FAA Proposes New Aircraft Registration Scheme
 
May 6, 2008
 
David J. Harrington- New York

The Federal Aviation Administration (FAA) has recently issued a Notice of Proposed Rulemaking (NPRM) that seeks to amend the current aircraft registration requirements at a significant cost to the taxpayers – and potentially to aircraft owners in the near future. 73 Fed. Reg. 10,703 (February 28, 2008). According to the NPRM, law enforcement and security agencies need more accurate, up-to-date aircraft registration information in the Civil Aviation Registry (the Registry) in order to help combat illegal narcotics trafficking and help support homeland security efforts.

Background

The Registry is responsible for maintaining and operating the national program for the registration of all U.S. civil aircraft and currently maintains records on approximately 340,000 aircraft. Since the 1970s, the FAA has used several methods to collect and maintain the accuracy of aircraft registration data. In the 1970s, aircraft owners were required to file an annual report on aircraft eligible for registration. In 1978, the annual report requirement was withdrawn when the Registry was reasonably current and was expected to remain current through contact with aircraft owners over the ordinary course of business. In 1980, the Registry established a Triennial Aircraft Registration Report that required certificateholders, in response to a request from the Registry, to send a report on an aircraft when three years passed without certain aircraft registration activities having taken place.

Due to the increased use of aircraft for drug smuggling during the 1980s, Congress passed the FAA Drug Enforcement Assistance Act of 1988 (FAA DEA Act), partially codified at 49 U.S.C. § 44111, which expanded the FAA’s mission to include providing assistance to law enforcement agencies involved in anti-narcotic trafficking efforts and identified specific shortcomings in the Registry’s systems of records. In response to the FAA DEA Act, the FAA made numerous changes to the registration process, including requiring physical addresses or locations of aircraft owners, legible printed or typed names on an application for aircraft registration and various technical upgrades to the Registry’s database.

Unfortunately, notwithstanding the FAA DEA Act, administrative changes, increased legal enforcement efforts, and the Triennial Aircraft Registration Report, the number of aircraft on the Registry for which the owner can’t be positively verified in a timely manner is increasing, and the accuracy and reliability of the Registry continues to deteriorate. According to FAA estimates, more than 104,000 of the 343,000 registered aircraft are no longer eligible for registration, roughly 30,000 aircraft are known to have bad addresses beyond the 30 days allowed for reporting address changes, and close to 15,000 aircraft had their certificates revoked due to bad addresses, but remain in the system to prevent reassignment of their U.S. registration number (N-number) until the FAA is positive that the aircraft is no longer operating with that N-number.

While accurate aircraft registration information is needed for law enforcement efforts, as well as delivery of airworthiness directives and other traditional safety-related information, the Registry is increasingly being used for newer programs, such as flight plan verification,¹ and for homeland security purposes. Therefore, in order to maintain accurate and reliable aircraft registration data that can meet the evolving needs of the Registry’s various users, the FAA believes that changes to the system are necessary to ensure accurate Registry data, that only eligible aircraft remain on the Registry, and that aircraft registration changes are reported within established intervals.

Proposed Changes to The Registry System

To address the problems with Registry, the FAA proposes the following major changes:

• The expiration of all certificates for currently registered aircraft with registration requirements for those aircraft that remain eligible for registration. Each aircraft registered before the effective date of the Final Rule would need to be re-registered sometime between October 1, 2008, and September 2011, depending on the month the current certificate was issued
• The three-year expiration of all certificates issued after the effective date of the Final Rule with a registration renewal process. Re-registered aircraft would receive a certificate with an expiration date, as would all new certificates issued after the date of the rule. Thereafter, the certificate would expire three years from the date of issuance, but would be renewable for successive three-year terms upon completion and submission of a brief renewal request form and payment of the applicable fee
• Elimination of the present Triennial Aircraft Registration Report program in its entirety
• Limits on the time an aircraft may remain in the sale-reported category (without an application being made for registration) before its N-number assignment is cancelled
• Limits on the time an applicant or successive applicants for registration have to complete the registration process and provisions for reserving the aircraft’s N-number if the aircraft is not registered at the end of this time
• Cancellation of the N-number of an aircraft registered under a dealer’s aircraft registration certificate if the dealer’s certificate has expired and application for registration has not been made under § 47.31

The proposed changes would also revise the definitions of U.S. citizen “partnership” and “corporation” to be identical with those found in 49 U.S.C. 40102(a)(15) and would clarify that a partnership may apply for registration only if each partner is an individual citizen of the United States.

While the current proposal does not change the current $5.00 charge for obtaining a certificate of aircraft registration, the NPRM notes that the FAA is pursuing fairer, more cost-based funding for the future. One of the FAA’s stated goals for its pending reauthorization is to match FAA funding more closely with the costs of providing services. The FAA argues that current funding does not align with FAA’s costs to provide services and the current aircraft registration fee, which has been $5.00 since the mid-1960s, is an example of this disconnect. To move the FAA to a more cost-based organization, the Administration’s proposal for FAA reauthorization, sent to Congress in February 2007, includes language that addresses registration and certification fees across the board. The House of Representatives adopted much of the Administration’s proposal for these fees in H.R. 2881, which passed the House in September 2007. Once the outcome of the reauthorization legislation is known, the FAA will decide whether additional action is necessary through either further legislation or rulemaking.

The estimated total cost of implementing the FAA’s proposed changes over 20 years ranges from $30.53 million ($16.50 million, discounted) to $33.03 million ($17.38 million, discounted). These costs include both the costs to aircraft owners as well as proposed processing costs for the Registry and include cost savings from the proposed elimination of the Triennial Program. These figures assume the current $5.00 registration fee and do not take into account any potential fee increases.

Comments on this NPRM are due before May 28, 2008.

You may send comments identified by Docket Number FAA-2008-0188 by using the following methods:

electronically at http://www.regulations.gov

by mail to:
Docket Operations, M-30
U.S. Dept. of Transportation
1200 New Jersey Ave., SE.
Room W12-140, West Building Ground Floor
Washington, D.C. 20590-001

by hand delivery or courier at the address listed above

by fax to Docket Operations at 202.493.2251

For more information, email David Harrington at david.harrington@hklaw.com or call toll free, 1.888.688.8500.

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1 Under the FAA’s Strategic Operations Security program, aircraft registration information, along with other information, is used as a basis to grant or deny aircraft access to the national airspace system. Aircraft seeking entry to operate in U.S. airspace will have its Registry information checked, and if the information found is sufficiently inconsistent with the profile of a properly registered aircraft, a pilot deviation will be filed on the operator and the operator may be denied access to the national airspace.