Rule2024-22000
U.S. Agents for Service on Individuals With Foreign Addresses Who Hold or Apply for Certain Certificates, Ratings, or Authorizations
Primary source
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Published
October 8, 2024
Effective
October 8, 2024
Issuing agencies
Transportation DepartmentFederal Aviation Administration
Abstract
The FAA will require individuals with foreign addresses, and no U.S. physical address of record on file with the FAA, who hold or apply for certain certificates, ratings, or authorizations to designate a U.S. agent for service of FAA documents. The U.S. agent will receive service of FAA documents on the certificate holder or applicant's behalf. This rule facilitates the FAA's ability to accomplish prompt and cost-effective service of process and service of other safety- critical or time-sensitive documents to individuals abroad through service on their U.S. agents.
Full Text
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<title>Federal Register, Volume 89 Issue 195 (Tuesday, October 8, 2024)</title>
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[Federal Register Volume 89, Number 195 (Tuesday, October 8, 2024)]
[Rules and Regulations]
[Pages 81305-81313]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-22000]
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DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 3
[Docket No.: FAA-2023-1194; Amendment No. 3-3]
RIN 2120-AL85
U.S. Agents for Service on Individuals With Foreign Addresses Who
Hold or Apply for Certain Certificates, Ratings, or Authorizations
AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).
ACTION: Final rule.
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SUMMARY: The FAA will require individuals with foreign addresses, and
no U.S. physical address of record on file with the FAA, who hold or
apply for certain certificates, ratings, or authorizations to designate
a U.S. agent for service of FAA documents. The U.S. agent will receive
service of FAA documents on the certificate holder or applicant's
behalf. This rule facilitates the FAA's ability to accomplish prompt
and cost-effective service of process and service of other safety-
critical or time-sensitive documents to individuals abroad through
service on their U.S. agents.
DATES:
Effective dates: Amendatory instructions 1 (part 3) and 2 (subpart
C of part 3) are effective October 8, 2024, amendatory instruction 3
(Sec. 3.303(d) and (e)) is effective January 6, 2025, and amendatory
instruction 4 (Sec. 3.303(d)) is effective July 7, 2025.
Compliance dates: The compliance dates for this final rule are as
follows: January 6, 2025, for applicants of any certificate, rating, or
authorization issued under part 47, 61, 63, 65, 67, or 107, and July 7,
2025 for holders of any certificate, rating, or authorization issued
under part 47, 61, 63, 65, 67, or 107.
ADDRESSES: For information on where to obtain copies of rulemaking
documents and other information related to this final rule, see ``How
to Obtain
[[Page 81306]]
Additional Information'' in the SUPPLEMENTARY INFORMATION section of
this document.
FOR FURTHER INFORMATION CONTACT: Jessica Kabaz-Gomez, Office of the
Chief Counsel, Enforcement Division, AGC-300, Federal Aviation
Administration, 800 Independence Avenue SW, Washington, DC 20591; (202)
267-7395; email <a href="/cdn-cgi/l/email-protection#d19bb4a2a2b8b2b0ff9ab0b3b0abfc96bebcb4ab91b7b0b0ffb6bea7"><span class="__cf_email__" data-cfemail="8bc1eef8f8e2e8eaa5c0eae9eaf1a6cce4e6eef1cbedeaeaa5ece4fd">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Executive Summary
A. Overview of Final Rule
B. Summary of the Costs and Benefits
II. Authority for This Rulemaking
III. Background
A. Statement of the Problem
B. Summary of the NRPM
C. General Overview of Comments
IV. Discussion of Comments and the Final Rule
A. Request for Use of the Defined Term ``U.S. agent address''
B. Request for Exception From the U.S. Agent for Service
Requirement for U.S. Government Employees, Military Members, and
Special Purpose Pilot Authorization (SPPA) Holders
C. Request for Pilots To Have Alternatives to a U.S. Agent for
Service Such as Email or Voluntary and Temporary Certificate
Surrender When Pilots Go Abroad
D. Miscellaneous Issues
V. Regulatory Notices and Analyses
A. Regulatory Impact Analysis
B. Regulatory Flexibility Act
C. International Trade Impact Assessment
D. Unfunded Mandates Assessment
E. Paperwork Reduction Act
F. International Compatibility
G. Environmental Analysis
VI. Executive Order Determinations
A. Executive Order 13132, Federalism
B. Executive Order 13175, Consultation and Coordination With
Indian Tribal Governments
C. Executive Order 13211, Regulations That Significantly Affect
Energy Supply, Distribution, or Use
D. Executive Order 13609, Promoting International Regulatory
Cooperation
VII. Privacy
VIII. Additional Information
A. Electronic Access and Filing
B. Small Business Regulatory Enforcement Fairness Act
I. Executive Summary
A. Overview of Final Rule
This final rule adds subpart C to part 3 of title 14 of the Code of
Federal Regulations (14 CFR). Subpart C requires individuals who have a
foreign address and no U.S. physical address of record on file with the
FAA to designate a U.S. agent for service if they apply for a
certificate, rating, or authorization issued under 14 CFR part 47, 61,
63, 65, 67, or 107, or hold a certificate, rating, or authorization
issued under any of these parts.\1\
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\1\ See U.S. Agents for Service on Individuals With Foreign
Addresses Who Hold or Apply for Certain Certificates, Ratings, or
Authorizations, 88 FR 38003 (June 12, 2023). These individuals
comprise the majority of individuals holding FAA certificates,
ratings, and authorizations abroad and represent those who the
agency most commonly serves with process and other safety-critical
or time-sensitive documents. Individuals who only hold or apply for
FAA certificates, ratings, or authorizations other than those issued
under 14 CFR part 47, 61, 63, 65, 67, or 107 are not covered by the
rule due to the limited benefit that would be derived by having the
rule apply to them.
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The U.S. agent will receive service of FAA documents on behalf of
the certificate, rating, or authorization holder or applicant. This
final rule facilitates the FAA's ability to accomplish prompt and cost-
effective service of process and service of other safety-critical or
time-sensitive documents to individuals abroad through service on their
U.S. agents.\2\ This will conserve agency resources, ensure that
lengthy delays in service of process do not compromise aviation safety,
and provide individuals abroad with timely notice of FAA actions and
the opportunity for more expedient due process.
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\2\ See U.S. Agents for Service on Individuals With Foreign
Addresses Who Hold or Apply for Certain Certificates, Ratings, or
Authorizations, 88 FR 38004 (June 12, 2023). Examples of documents
that may be served on U.S. agents may include reexamination letters,
letters of investigation, Office of Aerospace Medicine letters
requesting additional information or denying a medical certificate,
and notices to aircraft owners of ineffective or invalid aircraft
registration. Additionally, service of process includes the FAA's
service of documents that compel compliance, may be time-sensitive
or safety-critical, and are subject to administrative or legal
review, such as notices of proposed civil penalty or assessment,
orders of suspension or revocation, and emergency orders of
suspension or revocation.
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B. Summary of the Costs and Benefits
Approximately 115,000 individuals outside the U.S. as of July 2022
hold certificates, ratings, or authorizations issued under 14 CFR part
47, 61, 63, 65, 67, or 107 and do not have a U.S. physical address of
record on file with the FAA. Service of process abroad imposes
burdensome costs on the FAA. This rule will eliminate a majority of the
costs of affecting international service and transfer some of these
transaction costs back to the individual applicant or certificate
holder by requiring designation of a U.S. agent. The costs experienced
by these individuals will depend on the arrangements made (e.g., hiring
a professional U.S. agent for service of process could cost $50 to $200
annually). Although there may be some initial costs to the FAA to
revise its systems to accommodate the change, these costs will be
offset by avoiding the foreign service of process costs that include
international mailings and foreign translations.
II. Authority for This Rulemaking
The FAA's authority to issue rules on aviation safety, such as the
rules governing service that are addressed in this notice, 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,
including the authority to issue regulations.
This rulemaking is issued under the authority described in 49
U.S.C. 44701(a)(5), which establishes the authority of the
Administrator to prescribe regulations and minimum standards for other
practices, methods, and procedures the Administrator finds necessary
for safety in air commerce and national security. These regulations are
within the scope of that authority and are consistent with 49 U.S.C.
46103, which governs the FAA's service of notice, process, and actions,
and provides that the FAA may effectuate service on an agent.
III. Background
A. Statement of the Problem
Previously, only U.S. air carriers, foreign air carriers and
foreign persons operating a U.S.-registered aircraft in common carriage
solely outside the United States were required to designate a U.S.
agent for service of FAA documents.\3\ However, individuals across the
world can hold and apply for FAA certificates, ratings, and
authorizations. As of July 2022, there were approximately 115,000
individuals holding certificates, ratings, or authorizations issued
under 14 CFR part 47, 61, 63, 65, 67, or 107 who had a foreign address
and did not have a U.S. physical address of record on file with the
FAA. Serving certain documents on these individuals outside of the U.S.
presented a challenge for the FAA. Accomplishing valid service of
process abroad requires compliance with international service
requirements under multi-lateral treaties \4\ or by other means that
comport with the receiving
[[Page 81307]]
country's laws and the U.S.'s applicable laws regulating
extraterritorial service.
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\3\ See 49 U.S.C. 46103(a)(1) (requiring air carriers and
foreign air carriers to designate an agent) and 14 CFR 119.49 and
129.9 (implementing 46103(a)(1)).
\4\ See for example, the Hague Service Convention, 20 U.S.T. 361
(signed Nov. 15, 1965), the Inter-American Convention on Letters
Rogatory (adopted Jan. 30, 1975), and the Additional Protocol to the
Convention (IACAP) (adopted May 8, 1979), S. Treaty Doc. No. 98-27
(1986).
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The FAA's service of process abroad triggers these international
service requirements, specifically when the FAA sends documents abroad
that compel compliance and are subject to administrative or judicial
review. Such documents may include notices of proposed civil penalties,
orders of suspension or revocation, and emergency orders of suspension
or revocation. International service requirements can significantly
delay service of these documents for months (and in some cases over a
year), and also impose additional costs on the agency. Document
recipients cannot waive these international service requirements, nor
can they be circumvented with electronic service.
B. Summary of the Notice of Proposed Rulemaking (NPRM)
The NPRM was published in the Federal Register on June 12, 2023,
and the comment period for the NPRM closed on August 11, 2023.\5\ The
comment period was reopened on October 13, 2023, until October 30,
2023, due to a commenter's request to extend the comment period.\6\
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\5\ U.S. Agents for Service on Individuals With Foreign
Addresses Who Hold or Apply for Certain Certificates, Ratings, or
Authorizations, Notice of Proposed Rulemaking, 88 FR 38001 (June 12,
2023).
\6\ 88 FR 70911.
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The NPRM proposed adding a new subpart C to part 3 of 14 CFR to
require individuals who have a foreign address and no U.S. physical
address of record on file with the FAA to designate a U.S. agent for
service if they apply for a certificate, rating, or authorization
issued under 14 CFR part 47, 61, 63, 65, 67, or 107, or hold a
certificate, rating, or authorization issued under any of these parts.
A U.S. agent for service was defined as an entity or an adult (18 or
older) with a U.S. address who is designated to receive FAA service on
their behalf. Accordingly, the NPRM proposed allowing individuals to
hire any entity, including registered agent service companies, with a
U.S. address to be their designated U.S. agent. Alternatively, it
proposed permitting individuals to designate any adult who is 18 or
older with a U.S. address, including a relative or associate, to be
their U.S. agent. The rule also provided requirements on what type of
U.S. address the FAA would accept as sufficient for a U.S. agent.
The NPRM proposed that a U.S. agent would receive service of
process, and other time-sensitive or safety-critical documents from the
FAA on behalf of the individual certificate, rating, or authorization
holder or applicant. The U.S. agent would be responsible for timely
transmitting all documents the FAA served on the U.S. agent to the
individual who designated them. For this reason, the NPRM proposed the
requirement that a U.S. agent be mentally competent to assume this
duty. The NPRM also proposed that an individual must ensure their U.S.
agent understands the requirements for serving as a U.S. agent and
agrees to serve in that capacity. As explained in the NPRM, the
responsibility for ensuring these requirements are met would fall on
the individual designating the U.S. agent. Individuals designating U.S.
agents would be required to certify to the FAA, under penalty of
perjury, that a U.S. agent has accepted the responsibility of receiving
FAA service on behalf of the individual.
Additionally, the NPRM emphasized that the individual who
designates a U.S. agent would be responsible for ensuring that the FAA
can serve documents to their U.S. agent. An individual designating a
U.S. agent for service would be required to provide the U.S. agent's
full name; their U.S. address; their email address, should electronic
service be feasible; their fax number (optional); and their phone
number (optional), in the event of service issues. Individuals would be
required to keep their U.S. agent designation current. Absent
extraordinary circumstances, the FAA would consider service on an
individual's U.S. agent the equivalent of service directly on the
individual, triggering all appeal and reply deadlines provided in the
document being served.
The NPRM explained that the rule would facilitate the FAA's ability
to accomplish prompt and cost-effective service of process and service
of other safety-critical or time-sensitive documents to individuals
abroad through service on their U.S. agents. This would conserve agency
resources, ensure that lengthy delays in service of process do not
compromise aviation safety, and provide individuals abroad with timely
notice of FAA actions and the opportunity for more expedient due
process.
C. General Overview of Comments
The FAA received a total of 14 comments, two of which were
duplicates. All comments were from individual anonymous commenters.
Five of the commenters opposed the rule. Three of these commenters
suggested changes, as did one additional commenter who neither
supported nor opposed the proposed rule. The commenters' suggested
changes are discussed more fully in the Discussion of Comments and the
Final Rule section. Seven of the comments were outside the scope of the
rule.
IV. Discussion of Comments and the Final Rule
A. Request for Use of the Defined Term ``U.S. agent address''
A commenter noted that the proposed rule defined the term ``U.S.
agent address'' in proposed Sec. 3.302, the definition section, but
the term was not used in the proposed regulation. The FAA agrees and
amends proposed Sec. 3.303(b) in the final rule to include the term
``U.S. agent address'' for clarification. This is a non-substantive
change.
B. Request for Exception From the U.S. Agent for Service Requirement
for U.S. Government Employees, Military Members, and Special Purpose
Pilot Authorization (SPPA) Holders
Two commenters requested full exception from the applicability of
the rule for certain certificate holders. Specifically, the commenters
suggested that U.S. Government employees, military members, and special
purpose pilot authorization (SPPA) holders should be excepted from the
rule because the FAA should easily be able to find and contact them
through their employers (such as the U.S. Government, military, or
private companies). The FAA notes the purpose of the rule is to provide
service of documents within the U.S. to designated agents of
individuals, including those whose location abroad may already be
known, such as U.S. Government employees, military members, and SPPA
holders. More importantly, service on an individual's employer that has
not been designated as their agent does not satisfy service of process
requirements under 49 U.S.C. 46103. The rule, however, does not
preclude that individual from designating their employer as their U.S.
agent for service if the employer agrees and meets the requirements
provided by this rule in 14 CFR part 3, subpart C. Accordingly, the FAA
is adopting the rule as proposed, without the requested exceptions.
C. Request for Pilots To Have Alternatives to a U.S. Agent for Service
Such as Email or Voluntary and Temporary Certificate Surrender When
Pilots Go Abroad
One commenter requested that the FAA consider alternatives to the
rule that would only apply to pilots. Specifically, the commenter
requested
[[Page 81308]]
that the FAA consider email service for pilots or allow pilots to
temporarily and voluntarily surrender their certificate(s) to the FAA
for the time they are abroad. The FAA notes that alternatives to the
rule that would only apply to pilots, as the commenter proposed, rather
than all the applicable certificate, rating, and authorization holders
and applicants impacted by this rule would be unequal because there is
not any justification for favoring pilots over other impacted groups.
Nevertheless, the FAA considered the proposed alternatives, in case
they could be viable options for all individuals impacted by the rule.
The FAA determined that neither option is a viable alternative to a
U.S. agent.
The NPRM already addressed why email service was not a viable
alternative to this rule. Specifically, the NPRM explained that
international service conventions do not expressly authorize email
service of process abroad, and that email service abroad could violate
the domestic law of the receiving state and potentially result in
judgments that are unenforceable in foreign courts.\7\ Accordingly, the
FAA did not adopt the commenter's proposed email alternative to a U.S.
agent.
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\7\ While section 219 of the FAA Reauthorization Act of 2024
permits electronic or facsimile transmission by the FAA to the
person to be served or the designated agent of that person, the FAA
must also comply with international service conventions that
currently do not expressly authorize email service of process
abroad.
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The commenter's second proposed alternative of temporary and
voluntary certificate surrender to the FAA does not remedy the issue
the rule is addressing. The purpose of the rule is to assist the FAA
with efficient and effective service of documents to individuals
abroad. An individual's temporary and voluntary certificate surrender
for the time they are abroad would not assist the FAA with serving a
document to the individual once they are outside the United States. For
example, if an individual violates the Federal Aviation Regulations
before going to live abroad for a year, the FAA may need to take
enforcement action and serve the individual with a notice or order for
that violation when they are abroad. This would be true regardless of
whether the individual decides to put their certificate on hold with
the FAA temporarily and voluntarily for the time they are abroad.
Lastly, the FAA's regulations do not provide for temporary and
voluntary certificate surrenders because to create a system to receive,
temporarily store, and return an individual's physical certificates
would be costly. The FAA, therefore, has not adopted the commenter's
proposed alternative of temporary and voluntary certificate surrender
to the FAA.
D. Miscellaneous Issues
1. Commenters Who Opposed the Rule Without Proposing Changes
Two commenters generally opposed the rule, without proposing any
changes, which the FAA believes is based on a misunderstanding of
current requirements or the rule, as proposed. Both commenters asserted
that an individual with a U.S. address of record with the FAA does not
have to designate a U.S. agent or be reachable at their U.S. address,
and, therefore, questioned why an individual abroad, with no U.S.
postal address, would need to establish more reliable postal
communication with the FAA by designating a U.S. agent. The underlying
assumption that certificate, rating, and authorization holders do not
have to be reachable at their address of record with the FAA, whether
in the U.S. or abroad, is incorrect. The FAA's responsibility of
ensuring a safe National Airspace System requires that the agency be
able to reach certificate, rating, and authorization holders.\8\
Individuals are expected to be reachable at their address of record on
file with the FAA.
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\8\ See U.S. Agents for Service on Individuals With Foreign
Addresses Who Hold or Apply for Certain Certificates, Ratings, or
Authorizations, Notice of Proposed Rulemaking, 88 FR 38002 (June 12,
2023). The FAA's service of process abroad can trigger international
service requirements, which can create a serious risk to aviation
safety. For example, when the FAA is serving emergency orders of
revocation or suspension, the individual may attempt to continue
exercising the associated privileges of the certificate, rating, or
authorization, until the FAA serves the individual in accordance
with international service requirements, which may take months and
in some instances over a year.
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However, the purpose of this rule is not to address the reliability
of individuals' addresses, regardless of location. Rather, this rule is
intended to provide the FAA with a means to provide timely and cost-
effective service to individuals located abroad in light of
international service requirements. The FAA can more effectively and
efficiently send mail to a U.S. address than abroad due to
international service requirements that are discussed in the NPRM.\9\
This distinction justifies the requirement of U.S. agents for
individuals who have a foreign address of record on file with the FAA
and no U.S. physical address of record on file with the FAA.
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\9\ See 88 FR 38002. The two international service conventions
applicable to the FAA's service of certain documents are the Hague
Service Convention, 20 U.S.T. 361 (signed Nov. 15, 1965), and the
Inter-American Convention on Letters Rogatory, adopted January 30,
1975, together with the Additional Protocol to the Convention
(IACAP), adopted May 8, 1979, S. Treaty Doc. No. 98-27 (1986). The
main method for service under either convention, is through a
country's designated central authority, which is cumbersome, slow,
and costly compared to service of process accomplished directly
through registered mail on the intended recipient.
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The FAA believes the second commenter also misunderstood the
proposed rule as requiring individuals to designate a secondary U.S.
agent in the event their primary U.S. agent is on vacation. The NPRM
did not propose to require individuals to designate two U.S. agents.
Rather, the NPRM explained the importance of ensuring reachability in
the event a designated U.S. agent for service is temporarily unable to
accept service and offered an example of a proposed solution that did
not require the designation of a back-up U.S. agent. The NPRM provided
that U.S. agents could have a friend or associate collect the mail and
notify the individual of the service. Therefore, the FAA is not making
any changes to the rule as a result of the comments.
2. Comments on the Privacy Impact Assessment and Civil Aircraft
Registry Electronic Services Requirements
The FAA received three comments that asked about the public
availability of the Privacy Impact Assessment (PIA), which was
addressed by reopening the comment period when the PIA became publicly
available on the Department of Transportation's website. Another
comment, received after the comment period was reopened, stated that 15
days was not enough time to comment on the PIA. The FAA considered 15
days to be sufficient time to comment on the PIA. The document was
publicly available since August 23, 2023, almost two months before the
reopening of the comment period and is not a document that requires
public comment under the Administrative Procedure Act.
Finally, three comments were about the Civil Aircraft Registry
Electronic Services (CARES) requirements and availability of that
system for U.S. agent designation. These comments are out of scope and
premature because they did not specifically discuss the implementation
of the NPRM, but rather were about the CARES system, which is not the
system of collection for the U.S. agent information. The PIA simply
identified CARES as one potential system FAA could use to collect U.S.
agent information at some point in the future. The FAA has not made
changes in the final rule based on these comments and recommends
certificate holders and applicants reference
[[Page 81309]]
Advisory Circular (AC) 3-1 \10\ for further information on the
information that the FAA will collect and how it will do so in
accordance with this final rule.
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\10\ AC 3-1 was published in concurrence with this final rule
and can be found at <a href="http://drs.faa.gov/browse/AC/doctypeDetails">drs.faa.gov/browse/AC/doctypeDetails</a>.
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3. Final Rule Compliance Dates
This final rule changes the compliance date noted in the NPRM,
which was six months after the date of publication in the Federal
Register to nine months after the date of publication in the Federal
Register. The final rule clarifies there are two compliance dates. The
compliance dates for this final rule are as follows: January 6, 2025,
for applicants of any certificate, rating, or authorization issued
under part 47, 61, 63, 65, 67, or 107, and July 7, 2025 for holders of
any certificate, rating, or authorization issued under part 47, 61, 63,
65, 67, or 107. This additional time for current certificate, rating,
or authorization holders is provided to ensure FAA preparedness for the
collection of U.S. agent designations and to provide more time for
individuals to come into compliance with the final rule.
4. FAA Guidance Materials: Advisory Circulars and Orders
The FAA is publishing an Advisory Circular, U.S. Agents for
Service, with this final rule.\11\ It specifies the acceptable form and
manner for individuals to submit their designation of a U.S. agent. The
following FAA Advisory Circulars will also be updated, as necessary, to
reflect this final rule: AC 61-65H, AC 61-135A, AC 61-143, AC 65-30B,
AC 65-23A, AC 65-32A and AC 65-34A. The FAA's Advisory Circulars are
publicly available on FAA's website.\12\
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\11\ The FAA has placed a copy of these Advisory Circular in the
docket for this rulemaking, with the exception of AC 65-32A which is
also under revision as part of another rulemaking and will be
published with that rule.
\12\ FAA Advisory Circulars are available at: <a href="http://www.faa.gov/regulations_policies/advisory_circulars/">www.faa.gov/regulations_policies/advisory_circulars/</a>.
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V. Regulatory Notices and Analyses
Federal agencies consider impacts of regulatory actions under a
variety of Executive orders and other requirements. First, Executive
Order 12866 and Executive Order 13563, as amended by Executive Order
14094 (``Modernizing Regulatory Review''), direct that each Federal
agency 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 (Pub. L. 96-354) requires
agencies to analyze the economic impact of regulatory changes on small
entities. Third, the Trade Agreements Act (Pub. L. 96-39) prohibits
agencies from setting standards that create unnecessary obstacles to
the foreign commerce of the United States. 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 that may
result in the expenditure by State, local, and tribal governments, in
the aggregate, or by the private sector, of $100,000,000 or more
(adjusted annually for inflation) in any one year. The current
threshold after adjustment for inflation is $183,000,000, using the
most current (2023) Implicit Price Deflator for the Gross Domestic
Product. This portion of the preamble summarizes the FAA's analysis of
the economic impacts of this rulemaking.
In conducting these analyses, the FAA has determined that this
final rule: (i) will result in benefits that justify costs; (ii) is not
an economically ``significant regulatory action'' as defined in section
3(f) of Executive Order 12866; (iii) will not have a significant
economic impact on a substantial number of small entities as amended;
(iv) will not create unnecessary obstacles to the foreign commerce of
the United States; and (v) will not impose an unfunded mandate on
State, local, or tribal governments, or on the private sector.
A. Regulatory Impact Analysis
On June 12, 2023, the FAA published a NPRM and received 14
comments. None of the comments expressed concerns with economic impacts
of the proposal except one. One commenter expressed concern that the
rule's cost to individual pilots would be between $15 million and $30
million annually, and also expressed concern about the cost of enacting
the proposed regulatory change. However, the commenter does not provide
an explanation for the cost estimate, therefore the FAA continues to
use the estimate provided in the NPRM.
However, FAA has updated the cost of hiring a registered U.S. agent
service company based on a more recent source. In the NPRM, FAA
reported this cost could range from $150 to $300. The updated source
reports this could be between $50 and $200.
1. Baseline for the Analysis
In July 2022, approximately 115,000 individuals applied for or held
certificates, ratings, and authorizations issued under 14 CFR parts 47,
61, 63, 65, 67, and 107, had a foreign address, and did not have a U.S.
physical address of record on file with the FAA. The FAA estimates that
approximately 97 percent of these individuals that used a foreign
address are citizens of foreign countries. The FAA notes service of
process abroad imposes costs on the agency. The FAA estimates that it
sends over 8,000 documents abroad annually, including both service of
process and other documents, at a cost close to $600,000 including
mailing costs, staff time, and translation services when required.\13\
Examples of documents that have been sent abroad are as follows:
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\13\ The average cost to FAA per document served abroad is $75.
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1. Aerospace Medicine's Letters: a. All Denial Letters, b.
Withdrawal of Special Issuance (SI) Authorization Letters, c. Special
Issuance Authorization Letters, d. Re-examination/Request for
Information Letters, e. Lack of Qualification Letters with Referral to
Legal, f. Letters of Investigation, and g. Federal Drug and Alcohol
Testing Letters of Investigation,
2. Enforcement action documents: a. Notice of Proposed Civil
Penalty (NOPCP), b. Final Notice of Civil Penalty (FNPOCP), c. Order
Assessing Civil Penalty (OACP), d. Notice of Proposed Assessment
(NOPA), e. Civil Penalty Letter, f. Notice of Proposed Certificate
Action (NOPCA), g. Order of Suspension (OS), h. Order of Revocation
(OR), i. Emergency Order of Revocation (EOR), and j. Emergency Order of
Suspension (EOS),
3. Flight Standards Reexamination Letters,
4. All FAA Program Office's Letters of Investigation, and
5. Aircraft Registry Letters: a. Notices to Aircraft Owners of
Ineffective Aircraft Registration, and b. Notices to Aircraft Owners of
Invalid Aircraft Registration.
2. Benefits
The benefits of the final rule include prompt and cost-effective
service of these documents to individuals abroad through service on
their U.S. agents. Prompt service will conserve agency resources,
ensure that lengthy delays in service do not compromise aviation
safety, and provide individuals abroad timely notice of the FAA's
actions. However, these benefits are not quantified because the
ultimate impacts on aviation are not known.
3. Costs
Under this final rule, the affected individuals will bear the
transaction costs associated with having a foreign address on file with
the FAA. There is a minimal cost associated with
[[Page 81310]]
designating a new U.S. agent and any updates thereafter. Individuals
may designate an entity or an adult (18 or older) with a U.S. address
to serve as their U.S. agent. The FAA determined that the cost of
hiring a registered U.S. agent service company may range from $50 to
$200 annually.\14\ However, as discussed in the NPRM, many individuals
with foreign addresses may have a friend or family member residing in
the U.S. whom they may choose to designate as their U.S. agent,
resulting in no annual costs to those individuals for hiring a U.S.
agent for service.
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\14\ See <a href="http://www.chamberofcommerce.org/best-registered-agent-virginia">www.chamberofcommerce.org/best-registered-agent-virginia</a> (last accessed April 23, 2024).
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The FAA will incur implementation costs to collect the U.S. agent
information. However, the FAA anticipates developing an automated
system that would not require agency staff processing time. The initial
implementation costs will then be offset by saving the baseline foreign
service process costs and avoiding the costs of translation services
(required by contracting parties to the Hague Service Convention or
IACAP).
4. Summary
In summary, the FAA expects that the benefits of prompt document
service, which could affect aviation safety, will exceed any costs
associated with implementing this rule. Costs associated with
designating a U.S. agent for affected individuals abroad will be
largely incurred by the individual who holds, or is applying for, the
certificate, rating, or authorization, rather than the FAA. This final
rule will eliminate a majority of the FAA's current costs of affecting
international service and transfer some of these transaction costs back
to the individual being served by requiring designation of a U.S.
agent.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) of 1980, Public Law 96-354, 94
Stat. 1164 (5 U.S.C. 601-612), as amended by the Small Business
Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat.
857, Mar. 29, 1996) and the Small Business Jobs Act of 2010 (Pub. L.
111-240, 124 Stat. 2504, Sept. 27, 2010), requires Federal agencies to
consider the effects of the regulatory action on small business and
other small entities and to minimize any significant economic impact.
The term ``small entities'' comprises small businesses and not-for-
profit organizations that are independently owned and operated and are
not dominant in their fields, and governmental jurisdictions with
populations of less than 50,000.
The FAA did not identify any small entities that would be affected
by this rule because it concerns only individuals and not their
employers or entities or businesses the individuals are associated
with. The FAA did not receive any comments on the basis for this
certification during the public comment period after the publication of
the associated NPRM. Therefore, the FAA certifies that this 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 (Pub. L. 96-39), as amended by the
Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal
agencies from establishing standards or engaging in related activities
that create unnecessary obstacles to the foreign commerce of the United
States. Pursuant to these Acts, the establishment of standards is not
considered an unnecessary obstacle to the foreign commerce of the
United States, so long as the standard has a legitimate domestic
objective, such as the protection of safety, and does not operate in a
manner that excludes imports that meet this objective. The statute also
requires consideration of international standards and, where
appropriate, that they be the basis for U.S. standards. The FAA has
determined that this rule is not considered an unnecessary obstacle to
trade.
C. Unfunded Mandates Assessment
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
that may result in the expenditure by State, local, and tribal
governments, in the aggregate, or by the private sector, of $100
million or more (adjusted annually for inflation) in any one year. The
current threshold after adjustment for inflation is $183 million using
the most current (2023) Implicit Price Deflator for the Gross Domestic
Product. The FAA determined that this final rule will not result in the
expenditure of $187 million or more by State, local, or tribal
governments or by the private sector, in the aggregate, or the private
sector, in any one year.
D. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires
that the FAA consider the impact of paperwork and other information
collection burdens imposed on the public. According to the 1995
amendments to the Paperwork Reduction Act (5 CFR 1320.8(b)(2)(vi)), 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 action contains the following new information collection
requirements. As required by the Paperwork Reduction Act of 1995 (44
U.S.C. 3507(d)), the FAA has submitted the information collection to
OMB for its review.
Summary: The FAA is requiring individuals who hold or apply for
certificates, ratings, or authorizations issued under 14 CFR part 47,
61, 63, 65, 67, or 107 and who have a foreign address and no U.S.
physical address of record on file with the FAA to designate a U.S.
agent.
Use: The information collected and maintained in FAA databases is
used to serve various documents to the designated U.S. agents of
individuals with a foreign address.
Respondents: As of July 2022, there were 115,132 individuals who
held certificates, ratings, or authorizations issued under 14 CFR part
47, 61, 63, 65, 67, or 107 with a foreign address and who did not have
a U.S. physical address of record on file with the FAA. After the
implementation of the rule in Year 1, the FAA expects that the number
of new applicants who would be required to designate a U.S. agent would
be 4,362 annually. In addition, the FAA estimates that annually
approximately 4,606 respondents might process a change of U.S. agent
designation or an update to their U.S. agents' contact information.
Frequency: All 115,132 individuals with a foreign address, with no
U.S. physical address, who currently hold certificates, ratings, or
authorizations issued under 14 CFR part 47, 61, 63, 65, 67, or 107 are
required to designate a U.S. agent once during the implementation of
the rule in Year 1. Similarly, 4,362 respondents identified as
applicants who do not currently hold any certificates, ratings, or
authorization, would be required to designate a U.S. agent at the time
of their application in Year 2. Additionally, 4,606 respondents might
need to change their U.S. agent or update the information for their
current U.S. agent. This would require submission of a new U.S. agent
designation.
Annual Burden Estimate: The FAA estimates that it would take an
individual 10 minutes to submit a U.S.
[[Page 81311]]
agent designation. In Year 1, the number of annual burden hours would
be 19,189 [(115,132 individuals x (10 minutes / 60 minutes)], and 1,495
hours each year afterwards (=[(4,362 + 4,606) x (10 minutes / 60
minutes)]). The annual cost of this U.S. agent designation requirement
to individuals would be $1,195,761 in Year 1 and $93,131 each year
afterwards.\15\
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\15\ Using a loaded composite wage rate of $62.32 obtained from
a select of number of foreign countries and $10 a minute (=10/60 or
0.167 hour) estimated to submit a U.S. agent designation, the FAA
calculates that these individuals would incur $1,195,761, (= 115,132
x $62/hour x 0.167 hour).
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The collection of the U.S. agent designation will be fully
automated. Therefore, there will be no new annual cost to the
government.
E. International Trade Impact Assessment
The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the
Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal
agencies from establishing standards or engaging in related activities
that create unnecessary obstacles to the foreign commerce of the United
States. Pursuant to these Acts, the establishment of standards is not
considered an unnecessary obstacle to the foreign commerce of the
United States, so long as the standard has a legitimate domestic
objective, such as the protection of safety and does not operate in a
manner that excludes imports that meet this objective. The statute also
requires consideration of international standards and, where
appropriate, that they be the basis for U.S. standards. The FAA has
assessed the potential effects of this rule and determined that it will
not create unnecessary obstacles to the foreign commerce of the United
States.
F. Environmental Analysis
FAA Order 1050.1F 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 paragraph 5-6.6f and involves no extraordinary
circumstances.
VI. Executive Order Determinations
A. Executive Order 13132, Federalism
The FAA has analyzed this final rule under the principles and
criteria of Executive Order (E.O.) 13132, Federalism. The FAA has
determined that this action will not have a substantial direct effect
on the states, or the relationship between the Federal Government and
the States, or on the distribution of power and responsibilities among
the various levels of government, and, therefore, will not have
federalism implications.
B. Executive Order 13175, Consultation and Coordination With Indian
Tribal Governments
Consistent with Executive Order 13175, Consultation and
Coordination with Indian Tribal Governments,\16\ and FAA Order 1210.20,
American Indian and Alaska Native Tribal Consultation Policy and
Procedures,\17\ the FAA ensures that Federally Recognized Tribes
(Tribes) are given the opportunity to provide meaningful and timely
input regarding proposed Federal actions that have the potential to
have substantial direct effects on one or more Indian tribes, on the
relationship between the Federal Government and Indian tribes, or on
the distribution of power and responsibilities between the Federal
Government and Indian tribes; or to affect uniquely or significantly
their respective tribes. At this point, the FAA has not identified any
unique or significant effects, environmental or otherwise, to Indian
tribes resulting from this final rule.
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\16\ 65 FR 67249 (Nov. 6, 2000).
\17\ FAA Order No. 1210.20 (Jan. 28, 2004), available at
<a href="http://www.faa.gov/documentLibrary/media/1210.pdf">www.faa.gov/documentLibrary/media/1210.pdf</a>.
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C. Executive Order 13211, Regulations That Significantly Affect Energy
Supply, Distribution, or Use
The FAA analyzed this final rule under E.O. 13211, Actions
Concerning Regulations that Significantly Affect Energy Supply,
Distribution, or Use (May 18, 2001). The FAA has determined that it is
not a ``significant energy action'' under the executive order and is
not likely to have a significant adverse effect on the supply,
distribution, or use of energy.
D. Executive Order 13609, Promoting International Regulatory
Cooperation
Executive Order 13609, Promoting International Regulatory
Cooperation, promotes international regulatory cooperation to meet
shared challenges involving health, safety, labor, security,
environmental, and other issues and to reduce, eliminate, or prevent
unnecessary differences in regulatory requirements. The FAA has
analyzed this action under the policies and agency responsibilities of
Executive Order 13609, and has determined that this action will have no
effect on international regulatory cooperation.
VII. Privacy
With regard to the information persons may submit in accordance
with this final rule's requirements, the FAA conducted a privacy impact
assessment (PIA) under section 522(a)(5) of division H of the FY 2005
Omnibus Appropriations Act, Public Law 108-447, 118 Stat. 3268 (Dec. 8,
2004) and section 208 of the E-Government Act of 2002, Public Law 107-
347, 116 Stat. 2889 (Dec. 17, 2002). The PIA found the NPRM's proposed
requirements affecting privacy include the collection of personally
identifiable information (PII) of U.S. agents designated by individuals
with a foreign address and no U.S. physical address on file with the
FAA that hold or apply for certificates, ratings, or authorizations
issued under 14 CFR part 47, 61, 63, 65, 67, or 107. The rule collects
the U.S. agent's full name, U.S. address, fax number (optional), phone
number (optional), and email address.
As part of the PIA, the FAA analyzed the effect the rule would have
on collecting, storing, and disseminating personally identifiable
information (PII) of U.S. agents designated by individuals with a
foreign address and no U.S. physical address on file with the FAA that
hold or apply for certificates, ratings, or authorizations issued under
14 CFR part 47, 61, 63, 65, 67, or 107. The FAA also examined and
evaluated protections and alternative information-handling processes in
developing the rule to mitigate potential privacy risks. A copy of PIA
is posted on DOT's website.\18\
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\18\ Upon finalization, PIAs are posted on the Department of
Transportation's Privacy Program page, available at
<a href="http://www.transportation.gov/individuals/privacy/privacy-impact-assessments#Federal%20Aviation%20Administration%20">www.transportation.gov/individuals/privacy/privacy-impact-assessments#Federal%20Aviation%20Administration%20</a>(FAA).
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VIII. Additional Information
A. Electronic Access and Filing
A copy of the NPRM, all comments received, this final rule, the AC
for designation of U.S. agents, and all background material may be
viewed online at <a href="http://www.regulations.gov">www.regulations.gov</a> using the docket number listed
above. A copy of this final rule will be placed in the docket.
Electronic retrieval help and guidelines are available on the website.
It is available 24 hours each day, 365 days each year. An electronic
copy of this document may also be downloaded from the Office of the
Federal Register's website at <a href="http://www.federalregister.gov">www.federalregister.gov</a> and the
Government Publishing Office's
[[Page 81312]]
website at <a href="http://www.govinfo.gov">www.govinfo.gov</a>. A copy may also be found at the FAA's
Regulations and Policies website at <a href="http://www.faa.gov/regulations_policies">www.faa.gov/regulations_policies</a>.
Copies may also be obtained 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) 267-9677.
Commenters must identify the docket or notice number of this
rulemaking.
All documents the FAA considered in developing this final rule,
including economic analyses and technical reports, may be accessed in
the electronic docket for this rulemaking.
B. Small Business Regulatory Enforcement Fairness Act
The Small Business Regulatory Enforcement Fairness Act (SBREFA) of
1996 requires the FAA to comply with small entity requests for
information or advice about compliance with statutes and regulations
within its jurisdiction. A small entity with questions regarding this
document may contact its local FAA official, or the person listed under
the FOR FURTHER INFORMATION CONTACT heading at the beginning of the
preamble. To find out more about SBREFA on the internet, visit
<a href="http://www.faa.gov/regulations_policies/rulemaking/sbre_act/">www.faa.gov/regulations_policies/rulemaking/sbre_act/</a>.
List of Subjects in 14 CFR Part 3
Aircraft, Aviation safety, U.S. agent for service.
The Amendment
For reasons discussed in the preamble, the Federal Aviation
Administration amends title 14, Code of Federal Regulations as follows:
PART 3--GENERAL REQUIREMENTS
0
1. Effective October 8, 2024, the authority citation for part 3 is
revised to read as follows:
Authority: 49 U.S.C. 106(f), 106(g), 40113, 44701, 44704,
46111, and 46103.
0
2. Effective October 8, 2024, add subpart C to read as follows:
Subpart C--Designated U.S. Agents for Service
Sec.
3.301 Applicability.
3.302 Definitions.
3.303 Designation of a U.S. agent for service.
Sec. 3.301 Applicability.
This subpart applies to individuals who:
(a) Do not have a U.S. physical address of record on file with the
FAA;
(b) Have a foreign address of record on file with the FAA; and
(c) Hold or apply for certificates, ratings, or authorizations
under part 47, 61, 63, 65, 67, or 107 of this chapter.
Sec. 3.302 Definitions.
U.S. agent address is an address in the States of the United
States, the District of Columbia, or any U.S. territory or possession.
If the U.S. agent is an entity, the address must be the U.S. agent's
office address. If the U.S. agent is an individual, the address must be
the U.S. agent's usual place of residence or, if applicable, the
individual's U.S. military office address. If the U.S. agent is serving
as a U.S. agent in their official capacity with the military, the
address may be a military office address. A U.S. agent address may not
be a post office box, military post office box, or a mail drop box.
U.S. agent for service (U.S. agent) is an entity or an adult
(individual who is 18 or older) with a U.S. address who a certificate,
rating, or authorization holder or applicant designates to receive FAA
service on their behalf.
U.S. physical address is an address in the States of the United
States, the District of Columbia, or any U.S. territory or possession,
but excludes post office boxes, military post office boxes, mail drop
boxes, and commercial addresses that are not also residential
addresses.
Sec. 3.303 Designation of a U.S. agent for service.
(a) Individuals must designate a U.S. agent for service within the
U.S. in writing to the FAA in a form and manner prescribed by the
Administrator. Individuals designating a U.S. agent must ensure that
the U.S. agent understands the requirements for receiving FAA service
on behalf of the individual and is competent to perform that
responsibility.
(b) The designation must include the U.S. agent's full name, U.S.
agent address, email address, and certification by the individual that
the U.S. agent has accepted responsibility for receiving FAA service on
behalf of the individual. It may also include the U.S. agent's fax
number and phone number.
(c) Individuals must notify the FAA in a form and manner prescribed
by the Administrator of any change to their U.S. agent designation or
the U.S. agent's contact information within 30 days of the change.
(d) Individuals must comply with the requirements listed in this
subpart no later than:
(1) July 7, 2025, for holders of any certificate, rating, or
authorization issued under part 47, 61, 63, 65, 67, or 107. These
individuals who fail to timely designate a U.S. agent for service and
comply with the requirements under this subpart may not exercise the
privileges of any certificate, rating, or authorization issued under
part 47, 61, 63, 65, 67, or 107, and an individual aircraft owner's
aircraft registration certificate will be considered ineffective; and
(2) January 6, 2025, for applicants of any certificate, rating, or
authorization issued under part 47, 61, 63, 65, 67, or 107. An
applicant who fails to designate a U.S. agent for service and comply
with the requirements under this subpart shall not be issued a
certificate, rating, or authorization under part 47, 61, 63, 65, 67, or
107.
0
3. Effective January 6, 2025, amend Sec. 3.303 by revising paragraph
(d) and adding paragraph (e) to read as follows:
Sec. 3.303 Designation of a U.S. agent for service.
* * * * *
(d) Individuals holding any certificate, rating, or authorization
issued under part 47, 61, 63, 65, 67, or 107 must comply with the
requirements listed in this subpart no later than July 7, 2025. These
individuals who fail to timely designate a U.S. agent for service and
comply with the requirements under this subpart may not exercise the
privileges of any certificate, rating, or authorization issued under
part 47, 61, 63, 65, 67, or 107, and an individual aircraft owner's
aircraft registration certificate will be considered ineffective.
(e) No individual shall be issued a certificate, rating, or
authorization under parts 47, 61, 63, 65, 67, or 107 of this chapter
unless the individual has designated a U.S. agent as required under
this subpart.
0
4. Effective July 7, 2025, amend Sec. 3.303 by revising paragraph (d)
to read as follows:
Sec. 3.303 Designation of a U.S. agent for service.
* * * * *
(d) No individual shall exercise the privileges of any certificate,
rating, or authorization issued under part 47, 61, 63, 65, 67, or 107
of this chapter unless the individual has designated a U.S. agent as
required under this subpart. Aircraft registration certificates issued
to individuals who fail to designate a U.S. agent as required under
this subpart will be ineffective.
* * * * *
[[Page 81313]]
Issued under authority provided by 49 U.S.C. 106(f), 44701(a), and
44703 in Washington, DC.
Michael Gordon Whitaker,
Administrator.
[FR Doc. 2024-22000 Filed 10-7-24; 8:45 am]
BILLING CODE 4910-13-P
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</html>Indexed from Federal Register on October 8, 2024.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.