2015 – Edition 12 – January 7
Table of Contents
Maintaining Momentum in 2016
By Brett Levanto, Vice President of Communications
In the beginning of 2015, Executive Director Sarah MacLeod said “anything worth doing is worth doing again.” Whatever we do next – whether on behalf of the association, the maintenance industry or the aviation community – it must be rooted in our past. By building on success and learning from shortcomings, we get better every time around.
As we begin 2016, ARSA invites you to see just what it did over the past year. Below, after a few updates from December – we need to stay current, after all – you’ll see the most-read items from 2015 across each of the hotline’s regular sections. Each captures an important moment for the industry and illustrates how this association works on every issue on behalf of its members.
Each story will take you to the hotline in which it appeared. Peruse those editions and see what 2015 really meant for the men and women who keep the world safely in flight every day. Just don’t get caught looking back, the world can’t fly with us stuck in the past.
By ARSA Communications Staff
Now that the aviation world has turned its calendar to 2016, two FAA officials have ARSA’s Annual Repair Symposium on theirs.
Peggy Gilligan, associate administrator for aviation safety, and Tim Shaver, acting manager of the Aircraft Maintenance Division, have officially taken their places on the 2016 agenda. Don’t miss your chance for face time with agency leaders (more to come) and the opportunity to represent the maintenance community before your elected officials in Washington: Register today for both the 2016 Legislative Day and Annual Repair Symposium.
It’s one less thing on your January to-do list.
By Daniel Fisher, Vice President of Legislative Affairs
After a long wait, the aviation industry can look forward to some much-needed certainty on bonus depreciation, Sec. 179 expensing and the research and development (R&D) tax credit.
Late on Dec. 15, House and Senate leaders released the details of a year-end tax and budget deal that accomplishes several of ARSA’s policy priorities. It passed both chambers and was signed into law on Dec. 18. Among other things, as described below, the Protecting Americans from Tax Hikes (PATH) Act reinstates bonus depreciation and permanently increases higher Sec. 179 expensing levels and the R&D tax credit.
The PATH Act extends bonus depreciation for new property acquired and placed in service during 2015 through 2019. The bonus depreciation amount is 50 percent for property placed in service during 2015, 2016 and 2017 and phases down to 40 percent in 2018 and 30 percent in 2019. The deal continues to allow taxpayers to elect to accelerate the use of alternative minimum tax (AMT) credits in lieu of bonus depreciation under special rules for property placed in service during 2015. The provision also modifies the AMT rules beginning in 2016 by increasing the amount of unused AMT credits that may be claimed in lieu of bonus depreciation.
Sec. 179 Expensing Levels
The PATH Act permanently extends the small business expensing limitation and phase-out amounts in effect from 2010 to 2014 ($500,000 and $2 million, respectively). It also modifies the expensing limitation by indexing both the $500,000 and $2 million limits for inflation beginning in 2016.
R&D Tax Credit
The PATH Act also makes the R&D tax credit permanent. Starting in 2016, companies with less than $50 million gross receipts can claim the credit against AMT liability and, in certain cases, against payroll tax (FICA) liability.
By Brett Levanto, Vice President of Communications
On Dec. 10, President Obama signed the Every Student Succeeds Act (S. 1177) after it passed both houses of Congress by overwhelming, bipartisan majorities. The legislation replaces No Child Left Behind, which became law in 2002 and was much maligned for over-reliance on standardized testing to assess and incentivize school and student performance.
By 2020, S. 1177 will increase total appropriations for early and secondary education programs by nearly 12 percent, with money identified for teacher development, school improvement and programs to target disadvantaged and underperforming students. Although the law maintains the testing structure so unpalatable under No Child Left Behind, it shifts authority for mitigating sub-par results on those tests to state education authorities.
The new law places high value on science, technology, engineering and math (STEM) programs. By including technology and engineering into assessment regimes, allowing states to fund professional development and pay differentials for teachers of STEM-related subjects and creating standards for the use of federal funds in support of science and math, S. 1177 broadly empowers schools to provide useful skills for elementary and secondary students.
For the aviation maintenance industry, this is an important development. As reported in a 2013 Brookings Institution study, half of all STEM jobs are industrial and available to workers without a four-year college degree. The Every Student Succeeds Act encourages schools to provide all students with a solid foundation in these disciplines. The market for future technical workers – including aviation maintenance professionals – will be strengthened by core training in hands-on, applied skills.
For a complete assessment of S. 1177’s commitment to STEM programs, review the STEM Education Coalition’s analysis of the law.
Now that Congress and the president have upgraded the nation’s early and secondary education system, attention will turn to the Higher Education and Carl D. Perkins Acts. Review ARSA’s assessment (“Congress’ Homework,” below) of the work ahead to reauthorize those laws as the association supports efforts to enhance the system’s focus on technical skills.
To see all the ways ARSA works as the voice of the aviation maintenance industry, visit our ARSA Works page.
By Brett Levanto, Vice President of Communications
On Dec. 17, the Federal Register published a correction to a final rule published on Oct. 1 that amended certification procedures and marking requirements for aeronautical products and articles (read below for further detail). In the correction, the effective date of the final rule has been amended to permit earlier implementation of certain provisions, including new § 21.137(o) allowing U.S. production approval holders (PAH) to issue FAA Form 8130-3 as an authorized release certificate for aircraft engines, propellers and articles.
The association has been leading an industry coalition urging the FAA to allow early compliance in accordance with the “new” requirement in MAG Change 5. Beginning Apr. 1, 2016 MAG Change 5 will require all new articles produced by a U.S. PAH to be accompanied by FAA Form 8130-3 when installed during maintenance that will be issued a dual release.
The Oct. 1 published rule’s original effective date was March 29, 2016 for all provisions. The new effective date for the Form 8130-3 privilege (and several other amendments) is Jan. 4, 2016. As a result, PAHs that develop the procedures required by new § 21.137(o) may transition to the new privilege on or after that date, subject to the Manufacturing Inspection District Offices’ (MIDO) approval of those procedures. This will also allow the MIDOs to better manage their reviews of the PAH submissions.
To download a PDF copy of the FAA’s correction, visit: https://www.gpo.gov/fdsys/pkg/FR-2015-12-17/pdf/2015-31639.pdf.
By Brett Levanto, Vice President of Communications
On Dec. 8, ARSA requested the FAA’s chief counsel clarify the applicability of 14 CFR § 145.103 housing requirements. The association questioned the agency’s position that a repair station must have a hangar to enclose the largest aircraft listed on its operations specifications – even if work is limited to airframe components and no aircraft is ever housed. An Oct. 29 memorandum citing a March legal interpretation that § 145.103(b) applies to both class and limited airframe ratings created untenable guidance to the inspector workforce. With industry-wide implications, ARSA requested immediate assistance from the chief counsel.
“The FAA is authorized to promulgate regulations in the interest of safety,” the association’s letter said. “Absolutely no safety purpose is achieved by requiring component level work be performed in housing suitable for aircraft maintenance, simply because the certificate must be issued for an airframe rating. That conclusion is simply outrageous and unsupportable.”
Considering the agency has issued thousands of certificates to hangar-less component shops, enforcing such a strict interpretation of § 145.103(b) would impose an unnecessary burden on a broad and vital sector of the maintenance industry. In the absence of a safety-based rationale, there can be no justification for requiring a maintenance facility to incur the cost of housing aircraft that will never be seen by the repair station.
The association is determined to bring the agency’s reading of the regulation back to reality.
To learn more about housing, facility and equipment requirements, register for the association’s Part 145 Training Series.
To see all the ways that ARSA is working as the voice of the aviation maintenance industry, visit ARSA Works.
By Crystal Maguire, Vice President of Operations
The FAA has published draft Advisory Circular (AC) 43-210A, “Standardized Procedures for Requesting Approval of Data for Major Repairs and Major Alterations.” ARSA worked in concert with Airlines for America to immediately extend the original comment deadline to Feb. 7, 2016.
In the meantime, ARSA is coordinating a response to this advisory circular with its members and colleagues and will host online discussion sessions (stay tuned for schedule details) to gather information and comments for a comprehensive review of the guidance. The association notes immediately that the advisory circular references the field approval process which is not the only method by which data supporting major repairs and alterations can be approved and the work implemented.
Members are encouraged to perform an initial review of the advisory circular as well as the documents created by ARSA to address this issue so that work performed in 2008 is not lost during the agency’s attempt to outline an acceptable method of obtaining data approval and maintenance or alteration implementation.
(1) Draft document: http://www.faa.gov/aircraft/draft_docs/media/afs/AC_43-210A_Coord_Copy.pdf.
(2) Draft document comment grid (downloads as Word document): http://www.faa.gov/aircraft/draft_docs/media/afs/AC_43-210A_CF.docx.
This list includes Federal Register publications, such as final rules, Advisory Circulars and policy statements, as well as proposed rules and policies of interest to ARSA members. To view the list, click here.
2015 in Review
Each story will take you to the hotline in which it appeared. Peruse those editions and see what 2015 really meant for the men and women who keep the world safely in flight every day.
May 8: WAR: What is it Good For?
The next time you catch yourself dancing to Edwin Starr’s “War,” imagine that you are celebrating the promulgation of world aviation regulations. This “WAR,” unlike Starr’s topic, could unify the aviation world.
May 8: “Directly in Charge” of the New Contract Maintenance Rule
In April 2015, Legal Briefs introduced readers to the congressionally-mandated final rule on air carrier contract maintenance requirements. The regulation was the result of a decades-long battle over the safe and efficient practice of contracting air carrier maintenance.
ARSA on the Hill
July 2: Reauthorization Update: Everything Old [and Bad] Is New Again
Whenever Congress considers the FAA’s authorizing law, amendments hostile to the aviation maintenance industry and its customers will once again percolate to the surface.
March 6: One Size Doesn’t Fit All
Look around you; you likely see different people, with different roles and specialties working together on a civil aircraft or component. To the federal government, though, you’re all the same.
June 5: “Recreational or Medical” Marijuana vs FAA/DOT Drug Testing
Nearly 50 percent of the United States currently has laws legalizing marijuana in some form. How does this impact your repair station? Technically it doesn’t, if your operation performs maintenance on commercial aircraft operations including air tour for hire.
The association’s training program is provided through Obadal, Filler, MacLeod & Klein, PLC, the firm that manages ARSA. To go directly to OFMK’s online training portal, visit potomaclaw.inreachce.com. To learn more about the association’s training program and check course availability, visit arsa.org/training.
April 2: Personal Development – Motivation
In his TED talk, career analyst Dan Pink examines the puzzle of motivation, starting with a fact that social scientists know but most managers don’t: Traditional rewards aren’t always as effective as we think. Listen for illuminating stories — and maybe, a way forward.
November 6: MAG Change 5 – Briefing & Listening Session Recap
On Nov. 3, ARSA’s regulatory team hosted a discussion – headlined by Managing Director and General Counsel Marshall S. Filler – of Change 5 to the U.S.-E.U. Maintenance Annex Guidance (MAG). The session engaged members in order to complement the association’s assistance to industry as the FAA and EASA work to effectively implement the change.
October 2: Online Training – Parts in Three Parts
During each live Parts webinar this fall, participants engaged directly with Sarah MacLeod by asking questions, providing examples and seeking clarification on presented content. The resulting discussion left attendees with a full understanding of the rules and requirements impacting civil aircraft parts in maintenance operations.
February 5: Regulatory Compliance Training
Test your knowledge on § 145.205 – Maintenance, preventive maintenance, and alterations performed for certificate holders under parts 121, 125, and 135, and for foreign air carriers or foreign persons operating a U.S.-registered aircraft in common carriage under part 129.
September 3: Member Spotlight – Advantage Aviation Technologies, Dallas, Texas
Advantage Aviation Technologies is a certified woman-owned business that has been serving the aviation community for more than 25 years. An ARSA member since 2004, the repair station holds both FAA and EASA certifications and provides solutions for manufacturers and operators, including Southwest Airlines, Alaska Airlines, Airbus Eurocopter and Gulfstream.
September 3: Have You Seen This Person? Lee Ann Shay
As chief editor MRO, Lee Ann Shay directs Aviation Week’s coverage of the aviation maintenance industry. For repair stations, building relationships with media figures like Shay is a key first step to a positive image – which can be invaluable for both business development and political influence.
August 7: A Member Asked… Inspected, Repaired or Overhauled?
Q: Can you please clarify when to use inspected, repaired or overhauled on maintenance records?
AVMRO News Portal
ARSA strives to provide resources to educate the general public about the work of the association’s member organizations; should you need to provide a quick reference or introductory overview to the global MRO industry, please utilize AVMRO.ARSA.org.
AVMRO Industry Roundup
ARSA monitors media coverage on aviation maintenance to spread the word about the valuable role repair stations play globally by providing jobs and economic opportunities and in civic engagement. These are some of this month’s top stories highlighting the industry’s contributions.
You can explore these stories through ARSA’s Dispatch news portal.
FAA Honolulu Mega-Conference – Honolulu, Hawaii – January 14-15
MRO Latin America – Lima, Peru – January 21-22
MRO Middle East – Dubai, UAE – February 3-4
Singapore Air Show – Singapore – February 16-21
HAI Heli-Expo – Louisville, Kentucky – Februrary 29-March 3
ARSA Symposium – Arlington, Virginia – March 16-18
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the hotline is the monthly publication of the Aeronautical Repair Station Association (ARSA), the not-for-profit international trade association for certificated repair stations. It is for the exclusive use of ARSA members and federal employees on the ARSA mailing list. For a membership application, please call 703.739.9543 or visit http://arsa.org/membership/join/. This material is provided for educational and informational purposes only. It does not constitute legal, consulting, tax or any other type of professional advice. Law, regulations, guidance and government policies change frequently. While ARSA updates this material, we do not guarantee its accuracy. In addition, the application of this material to a particular situation is always dependent on the facts and circumstances involved. The use of this material is therefore at your own risk. All content in the hotline, except where indicated otherwise, is the property of ARSA. This content may not be reproduced, distributed or displayed, nor may derivatives or presentations be created from it in whole or in part, in any manner without the prior written consent of ARSA. ARSA grants its members a non-exclusive license to reproduce the content of the hotline. Employees of member organizations are the only parties authorized to receive a duplicate of the hotline. ARSA reserves all remaining rights and will use any means necessary to protect its intellectual property.
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