinterpreted. Section 183.47 has been significantly modified 
to clarify that eligibility is based solely on experience performing 
the functions sought, and the title of the section changed to 
Qualifications. The proposed language identified many different 
certificate holders as eligible for ODA, but did not specify the 
authority available for each type of certificate holder.
    Holding a certificate is not an eligibility requirement for ODA. 
However, most functions authorized under the ODA program require the 
applicant to have been issued and hold a certificate related to the 
function. The only aircraft certification functions currently 
anticipated for non-certificate holders are the approval of major 
alteration and major repair data. Our draft order states that functions 
such as issuing STCs or PMA supplements require the applicant to have 
previously obtained such certificates from the FAA. The language in 
Sec.  183.47 has been revised to require only experience performing the 
desired function and experience with related FAA procedures and 
policies. The list of certificates has been removed from the rule 
language. The specific eligibility requirements for the available 
programs and functions are described in the associated FAA policy.
    Comment: Several commenters, including IAE, United Technologies, 
Matsushita Avionics System Corporation and Gulfstream Aerospace 
recommend that the FAA make holders of PMAs that were granted by 
license eligible for an ODA. They state that PMA holders seeking 
production approval functions should not be required to have experience 
in both design and production approval to obtain an ODA. This would be 
an additional requirement from the ODAR system. The commenters 
recommend proposed Sec.  183.47(c) be reworded as follows: ``An 
applicant seeking function in the area of production must have for the 
product, components, parts, or appliances for which the applicant is 
seeking designation authorization, a current PC, TSOA or PMA issued 
under Part 21 of this chapter.''
    Response: The FAA agrees. A PMA holder may apply for an ODA to 
perform production and airworthiness functions even if it does not have 
any engineering design experience. As noted above, the qualification 
requirement has been revised to require only experience performing the 
desired function and experience with related FAA procedures and 
policies. The details of the specific eligibility requirements for the 
available programs and functions will be more fully described in the 
associated policy.
Section 183.49 Authorized Functions
    Comment: Electronic Cable Specialists comments that the preamble 
language indicates that the FAA is not considering delegation of PMAs. 
The commenter states that design approvals for PMAs should be a part of 
the ODA program.
    Response: The FAA agrees that an ODA Holder may issue PMA 
supplements. However, the FAA has never delegated the issuance of an 
original PMA, and we do not intend to do so under ODA. No change to the 
rule has been made based on this comment.
    Comment: One commenter states that proposed Sec.  183.49(c)(1) and 
(c)(3) appear to duplicate the provisions of Sec.  183.29. The 
commenter believes that allowing DERs and ODA Unit members to perform 
the same functions would double the FAA's oversight workload.
    Response: The FAA disagrees. The commenter presumes that a DER and 
ODA Unit member would be performing the same function. Although these 
proposed sections provide for functions similar to those performed by a 
DER, the performance of a function under an ODA is separate and 
distinct from a function performed by an individual designee. As such, 
oversight of ODA functions is separate from any individual designee 
oversight. No change to the rule has been made based on this comment.
    Comment: One commenter recommends that the rule should have a 
subparagraph to denote inherently governmental functions that may not 
be delegated.
    Response: Listing inherently governmental functions is not 
consistent with accepted regulatory drafting, or with the intent of 
this rule. The FAA's delegation regulations define only those functions 
that may be accomplished by designees. We have revised proposed Sec.  
183.49 by removing any reference to specific functions. The ODA rule 
allows the delegation of any function allowed by 49 U.S.C. 44702(d). No 
change to the rule has been made based on this comment.
    Comment: AIA and Boeing note that the proposal does not indicate 
whether the ODA program will apply to part 34 (emissions) or part 36 
(aircraft noise) standards. The commenters state that delegation in 
these areas would be a significant opportunity to gain efficiency in 
the certification process with no associated safety risk. They request 
that the rule state that parts 34 and 36 are included.
    Response: The FAA does not agree that the rule should specifically 
note application to parts 34 and 36. As revised, the rule allows 
designees to make findings of compliance with any FAA requirements. The 
FAA anticipates that ODA Holders may perform noise

[[Page 59939]]

and emission-related functions to the extent currently performed by 
DERs, but does not expect an expansion of the authorized functions 
under the ODA program. No change to the rule has been made based on 
this comment.
Section 183.51 ODA Unit Personnel (Proposed Sec.  183.51 Personnel)
    Comment: Piper Aircraft recommends a provision in the rule or FAA 
policy requiring that ODA Unit members receive training similar to that 
of FAA personnel.
    Response: The FAA disagrees that ODA Unit members need the same 
training as FAA personnel. Training requirements may not be appropriate 
for all types of ODA Unit members that may exist under an ODA program. 
For example, engineers may perform limited functions of a repetitive 
nature, such as burn test approvals, for which there is no associated 
FAA training. When appropriate, the training requirements for ODA Unit 
members will be defined in the FAA policy, but they are not appropriate 
to include in the rule language. No change to the rule has been made 
based on this comment.
    Comment: One commenter states that the rule should specify that ODA 
staff members and ODA Unit Members must be United States citizens, must 
be subjected to the same background check as FAA employees, and must 
live in the United States.
    Response: The FAA disagrees. Neither United States citizenship nor 
a federal employee background check are qualifications currently 
imposed on individual designees. Further, staff members of delegated 
organizations are not required to be United States citizens, nor are 
they subject to background checks by the FAA. The FAA expects that some 
ODA Holders will have staff members in foreign countries performing 
functions for them. The associated FAA orders will include any 
limitations regarding staff members in foreign countries. No change to 
the rule has been made based on this comment.
    Comment: IAE and United Technologies state that the experience for 
determining conformity and issuing airworthiness approvals should be in 
inspection, not aircraft certification.
    Response: The FAA agrees that inspection and related experience is 
appropriate for conformity and airworthiness approvals. Accordingly, we 
have removed the phrase ``in aircraft certification'' from Sec.  
183.51(b).
    Comment: One commenter notes that the terms ``qualified'' and 
``experienced'' are subject to many interpretations. The rule should be 
more specific in explaining what these terms mean.
    Response: The FAA disagrees. Specifying what qualified and 
experienced means in the many possible types of administrators and 
personnel that might be needed in an ODA organization is inappropriate 
for regulatory standards. The language is consistent with other 
designee rules currently used by the FAA, and delegation remains at the 
discretion of the FAA. More detail regarding qualifications for ODA 
positions can be found in the associated FAA orders. No change to the 
rule has been made based on this comment.
Section 183.53 Procedures Manual
    Comment: IAE and United Technologies state that the continued 
airworthiness requirements in proposed Sec.  183.53(n) (revised as 
Sec.  183.53(b)(13)) should be applicable only to engineering 
functions, and not to production approval holders.
    Response: The FAA disagrees. The procedures manual requirement 
applies to ODA Holders performing either engineering design or 
manufacturing-related approvals. Manufacturing issues not specifically 
related to the engineering or type design functions may lead to service 
difficulties and require investigation by an ODA holder. While no 
change to the rule has been made based on this comment, the proposed 
requirement is now contained in Sec.  183.53(c)(13) referencing 
continued responsibilities.
    Comment: IAE and United Technologies recommend rewording the last 
sentence of the introductory text of Sec.  183.53 regarding changes to 
the procedures manual, stating that there may be instances when the FAA 
will authorize an ODA Holder to implement minor changes to the manual 
without FAA approval. They suggest revising the sentence to state 
``Changes may be implemented prior to FAA approval in accordance with 
the change procedure in the manual.''
    Response: The FAA agrees that certain minor changes to the manual 
may be made without prior approval. However, the procedures manual must 
specify the types of changes that may be adopted without FAA approval. 
Proposed Sec.  183.53 has been revised and its paragraphs redesignated. 
Section 183.53(b) allows certain changes to be made to the manual, and 
to require that the manual describe the types of changes that may be 
incorporated without specific FAA approval.
    Comment: IAE and United Technologies state that the regulation is 
too detailed regarding the content of the procedures manual. The 
commenters fear that stating the content as a minimum requirement will 
discourage the adoption of industry practices that exceed the 
requirements in the regulation. They note that the details of 
procedures manuals are usually in Orders and advisory circulars.
    Response: The FAA has determined that it is appropriate to specify 
procedures manual requirements in the regulation. Since this section of 
the rule defines only the required content of the manual, rather than 
how to perform authorized functions, ODA Holders will still be free to 
introduce good practices that satisfy the requirements. No change to 
the rule has been made based on this comment.
Section 183.55 Limitations
    Comment: IAE and United Technologies Corporation suggest changing 
Sec.  183.55(b) to add the term ``significant,'' since minor changes 
within an ODA Unit may not affect the Unit's qualifications.
    Response: The FAA disagrees. The addition of the term 
``significant'' would have no impact on the requirements of this 
paragraph. If changes within the ODA Unit or ODA Holder do not affect 
the qualifications of the ODA Unit or Holder, or the ability of the ODA 
Unit to perform authorized functions, then they do not have to be 
reported. No change to the rule has been made based on this comment.
Section 183.57 Responsibilities of an ODA Holder
    Comment: Raytheon Aircraft and GAMA comment on the language of 
proposed Sec.  183.57(c), which specifies that the ODA Holder must 
``Ensure that no interference or conflicting restraints are placed on 
the ODA Unit or on the personnel performing the designated functions 
while complying with this part and the approved procedures manual.'' 
They state that the proposed language is not consistent with existing 
wording used in FAA Order 8100.9, paragraph 3-3(a). The commenters 
question why this section is different from the language of the 
existing order. Since the intent is the same, one commenter recommends 
that the FAA adopt wording similar to that in Order 8100.9. That Order 
states ``The authorization holder must ensure that the administrator 
and ARs [Authorized Representatives] remain free of any restraints that 
would limit the DOA's, DAS's, or SFAR 36's ability to ensure that 
authorized functions are performed in compliance with FAA 
regulations.''
    Response: The FAA agrees that the intent of the proposed language 
is

[[Page 59940]]

similar to that stated in Order 8100.9. However, we have determined 
that the language used in the rule is preferable for the purpose of 
regulation since it also prohibits interference with the ODA Unit by 
the ODA Holder. No change to the rule has been made based on this 
comment.
Section 183.63 Records and Reports (Proposed Sec.  183.61)
    Comment: Two commenters state that the requirement to submit data 
in the proposed Sec.  183.63(b)(3) should not apply to airworthiness 
certificates, export approvals, the production limitation records or 
``any other approval authorized under this subpart.'' One commenter 
points out that production limitation record requirements are already 
addressed in the proposed Sec.  183.63(b)(2), and that the retention 
requirements for airworthiness certificates and approvals should be 
consistent with record retention requirements imposed on other 
designees. The commenters recommend deletion of proposed Sec.  
183.63(b)(6) for the same reasons. The same commenters recommend 
conformity inspection records and airworthiness approvals be maintained 
for two years rather than indefinitely as proposed.
    Response: The FAA agrees in part. Airworthiness certificates or 
approvals are generally maintained for two years by most types of 
designees. The final rule adopts a two-year requirement for those ODA 
Holders that only issue these types of certificates or approvals. 
However, ODA Holders that perform type design approvals, such as TC and 
STC programs, are required to maintain records typically submitted to 
and maintained by the FAA as part of standard certification projects. 
The airworthiness certificates or approvals associated with such design 
approval projects must be maintained indefinitely. As revised, Sec.  
183.61(a)(2) requires indefinite retention of airworthiness 
certificates or approvals performed as part of type design programs, 
and revised Sec.  183.61(c) requires retention of other airworthiness 
approvals or certificates for two years. The FAA agrees that reference 
to production limitation record data in the proposed section Sec.  
183.63(b)(3) duplicated the requirement for the production certificate 
in the proposed Sec.  183.63(b)(2). The requirement for production 
related records has also been incorporated in revised 183.61(a)(2). The 
retention requirement of proposed Sec.  183.63(b)(6) is also 
incorporated in the revised 183.61(a)(2) as a general requirement for 
all approvals, rather than a stand-alone requirement.
    Comment: Two commenters recommend retaining the periodic audit and 
records of corrective action required under proposed Sec.  183.63(b)(9) 
for two years rather than indefinitely.
    Response: The FAA agrees that these records need not be retained 
indefinitely. However, we consider periodic audit records an important 
means to document an organization's continued compliance with the 
requirements for the authorization. Two years may not be adequate in 
all cases, since the planned oversight evaluation interval of two years 
could result in the development and destruction of these records before 
review of the corrective action by the FAA. To ensure adequate 
documentation for oversight of the ODA Holder, Sec.  183.61(b) requires 
these records be maintained for five years.
    Comment: IAE and United Technologies state that the two year record 
retention requirements in proposed Sec.  183.63(c)(1) should not be 
applied to a production approval holder (PAH) that holds an ODA since 
it is not required for an FAA inspector or designee. They add that part 
21 already specifies the inspection data requirement for PAHs.
    Response: The FAA agrees. While such requirements are not imposed 
on individual designees, the requirement is contained in the existing 
DOA rules. While necessary under the DOA rule, the FAA agrees that it 
is not necessary under the ODA program since the other production 
approval holder requirements in part 21 apply. The requirement proposed 
in Sec.  183.63(c)(1) has been removed.
    Comment: IAE and United Technologies state that the requirement of 
proposed Sec.  183.63(b)(4) for an ODA Holder to maintain a list of 
products on which it has performed an authorized function should apply 
only to ``authorized engineering functions.'' The commenter points out 
that records retention for manufacturing functions should be the same 
as for other designees.
    Response: The FAA disagrees that the list requirement should apply 
only to engineering functions. The purpose of this requirement is to 
maintain a list of the specific products for which the ODA holder 
issues approvals. For example, a manufacturer authorized to issue 
airworthiness certificates is required to maintain a list of the 
aircraft for which it issued airworthiness certificates, and a repair 
station authorized to approve alteration data is required to maintain a 
list of the aircraft for which it has approved alteration data. We have 
removed the proposed language specifying the means of identification, 
but no change to the rule has been made based on this comment.
Section 183.65 Data Review and Service Experience (Now Sec.  183.63 
Continuing Requirements: Products, Parts or Appliances)
    Comment: AIA states that proposed Sec.  183.65(b) would require an 
ODA Unit to submit information necessary for the FAA to implement 
corrective action. The ODA Unit is the interface between the ODA Holder 
and the FAA. A certificate holder's obligation to develop and submit 
information under Sec.  21.99 and Sec.  21.277(b) remains in effect. 
Several commenters note that the responsibility to investigate safety 
concerns should be directed toward the ODA Holder, not the ODA Unit.
    Response: The FAA agrees that Sec.  21.99 applies, but only to 
certificate holders. Further, Sec.  21.277(b) applies only to 
Delegation Option Authorization holders, which are being phased out as 
part of this rulemaking. The language of proposed Sec.  183.65(b) was 
intended to impose similar requirements on ODA Holders. We note that 
while the proposed rule would have imposed the information submission 
requirement on the ODA Unit, we agree that investigation of service 
problems is a responsibility of the ODA Holder. An ODA Unit would be 
involved only in determining whether any proposed solution or design 
change is in compliance with the regulations. Accordingly, the language 
in Sec.  183.63 has been revised to indicate that it applies to the ODA 
Holder rather than the ODA Unit. We also note that in those cases where 
the ODA Holder is not the certificate holder, this section requires the 
ODA Holder to conduct investigation into potentially unsafe conditions 
or non-compliant conditions for those certificates they issued to 
another holder. Unlike Sec.  21.99, this section introduces the 
requirement for investigating non-compliant conditions, while Sec.  
21.99 applies only to unsafe conditions. The rule has been revised as 
noted above as a result of this comment.
    Comment: AIA states that Sec.  183.65(a) requires that 
investigations into potentially unsafe conditions must take priority 
over all other delegated activities. The commenter is concerned that 
this text may be misinterpreted or misapplied in practice. The 
commenter states that organizations may have the capability to perform 
parallel activities on different projects, and does not want the 
requirement misapplied to affect ongoing projects. The commenter would 
like the preamble of the final rule to clarify the priority clause and 
the two purposes it says the clause serves.

[[Page 59941]]

    Response: The FAA agrees that the text regarding priority of 
investigation into unsafe conditions may be misinterpreted, and that 
the language in the proposed rule is not appropriate. The investigation 
into unsafe conditions is an activity that is inherent upon the ODA 
Holder and not something the FAA delegates. We agree that it might be 
feasible for an ODA holder to adequately perform an investigation while 
certification activity continues. Since the FAA will continue to manage 
the ODA Holder's delegated activity, the FAA will determine whether an 
ODA Holder is placing sufficient emphasis on the investigation of 
service problems. We could restrict the ODA Holder's authority until 
its performance improves. The language regarding priority of the 
investigation has been deleted.
    Comment: IAE and United Technologies state that the proposed rule 
would require an ODA Unit to investigate safety concerns that it or the 
FAA identifies. This is not a responsibility of current ODAR holders, 
and should not be imposed on ODA Holders that only have manufacturing 
inspection responsibilities. An ODA Unit may not have personnel with 
the expertise to conduct these investigations. If imposed, this 
requirement should be on the ODA Holder. The commenter also states that 
the responsibility to investigate is already covered under Sec.  21.3. 
The language in the proposed rule would limit the FAA's ability to 
conduct investigations.
    Response: The FAA agrees that an ODA Holder is responsible for 
investigation of service difficulties, and has revised the rule 
language accordingly. However, while the requirement may be redundant 
to Sec.  21.3 for an ODAR, some ODA Holders might issue certificates to 
other persons, and the requirement to investigate safety concerns does 
not duplicate the requirements of part 21. The FAA does not agree that 
the proposed language would limit our ability to conduct 
investigations. The rule has been revised as noted above as a result of 
this comment.
Section 183.67 Transferability and Duration
    Comment: Several commenters, including GE Aircraft Engines, 
Gulfstream, and Boeing, state that the authorization should not have an 
expiration date and should remain effective until the FAA revokes it or 
the applicant surrenders it. The commenters state that renewing 
authorizations is an unnecessary step and will only increase the FAA's 
workload. They also note that the rule does not specify the maximum 
duration of the ODA or how the FAA will determine individual expiration 
dates.
    Response: The FAA disagrees; all FAA individual designee programs 
have expiration dates. The FAA determines expiration dates based on the 
experience and history of the organization and the functions they 
perform. Renewal of the authorization allows the FAA to periodically 
assess an organization's performance and determine whether the workload 
of the organization justifies continuing the authorization. No change 
to the rule has been made based on this comment.

Comments on the Proposed Regulatory Evaluation

    Comment: United Airlines, which holds current DAS and SFAR 36 
authorizations, opposes the rule because it would have to reapply under 
ODA to continue using its current authority. United Airlines comments 
that as proposed, an ODA would increase its administrative workload 
when compared to the current delegation program.
    Response: As noted in the Initial Regulatory Evaluation, the FAA 
expects that the initial administrative burden will be slightly greater 
than that under the current programs. However, we expect that the 
annual administration costs will be about the same as the annual 
administration costs under its existing designation programs. As other 
commenters noted, the ODA program will provide organizations with 
greater work scheduling flexibility and the overall cost of their work 
will decrease because they can use their resources more efficiently. 
The ODA is also designed to streamline the process when an organization 
seeks to add to its designated functions. No change to the rule has 
been made based on this comment.
    Comment: Boeing comments that our estimated ODA costs were an order 
of magnitude too low. In a telephone conversation (a summary of which 
is in the docket), a Boeing representative clarified that its written 
comment was based on the total cost to move from a DOA, DAS, or SFAR 36 
designation to an ODA and not based on the incremental cost to move 
from a DDS to an ODA. The Boeing representative reported that the cost 
of going from a DDS to an ODA would be about 10 percent of the total 
cost that it had included in its comment. He concluded that FAA 
estimates in the Initial Regulatory Evaluation of the unit costs of 
moving from a DDS to an ODA (an initial cost of $13,480 for a large 
organization and $7,980 for a small organization and an annual cost of 
$13,450 for a large organization and $6,850 for a small organization) 
were reasonable.
    Response: We agree and use those same unit cost values in the Final 
Regulatory Evaluation.
    Comment: In the Initial Regulatory Evaluation, we estimated that 
the initial cost to obtain an ODA would be $7,320 for a large ODAR and 
$5,780 for a small ODAR. The IAE comments that its large manufacturing 
ODAR initial cost would be $7,260. Pratt and Whitney commented that its 
large manufacturing ODAR initial cost would be $12,020.
    Response: Based on these responses, the Final Regulatory Evaluation 
uses an average of these costs resulting in an initial cost of $9,640 
for the typical large ODAR that transitions to an ODA.
    Comment: In the Initial Regulatory Evaluation, we estimated that 
the average annual cost for a large ODAR would be $6,410 and the annual 
cost for a small ODAR would be $5,310. In its comment, IAE reports that 
it currently spend $29,870 every two years for the oversight/audit for 
their ODAR. International Aero Engines estimates that the total cost of 
this annual requirement would be $56,660 over two years. Thus, their 
annual incremental compliance costs for an ODA would be $26,790 more 
(over two years) than their current ODAR costs, or $13,395 in 
additional annual costs.
    Response: We used the IAE estimate of $13,395 as the annual cost in 
the Final Regulatory Evaluation for a large ODAR annual cost.
    Comment: Pratt and Whitney estimated an annual cost of $138,900 for 
their ODA.
    Response: It was not clear whether this estimate is the incremental 
cost of going from its current authorization or whether it is the total 
cost of operating an ODA. Consequently, in light of the Boeing and IAE 
comments, we determined that the IAE estimate was the appropriate 
estimate of the annual cost of a large ODAR.

Discussion of Changes and Clarifications to the Proposed Requirements

    As noted above, we have significantly changed the format of the 
final rule language to simplify it and increase its readability. In 
some cases, text has been moved or regrouped into more intuitive 
sections and paragraphs, and the heading changed to better reflect the 
content of the section. Any substantive changes, of which there were 
few, are noted here. This section will not discuss

[[Page 59942]]

language changes made to clarify the intent or format of the rule.
Section 21.230 Compliance Dates
    Proposed Sec.  21.230 has been eliminated; it did not contain 
compliance dates as the title suggested. The expiration of DOA has been 
added to Sec.  21.235. No reference to part 183 is included since a 
reference to ODA is not necessary. The proposed phrase ``no person may 
apply for'' is incorrect and has been revised to read ``the 
Administrator will no longer accept.''
Section 21.430 Compliance Dates
    Proposed 21.430 has been eliminated; it did not contain compliance 
dates as the title suggested. The expiration of DAS has been added to 
Sec.  21.435. No reference to part 183 is included since a reference to 
ODA is not necessary. The phrase ``no person may apply for'' is 
incorrect and has been changed to ``the Administrator will no longer 
accept.''

SFAR 36

    The proposed revision to SFAR 36 section 4 has been revised to 
incorporate language from the current rule regarding the certificate 
holding district office that was inadvertently left out of the proposed 
rule revision. The language addressing application for an ODA under 
part 183 has been removed, since it is outside the scope of SFAR 36 and 
is not regulatory in nature.
    A new expiration date for SFAR 36 has been incorporated into the 
text.
Section 183.1 Scope
    The word ``private'' has been deleted from paragraphs (a) and (b) 
because it is unnecessary. The introductory text of this section 
contains the term ``private person,'' while paragraphs (a) and (b) are 
intended to distinguish designations granted to individuals from those 
granted to organizations.
Section 183.15 Duration of Certificates
    Proposed paragraph 183.15(b) used the term ``Certificate of 
Authority;'' we have replaced it with the more generic term ``proof of 
authorization.'' Certificates of Authority are specific to certain 
types of designees, while the expiration date described in this section 
will be included on all types of documentation used to identify 
representatives of the Administrator.
Section 183.41 Applicability and Definitions
    Proposed paragraph (a)(2) has been removed. The definitions in 
Sec.  183.41(b) have been reordered in a more logical sequence. The 
definition of ODA Unit has been revised to prevent an interpretation 
that unit members are performing functions on ``behalf of the 
administrator.'' This definition implied that the ODA Unit members were 
the ``designees,'' when, in fact, the ODA Holder is the designated 
organization that is authorized to perform the functions on behalf of 
the Administrator. The ODA Unit is defined as the identified 
individuals within the ODA Holder who perform the functions.
Section 183.45 Issuance of Organization Designation Authorizations
    The description of the contents of the Letter of Designation in 
paragraph (a) has been removed since it was non-regulatory in nature.
Section 183.47 Qualifications (Proposed Sec.  183.47 Eligibility)
    Section 183.47 has been extensively revised and re-titled 
``Qualifications.'' The proposed section listed a number of FAA 
certificates and presumed that a holder of any such certificate was 
``eligible'' for an ODA. In fact, the primary requirement to become an 
ODA Holder is sufficient experience performing the authorized 
functions. The certificates listed appeared to be requirements to 
perform certain functions, rather than eligibility requirements to be 
granted an ODA. The section has been revised to require only that an 
applicant have adequate facilities, experience performing the functions 
sought, and experience with FAA policies and procedures related to the 
functions sought. Based on comments received, we have deleted the 
proposed requirement that the ODA Holder have facilities located within 
the United States.
Section 183.49 Authorized Functions
    Section 183.49 has been extensively revised. The list of specific 
authorized functions has been removed, as identification of these 
functions was not necessary. This section now provides the authority 
for the Administrator to delegate any statutorily authorized function.
Section 183.51 Personnel
    Section 183.51 has been re-titled ``ODA Unit Personnel'' to more 
accurately describe its content. Paragraph 183.51(b) has been revised 
based on comments submitted. As proposed, the language inferred that 
experience and expertise ``in aircraft certification'' is required to 
make conformity determinations, or issue airworthiness certificates. 
What is required is experience and expertise in the function requested. 
The phrase ``in aircraft certification'' has been removed.
Section 183.53 Procedures Manual
    Section 183.53 has been revised and its paragraphs redesignated. 
Based on comments received, the language has been revised to allow for 
an ODA Holder to make minor changes to the procedures manual without 
FAA approval. A description of the minor changes allowed must be 
defined in the approved procedures manual.
    Proposed paragraph 183.53(c) has been clarified to require 
definition of the organizational structure and responsibilities of both 
the ODA Holder and ODA Unit. The proposed rule was unclear whether the 
requirement to define the organizational structure applied to the ODA 
Unit, ODA Holder, or both.
    Proposed paragraph 183.53(e) has been revised to clarify that the 
ODA Holder must perform periodic audits of both the ODA procedures and 
the ODA Unit.
    Proposed paragraph 183.53(h) has been revised to clarify that the 
procedures manual must contain only a description of the training 
required for ODA Unit members. As proposed, it appeared that the actual 
training material was required to be included in the manual.
    Proposed paragraph 183.53(j) has been revised to require position 
descriptions and required qualifications only for the ODA Unit members.
    A new procedures manual requirement has been added in revised 
paragraph 183.53(c)(15) requiring ``Any other information required by 
the Administrator necessary to supervise the ODA Holder in the 
performance of its authorized functions.'' This is intended to allow 
the FAA to revise future procedures manual requirements in policy 
materials without amending the rule language.
Section 183.55 Limitations
    The substance of proposed paragraph 183.55(a) has been moved to 
Sec.  183.49, and the remaining sections redesignated accordingly. 
Proposed paragraph 183.55(b) has been revised to require notification 
of any change that may affect performance of an authorized function, 
rather than only changes within the ODA Unit or ODA Holder. For 
example, changes that are not within the Unit or Holder, such as 
changes in facilities, may require reporting. Additionally, proposed 
paragraph 183.55(d) was revised to make the ODA Holder, rather than the 
ODA Unit subject to limitations specified by the Administrator.

[[Page 59943]]

Limitations are actually imposed on the ODA Holder, and flow down to 
the ODA Unit.
Section 183.57 Responsibilities of an ODA Holder
    New paragraph 183.57(e) contains the requirement from proposed 
Sec.  183.59 to notify the FAA of a change that may affect the ODA 
Holder's ability to meet the regulations requirements.
Section 183.59 Continued Eligibility
    The provisions of proposed Sec.  183.59 have been moved to Sec.  
183.57, and subsequent sections redesignated accordingly.
Section 183.61 Inspection
    This section has been redesignated as Sec.  183.59.
Section 183.63 Records and Reports
    This section has been redesignated as Sec.  183.61, and extensively 
revised based on comments received. The description of the content of 
records has been revised for clarity. Based on comments received, most 
airworthiness certificates and approvals must be maintained only for 
two years, rather than indefinitely as proposed. However, airworthiness 
certificates and approvals supporting type design approval projects 
must be maintained for the duration of the authorization. Based on 
comments received, the requirement to maintain inspection records 
proposed in Sec.  183.63(c)(1) has been removed and periodic audit and 
corrective action records must be maintained for five years, rather 
than indefinitely, as proposed. Service difficulty records must also be 
maintained for five years rather than for two years as proposed in 
Sec.  183.63(c)(2). These retention requirements are intended to allow 
access to a greater amount of service history information if an 
investigation is required.
Section 183.65 Data Review and Service Experience
    This section has been redesignated 183.63, and retitled 
``Continuing Requirements: Products, Parts or Appliances.'' Proposed 
paragraphs 183.65(a) and (b) have been revised to clarify the 
requirements on the ODA Holder. A new requirement has been added to 
require the ODA Holder to actively monitor service difficulties. This 
is now done by current delegated organizations and is appropriate for 
inclusion in the regulatory text. Based on comments received, the 
notification and investigation requirements now apply to the ODA Holder 
rather than the ODA Unit.
    The intent of proposed Sec.  183.65(c) regarding operational 
approvals has been moved to new Sec.  183.65 and titled ``Continuing 
Requirements: Operational Approvals.'' The section has been revised to 
clarify that the ODA Holder must notify the FAA of problems with 
operational approvals and investigate those matters. This section 
requires that the ODA Holder inform the Administrator of any error in 
issuance of an operational approval (certificate or authorization), and 
when instructed by the Administrator, suspend issuance of any similar 
approval until corrective action is implemented. This section also 
requires that the ODA Holder investigate any problem.

Paperwork Reduction Act

    As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)), the FAA submitted a copy of the information collection 
requirements(s) in this final rule to the Office of Management and 
Budget for its review. An agency may not collect or sponsor the 
collection of information, nor may it impose an information collection 
requirement unless it displays a currently valid Office of Management 
and Budget (OMB) control number.
    This rule contains information collections that are subject to 
review by OMB under the Paperwork Reduction Act of 1995 (Pub. L. 104-
13). OMB has not yet approved the collection of this information.
    This rule was proposed in the Federal Register on January 21, 2004. 
At that time the FAA requested public comments on the proposed 
information collection requirements. Based on comments received, the 
proposed requirement for respondents to maintain aircraft inspection 
records has been removed, and periodic audit and corrective action 
records must be maintained for five years, rather than indefinitely. 
Additionally, service difficulty information must be retained for five 
years, rather than the proposed two years, to ensure adequate 
information is available in the event safety issues require 
investigation. See the disposition of comments and discussion of 
changes and clarifications to the proposed language for more 
information. No comments addressed recordkeeping or reporting cost or 
burden estimates.
    Annual Burden Estimate: We estimate the proposed rule imposes an 
annual public reporting burden of $235,840 based on 4288 hours at 
$55.00 per hour. The estimated recordkeeping costs are $161,700, based 
on 2940 hours at $55.00 per hour. Both of these cost estimates are 
based on clerical, technical, and overhead expenses.
    Estimates of the burden created by the rule are based on the 
following: The rule will phase out over three years the existing DAS 
and DOA rules contained in Subparts J and M of part 21, as well as SFAR 
No. 36. The collection and recordkeeping requirements imposed by those 
rules will transition to the requirements contained here over the 
initial three-year period. In addition, existing ODARs that are 
currently managed under part 183 will also be converted to ODA over the 
initial three-year period. As a result, the initial three-year burden 
will be large, with a smaller burden over the life of the program. It 
is expected that about 180 applications will be processed within the 
first three years of the program, with an estimated 10 more 
applications being submitted per year over the life of the program.
    The annual cost to the Federal Government to analyze and process 
the information received is estimated to be $69,300 per year. This 
estimate is based on 1260 hours at $55.00 per hour.

International Compatibility

    In keeping with U.S. obligations under the Convention on 
International Civil Aviation, it is FAA policy to comply with 
International Civil Aviation Organization (ICAO) Standards and 
Recommended Practices to the maximum extent practicable. The FAA has 
determined that there are no ICAO Standards and Recommended Practices 
that correspond to these regulations.

Economic Assessment, Regulatory Flexibility Determination, Trade Impact 
Assessment, and Unfunded Mandates Assessment

Preamble Summary

    This portion of the preamble summarizes our analysis of the 
economic impacts of the rule. We suggest readers seeking greater detail 
read the full regulatory evaluation, which is in the docket.
    Changes to Federal regulations must undergo several economic 
analyses. First, Executive Order 12866 directs that each Federal agency 
shall propose or adopt a regulation only upon a reasoned determination 
that the benefits of the intended regulation justify its costs. Second, 
the Regulatory Flexibility Act of 1980 requires agencies to analyze the 
economic impact of regulatory changes on small entities. Third, the 
Trade Agreements Act (19 U.S.C. 2531-2533) prohibits agencies from 
setting standards that create unnecessary obstacles to the foreign 
commerce of the United States. In developing U.S.

[[Page 59944]]

standards, the Trade Act requires agencies to consider international 
standards and, where appropriate, to use them as the basis for U.S. 
standards. Fourth, the Unfunded Mandates Reform Act of 1995 (Pub. L. 
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, we determined this rule: (1) Has 
benefits that justify its costs, is not a ``significant regulatory 
action'' as defined in section 3(f) of Executive Order 12866, and is 
not ``significant'' as defined in DOT's Regulatory Policies and 
Procedures; (2) does not have a significant economic impact on a 
substantial number of small entities; (3) has a neutral international 
trade impact; 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 as follows.

Total Benefits and Costs of This Rulemaking

    The aviation industry reported that the conversion to an ODA system 
allows them to schedule their manufacturing, modification, and repair 
activities more efficiently than they can under the current designee 
system. It also allows us to more effectively monitor the 
organizational designee system. Under certain assumptions discussed in 
detail in the Regulatory Evaluation, we estimate that the aviation 
industry could annually save about $3.445 million in opportunity costs 
and a total present value savings of $24.9 million between 2006 and 
2015. We calculate that the total initial costs for the ODA program 
will be $1.725 million spread over three years. The incremental annual 
costs of operating ODA programs between 2006 and 2015 will be $17.4 
million. The average annual cost will be $2.175 million. The present 
value of the total costs for the ODA program will be $12.3 million.

Who Is Potentially Affected by This Rulemaking

    Aircraft manufacturers, air carriers, commercial operations, repair 
stations, and aircraft parts manufacturers may be affected by this 
rule.

Alternatives We Considered

    We did not consider other alternatives to this final rule because 
the proposed rule had been developed in conjunction with the ARAC 
recommendations. We received positive industry responses to the 
proposed rule and we received no suggested alternatives other than to 
maintain the current system.

Cost Assumptions and Sources of Information

    Period of analysis is 2006-2015.
    Final rule will be effective by January 1, 2006.
    Discount rate is 7 percent.
    Fully burdened labor rate for an aviation engineer is $110 an hour.
    The affected parties will be 4 aircraft and two propeller 
manufacturers that have 7 DOAs, 26 companies that have 33 DASs, 13 
companies that have 13 SFAR 36 authorizations, 42 organizations that 
have 47 maintenance ODARs, and 81 organizations that have 89 
manufacturing ODARs. We did not estimate a cost for the unknown number 
of organizations that do not currently have a designation authorization 
may choose to apply for an ODA.
    We obtained data from members of an ARAC working group, existing 
DAS, DOA, and SFAR 36 holders, and from public comments on the proposed 
rule.

Estimated Benefits

    We determined that the rule will generate both improved safety and 
reduced costs. By shifting our inspection focus from reviewing test 
results to overseeing the designation program, we will be able to more 
efficiently use our resources while extending our oversight coverage, 
thereby increasing safety. In the NPRM, we requested that commenters 
provide quantitative estimates of their cost savings from substituting 
an ODA for their current designation authorizations. We did not receive 
any quantitative estimates, but nearly all of the industry commenters 
noted that an ODA will allow them to more efficiently schedule their 
work and save them time. This view was also the consensus in the ARAC 
working group. Under certain assumptions discussed in the Regulatory 
Evaluation, we estimate that the aviation industry could annually save 
$3.445 million in undiscounted opportunity costs. We received comments 
from individuals who believe that the ODA program will increase costs. 
We disagree with those comments. Were an ODA to increase an 
organization's net costs, that organization has the option to not 
participate.

Costs of This Rulemaking

    The average undiscounted initial cost for an existing DAS, DOA, or 
SFAR 36 holder to transition to an ODA will be $13,480 for a large 
program and $7,980 for a small program. The average annual incremental 
undiscounted cost will be $13,450 for an existing DAS, DOA, or SFAR 36 
holder with a large program and $6,850 for those with a small program. 
We received two comments on the estimated costs for a manufacturing 
ODAR program to convert to an ODA. Taking the average of these costs, 
the average undiscounted initial cost for a large ODAR program will be 
$9,640 and $7,505 for a small ODAR program. The average incremental 
annual undiscounted cost will be $6,410 for a large ODAR program and 
$5,310 for a small ODAR program.

Cost Benefit Summary

    Industry worked with us to improve our oversight efficiency and 
maintain system safety. This rule creates a more efficient system with 
benefits to both the industry and to the FAA. There were 10 industry 
comments that supported the proposed rule as being cost beneficial and 
one industry comment opposing it. As noted earlier, under certain 
assumptions described in Section III.C of the Regulatory Evaluation, 
the present value of the annual reduction in the opportunity costs from 
the ODA program could be $24.9 million, which is greater than the 
present value of the compliance costs of $12.3 million.

Changes From the NPRM to the Final Rule

    Based on the comments received from the NPRM, we made three 
moderate changes in the unit cost estimates from those in the NPRM to 
those in the final rule. In response to two comments from manufacturers 
that hold ODARs, we increased our annual compliance costs for a large 
ODAR holder from the estimated $7,320 in the NPRM to $9,640 in the 
final rule analysis. In the NPRM, we had estimated that participants in 
the DDS program would have minimal costs. We received two comments 
stating that there will be costs for these programs to apply for an 
ODA. Based on the comments, we increased our initial compliance costs 
for DOA, DAS, and SFAR 36 holders from the estimated minimal amount in 
the NPRM to $13,480 in the final rule for a large program and $7,980 in 
the final rule for a small program. Finally, we increased our annual 
compliance costs for DOA, DAS, and SFAR 36 holders from a minimal 
amount in the NPRM to $13,450 in the final rule for a large program and 
$6,850 in the final rule for a small program. As a result, we calculate 
that the total initial costs for the final rule will be $1.725 million 
whereas we had estimated that it would

[[Page 59945]]

be $1.144 million in the NPRM. Whereas we had estimated that the annual 
incremental cost would be $1.102 million in the NPRM, for the final 
rule it will now be $2.175 million.

Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (RFA) establishes ``as a 
principle of regulatory issuance that agencies shall endeavor, 
consistent with the objective of the rule and of applicable statutes, 
to fit regulatory and informational requirements to the scale of the 
business, organizations, and governmental jurisdictions subject to 
regulation.'' To achieve that principle, the RFA requires agencies to 
solicit and consider flexible regulatory proposals and to explain the 
rationale for their actions. The RFA covers a wide range of small 
entities, including small businesses, not-for-profit organizations and 
small governmental jurisdictions.
    Agencies must perform a review to determine whether a 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 Act. In the Final Regulatory Evaluation, we note two important 
considerations for a small business impact. First, three of the four 
categories of designations already operate under programs that are very 
similar to the ODA program. Only the ODARs do not currently operate 
under an ODA-like system. There are about 4,000 aircraft repair 
stations and aircraft parts manufacturers (nearly all of which are 
small entities). Twenty of the 47 maintenance ODARs and 42 of the 89 
manufacturing ODARs are operated by small companies having fewer than 
1,500 employees. While there are a substantial number of small 
entities, the rule will not have a significant impact. The rule will 
not require them to operate an ODA. They can apply for one, but it is 
their choice. That is, if an ODA makes business sense, a small business 
has the option of applying for it, but is not required to have one. 
Second, the expected efficiency gains for some of these companies will 
exceed the expected compliance costs.
    In light of this evidence, the FAA Administrator certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities.

International 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 obstacles. The FAA assessed the potential effect 
of this final rule and determined that because the compliance costs are 
minimal, and there will likely be net cost savings from increased 
scheduling efficiencies for primarily domestic organizations, this 
final rule will slightly reduce costs for U.S. organizations. It has no 
effect on foreign organizations. Thus, the final rule has a minimal 
effect on foreign commerce.

Unfunded Mandates Reform Act

    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 value of $120.7 million in lieu of $100 
million.
    This final rule does not contain such a mandate. The requirements 
of Title II do not apply.

Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (RFA) establishes ``as a 
principle of regulatory issuance that agencies shall endeavor, 
consistent with the objective of the rule and of applicable statutes, 
to fit regulatory and informational requirements to the scale of the 
business, organizations, and governmental jurisdictions subject to 
regulation.'' To achieve that principle, the RFA requires agencies to 
solicit and consider flexible regulatory proposals and to explain the 
rationale for their actions. The RFA covers a wide range of small 
entities, including small businesses, not-for-profit organizations and 
small governmental jurisdictions.
    Agencies must perform a review to determine whether a 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 Act.
    The rule will require every organization that has a designation 
authorization to apply for an ODA if it intends to continue to have a 
designation authorization. Most of the 4,000 entities that participate 
in the aviation industry do not have designation authorizations. 
Rather, they perform their necessary testing and examinations using 
FAA-approved individuals operating under standard practices. This rule 
does not require these entities to have an ODA program and they can 
continue to operate using the existing system. As a result, the 
Administrator certifies that the rule will not have a significant 
impact on a substantial number of small entities.

International Trade Impact Assessment

    As the compliance costs are minimal, this final rule will have a 
minimal trade impact.

Unfunded Mandates Reform Act

    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.''
    We note that the rule would not impose a significant private sector 
cost. Thus, this rule does not contain such a mandate and the 
requirements of Title II of the Unfunded Mandates Reform Act of 1995 do 
not apply.

Executive Order 13132, Federalism

    The FAA has analyzed this final rule under the principles and 
criteria of Executive Order 13132, Federalism. We 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 rulemaking action qualifies for the categorical 
exclusion identified in

[[Page 59946]]

paragraph 303(d) and involves no extraordinary circumstances.

Regulations That Significantly Affect Energy Supply, Distribution, or 
Use

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

List of Subjects

14 CFR Part 21

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

14 CFR Part 121

    Air carriers, Aircraft, Airmen, Aviation safety, Reporting and 
recordkeeping requirements, Safety, Transportation.

14 CFR Part 135

    Air taxis, Aircraft, Airmen, Aviation safety, Reporting and 
recordkeeping requirements.

14 CFR Part 145

    Aircraft, Aviation safety, Reporting and recordkeeping 
requirements.

14 CFR Part 183

    Aircraft, Airmen, Authority delegations (Government agencies), 
Reporting and recordkeeping requirements.

The Amendments

0
The Federal Aviation Administration amends parts 21, 121, 135, 145, and 
183 of the Federal Aviation Regulations as follows:

PART 21--CERTIFICATION PROCEDURES FOR PRODUCTS AND PARTS

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

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


0
2. Section 21.235 is revised to read as follows:


Sec.  21.235  Application.

    (a) An application for a Delegation Option Authorization must be 
submitted, in a form and manner prescribed by the Administrator, to the 
Aircraft Certification Office for the area in which the manufacturer is 
located.
    (b) An application must include the names, signatures, and titles 
of the persons for whom authorization to sign airworthiness 
certificates, repair and alterations forms, and inspection forms is 
requested.
    (c) After November 14, 2006, the Administrator will no longer 
accept applications for a Delegation Option Authorization.
    (d) After November 14, 2009, no person may perform any function 
contained in a Delegation Option Authorization issued under this 
subpart.

0
3. Section 21.435 is revised to read as follows:


Sec.  21.435  Application.

    (a) An applicant for a Designated Alteration Station authorization 
must submit an application, in writing and signed by an official of the 
applicant, to the Aircraft Certification Office responsible for the 
geographic area in which the applicant is located. The application must 
contain:
    (1) The repair station certificate number held by the repair 
station applicant, and the current ratings covered by the certificate;
    (2) The air carrier or commercial operator operating certificate 
number held by the air carrier or commercial operator applicant, and 
the products it may operate and maintain under the certificate;
    (3) A statement by the manufacturer applicant of the products for 
which he holds the type certificate;
    (4) The names, signatures, and titles of the persons for whom 
authorization to issue supplemental type certificates or experimental 
certificates, or amend airworthiness certificates, is requested; and
    (5) A description of the applicant's facilities, and of the staff 
with which compliance with Sec.  21.439(a)(4) is to be shown.
    (b) After November 14, 2006, the Administrator will no longer 
accept applications for a Designated Alteration Station authorization.
    (c) After November 14, 2009, no person may perform any function 
contained in a Designated Alteration Station authorization issued under 
this subpart.

PART 121--OPERATING REQUIREMENTS: DOMESTIC, FLAG, AND SUPPLEMENTAL 
OPERATIONS

0
4. The authority citation for part 121 continues to read as follows:

    Authority: 49 U.S.C. 106(g), 40113, 40119, 44101, 44701-44702, 
44705, 44709-44711, 44713, 44716-44717, 44722, 44901, 44903-44904, 
44912, 46105.

PART 135--OPERATING REQUIREMENTS: COMMUTER AND ON DEMAND OPERATIONS 
AND RULES GOVERNING PERSONS ON BOARD SUCH AIRCRAFT

0
5. The authority citation for part 135 continues to read as follows:

    Authority: 49 U.S.C. 106(g), 40113, 44701-44702, 44705, 44709, 
44711-44713, 44715-44717, 44722.

PART 145--REPAIR STATIONS

0
6. The authority citation for part 145 continues to read as follows:

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

0
7. In parts 121, 135, and 145, Special Federal Aviation Regulation No. 
36, the text of which is found at the beginning of part 121, is amended 
by revising the introductory text of section 4; revising the 
introductory text of section 7; revising the termination date to read 
as follows.

Special Federal Aviation Regulation No. 36

* * * * *
    4. Application. The applicant for an authorization under this 
Special Federal Aviation Regulation must submit an application before 
November 14, 2006, in writing, and signed by an officer of the 
applicant, to the certificate holding district office charged with the 
overall inspection of the applicant's operations under its certificate. 
The application must contain--
* * * * *
    7. Duration of Authorization. Each authorization issued under this 
Special Federal Aviation Regulation is effective from the date of 
issuance until, November 14, 2009, unless it is earlier surrendered, 
suspended, revoked or otherwise terminated. Upon termination of such 
authorization, the terminated authorization holder must:
* * * * *
    This Special Federal Aviation Regulation terminates November 14, 
2009.
* * * * *

PART 183--REPRESENTATIVES OF THE ADMINISTRATOR

0
8. The authority citation for part 183 continues to read as follows:

    Authority: 31 U.S.C. 9701; 49 U.S.C. 106(g), 40113, 44702, 
44721, 45303.


0
9. Section 183.1 is revised to read as follows:

[[Page 59947]]

Sec.  183.1  Scope.

    This part describes the requirements for designating private 
persons to act as representatives of the Administrator in examining, 
inspecting, and testing persons and aircraft for the purpose of issuing 
airman, operating, and aircraft certificates. In addition, this part 
states the privileges of those representatives and prescribes rules for 
the exercising of those privileges, as follows:
    (a) An individual may be designated as a representative of the 
Administrator under subparts B or C of this part.
    (b) An organization may be designated as a representative of the 
Administrator by obtaining an Organization Designation Authorization 
under subpart D of this part.

0
10. Section 183.15 is amended by removing paragraph (c), redesignating 
paragraph (d) as paragraph (c), and revising paragraphs (a) and (b) to 
read as follows:


Sec.  183.15  Duration of certificates.

    (a) Unless sooner terminated under paragraph (c) of this section, a 
designation as an Aviation Medical Examiner is effective for one year 
after the date it is issued, and may be renewed for additional periods 
of one year at the Federal Air Surgeon's discretion. A renewal is 
effected by a letter and issuance of a new identification card 
specifying the renewal period.
    (b) Unless sooner terminated under paragraph (c) of this section, a 
designation as Flight Standards or Aircraft Certification Service 
Designated Representative as described in Sec. Sec.  183.27, 183.29, 
183.31, or 183.33 is effective until the expiration date shown on the 
document granting the authorization.
* * * * *

0
11. A new subpart D is added to part 183 to read as follows:

Subpart D--Organization Designation Authorization

Secs.
183.41 Applicability and definitions.
183.43 Application.
183.45 Issuance of Organization Designation Authorizations.
183.47 Qualifications.
183.49 Authorized functions.
183.51 ODA Unit personnel.
183.53 Procedures manual.
183.55 Limitations.
183.57 Responsibilities of an ODA Holder.
183.59 Inspection.
183.61 Records and reports.
183.63 Continuing requirements: Products, parts or appliances.
183.65 Continuing requirements: Operational approvals.
183.67 Transferability and duration.


Sec.  183.41  Applicability and definitions.

    (a) This subpart contains the procedures required to obtain an 
Organization Designation Authorization, which allows an organization to 
perform specified functions on behalf of the Administrator related to 
engineering, manufacturing, operations, airworthiness, or maintenance.
    (b) Definitions. For the purposes of this subpart:
    Organization Designation Authorization (ODA) means the 
authorization to perform approved functions on behalf of the 
Administrator.
    ODA Holder means the organization that obtains the authorization 
from the Administrator, as identified in a Letter of Designation.
    ODA Unit means an identifiable group of two or more individuals 
within the ODA Holder's organization that performs the authorized 
functions.


Sec.  183.43  Application.

    An application for an ODA may be submitted after November 14, 2006. 
An application for an ODA must be submitted in a form and manner 
prescribed by the Administrator and must include the following:
    (a) A description of the functions for which authorization is 
requested.
    (b) A description of how the applicant satisfies the requirements 
of Sec.  183.47 of this part;
    (c) A description of the applicant's organizational structure, 
including a description of the proposed ODA Unit as it relates to the 
applicant's organizational structure; and
    (d) A proposed procedures manual as described in Sec.  183.53 of 
this part.


Sec.  183.45  Issuance of Organization Designation Authorizations.

    (a) The Administrator may issue an ODA Letter of Designation if:
    (1) The applicant meets the applicable requirements of this 
subpart; and
    (2) A need exists for a delegation of the function.
    (b) An ODA Holder must apply to and obtain approval from the 
Administrator for any proposed changes to the functions or limitations 
described in the ODA Holder's authorization.


Sec.  183.47  Qualifications.

    To qualify for consideration as an ODA, the applicant must--
    (a) Have sufficient facilities, resources, and personnel, to 
perform the functions for which authorization is requested;
    (b) Have sufficient experience with FAA requirements, processes, 
and procedures to perform the functions for which authorization is 
requested; and
    (c) Have sufficient, relevant experience to perform the functions 
for which authorization is requested.


Sec.  183.49  Authorized functions.

    (a) Consistent with an ODA Holder's qualifications, the 
Administrator may delegate any function determined appropriate under 49 
U.S.C. 44702(d).
    (b) Under the general supervision of the Administrator, an ODA Unit 
may perform only those functions, and is subject to the limitations, 
listed in the ODA Holder's procedures manual.


Sec.  183.51  ODA Unit personnel.

    Each ODA Holder must have within its ODA Unit--
    (a) At least one qualified ODA administrator; and either
    (b) A staff consisting of the engineering, flight test, inspection, 
or maintenance personnel needed to perform the functions authorized. 
Staff members must have the experience and expertise to find 
compliance, determine conformity, determine airworthiness, issue 
certificates or issue approvals; or
    (c) A staff consisting of operations personnel who have the 
experience and expertise to find compliance with the regulations 
governing the issuance of pilot, crew member, or operating 
certificates, authorizations, or endorsements as needed to perform the 
functions authorized.


Sec.  183.53  Procedures manual.

    No ODA Letter of Designation may be issued before the Administrator 
approves an applicant's procedures manual. The approved manual must:
    (a) Be available to each member of the ODA Unit;
    (b) Include a description of those changes to the manual or 
procedures that may be made by the ODA Holder. All other changes to the 
manual or procedures must be approved by the Administrator before they 
are implemented.
    (c) Contain the following:
    (1) The authorized functions and limitations, including the 
products, certificates, and ratings;
    (2) The procedures for performing the authorized functions;
    (3) Description of the ODA Holder's and the ODA Unit's 
organizational structure and responsibilities;
    (4) A description of the facilities at which the authorized 
functions are performed;
    (5) A process and a procedure for periodic audit by the ODA Holder 
of the ODA Unit and its procedures;
    (6) The procedures outlining actions required based on audit 
results,

[[Page 59948]]

including documentation of all corrective actions;
    (7) The procedures for communicating with the appropriate FAA 
offices regarding administration of the delegation authorization;
    (8) The procedures for acquiring and maintaining regulatory 
guidance material associated with each authorized function;
    (9) The training requirements for ODA Unit personnel;
    (10) For authorized functions, the procedures and requirements 
related to maintaining and submitting records;
    (11) A description of each ODA Unit position, and the knowledge and 
experience required for each position;
    (12) The procedures for appointing ODA Unit members and the means 
of documenting Unit membership, as required under Sec.  183.61(a)(4) of 
this part;
    (13) The procedures for performing the activities required by Sec.  
183.63 or Sec.  183.65 of this part;
    (14) The procedures for revising the manual, pursuant to the 
limitations of paragraph (b) of this section; and
    (15) Any other information required by the Administrator necessary 
to supervise the ODA Holder in the performance of its authorized 
functions.


Sec.  183.55  Limitations.

    (a) If any change occurs that may affect an ODA Unit's 
qualifications or ability to perform a function (such as a change in 
the location of facilities, resources, personnel or the organizational 
structure), no Unit member may perform that function until the 
Administrator is notified of the change, and the change is approved and 
appropriately documented as required by the procedures manual.
    (b) No ODA Unit member may issue a certificate, authorization, or 
other approval until any findings reserved for the Administrator have 
been made.
    (c) An ODA Holder is subject to any other limitations as specified 
by the Administrator.


Sec.  183.57  Responsibilities of an ODA Holder.

    The ODA Holder must--
    (a) Comply with the procedures contained in its approved procedures 
manual;
    (b) Give ODA Unit members sufficient authority to perform the 
authorized functions;
    (c) Ensure that no conflicting non-ODA Unit duties or other 
interference affects the performance of authorized functions by ODA 
Unit members.
    (d) Cooperate with the Administrator in his performance of 
oversight of the ODA Holder and the ODA Unit.
    (e) Notify the Administrator of any change that could affect the 
ODA Holder's ability to continue to meet the requirements of this part 
within 48 hours of the change occurring.


Sec.  183.59  Inspection.

    The Administrator, at any time and for any reason, may inspect an 
ODA Holder's or applicant's facilities, products, components, parts, 
appliances, procedures, operations, and records associated with the 
authorized or requested functions.


Sec.  183.61  Records and reports.

    (a) Each ODA Holder must ensure that the following records are 
maintained for the duration of the authorization:
    (1) Any records generated and maintained while holding a previous 
delegation under subpart J or M of part 21, or SFAR 36 of this chapter.
    (2) For any approval or certificate issued by an ODA Unit member 
(except those airworthiness certificates and approvals not issued in 
support of type design approval projects):
    (i) The application and data required to be submitted under this 
chapter to obtain the certificate or approval; and
    (ii) The data and records documenting the ODA Unit member's 
approval or determination of compliance.
    (3) A list of the products, components, parts, or appliances for 
which ODA Unit members have issued a certificate or approval.
    (4) The names, responsibilities, qualifications and example 
signature of each member of the ODA Unit who performs an authorized 
function.
    (5) A copy of each manual approved or accepted by the ODA Unit, 
including all historical changes.
    (6) Training records for ODA Unit members and ODA administrators.
    (7) Any other records specified in the ODA Holder's procedures 
manual.
    (8) The procedures manual required under Sec.  183.53 of this part, 
including all changes.
    (b) Each ODA Holder must ensure that the following are maintained 
for five years:
    (1) A record of each periodic audit and any corrective actions 
resulting from them; and
    (2) A record of any reported service difficulties associated with 
approvals or certificates issued by an ODA Unit member.
    (c) For airworthiness certificates and approvals not issued in 
support of a type design approval project, each ODA Holder must ensure 
the following are maintained for two years;
    (1) The application and data required to be submitted under this 
chapter to obtain the certificate or approval; and
    (2) The data and records documenting the ODA Unit member's approval 
or determination of compliance.
    (d) For all records required by this section to be maintained, each 
ODA Holder must:
    (1) Ensure that the records and data are available to the 
Administrator for inspection at any time;
    (2) Submit all records and data to the Administrator upon surrender 
or termination of the authorization.
    (e) Each ODA Holder must compile and submit any report required by 
the Administrator to exercise his supervision of the ODA Holder.


Sec.  183.63  Continuing requirements: Products, parts or appliances.

    For any approval or certificate for a product, part or appliance 
issued under the authority of this subpart, or under the delegation 
rules of subpart J or M of part 21, or SFAR 36 of this chapter, an ODA 
Holder must:
    (a) Monitor reported service problems related to certificates or 
approvals it holds;
    (b) Notify the Administrator of:
    (1) A condition in a product, part or appliance that could result 
in a finding of unsafe condition by the Administrator; or
    (2) A product, part or appliance not meeting the applicable 
airworthiness requirements for which the ODA Holder has obtained or 
issued a certificate or approval.
    (c) Investigate any suspected unsafe condition or finding of 
noncompliance with the airworthiness requirements for any product, part 
or appliance, as required by the Administrator, and report to the 
Administrator the results of the investigation and any action taken or 
proposed.
    (d) Submit to the Administrator the information necessary to 
implement corrective action needed for safe operation of the product, 
part or appliance.


Sec.  183.65  Continuing requirements: Operational approvals.

    For any operational authorization, airman certificate, air carrier 
certificate, air operator certificate, or air agency certificate issued 
under the authority of this subpart, an ODA Holder must:
    (a) Notify the Administrator of any error that the ODA Holder finds 
it made in issuing an authorization or certificate;
    (b) Notify the Administrator of any authorization or certificate 
that the ODA Holder finds it issued to an applicant not meeting the 
applicable requirements;
    (c) When required by the Administrator, investigate any problem

[[Page 59949]]

concerning the issuance of an authorization or certificate; and
    (d) When notified by the Administrator, suspend issuance of similar 
authorizations or certificates until the ODA Holder implements all 
corrective action required by the Administrator.


Sec.  183.67  Transferability and duration.

    (a) An ODA is effective until the date shown on the Letter of 
Designation, unless sooner terminated by the Administrator.
    (b) No ODA may be transferred at any time.
    (c) The Administrator may terminate or temporarily suspend an ODA 
for any reason, including that the ODA Holder:
    (1) Has requested in writing that the authorization be suspended or 
terminated;
    (2) Has not properly performed its duties;
    (3) Is no longer needed; or
    (4) No longer meets the qualifications required to perform 
authorized functions.

    Issued in Washington, DC, on September 30, 2005.
Marion C. Blakey,
Administrator.
[FR Doc. 05-20470 Filed 10-12-05; 8:45 am]
BILLING CODE 4910-13-P


</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>