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September 2013

the hotline 1984


Table of Contents
Latest News
Sarah Says
ARSA to SBA: FAA Ignored Small Business Protections
New Drug Program Management Service Benefit
Canada, US Government Seek Input on Regulatory Cooperation
Free Recorded Webinars Available on New D&A Program, Obamacare Planning
MacLeod Addresses InfoShare on Proper Reporting
Fruits of Our Labor
FAA Again Ignored Small Business Concerns

Legal Briefs
Hazardous Materials (Hazmat) Rules for Repair Stations

ARSA on the Hill

Regulatory Outlook
Final Documents/ Your Two Cents

Quality Time
New OFCCP Rules on Hiring Veterans and Disabled
Limitations of Liability – Delaware Case Study

Membership
Member Spotlight: Coopesa – San Juan, Costa Rica
Have You Seen This Person?
A Member Asked…
Check Out ARSA’s Library of Recorded Webinars and Online Training Classes
Take Advantage of ARSA’s Members Getting Members Program, Get 10% Off on Membership Dues
Target Your Message: Advertise in ARSA’s Newsletters and Website!
Exhibit, Sponsor the 2014 Repair Symposium

Positive Publicity

International News
ICAO Floats Global Emissions Scheme
International Roundup

Welcome New Members

Regulatory Compliance Training

Upcoming Events


Latest News

Sarah Says: Double Trouble

By Sarah MacLeod, ARSA Executive Director
This month, ARSA Executive Director Sarah MacLeod discusses the extra regulatory measures repair stations must undergo to comply with hazardous material requirements. To read MacLeod’s blog, as well as other commentary issued during the month of September, please visit http://blog.arsa.org/.

ARSA to SBA: FAA Ignored Small Business Protections

On Sept. 26, ARSA urged Small Business Administration Chief Counsel for Advocacy Winslow Sargeant to request the immediate withdrawal of a Federal Aviation Administration (FAA) proposed Airworthiness Directive regarding the replacement of certain cylinder assemblies. ARSA contends the FAA disregarded congressional mandates in the Regulatory Flexibility Act, and that if the agency continues to get away with inaccurately assessing the small business impact of proposed rules, the entire industry will feel the consequences. Read more at http://arsa.org/arsa-drafts-sbas-help-to-defeat-costly-proposed-rule/.

New Drug Program Management Service Benefit

ARSA, in partnership with NATA Compliance Services (NATACS), is pleased to announce a new drug program management service that provides accurate, fast, and reliable results for a safe and compliant drug-free workplace. NATACS is a “one stop” solution that provides policy templates, plan setup, regulatory assistance, and program administration. Read more at http://arsa.org/new-drug-program-management-service-benefit/.

Canada, US Government Seek Input on Regulatory Cooperation

On Aug. 29, the United States and Canada released a notice inviting public comment on the Regulatory Cooperation Council’s (RCC) progress and how best to harmonize regulatory policy between the two countries. The RCC’s mandate is to promote economic growth, job creation, and benefits to consumers and businesses in North America through increased regulatory transparency and coordination. Read more at http://arsa.org/canada-us-governments-seek-input-on-regulatory-cooperation/.

Free Recorded Webinars Available on New D&A Program, Obamacare Planning

In September, ARSA held two free webinars to better prepare its members to maneuver in a sea of regulations.

On Sept. 18, ARSA, in partnership with NATA Compliance Services (NATACS), presented the association’s new member benefit drug program management service. The system is designed to provide accurate, fast, and reliable results for a safe and compliant drug-free workplace. NATACS is a “one stop” solution providing policy templates, plan setup, regulatory assistance, and program administration.

On Sept. 25, ARSA hosted a presentation from Alper Services on the latest changes regarding the Affordable Care Act (Obamacare) to help make strategic decisions about health insurance offerings. The webinar included considerations of whether to offer benefits (“pay or play”), how to structure the benefits and contributions to meet financial needs, and what areas must be addressed to maintain compliance with the auditable requirements outlined by the Internal Revenue Service and the Department of Labor.

To watch these and other free recorded webinars, visit: http://arsa.org/training-2/arsa-online-training-recorded-sessions/.

MacLeod Addresses InfoShare on Proper Reporting

On Sept. 18, ARSA Executive Director Sarah MacLeod spoke at the Aviation Safety InfoShare conference in Atlanta. The three-day event is a confidential, biannual meeting sponsored by the Federal Aviation Administration in which government and business representatives share aviation industry concerns and discuss current safety issues and mitigations. Read more at http://arsa.org/macleod-addresses-infoshare-on-proper-reporting/.

Fruits of Our Labor

ARSA’s effort to connect lawmakers with repair stations back in their districts was the association’s summer strategy to tackle broader policy initiatives, including the “lift the ban” campaign. Read more at http://arsa.org/fruits-of-our-labor/.

FAA Again Ignored Small Business Concerns

ARSA Vice President of Legislative Affairs Daniel Fisher writes that the FAA’s improper economic analysis on a proposed rule underestimates the agency’s claim that small entities would not be detrimentally affected by the action. Read the blog post at http://blog.arsa.org/?p=265.

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Legal Briefs


Hazardous Materials (Hazmat) Rules for Repair Stations

Handling and carriage of hazardous materials (hazmat) are closely regulated activities. Title 49 of the Code of Federal Regulations (CFR) lays out the general rules for transporting hazmat by rail car, aircraft, vessel, and motor vehicle. So, how do these regulations impact repair stations?

It is easy for an employer to earn hazmat status; the factors are found in 49 CFR § 171.8. It is equally simple for a repair station to meet these requirements unwittingly. Generally, a hazmat employer is one who utilizes a hazmat employee and transports, causes the transport of, or handles hazardous materials in the course of business. A hazmat employee is any individual, whether full-time, part-time, or temporary, who directly affects hazardous material transportation safety by handling, preparing for transport, overseeing its shipping safety, or operating a vehicle used to transport hazmat.

In addition to the general rules in Title 49, repair stations have two more hazmat regulations in Title 14 that deal with: 1) training, and 2) notification requirements.

Also, a repair station must declare its status (i.e., whether it is a hazmat employer), when applying for a part 145 certificate and when changing or amending its certificate. If it is a hazmat employer, it must certify its employees (and those of its contractors and subcontractors) are properly trained.

Training Requirements – 14 CFR § 145.165 requires repair stations that are hazmat employers to adhere to the strictly defined training regulations in 49 CFR § 172.704. Section 145.165 also maintains that repair station employees performing or supervising a job function involving hazmat (specifically those functions listed in § 121.1001 or § 135.501) receive training in accordance with the part 121 or part 135 operator’s hazmat training program.

Finally, § 145.53 mandates that a repair station applicant “certify in writing” that its hazmat employees, and/or those hazmat employees of its contractors and subcontractors, have received all required hazmat training.

For repair stations located in the United States, the training requirements are found in 49 CFR part 172 subpart H. For repair stations located outside the United States, the requirements are found in the most current edition of the International Civil Aviation Organization (ICAO) Technical Instructions for the Safe Transport of Dangerous Goods by Air.

Notification Requirements – Repair stations that are hazmat employers must also comply with air carrier notification requirements in § 145.206. The section requires acknowledgement of an air carrier’s notification of its hazmat status (i.e., will carry or will not carry) submitted under § 121.1005(e) or § 135.505(e). The repair station must then notify its “employees, contractors, or subcontractors” that “handle or replace” hazmat items regulated by 49 CFR parts 171 through 180 of the air carrier’s hazmat status.

Note that § 145.206 is confusing; while § 121.1005(e) and § 135.505(e) specifically limit the air carrier’s notification “only to repair stations that are regulated by 49 CFR parts 171 through 180,” (i.e. hazmat employers) there is no such limiting language in § 145.206, which reads instead that “each repair station must acknowledge receipt.”

Concerned by the potential confusion, ARSA petitioned the Federal Aviation Administration (FAA) in 2005 to clarify that § 145.206 only applied to hazmat employer repair stations. The FAA did not think it necessary to change the language since § 121.1005(e) and § 135.505(e) only require air carriers to notify hazmat employers. Thus, while the language remains overbroad, the FAA agreed that § 145.206 applies to hazmat employers only.

HAZMAT Articles

ARSA Requests FAA to Amend and Reissue Repair Station Hazmat Certification Guidance
HazMat Compliance Baseline
Update: ARSA Asks FAA to Amend Hazmat Training Rule
Hazardous Materials (Hazmat) Training NPRM

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ARSA on the Hill

By Daniel Fisher, ARSA vice president of legislative affairs

In September, ARSA’s legislative team met with senior officials from the Office of Management & Budget (OMB), Transportation Security Administration (TSA), and Department of Homeland Security (DHS) regarding the status of the repair station security rule. Additionally, the association worked with several Capitol Hill offices on “lift the ban” legislation and other options to pressure the DHS, TSA, and OMB to finalize the regulations so the Federal Aviation Administration (FAA) can once again certificate new foreign repair stations.

The association also educated the Small Business Administration and lawmakers about the FAA’s failure to follow congressional mandates under the Regulatory Flexibility Act when it issued a notice of proposed rulemaking for an airworthiness directive on the replacement of certain cylinder assemblies.

On Sept. 23, ARSA PAC delivered campaign support to Rep. Adam Schiff (D-Cal.). Last summer, Rep. Schiff visited Fortner Engineering in Glendale, Cal. Following the visit, he sent a letter to DHS detailing the impact of the FAA foreign repair station certification ban and urging action.

ARSA PAC will continue striving to ensure our allies, like Rep. Schiff, return to Congress in 2014. Learn more about the association’s political program and how to provide solicitation consent.

 

Regulatory Outlook

Final Documents/Your Two Cents

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. Read more at http://arsa.org/final-documents-your-two-cents/.

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Quality Time

Editor’s note: The views and opinions expressed by contributing authors do not necessarily state or reflect those of ARSA, and shall not be used for endorsement purposes.

New OFCCP Rules on Hiring Veterans and Disabled

By Jonathan w. Yarborough,Constangy, Brooks & Smith, LLC, 80 Peachtree Rd., Ste. 208, Asheville, NC 28803-3160. © 2013 Jonathan W. Yarborough ALL RIGHTS RESERVED.

On Sept. 24, the Office of Federal Contract Compliance Programs (OFCCP) issued a final rule under Sec. 503 of the Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA). The rules will go into effect on March 24, 2014.

The new regulation requires federal contractors and subcontractors to adopt quantifiable hiring goals for individuals with disabilities and hiring benchmarks for military veterans. Contractors must establish a hiring goal to ensure 7 percent of each job group in their workforce is made up of qualified individuals. If the company employs fewer than 200, the target instead applies to the entire workforce.

These goals, however, are “aspirational,” not ceilings or quotas. Contractors would not be subject to fines, penalties, or sanctions for not hitting the marks. They are, however, expected to analyze their recruitment practices in order to improve the manner in which they hire.

The final rules include new data collection and analysis requirements. Contractors must create and retain for three years records containing the:

  1. total number of open and filled jobs;
  2. number of applicants for all positions and the number of veteran or disabled candidates; and
  3. number hired and how many had disabilities or were veterans.

Contractors are still not able to force applicants to identify whether or not they are disabled and/or veterans; candidates must do so voluntarily.

Limitations of Liability – Delaware Case Study

By Steven E. Pazar, Attorney at Law, 11 Carriage House Lane, Boxford, Massachusetts 01921. © 2013 Steven E. Pazar ALL RIGHTS RESERVED.

Steven is a counselor to businesses operating in high-risk industries, including aviation. He provides templates, tools, and training to improve contracting efficiency, close deals faster, and control costs.

The economic risks to a service provider associated with an error or bad result usually exceed the monies paid for the work. Therefore, service contracts often include a limitation of liability provision restricting a party’s responsibility to the amounts paid.

State courts are issuing decisions on enforceability and other issues related to limited liability provisions. RHA Construction, Inc. v. Scott Engineering, Inc., (Del. Super., 2013) is the latest decision offering guidance for drafting and negotiating contracts.

RHA Construction and Scott Engineering signed two contracts for engineering services; both were approximately ten pages in length and incorporated a one-page addendum titled “Terms and Conditions of Agreement for Professional Services” (“Terms and Conditions”). The Defendant (Scott Engineering) contended award of damages should be limited to the fees paid as specified by the contract’s limitation of liability. The Plaintiff (RHA) disputed not only the enforceability of the section, but whether the Terms and Conditions were even attached.

RHA swore that the Terms and Conditions addendum was not attached to the 2007 contract. However, under Delaware law the company was held to the terms clearly incorporated by reference. Based on prior case law, the court reasoned “the General Terms and Conditions document was not only incorporated by reference in the contract, but the contract language itself described the General Terms and Conditions as ‘an integral part of the agreement’…therefore, as a matter of law, the Terms and conditions…were incorporated into the May 2007 agreement.”

Limitation of liability provisions that relieve a party from its own negligence generally find disfavor in Delaware. However, a limitation of liability can be enforced where the damages are uncertain and the limitation amount agreed upon is reasonable. The Court will look to factors including: the length of the contract, the clarity of the language, the clarity of the disclaimed liability, and whether the clause was in boldface type.

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Membership


Member Spotlight: Coopesa – San Juan, Costa Rica

Coopesa, originally known as the Cooperativa Autogestionaria de Servicios Aeroindustriales R.L., was founded in 1963 as an employee-owned company.

Certificated by the FAA, EASA, and air agencies from Aruba, Bermuda, Brazil, Columbia, Mexico, Panama, and Venezuela, the company, provides maintenance, repair, and overhaul of narrowbody aircraft. It currently services the Boeing 757, Boeing 737 series, including NG’s, Boeing 727, DC-9, and MD-80 aircraft, and will soon include the Airbus 320.

Coopesa has been a member of ARSA since 1996.

For more information, visit http://www.coopesa.com.

Are you an ARSA member who would like to be in the “Member Spotlight?” If so, please contact Josh Pudnos at Josh.Pudnos@arsa.org.

Have You Seen This Person?

Each month, the hotline spotlights key regulatory, legislative, and business leaders making important contributions to the aviation industry. This month we look at Sen. Maria Cantwell, D-Wash., chairman of the Senate Commerce Subcommittee on Aviation Operations, Safety, & Security.

Sen. Maria Cantwell, chairman of the Commerce Subcommittee on Aviation Operations, Safety, & Security

Maria Cantwell currently serves as a Democratic senator from the state of Washington. She was first elected to the Senate in 2000 and is currently serving her third term.

A committed public servant, Cantwell sits on a number of committees. Apart from her chairmanship of the Commerce Subcommittee on Aviation Operations, Safety, & Security, Cantwell also works on the Energy & Natural Resources Committee, the Finance Committee, and the Small Business & Entrepreneurship Committee, and is the chairman of the Indian Affairs Committee.

Prior to her current role, Cantwell served one term in the U.S. House of Representatives from 1993-1995. After losing her seat in 1996, she left public office to work in the high-tech industry as Senior Vice President of Consumer Products for RealNetworks. She also served in the Washington State House of Representatives from 1986-1993.

Cantwell was the first member of her family to graduate college, earning a bachelor’s degree from Miami University of Ohio.

A Member Asked…

Q: Is it acceptable to install a part/component that has been salvaged or of “unknown status” into a higher assembly and certify the part/component by virtue of the fact that it passed the testing specification for the higher assembly or does the part/component first have to be certified to its own/original design specification before installation?

A:

It depends.

We will assume this process is being done under the privileges and limitations of a repair station certificate. You should determine whether that organization’s repair station document (used to comply with 14 CFR § 145.209) or quality manual (used to comply with 14 CFR § 145.211) has procedures for recovering parts from “salvageable units” and/or for validating individual piece parts/components/subassemblies before (visual inspection), during (form and fit), and after (testing for functional verification) installation ensuring the “article” (top assembly) is returned to at least its original or properly altered condition (to comply with 14 CFR § 43.13(b) and § 145.201(a)(3)).

Another query is whether the test actually verifies the function of the piece part/component/subassembly in question. If the maintenance data (required by 14 CFR § 43.13(a)) actually tests the “condition” of the “inside unit,” it certainly makes the test an acceptable method, technique, and practice for determining the continue-in-service condition of the part/component/subassembly. Therefore, the maintenance performed on the assembly being approved for return-to-service is acceptable (see, 14 CFR § 43.9).

The bottom line is the certificate holder issuing the approval for return-to-service has to have a reasonable technical basis for determining the “continue-in-service” (airworthy) condition of a part/component/assembly. This is true for both new and used parts; it is just easier on new parts. When dealing with new parts, you still inspect and ensure form, fit, and function (if there is a test). For a used part, you either perform maintenance (see the definition of that term in 14 CFR § 1.1) under part 43 (see specific sections above) or you depend on someone else’s maintenance record (and still you better do an incoming inspection, form/fit determination and test when you install it in the higher assembly).

Check Out ARSA’s Library of Recorded Webinars and Online Training Classes

ARSA is pleased to announce that recorded online training classes and webinars are now available for member purchase. Check back often as courses will be continually added. Read more at http://arsa.org/training-2/online-training/.

Take Advantage of ARSA’s Members Getting Members Program, Get 10% Off on Membership Dues

The best form of advertising is word of mouth. Use the Members Getting Members Toolkit to recruit an ARSA member and your company will receive a discounted membership rate for your next membership term. Get more information at http://arsa.org/membership/members-getting-members/

Target Your Message: Advertise Today in ARSA’s Newsletters and Website!

ARSA recently updated its menu of advertising opportunities for arsa.org, the hotline and the ARSA Dispatch. Take advantage of these great opportunities today to showcase your company, a new product or event. For more information go to http://arsa.org/advertise/

Exhibit, Sponsor the 2014 Repair Symposium

As the maintenance industry’s top event devoted exclusively to regulatory compliance, the ARSA Symposium attracts a highly qualified professional audience. Use this opportunity to promote your company while showing support for ARSA. Get more information at http://arsa.org/news-media/events/arsa-symposium/arsa-annual-repair-symposium-sponsorship/

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Positive Publicity

As part of ARSA’s ongoing Positive Publicity Campaign (PPC), the association is actively working to enhance the media’s understanding of our $65 billion industry and its vital importance to global civil aviation. To accomplish this goal, ARSA monitors media coverage on aviation maintenance to spread the word about the valuable role repair stations provide their communities in jobs, economic opportunities, and community involvement. These are some of this month’s top stories highlighting the industry’s contributions.

International News


ICAO Floats Global Emissions Scheme

Beginning Sept. 24, the International Civil Aviation Organization held its 38th Triennial Assembly in Montreal, where delegates from member states discussed the formation of an international market-based mechanism to curb aviation emissions.

Negotiations ranged from carbon fee exemptions for developing countries to charging international air carriers for a portion of their emissions in flight. European delegates offered the European Union – Emission Trading System (EU-ETS) as a framework, although the new mechanism would replace EU-ETS on a global scale by 2020.

The international body hopes to reach consensus on a new system quickly, since aviation emissions are expected to double by 2030 as flights from emerging economies like China continue to increase. Members are confident such an agreement would avoid a trade war like the one threatened over the implementation of EU-ETS earlier this year.

International Roundup

To provide more international coverage, ARSA presents a monthly roundup of world events pertaining to the industry

Joint Venture Maintenance Facility to Open in Qatar (AIN Online)

Dubai World Center Sees First FBO Hangar Completed (Arabian Aerospace Online News Service)

Tata Plans MRO Unit in India (Aviation Week)

Ryanair Invests in the Expansion of Kaunas Aircraft Maintenance Unit (BBN)

Avcom Extends Russia’s Business Aircraft Support Network (AIN Online)

Legacy Aviation Services Obtains Mexican Repair Authority (AIN Online)

Dallas Aeronautical Services Brazil to Open New Facility in Sao Jose dos Campos (AviTrader)

Lion Group to Build MRO on Indonesia’s Batam Island (Air Transport World)

Welcome New Members

Regulatory Compliance Training

Test your knowledge on §145.57 Duration and Renewal of Certificate.

MROMontreal300x250

Upcoming Events

2013 AOPA Aviation Summit – Oct. 10-12, 2013

MRO Network: Airline E&M North America – Oct. 15-17, 2013

NBAA Annual Meeting and Convention – Oct. 20-26, 2013

MARPA Annual Conferences – Oct. 23-25, 2013

MRO Asia – Oct. 29-31, 2013

International Aviation Forecast Conference – Nov. 3-5, 2013

SpeedNews 18th Annual Regional & Business Aviation Industry Suppliers Conference – Nov. 6-8, 2013

International PMA Summit – Nov. 8-9, 2013

AVM Summit, USA – Nov. 21-22, 2013

AVM Summit, Europe – Jan. 21-22, 2014

MRO Middle East – Feb. 5-6, 2014

ARSA Annual Repair Symposium and Legislative Fly-In – March 19-21, 2014

Previous 12 issues:

2013: Jan Feb Mar Apr May June July
2012: Jun Jul Aug Sep Oct Nov Dec

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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.

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ARSA reserves all remaining rights and will use any means necessary to protect its intellectual property.

© 2013 Aeronautical Repair Station Association

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