The FAA Proposes Changes To Aircraft Registration

In a Notice of Proposed Rulemaking (“NPRM”) published on February 28, 2008 in the Federal Register, the FAA is proposing significant changes to its aircraft registration requirements. At this point in time, the NPRM is merely a proposal and is not a final regulation. However, since these changes will affect current aircraft owners, as well as future aircraft transactions, I wanted to provide an overview of the proposed changes to assist interested parties in providing comments to the FAA.

The Purpose Of the Proposed Changes

According to the NPRM the changes are “based upon the need to increase and maintain the accuracy of aircraft registration information in the Civil Aviation Registry” and are intended to ensure that aircraft owners keep the Registry up-to-date regarding changes in aircraft registration. The NPRM also notes that “these amendments would respond to the concerns of law enforcement and other government agencies and would provide more accurate, up-to-date aircraft registration information to all users of the Civil Aviation Registry database.”

Prior to issuing the NPRM, the FAA analyzed the Registry’s aircraft registration data and determined that approximately 104,000 of the more than 343,000 U.S. registered aircraft may no longer be eligible for registration. The FAA’s research disclosed that in recent years:

17,000 aircraft have been reported as sold by their former owners without the purchasers making application for registration (with about 15,900 being in the “sale-reported” category for more than 6 months);

4,700 have started registration without completing the requirements (with about 2,100 being in the “registration-pending” category for more than 12 months);

Approximately 30,100 aircraft are known to have bad addresses that have been incorrect far longer than the 30 days allowed for reporting change;

Close to 14,700 aircraft have had their certificates of registration 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 the aircraft is no longer operating with that N-Number; and

Up to 41,000 additional unidentified aircraft are estimated to be inactive or possibly no longer eligible for registration.

Based upon these statistics, the FAA believes that the most cost-efficient way to weed out the questionable registrations and to increase the accuracy of the Registry is to limit the duration of an aircraft’s registration certificate (“Certificate”).

The Proposed Changes

The NPRM proposes:

The expiration of all Certificates for currently registered aircraft with re-registration requirements for those aircraft that remain eligible for registration;

The periodic expiration of all Certificates issued after the effective date of the proposed rule with a registration renewal process;

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 before its N-Number assignment is canceled (“Sale reported” means the FAA has received notice of a sale from the last registered owner, but no application for registration has been filed, and the aircraft has not been registered to the new owner);

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; and

Cancellation of the N-number of an aircraft registered under a Dealer’s Aircraft Registration Certificate (Dealer’s Certificate), if the Dealer’s Certificate has expired and application for registration has not been made under FAR 47.31.

What does this generally mean to aircraft owners? Well, if the NPRM becomes a final rule, an aircraft owner who wants to maintain registration of his or her aircraft would have to re-register the aircraft within a specified time period. Once re-registered, the aircraft owner would receive a Certificate with an expiration date. New aircraft owners would automatically receive a Certificate issued with an expiration date. Once issued, whether through re-registration or new registration, the Certificate would expire three years from the date of issuance. However, the aircraft owner could renew the Certificate for successive three-year terms if he or she completes and submits a renewal request form and pays the applicable fee.

Although the FAA currently charges $5.00 to issue a new Certificate, the NPRM provides notice that this fee does not cover the FAA’s costs and, if the FAA has its way, the fee will increase if and when the current FAA Authorization (yes, the one containing user fees) is approved by Congress. This isn’t surprising and, providing any increase is reasonable, makes fiscal sense. Unfortunately, that would end the last great government deal!

Let’s talk a little more specifically about some of these changes.

Aircraft Re-Registration/Renewal. Under the NPRM, Certificates would need to be “re-registered” and/or “renewed.” “Re-registration” would be the process for obtaining a new Certificate for an aircraft that was registered before the effective date of the rule and has a Certificate without an expiration date. “Renewal” would be necessary for any aircraft that has a Certificate with an expiration date. Under the NPRM, all currently registered aircraft would need to be “re-registered” within a 3-year phase-in period. The month in which the aircraft was originally registered would dictate specifically when during that 3-year period the aircraft would need to be “re-registered” and each aircraft would have a 3-month window within which to accomplish the re-registration.

Aircraft owners would receive a notice from the Registry approximately 120 days before the expiration date on a Certificate along with the Aircraft Registration Renewal form. The aircraft owner could then either mail in the Aircraft Registration Renewal form and fee, or if there were no change in registration information, he or she could file the completed form and pay the fee electronically through the Registry’s web site. If an aircraft owner does not “re-register” his or her aircraft within the time allowed, the aircraft’s Certificate would expire and, after 30 days, the FAA could administratively cancel the aircraft’s N-number.

Once issued, a new Certificate would expire 3 years from the last day of the month in which the certificate is issued. Any subsequent Certificates issued through “renewal” would expire 3 years after the expiration date of the previous certificate. Thus, aircraft owners would not be penalized for early renewal within the 3-month renewal period.

Sale Reported and Registration Pending. The NPRM also sets deadlines beyond which an aircraft registration may not remain in either the “sale reported” or “registration pending” categories. (“Registration pending” means the FAA has received evidence of ownership change and an application for registration, but due to various reasons is not able to complete the registration of the aircraft). Under the NPRM, an aircraft registration could remain in the “sale reported” category for 6 months, in the “registration pending” category for 12 months and, since the categories are distinct, up to a maximum of 18 months between the two categories. If the time limits are exceeded, the FAA could cancel assignment of N-numbers.

Additionally, an aircraft owner would have 12 months as the maximum time that the pink copy of the application for registration, including any subsequently issued extensions, could be used as temporary authority to operate the aircraft after ownership has transferred, and registration requirements have not been met. If the aircraft owner does not complete the registration of the aircraft within the 12-month period, he or she would not be able to legally operate the aircraft.

Comments

Comments to the NPRM are due no later than May 28, 2008 and must be identified by Docket Number FAA-2008-0188. Comments may be sent using any of the following methods: Federal eRulemaking Portal at http://www.regulations.gov; U.S. Mail to Docket Operations, M-30, U.S. Department of Transportation, 1200 New Jersey Avenue, SE., Room W12-140, West Building Ground Floor, Washington, DC 20590-0001; Hand Delivery or Courier to Docket Operations in Room W12-140 of the West Building Ground Floor at 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays; or fax comments to Docket Operations at 202-493-2251.

Now is your chance to provide the FAA input and to have your voice heard.

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