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New
IRS Revenue Ruling Affects Some Business Aviation Structures
NBAA
reports that IRS Revenue Ruling 2005-64 considers whether the losses incurred by
an individual who engages in an air transportation activity in the circumstances
described below are passive losses within the meaning of Sec. 469 of the
Internal Revenue Code and whether the amounts paid for the air transportation
services described below are subject to the tax imposed by Sec. 4261. The IRS
decided that the lease of an aircraft by an S corporation, without a pilot or
maintenance crew, to a related C corporation for its air transportation needs
was a rental activity and, therefore, subject to the passive activity loss
limitations. However, it was not subject to the Code Sec. 4261 excise tax on air
transportation. On the other hand, another S corporation's lease of an aircraft,
with pilot and maintenance crew, to a related corporation for its air
transportation needs, wasn't a rental activity subject to the passive activity
loss limitations, but was subject to the air transportation excise tax. Download
the Revenue Ruling at:
http://web.nbaa.org/member/ops/taxes/revruling/2005-064.pdf
Update
to AC 90-100, U.S. Terminal and Enroute RNAV Operations
NBAA reports that "The FAA has published GENOT 05005,
"Operation on U.S. Area Navigation (RNAV) Routes, Standard Terminal
Arrivals and Departure Procedures." This GENOT provides an update to
information on Advisory Circular 90-100 relative to the RAIM check
requirement. In part, the AC states, "The FAA is developing a RAIM
prediction service for general use. Until this capability is operational, a
RAIM prediction does not need to be done for any RNAV route conducted where
ATC provides radar monitoring or RNAV departure/arrival procedure, which has
an associated 'RADAR REQUIRED' note charted. Operators may check RAIM
availability for RNAV departure/arrival procedures at any given airport by
checking approach RAIM for that location." To view the full GENOT at:
http://www.faa.gov/NTAP/NTAP05SEP29/gen05005.htm"
New
Rules Aim To Ensure Airworthy Parts
According
to AIN egulations
will go into effect October 17 to help ensure that replacement parts are
airworthy. New FAR Part 3 creates additional rules banning certain false or
misleading statements about type-certified parts that go beyond those now
covered in Parts 21 and 43. In addition, Part 3 prohibits “intentionally
misleading statements” about the airworthiness of parts. This includes any
statement “that makes a representation as to the airworthiness or
acceptability of a part, including advertisements, as well those records
regularly relied upon by installers of equipment to ensure airworthiness.”
Possible
Mis-wiring Prompts Citation AD Proposal
According
to AIN a single report of a mis-wired APU fire-extinguishing bottle on a
Citation X (Model 750) has prompted a proposed AD to require placing
identification sleeves on the positive and negative terminals of APU and main
engine fire-extinguishing bottle wiring and reconnecting the wires to the
correct terminal studs on Citation 500s, 550s, S550s, 560s, 560XLs and 750s.
The fire-extinguishing bottles on these airplanes have positive and negative
studs that are the same size, “so it is possible to cross-connect the wiring
of the positive and negative leads,” the FAA said. The agency estimates
there are about 2,800 of these model airplanes in the worldwide fleet and
proposes compliance with the directive within 100 flight hours or 60 days of
the effective date of the AD. Comments on the proposal are due November 14.
For more information, contact the FAA’s Robert Adamson in Wichita at (316)
946-4145.
FAA
Moves To End Mode-S Exemptions
According
to AIN the
FAA has withdrawn its decade-old proposal to rescind its requirement for
Mode-S transponders and, consequently, plans to end the hundreds of Mode-S
installation exemptions currently in effect. Beginning March 1, 2007, the FAA
has proposed that it will no longer allow exempted Part 121 and 135 operators
to fly without a Mode-S transponder. No new exemptions would be granted after
that date, though Mode-A or -C transponders could continue to be used until
they can no longer be repaired, after which they would have to be replaced
with a permanent Mode-S unit. When the FAA in 1996 proposed to rescind the
mandate to install Mode-S transponders (except on aircraft equipped with TCAS
II), the agency was inundated with requests for exemptions, as operators
anticipated the Mode-S requirement would be withdrawn. Comments on the
proposal are due November 7. For more information, contact the FAA at (202)
267-9677.
FAA
Issues Notice on Reevaluation of De-Icing Programs
In
Notice 8000.308, the FAA provides guidance and information for aircraft
operators regarding the evaluation of deicing/anti-icing programs. This
notice applies to Part 125 and Part 135 certificate holders that have
elected to operate with a program approved under Part 121.629(c). The notice
stresses the need for reevaluation by each certificate-holding district
office and certificate holder of the holder's deicing/anti-icing program and
outlines specific areas of concern. Using the system safety principles and
risk assessment process, the FAA determined that programs requiring FAA
approval, such as ground deicing/anti-icing programs, would have the highest
degree of inherent risk and, as such, were determined to be the most
critical due to the approaching 2005–2006 winter season. Download the
notice at:
http://web.nbaa.org/public/ops/N8000-308.pdf
Holdover
time is the estimated time de-icing/anti-icing fluid will prevent the formation
of frost or ice, and the accumulation of snow on the treated surfaces of an
aircraft. Holdover time begins when the final application of deicing/anti-icing
fluid commences and expires when the deicing/anti-icing fluid applied to the
aircraft loses its effectiveness. Operators required to develop, and have
available, holdover timetables for use by their personnel may find the latest
guidelines on the FAA web site (under Airline Safety, More) at:
http://www.faa.gov/other_visit/aviation_industry/airline_operators/
Second-in-command
Pilot Type Rating Rules Adopted
According
to AIN, pilots serving as second-in-command (SIC) will be required to possess a
SIC type rating for operations outside U.S. airspace, under new FAA regulations
published today. The purpose of the rules is to make it relatively simple for
FAA type-rating requirements to conform with International Civil Aviation
Organization (ICAO) requirements, allowing
U.S.
flight crews to fly to international destinations without the threat of being
grounded for not holding the appropriate type rating. The SIC type rating, which
does not require additional training, would not be mandatory for operations
within U.S airspace. To be eligible for the rating, a qualified PIC or a
type-rated CFI would verify SIC training was given and a completed FAA Form
8710-1 would be presented in person to either a FSDO or a designated examiner
along with the applicant’s logbook or training records. Of the 49 comments
received since the rules were proposed last November, about half were in favor
and about one-quarter were opposed. Another quarter had specific questions. The rules
go into effect on September 6.
Feds
Seek To Snoop On In-flight Communications
According
to AIN, fearing that terrorists will exploit emerging in-flight broadband
services to remotely activate bombs or coordinate hijackings, the Justice
Department has asked the Federal Communications Commission for the power to
eavesdrop on any passenger’s Internet use or cellphone call within 10 minutes
of obtaining a court order. According to a 23-page Justice Department filing,
“There is a short window of opportunity in which action can be taken to thwart
a suicidal terrorist hijacking or remedy other crisis situations on board an
aircraft, and law enforcement needs to maximize its ability to respond to these
potentially lethal situations.” The FCC is currently considering rule changes
that would permit cellphone calling and additional broadband wireless use in
flight. The
Washington
,
D.C.
organization Center for Democracy and Technology yesterday filed comments of
its own with the FCC opposing the government’s request to force satellite
broadband service providers to equip their in-air networks with
rapid-wiretapping technology. The group said the Justice Department should be
seeking such authority directly from Congress, not the FCC.
Europe
Plans To Introduce Aircraft Emissions Fees
According
to AIN, within a decade, operators of aircraft with an mtow of 19,000 pounds or
more and flying in the airspace of the 25-state European Union (EU) will likely
have to start paying for carbon dioxide emissions from their engines. A final
report from consultants was published on Friday and advises the European
Commission that it would be both feasible and legal to implement emissions
trading for operators, regardless of their aircraft’s country of registration
or type of operation. If the EC accepts emissions trading–and it is expected
to do so by the end of this year–the system could apply to aviation by 2010.
The EC’s expected acceptance of emissions trading as a means of reducing
aviation’s output of greenhouse gases appears to confirm that it will not
impose taxes on aircraft fuel. Instead, the EU governments have proposed to levy
a new airline passenger tax. The consultant’s report proposes a system whereby
aircraft operators would bid in an auction for the emissions permits that they
require. Under an alternative program, operators would be allocated emissions
permits and would then buy or sell these depending on their needs.
8.33
kHz Spacing Mandate for ICAO European Region
Beginning
March 2007, 8.33-kHz communications frequency space above FL195 in the ICAO
European region will be mandatory. Frequency spacing is currently mandatory in
the ICAO European region above FL245. Plans to require 8.33-kHz spacing below
FL195 are currently being developed. For more information regarding these
mandates, please visit http://www.eurocontrol.int/vhf833/
Mandatory
Phasing for Mode-S Elementary (ELS) and Enhanced (EHS) Surveillance
Mode-S
Elementary (ELS) and Enhanced (EHS) surveillance is scheduled for mandatory
phasing in European airspace by March 30, 2007. This will include eight data
downlinks and will begin in
France
,
Germany
and the
U.K.
This will affect all aircraft operations of any weight or country of
registration. For more information regarding Mode-S Elementary and Enhanced (EHS)
surveillance phasing please visit http://www.eurocontrol.int/mode_s/
If your company
or its employees ever charter aircraft when your airplane is unavailable, your
company might be exposed to liability in the event of an accident or incident.
Insurance coverage, known as non-owned aircraft liability insurance, is
available to manage that risk. Non-owned aircraft liability insurance provides
coverage in the event a corporation becomes legally liable for injuries and
property damage to third parties as a result of a loss involving a corporation's
or employee's use of a non-owned aircraft. Liability coverage would be provided
to the corporation as long as the aircraft is not partly or wholly owned or
registered in the name of the corporation. Ensure your company is appropriately
covered by learning more about non-owned aircraft liability insurance online at:
http://web.nbaa.org/member/ops/taxes/riskmgmt/200508.php
ACAS
II Exemptions in
Europe
ACAS
II Exemptions are available until March 31, 2006 for operation in European
airspace. Visit http://www.eurocontrol.int/acas
for more details.
Britain
Weighs Ban Against Basing Non-UK Aircraft
From: AINalerts:
July 7, 2005
The days might
soon be over for the basing of non-UK-registered general aviation aircraft in
the
UK
. The country’s Department for Transportation (DFT) is considering a plan to
prohibit non-commercial foreign-registered aircraft from being permanently
based in
Britain
. A comment period on the plan is expected shortly. According to the British
Business and General Aviation Association (BBGA), if European authorities
addressed the factors that lead operators to register offshore–in its view,
excessively burdensome regulation and bureaucracy–then many aircraft would
in fact return to EU national registers. According to a DFT spokesman, the
comment period will begin before the end of August. Full details of the
process will be posted under the consultations section of the department’s
Web site at www.dft.gov.uk.
French civil aviation authorities have been considering similar changes over
the past two years, but do not yet appear to have made a firm decision. They
too have become concerned by the dwindling number of non-commercial aircraft
on the French register. But like the BBGA, the French chapter of the European
Business Aviation Association has essentially argued that operators are being
driven away from their national registers by excessively complex and costly
regulations.
Say
Goodbye to Hundreds of NDB Approaches
From: AINalerts:
July 7, 2005
Starting today, 216 NDB
approaches will be decommissioned. Although the FAA has yet to actually switch
them off the air, the decommissioned NDB stations will no longer be
flight-checked, maintained, approved for use or shown on updated charts,
according to AOPA. “The FAA decommissioned them after careful coordination
with AOPA and the aviation community,” said Randy Kenagy, AOPA director of
advanced technology. This means that the FAA “can stop spending money on
something few use and will have more funds for GPS-WAAS approaches to general
aviation airports,” he added. The FAA has proposed decommissioning a total
of 479 NDB procedures, with the final set of procedures scheduled to be
eliminated in September. AOPA told the agency that 60 NDB approaches should be
saved because they provided the lowest minimums. However, the FAA retained
just 35 of the 60, according to AOPA.
Stage
4 Noise Standards to Take Effect in 2006
From:
AINalerts:
July 5, 2005
All jet and
transport-category airplanes (those with an mtow of 12,500 pounds or more) for
which application of a new type design is submitted on or after Jan. 1, 2006,
will have to meet new noise certification levels. The FAA today issued its
final FAR Part 36 Stage 4 noise levels that were originally proposed in
December 2003. Stage 4 is a cumulative 10 EPNdB (effective perceived noise
level in decibels) less than the current Stage 3 limits. They are based on the
work of the International Civil Aviation Organization’s committee on
aviation environmental protection, in which the FAA and the International
Business Aviation Council are active members. All business jets currently
manufactured meet Stage 3 and nearly all would qualify to be recertified to
meet Stage 4. Although the proposal doesn’t contain a Stage 4 retrofit
requirement and the FAA said it has no plans to impose such a requirement, one
of the committee’s recommendations called for a phaseout by 2020 of Stage 3
airplanes with an mtow of more than 75,000 pounds. In its proposal, the FAA
had noted that 25 years elapsed between the adoption of Stage 3 in 1975 and an
all-Stage 3 airline fleet in December 1999. For more information, contact the
FAA’s Laurette Fisher at (202) 267-3561.
NBAA And NATA Critical of CVR/FDR
Proposal
From:
AINalerts:
July 5, 2005
NBAA and the National Air
Transportation Association submitted comments critical of the FAA’s proposed
rule to modify recording, sampling and installation requirements for cockpit
video recorders (CVRs) and flight data recorders (FDRs). The comments were
submitted just before the deadline last week. According to NBAA, the FAA’s
economic analysis required for this rule “failed to address a single
business aircraft affected by this proposal.” The association estimates that
this rule could cost the Part 91 and 135 community more than $1 billion to
meet these new requirements, and it has asked that the FAA halt any further
rulemaking on this issue “until it completes the required economic
analysis.” The comments from NATA were much the same: “The agency failed
to conduct even a cursory review of the feasibility and economic impact of the
rule for aircraft operated under Parts 135 and 91. This oversight has
resulted in substantial flaws in the FAA estimates of time to complete CVR
retrofits, the overall costs of the upgrades and the number of small
businesses impacted” by the proposal. NATA also wants the agency to suspend
action on the rulemaking.
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