
[Federal Register Volume 81, Number 135 (Thursday, July 14, 2016)]
[Proposed Rules]
[Pages 45871-45909]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-16596]



[[Page 45871]]

Vol. 81

Thursday,

No. 135

July 14, 2016

Part V





Department of Transportation





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Federal Aviation Administration





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14 CFR Part 139





Safety Management System for Certificated Airports; Proposed Rules

  Federal Register / Vol. 81 , No. 135 / Thursday, July 14, 2016 / 
Proposed Rules  

[[Page 45872]]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 139

[Docket No.: FAA-2010-0997; Notice No. 16-04]
RIN 2120-AJ38


Safety Management System for Certificated Airports

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Supplemental notice of proposed rulemaking (SNPRM).

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SUMMARY: On October 7, 2010, the FAA published in the Federal Register 
a notice of proposed rulemaking (NPRM) to require certificate holders 
to establish a safety management system (SMS) for the entire airfield 
environment, including movement and non-movement areas, to improve 
safety at airports hosting air carrier operations. After reviewing the 
comments received and conducting further internal analysis, the FAA is 
amending that proposal. The FAA now proposes to require an SMS only for 
a certificated airport classified as a small, medium, or large hub 
airport in the National Plan of Integrated Airport Systems; serving 
international air traffic; or having more than 100,000 total annual 
operations. The FAA is also proposing changes that would extend the 
implementation period from 18 to 24 months; require submission of an 
implementation plan within 12 months instead of 6 months of the 
effective date of the final rule; modify the training requirements; 
ensure consistency among various FAA SMS initiatives, and reduce the 
implementation burden.

DATES:  Send your comments on or before September 12, 2016.

ADDRESSES: You may send comments identified by Docket Number FAA-2010-
0997 using any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for sending your 
comments electronically.
     Mail: Send comments to Docket Operations, M-30; U.S. 
Department of Transportation, 1200 New Jersey Avenue SE., Room W12-140, 
West Building Ground Floor, Washington, DC 20590-0001.
     Hand Delivery or Courier: Bring comments to Docket 
Operations in Room W12-140 of the West Building Ground Floor at 1200 
New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., 
Monday through Friday, except Federal holidays.
     Fax: Fax comments to Docket Operations at 202-493-2251.
    For more information on the rulemaking process, see the 
SUPPLEMENTARY INFORMATION section of this document.
    Privacy: In accordance with 5 U.S.C. 553(c), the Department of 
Transportation (DOT) solicits comments from the public to better inform 
its rulemaking process. DOT posts these comments, without edit, 
including any personal information the commenter provides, to 
www.regulations.gov, as described in the system of records notice (DOT/
ALL-14 FDMS), which can be reviewed at www.dot.gov/privacy.
    Docket: To read background documents or comments received, go to 
http://www.regulations.gov and follow the online instructions for 
accessing the docket. Or, go to the Docket Management Facility in Room 
W12-140 of the West Building Ground Floor at 1200 New Jersey Avenue 
SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, 
except Federal holidays.

FOR FURTHER INFORMATION CONTACT: For technical questions concerning 
this proposed rule, contact Keri Lyons, Office of Airports Safety and 
Standards, Airport Safety and Operations Division, AAS-300, Federal 
Aviation Administration, 800 Independence Avenue SW., Washington, DC 
20591; telephone (202) 267-8972; email keri.lyons@faa.gov.

SUPPLEMENTARY INFORMATION: Later in this preamble under the Additional 
Information section, we discuss how you can comment on this proposal 
and how we will handle your comments. This discussion includes related 
information about the docket, privacy, and the handling of proprietary 
or confidential business information. We also discuss how you can get a 
copy of this proposal and related rulemaking documents.

Authority for This Rulemaking

    The FAA's authority to issue rules regarding aviation safety 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.
    The FAA is proposing this rulemaking under the authority described 
in Subtitle VII, part A, subpart III, section 44706, ``Airport 
operating certificates.'' Under that section, Congress charges the FAA 
with issuing airport operating certificates (AOC) that contain terms 
that the Administrator finds necessary to ensure safety in air 
transportation. This proposed rule is within the scope of that 
authority because it requires certain certificated airports to develop 
and maintain an SMS. The development and implementation of an SMS 
ensures safety in air transportation by assisting these airports in 
proactively identifying and mitigating safety hazards.

I. Executive Summary

A. Purpose of This SNPRM

    The increasing demands on the U.S. air transportation system, 
including additional air traffic and surface operations and airport 
construction, have the potential to heighten risk to operating 
aircraft. Historically, the approach to aviation safety was based on 
the reactive analysis of past accidents and the introduction of 
corrective actions to prevent the recurrence of those events. An SMS, 
however, helps airport operators to proactively identify potential 
hazards in the operating environment, analyze the risks of those 
hazards, and mitigate those risks to prevent an accident or incident. 
In its most general form, SMS is a set of decision making tools that an 
airport operator would use to plan, organize, direct, and control its 
everyday activities in a manner that enhances safety.
    On October 7, 2010, the FAA published an NPRM entitled ``Safety 
Management System for Certificated Airports'' (75 FR 62008). In the 
NPRM, the FAA proposed to require all 14 Code of Federal Regulations 
(CFR) part 139 certificate holders to establish an SMS to improve the 
safety of their aviation-related activities.
    The FAA received 65 comments in response to the NPRM from a variety 
of commenters. Because of the complexity of the issues and concerns 
raised by the commenters, the FAA began to reevaluate whether 
deployment of SMS at all certificated airports was the most effective 
approach. As part of this process, the FAA looked at applicability for 
various categories of certificate holders to determine which option 
would maximize safety benefits in the least burdensome manner. While 
the FAA is proposing a preferred alternative in this SNPRM, the FAA 
requests comments on the other applicability alternatives discussed in 
this SNPRM.
    The preferred alternative harmonizes with the intent of ICAO SMS 
standards by including all certificated airports accepting 
international operations. The FAA supports conformity of U.S. aviation 
safety regulations with ICAO standards and recommended practices and 
believes the SNPRM meets the

[[Page 45873]]

intent of the ICAO standard in a way that complements existing airport 
safety regulations in part 139.
    The FAA continues to believe that an SMS can address potential 
safety gaps through improved management practices.\1\ SMS's proactive 
emphasis on hazard identification and mitigation, and on communication 
of safety issues, would provide certificate holders with robust tools 
to improve safety. While the comments generated some changes to the 
proposal in this document, most of the proposed core elements of the 
SMS program remain in this SNPRM.
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    \1\ Additional information regarding the purpose of the proposed 
SMS requirement can be found in the ``Background'' section of the 
NPRM (75 FR 62008).
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B. Summary of the Major Provisions of the SNPRM

    The major change in this SNPRM is to the proposed applicability. 
Rather than requiring an SMS at all certificated airports, the FAA now 
proposes to require an SMS be developed, implemented, maintained, and 
adhered to at any certificated airport:
     Classified as a small, medium, or large hub \2\ airport in 
the National Plan of Integrated Airport Systems (NPIAS); \3\
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    \2\ The FAA's use of the term hub airport is different than that 
of airlines, which use the term to denote an airport with 
significant connecting traffic by one or more carriers. As defined 
in 49 U.S.C. 47102, large hubs are those airports that account for 1 
percent or more of total U.S. passenger boardings (U.S. passenger 
enplanements); medium hubs are airports that account for between 
0.25 percent and 1 percent of total U.S. passenger boardings; and 
small hubs are airports that enplane 0.05 percent to 0.25 percent of 
total U.S. passenger boardings.
    \3\ The Secretary of Transportation is required to maintain a 
plan for developing public-use airports that are important to the 
national transportation system. The NPIAS identifies the types of 
projects and estimated costs eligible for federal financial 
assistance necessary to provide a safe, efficient, and integrated 
system of airports. The FAA Office of Airports maintains the NPIAS 
and publishes a Report to Congress every other year. Current and 
past reports are available at http://www.faa.gov/airports/planning_capacity/npias/.
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     Identified by the U.S. Customs and Border Protection (CBP) 
as a port of entry (under 19 CFR 101.3), designated international 
airport (under 19 CFR 122.13), landing rights airport (under 19 CFR 
122.14), or user fee airport (19 CFR 122.14) (collectively referred to 
throughout this proposal as ``international airports''); or
     Identified as having more than 100,000 total annual 
operations (according to best available data).
    Additionally, the FAA proposes extending the implementation period 
from 18 to 24 months, requiring submission of an implementation plan 
within 12 months instead of 6 months of the effective date of the final 
rule, and changes to the training requirements. Other changes have also 
been made to ensure consistency among various FAA SMS initiatives and 
to reduce the implementation burden.
    Throughout the document, the FAA requests specific comment on the 
following issues:
     What other methods may be available to accurately account 
for and determine applicability based on annual operations or whether 
the FAA should use a different baseline for determining applicability;
     What other methods may be available to identify 
international airports;
     What types of data or other information certificated 
airports could provide under a national reporting database;
     Whether the estimates of the average pool of employees 
needing comprehensive SMS training is an accurate average across all 
airports affected by the proposal;
     What types of job roles would require comprehensive SMS 
training; and
     Whether the implementation of the proposed accountable 
executive definition is feasible.

C. Summary of the Costs and Benefits

    This proposed rule would require certain certificate holders under 
part 139 to establish an SMS. SMS is a set of tools designed to help 
airports effectively integrate formal risk control procedures into 
normal operational practices to improve operational safety. Benefits 
are estimated at $370.8 million ($225.9 million present value) and 
total costs are estimated at $238.9 million ($157.5 million present 
value), with benefits exceeding costs. The following table shows 
benefits and costs of the alternatives over 10 years.

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                                                                                                     Preferred
                                                                                                   alternative:
                                                                   International    L, M, S and   L, M, S, >100K
            Base case                All  ($)      Class I  ($)         ($)       >100K ops  ($)     ops, and
                                                                                                   international
                                                                                                        ($)
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Benefits........................    $382,987,281    $368,096,671    $360,907,166    $356,128,301    $370,788,457
Costs...........................     471,104,787     341,021,606     215,010,997     163,760,850     238,865,692
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    Net Benefits................     -88,117,506      27,075,065     145,896,169     192,367,451     131,922,764
PV Benefits (7%)................     233,282,770     224,210,033     219,830,291     216,919,352     225,850,869
PV Costs (7%)...................     307,842,595     223,584,687     141,796,001     108,819,973     157,496,312
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    PV Net Benefits (7%)........     -74,559,825         625,346      78,034,290     108,099,379      68,354,557
PV Benefits (3%)................     307,499,272     295,542,114     289,769,378     285,932,407     297,704,052
PV Costs (3%)...................     389,440,320     282,304,199     178,432,284     136,340,226     198,211,977
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    PV Net Benefits (3%)........     -74,559,825         625,346      78,034,290     108,099,379      68,354,557
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Mitigation Costs: Not quantified, estimates not included.
Given the range of mitigation actions possible, it is difficult to quantify potential benefits.

    The estimated costs of this rule do not include the costs of 
mitigations that operators could incur as a result of conducting the 
risk analysis proposed in this rule. Given the range of mitigation 
actions possible, it is difficult to provide a quantitative estimate of 
both the costs and benefits of such mitigations. We anticipate that 
operators will only implement mitigations where benefits of doing so 
exceed the costs of mitigations. In order for the estimated benefits to 
exceed the costs of the rule, the mitigation costs must be below $68.4 
million over 10 years (discounted at 7%). The FAA requests comment on 
this assumption, as well as data regarding costs and benefits 
associated with any mitigations implemented through voluntary SMS 
programs.

[[Page 45874]]

II. Background

A. NPRM

    In the NPRM, the FAA proposed to require all part 139 certificate 
holders to develop and implement an SMS to improve the safety of their 
aviation-related activities. An SMS is a formalized approach to 
managing safety by developing an organization-wide safety policy, 
developing formal methods of identifying hazards, analyzing and 
mitigating risk, developing methods for ensuring continuous safety 
improvement, and creating organization-wide safety promotion 
strategies.
    The original comment period was to close on January 5, 2011, but, 
in response to several commenters' requests, the FAA extended the 
comment period to July 5, 2011. Additionally, the FAA permitted 
commenters to submit clarifying questions to the docket during the 
comment period. The FAA answered these questions before the comment 
period closed in a document that was placed in the docket (the 
``Responses to Clarifying Questions'').\4\ The FAA also published a 
technical report detailing results of the Office of Airports' SMS pilot 
studies that was also placed in the docket.\5\
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    \4\ ``FAA Responses to Clarifying Questions About Proposed 
Rulemaking for SMS for Certificated Airports'' is available at 
http://www.regulations.gov/#!documentDetail;D=FAA-2010-0997-0073).
    \5\ Safety Management System Pilot Studies (Technical Report) is 
available at http://www.regulations.gov/#!documentDetail;D=FAA-2010-
0997-0074.
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    In the NPRM, the FAA proposed a new subpart E that would have: (i) 
Required all holders of an airport operating certificate (AOC) to have 
an approved airport SMS; (ii) prescribed the components of an SMS; and 
(iii) prescribed implementation requirements for an airport SMS. 
Certificate holders would have implemented SMS throughout the airport 
environment, including the movement and non-movement areas (e.g., 
runways, taxiways, run-up areas, ramps, apron areas, and on-airport 
fuel farms).
    Under the proposal, the FAA envisioned an SMS as an adaptable and 
scalable system. For example, the proposal permitted certificate 
holders to maintain a separate SMS manual in addition to the Airport 
Certification Manual (ACM), or maintain SMS documentation directly in 
the ACM. Options such as these would have permitted certificate holders 
that operate multiple airports maximum flexibility in the development 
of their SMS. Similarly, the proposal included a requirement for 
certificate holders to establish a system for identifying safety 
hazards and a systematic process to analyze hazards and their 
associated risks. By not prescribing any one means for identifying 
hazards or analyzing risk, the proposal permitted certificate holders 
flexibility in developing scalable and adaptable processes under their 
SMS.

B. Summary of Comments on NPRM

    The FAA received 65 comments in response to the NPRM from a variety 
of commenters including air carriers, airport operators/certificate 
holders, representatives of airline employees, trade associations, an 
airport user group, attorneys general, consultants, universities and 
private citizens. Commenters included:
     Air carriers: Delta Airlines,
     Airport operators/certificate holders: Alaska Department 
of Transportation and Public Facilities, Austin-Bergstrom International 
Airport (TX), Bangor International Airport (ME), City of Albuquerque 
(NM), City of Merced (CA), City of Phoenix (AZ), City of Prescott (AZ), 
Clark County Department of Aviation (NV), Coastal Carolina Regional 
Airport (NC), Columbus Regional Airport Authority (OH), Contra Costa 
County (CA), Dallas/Fort Worth International Airport (TX), Denver 
International Airport (CO), Floyd Bennett Memorial Airport (NY), Glynn 
County Airport Commission (GA), Hartsfield-Jackson Atlanta 
International Airport (GA), Houston Airport System (TX), Huntingburg 
Airport (IN), Indianapolis Airport Authority (IN), Jacksonville 
International Airport (FL), Lee County Port Authority (FL), Louisville 
Regional Airport Authority (KY), Manchester-Boston Regional Airport 
(MA), March Inland Port Authority (CA), Maryland Aviation 
Administration (MD), Miami-Dade Aviation Department (FL), Modesto City-
County Airport (CA), Myrtle Beach International Airport (SC), Norm Y. 
Mineta San Jose International Airport (CA), Pitkin County (CO), 
Pittsburgh International Airport (PA), Port Authority of New York and 
New Jersey (NY/NJ), Port of Portland (OR), Rapid City Regional Airport 
(SD), Rochester Airport Company (MN), San Antonio Airport System (TX), 
Santa Barbara Airport (CA), Tri-Cities Regional Airport (TN), Tucson 
Airport Authority (AZ), Tulsa Airport Authority (OK), Wayne County 
Airport Authority (MI),
     Representatives of airline employees: Airline Pilots 
Association (ALPA),
     Trade associations: Airlines for America (A4A), Aircraft 
Owners and Pilots Association (AOPA), Airports Council International-
North America (ACI-NA), American Association of Airport Executives 
(AAAE), American Association for Justice (AAJ), Colorado Airport 
Operators Association (CAOA), Experimental Aircraft Association (EAA), 
National Air Transportation Association (NATA),
     Airport users groups: Prescott Airport Users Association,
     Attorneys General: Attorney General for the District of 
Columbia, Attorney General for the State of Oklahoma,
     Consultants and universities: Landry Consultants and Dave 
Fleet Consulting, Purdue University, the University of Southern 
California Aviation Safety and Security Program (U.S.C.), and
     Eight individuals and 9 anonymous submissions.
    One individual submitted a comment that was out-of-scope, and 
portions of Clark County, Dallas-Fort Worth International, and AOPA's 
submissions were out-of-scope.
    In addition to the above, the FAA received clarifying questions 
from the following entities during the comment period: AAAE, ACI-NA, 
Austin-Bergstrom International Airport, Fairbanks International 
Airport, Fresno Yosemite International Airport, Landry Consultants and 
Dave Fleet Consulting, Louisville Regional Airport Authority, Maryland 
Aviation Administration, Port of Seattle, and U.S.C.. The FAA answered 
these questions in the Responses to Clarifying Questions.\6\ Those 
questions are not addressed in this document.
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    \6\ FAA Responses to Clarifying Questions (May 24, 2011), 
available at http://www.regulations.gov/#!documentDetail;D=FAA-
;2010-0997-0073.
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C. Need for SNPRM

    While reviewing the comments to the NPRM, the FAA began to re-
evaluate whether requiring an SMS at all certificated airports was the 
most effective option. As part of this process, the FAA looked at the 
applicability for various categories of certificate holders to 
determine which option would maximize safety benefits in the least 
burdensome manner. While the FAA is proposing a preferred alternative 
in this SNPRM, the FAA requests comments on the other applicability 
alternatives discussed in this SNPRM.

[[Page 45875]]

III. Discussion of Proposals in the SNPRM

A. Differences Between the SNPRM and the NPRM

1. Applicability
    In the NPRM, the FAA proposed that all 544 \7\ certificated 
airports be covered by the SMS requirements.
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    \7\ The number of certificated airports at the time of SNPRM 
development.
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    Based on comments and other information gathered, it became evident 
that application of SMS across all certificated airports was not 
practical. In response, the FAA revised its assumptions used to 
calculate overall costs associated with this SNPRM's proposal. The FAA 
also reviewed additional accident and incident databases to obtain more 
accurate assumptions of benefits derived from an SMS. These additional 
databases included the FAA Accident and Incident Database (AIDS), 
NASA's Aviation Safety Reporting System (ASRS), the FAA's Wildlife 
Strike Database, and the FAA's Runway Incursion Database.
    Using these revised cost and benefit estimates, the FAA considered 
a range of alternatives to determine how to apply an SMS requirement 
that would reduce risk at the largest group of airports while still 
producing net benefits. The FAA focused on airports with the highest 
passenger enplanements and largest total operations so that safety 
benefits would flow to the overwhelming majority of aircraft operations 
in the United States. The FAA also focused on incorporating airports 
with international passenger operations to ensure conformity with 
international standards and recommended practices. To that end, the FAA 
developed the following alternatives for additional analysis:
     All part 139 airports (as originally proposed) (544 
airports covering 99.8% of U.S. passenger enplanements);
     Airport operators holding a Class I AOC (388 airports 
covering 99.7% of U.S. passenger enplanements);
     Certificated international airports (240 airports covering 
96.1% of U.S. passenger enplanements);
     Large, medium, and small hub airports (as identified in 
the NPIAS) and certificated airports with more than 100,000 total 
annual operations (177 airports covering 97.5% of U.S. passenger 
enplanements); and
     Large, medium, and small hub airports, certificated 
airports with more than 100,000 total annual operations, and 
certificated international airports (268 airports covering 98% of U.S. 
passenger enplanements).
    Because the FAA chose to analyze various alternatives based on 
classifications outside the scope of part 139 (e.g., hubs or 
international status instead of AOC class), it relied on the best 
available information to develop the list of affected airports under 
each alternative. To identify those airports classified as large, 
medium, or small hubs, the FAA relied on the 2011-2015 NPIAS, current 
at the time of this analysis. Similarly, the FAA relied on annual 
operations data reported through FAA Form 5010-1, Airport Master Record 
(downloaded August 1, 2012). The FAA relied on data obtained from Title 
19 of the CFR (see Sec. Sec.  101.3, 122.13, 122.14, 122.15) and the 
CBP to identify certificated airports authorized to accept 
international traffic.
    After reviewing each of the alternatives and the associated costs 
and benefits of each, the FAA's preferred proposal would require an SMS 
be developed, implemented, maintained, and adhered to only at a 
certificated airport:
     Classified as a small, medium, or large hub airport in the 
NPIAS; or
     Identified as an international airport; or
     Identified as having more than 100,000 total annual 
operations.
    This preferred alternative covers 268 airports across Classes I, 
II, III, and IV, thus eliminating the NPRM's SMS requirements for 276 
airports that have few passenger enplanements and less complex 
operations. The airports that comprise this alternative account for 
over 98% of all passenger enplanements in the U.S.
    While simply applying the proposed SMS requirements to large, 
medium, and small hub-certificated airports would account for most of 
this traffic, many critical airports would not be included because they 
do not meet those enplanement thresholds. Simply accounting for 
airports with higher passenger enplanements fails to acknowledge the 
many other complex, certificated airports that have significant levels 
of aircraft operations.\8\ Therefore, to ensure that these busy 
airports are covered by the proposal, the preferred alternative 
includes airports with more than 100,000 total annual operations based 
on their operations data submitted through FAA Form 5010-1, Airport 
Master Record available on August 1, 2012. The FAA acknowledges that 
data submitted through FAA Form 5010-1 may be estimates for airports 
that do not have an air traffic control tower. While more definitive 
data may be available through the FAA's air traffic control tower 
counts, this information may not be readily available, may not be 
accessible to the public, and does not account for certificated 
airports that do not have an air traffic control tower. The FAA 
requests comments on what other methods may be available to accurately 
account for and determine the proposed rule's applicability based on 
annual operations, or whether the FAA should use a different baseline 
for determining applicability.
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    \8\ Section V(B), Applicability contains detailed analysis of 
these alternatives.
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    The preferred alternative also harmonizes with the intent of 
International Civil Aviation Organization (ICAO) SMS standards by 
including all certificated airports accepting international operations. 
In December 1996, the FAA published Advisory Circular (AC) 150/5000-5C, 
Designated U.S. International Airports, which explained the different 
categories of U.S. airports designated to serve international air 
traffic and provided a list of those airports. However, the FAA 
cancelled that AC in September 2010 when it published AC 150/5000-16, 
Announcement of Availability of the Guide for Private Flyers--U.S. 
International Airports. The Guide for Private Flyers, published by the 
CBP, lists all U.S. international airports, designated airports, 
landing rights airports, and user fee airports. It also defines the 
term ``international airport'' and clarifies the use of the word 
``international'' in an airport name. Since the FAA no longer maintains 
its own list of international airports, the FAA believes the CBP list 
serves as the best available source of this information because it is 
developed based on Title 19 (Customs Duties) of the CFR. The FAA 
believes this approach corresponds with the intent of ICAO Annex 14 
standards. The FAA requests comments on this approach, and what other 
methods may be available to identify international airports.
    The FAA acknowledges that an airport's status in any one of these 
categories may change over time. For example, a small hub airport may 
become a nonhub airport during the FAA's annual update of passenger 
enplanement data if its enplanements fall below 0.05% of the total U.S. 
passenger enplanements. Similarly, an airport not currently considered 
a hub might see its enplanements increase making it a small hub. The 
same case could be made for annual operations and international status.

[[Page 45876]]

    In these cases, the FAA would review each airport's status 
annually,\9\ consistent with published enplanement data,\10\ to 
determine which airports are covered by the SMS requirement then in 
effect. If there is a change to an airport's status that affects its 
need to comply with those SMS requirements, the FAA would then notify 
the certificate holder in writing of its changed status. If the change 
would require the certificate holder to comply with those SMS 
requirements, the certificate holder would then have two years to 
comply with the SMS requirements then in effect. Certificate holders 
whose status changed to be outside the scope of the SMS requirements 
then in effect would be encouraged to voluntarily maintain and adhere 
to an SMS. The FAA would maintain a list of those certificate holders 
meeting the required applicability on its public Web site, updating the 
list annually.
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    \9\ The Office of Airports regularly tracks the status of 
certificated airports. As such, this review would result in an 
insignificant increase in cost based on current FAA oversight 
activities.
    \10\ This data is available online at http://www.faa.gov/airports/planning_capacity/passenger_allcargo_stats/passenger/. 
Passenger enplanement data is gathered from the Air Carrier Activity 
Information System (ACAIS).
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    The FAA requests comment on this approach. Specifically, if a 
certificate holder meets the threshold to trigger an SMS requirement, 
should the certificate holder be required to maintain an SMS even if it 
no longer meets the threshold? Should a certificate holder meet the 
applicability threshold for two consecutive years prior to triggering 
an SMS requirement?
2. Implementation
    Under this proposal, certificate holders would be required to 
develop and implement an SMS within 2 years of the effective date of 
the final rule. The NPRM originally proposed SMS implementation within 
1 year from the effective date of the final rule. This change responds 
to commenters' requests for additional time to implement SMS.
    The FAA recognizes the complexity of implementing SMS in the 
airport environment and, therefore, increased the timeframes for 
implementation. The FAA requests comments whether this proposed 
implementation timeframe is sufficient. Comments should be supported by 
specific data demonstrating a different implementation timeframe is 
necessary.
3. Training
    The NPRM proposed an SMS training requirement for all employees and 
tenants with access to the movement and non-movement areas of the 
airport. To maximize the potential for proactively identifying hazards, 
the intent was to ensure that individuals authorized access to the 
movement and non-movement area received training. The FAA's intent was 
to create a broad training requirement, allowing certificate holders 
flexibility in how they trained persons with access to these areas. 
This flexibility included allowing train-the-trainer programs and 
training specific to the person's role in the SMS. This would allow 
certificate holders to provide orientation to the majority of persons 
accessing the non-movement and movement areas of hazard identification 
and reporting, rather than training on all of the certificate holder's 
SMS initiatives.
    Commenters appear to have interpreted the proposed training 
requirement to be cumbersome, time consuming, and excessively costly. 
In light of these comments and lessons learned from the pilot studies, 
this proposal offers a two-pronged approach to training: (i) 
Comprehensive SMS training specific to the individual's role and 
responsibility in implementation and maintenance of the SMS; and (ii) 
hazard awareness and reporting awareness orientation for all other 
individuals with access to the movement and non-movement areas.
    The FAA expects certificate holders to provide training appropriate 
to the person's role in the certificate holder's SMS. For example, 
those persons responsible for analyzing hazard reports to determine 
action should be properly trained in Safety Risk Management (SRM) and 
hazard assessment procedures. Individuals, including staff and/or 
managers, with responsibility for daily oversight of the SMS would be 
trained in all requirements of the SMS. The certificate holders could 
use train-the-trainer formats where necessary.
    By clarifying this proposed requirement, the FAA anticipates that, 
on average, 10 employees or managers would need this training at large 
airports and 3 employees or managers would require it at small 
airports.\11\ The supplemental initial regulatory evaluation uses these 
estimates in the cost analysis. The FAA requests comments on whether 
these estimates are accurate as an average across all airports affected 
by this proposal. The FAA acknowledges that there may be certificate 
holders included in the preferred applicability alternative who have 
smaller staffs than these numbers take into account. The FAA also 
requests comments on the job roles that would require this type of 
specific training.
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    \11\ As discussed in the Supplementary Initial Regulatory 
Evaluation, the analysis classifies large, medium, and small hub 
airports as large airports and all others as small airports.
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    For the remaining persons with access to the movement and non-
movement areas, certificate holders could use a variety of means to 
provide awareness. For example, a certificate holder could develop a 
brochure or white paper for inclusion in the employee's indoctrination 
package, or add a reference to hazard identification and reporting to 
existing training programs such as security or driver training.
    The certificate holder would bear the cost of publishing this 
awareness material and updating it as necessary. For persons employed 
by tenants, the certificate holder would be responsible for providing 
the materials to the tenants for distribution. Tenants, such as air 
carriers, caterers, fueling agents, and FBOs, all would potentially 
receive this information if their employees access the movement or non-
movement areas. However, the certificate holder could choose to provide 
this material or briefings during badging or security training.
    There should be minimal record-keeping costs associated with this 
type of training/awareness. The FAA anticipates that certificate 
holders would retain copies of the materials provided and a 
distribution log detailing when the materials are provided to employees 
and tenants.
    The FAA does not intend for the proposed requirement to apply to 
persons escorted by a trained individual. As for an air carrier's 
crewmember training, those individuals authorized to enter the movement 
and non-movement areas unescorted would receive training appropriate to 
their role; in this case, awareness of hazard identification and 
reporting. The air carrier would then distribute the materials provided 
by the certificate holder.
    While the NPRM did not explicitly propose recurrent training, the 
FAA envisioned the need for certificate holders to provide individuals 
with updated information, all in support of a positive safety culture. 
This proposal includes a requirement for recurrent training every other 
year. It also would require the update of publications for the hazard 
awareness orientation requirement on the same schedule.
4. Definition of Accountable Executive
    Numerous commenters thought the definition of accountable executive 
proposed in the NPRM was impractical

[[Page 45877]]

and needed to be revised. After considering these comments, the FAA 
agrees that the proposed definition will present compliance and 
operational challenges in the U.S. airport environment. Therefore, in 
this SNPRM, the new proposed definition (i) eliminates the substantive 
differences between the part 121 and part 139 definitions, and (ii) 
clarifies that the accountable executive should not be personally 
liable to the FAA through certificate action or civil penalty. The FAA 
requests comment on the feasibility of implementing this proposed 
definition.

B. Proposals Remaining From NPRM

    As proposed in the NPRM, the certificate holder's SMS would be 
required to contain the following four components: Safety policy, 
safety risk management, safety assurance, and safety promotion. To 
satisfy the safety policy component, the certificate holder would 
establish a policy which, among other things, defines the certificate 
holder's safety objectives, establishes a safety policy statement, 
defines the certificate holder's management responsibilities and 
accountabilities for safety issues, and identifies and communicates the 
organization's structure for handling safety issues.
    The certificate holder would also be required to designate an 
accountable executive, within the certificate holder's own organization 
or governance structure, who would act on its behalf in overseeing the 
implementation and daily operation of the SMS. For most airports, the 
FAA anticipates the accountable executive would be an airport manager 
or airport director rather than a lower level manager or supervisor.
    Under safety risk management, the certificate holder would develop 
processes to identify hazards that may impact the airport's operations. 
The certificate holder would use these processes to systematically 
analyze those hazards and their risks, as well as proactively mitigate 
risk unacceptable to the certificate holder. The certificate holder 
would retain any documentation developed through these processes to 
assist in trend and root cause analysis.
    Through safety assurance, the certificate holder would develop and 
implement processes to monitor the safety performance of its SMS. 
Additionally, the certificate holder would establish and maintain a 
hazard reporting system that provides reporters confidentiality when 
communicating safety issues to the system. The certificate holder's 
staff would regularly update the accountable executive on pertinent 
safety information such as the certificate holder's compliance with 
part 139 subpart D requirements, and its performance with regard to its 
safety objectives, safety critical information, the status of any 
ongoing mitigations established through safety risk management, and the 
status of implementing the SMS.
    Under safety promotion, the certificate holder would identify 
managers and staff employees responsible for oversight and 
implementation of the SMS and would provide training on their SMS 
responsibilities. These individuals would receive recurrent training 
every 24 months. For all other individuals with regular access to the 
movement and non-movement areas of the airfield, the certificate holder 
would develop and distribute hazard reporting and awareness orientation 
materials, ensuring those individuals are made aware of hazards and how 
to report them to the certificate holder's hazard reporting system. The 
certificate holder would then keep records of training provided and 
hazard reporting and awareness orientation materials for 24 calendar 
months.
    The certificate holder would also be required to develop processes 
and procedures to communicate important safety information that ensures 
all persons authorized access to the movement and non-movement areas 
are aware of the SMS and their safety roles and responsibilities. 
Feedback would be provided to individuals using the certificate 
holder's hazard reporting system. Lessons learned that are relevant to 
airport employees or stakeholders also would be communicated.
    The certificate holder would have the option of either developing 
and maintaining a separate SMS manual in addition to the Airport 
Certification Manual (ACM), or incorporating these proposed 
requirements directly in the ACM. If the certificate holder develops a 
separate SMS manual, it would cross-reference the SMS requirements in 
its FAA-approved ACM.

IV. Discussion of Comments Received on NPRM

A. FAA Rulemaking Authority

    The NPRM proposed implementing SMS throughout the airport 
environment, including the movement and non-movement areas (e.g., 
runways, taxiways, run-up areas, ramps, apron areas, and on-airport 
fuel farms). In the NPRM, the FAA acknowledged the proposal extended 
the scope of part 139 by including the non-movement area but concluded 
that ensuring air transportation safety required that an SMS apply to 
any place that affects safety during aircraft operations. An 
association and a certificate holder noted that the application of SMS 
to the non-movement area is an unprecedented expansion of the FAA's 
regulatory scope.
    The FAA has authority under 49 U.S.C. 44706 to issue AOCs that 
contain terms to ensure safety in air transportation. The FAA 
acknowledges that it has historically focused its regulatory practice 
on the movement area. However, the statutory authority encompasses the 
entire airport operating environment, which includes the non-movement 
area. The proposed requirement to develop and implement an SMS ensures 
safety in air transportation by assisting certificate holders in 
proactively identifying and mitigating safety hazards. Furthermore, as 
discussed later, findings from the SMS pilot studies and the large 
number of safety incidents occurring in the non-movement area support 
extending SMS to the non-movement area to ensure safety in air 
transportation.
    Accordingly, as stated in the NPRM, this proposal, to the extent it 
would apply to both the movement and non-movement areas, is within the 
FAA's statutory authority.

B. Applicability

    The NPRM proposed requiring all certificate holders, including 
airport operators holding a Class I, II, III, or IV AOC, to develop and 
implement an SMS for the movement and non-movement areas of the 
airport. One Class IV certificate holder recommended that the FAA 
require SMS only at airports holding a Class I AOC, stating this would 
target the majority of air carrier passengers in the U.S. and allow 
small airports to avoid costly burdensome regulations. The certificate 
holder recommended a voluntary program for Class II, III, and IV 
certificate holders.
    The FAA partially agrees with the commenter. The FAA believes all 
certificate holders would realize benefits from formalized hazard 
identification, risk analysis, training and communications processes. 
However, further review of costs and benefits indicate that, for 
certificate holders with fewer operations, the costs of SMS 
implementation may be disproportionate to the benefits realized. The 
FAA continues to evaluate means to reduce costs for smaller airports, 
but, in the absence of significant regulatory cost reductions, the 
FAA's preferred proposal is to require SMS

[[Page 45878]]

implementation at large, medium, and small hub airports, certificated 
airports with more than 100,000 total annual operations, and 
certificated international airports.
    Requiring an SMS for only the largest and most complex of 
operations will enhance safety at airports receiving 98% of all 
passenger enplanements. The revised proposed rule would apply to 268 
airports, thus eliminating the burden on 276 airports that have few 
passenger enplanements and less complex operations.\12\ This proposed 
requirement advances the FAA's safety goals and at the same time 
reduces the burden imposed by the NPRM. Although not proposing to 
require SMS implementation at all certificated airports, the FAA 
encourages all certificate holders to voluntarily implement SMS based 
on this proposed rule and accompanying agency guidance.
---------------------------------------------------------------------------

    \12\ These figures are current as of October 2012.
---------------------------------------------------------------------------

    Besides the alternative proposed in this SNPRM and the proposal in 
the NPRM, the FAA analyzed a variety of other applicability scenarios 
including:
     Airport operators holding a Class I AOC;
     Certificated international airports; and,
     Large, medium, and small hub airports and certificated 
airports with more than 100,000 total annual operations.
i. Airport Operators Holding a Class I AOC
    Since the last major revision to part 139, the FAA typically has 
applied technical requirements based on AOC class. Consistent with this 
past practice, the FAA first analyzed limiting applicability to Class I 
certificate holders. When reviewed as a whole, the 388 airports 
identified as holding a Class I AOC (as of October 2012) account for 
99.7% of the total U.S. passenger enplanements as of the end of 
calendar year 2011. All certificated airports account for 99.8% of the 
total U.S. passenger enplanements, a difference of 0.1%. However, the 
list fails to account for many busy airports by total annual operations 
(not passenger enplanements), some of which receive more total annual 
operations than some Class I airports. Class I certificate holders also 
appear to include many smaller airports that support only domestic 
operations. For these reasons, the FAA does not believe that limiting 
applicability to Class I certificate holders alone is the best way to 
enhance safety through SMS.
ii. Certificated International Airports
    The FAA also analyzed certificated international airports. Limiting 
the scope to these airports meets the intent of the ICAO standard. In 
the NPRM, the FAA addressed the ICAO standard by proposing all 
certificate holders implement an SMS. However, many commenters 
expressed concerns about the expansion of applicability beyond the ICAO 
standard (i.e., applying the standard to airports serving only domestic 
traffic). The FAA identified 240 certificated airports with 
international services (as of August 1, 2012). Relying on data prepared 
by the CBP, these 240 airports encompass all certificated airports that 
serve as ports of entry, designated international airports, landing 
rights airports, and user fee airports.
    These international airports account for 96.1% of the total U.S. 
passenger enplanements (as of the end of calendar year 2011). While 
these airports account for the vast majority of international 
operations within the U.S., this scenario fails to capture some of the 
nation's busiest airports that accept only domestic operations. Based 
on the limitation of applicable airports under this scenario, the FAA 
does not believe that limiting applicability to international airports 
is a viable option to achieve the most safety benefit.
iii. Large, Medium, and Small Hub Airports and Certificated Airports 
With More Than 100,000 Total Annual Operations
    The FAA also analyzed airports by their NPIAS category, looking at 
the airports that receive the vast majority of enplanements, otherwise 
known as hubs. Including only large, medium, and small hub airports 
does not capture airports receiving large numbers of total annual 
operations. Therefore, the FAA included in its analysis of this 
scenario certificated airports with more than 100,000 total annual 
operations according to their Airport Master Record, FAA Form 5010-1 
(available on August 1, 2012).
    This grouping gets much closer to the goal of accounting for the 
most complex, busiest and highest passenger enplanements throughout the 
country. Using this grouping for applicability would include 177 
certificated airports that account for 97.5% of total U.S. passenger 
enplanements, and all certificated airports having more than 100,000 
total annual operations. The FAA believes this alternative achieves the 
goal of integrating safety management practices into the most complex, 
highest operation and passenger enplanement airports. Also, of those 
alternatives for which FAA has estimated benefits and costs, this 
alternative has the highest estimated net benefits. However, this 
alternative does not harmonize with ICAO standards because 91 
international airports would not be required to implement an SMS, which 
could expose small international airports to the risk that 
international carriers refuse to operate there. Opting out would also 
require the FAA to file a difference with international standards.
iv. Preferred Alternative
    The FAA now proposes to require an SMS be developed, implemented, 
maintained, and adhered to at any certificated airport:
     Classified as a small, medium, or large hub airport;
     Identified as an international airport; or
     Identified as having more than 100,000 total annual 
operations.
    This preferred alternative ensures that safety management practices 
will be integrated into the busiest airports and harmonizes with 
international standards. This alternative applies to 268 airports, 
encompassing 98% of total U.S. passenger enplanements. In addition, 
this alternative positively responds to the commenters' requests to 
limit applicability.
    On the other hand, including the additional 91 small international 
airports that would not be captured by the preceding alternative 
reduces the estimated net benefits of the rule. This is largely due to 
the small number of reported accidents at these 91 airports. However, 
FAA's analysis does not consider the possibility that international 
airports without SMS risk losing international business due to a lack 
of compliance with ICAO standards. If this were to occur, airlines and 
other operators would incur costs to re-route to suboptimal locations. 
The magnitude of this potential effect is uncertain, as it would depend 
on the decisions of foreign actors to cease operations to domestic 
airports without a compliant SMS. FAA welcomes comments on this issue.
v. Large, Medium, and Small Hub Airports; Certificated Airports With 
More Than 100,000 Total Annual Operations; and an Optional Certificate 
of Compliance Program for Airports With Less Than 100,000 Annual 
Operations
    The FAA is also seeking comment on an alternative featuring an 
optional certificate of compliance program for airports that aren't 
required to

[[Page 45879]]

implement an SMS, but is otherwise identical to the alternative 
discussed in part iii of this section. This option would allow airports 
with less than 100,000 annual operations to choose to implement a 
compliant SMS if they believe the benefits to them will outweigh the 
costs to them.
    This alternative mitigates the concern that small international 
airports would suffer a decline in their international traffic due to a 
lack of compliance with ICAO's SMS standards, as airports could 
implement a compliant SMS if they so choose. Providing choice to these 
airports should also lead to higher net benefits than the preferred 
alternative, as those airports where the benefits of SMS do not exceed 
the costs can forego those costs.
    As previously stated, this alternative could present business risks 
to those small airports choosing to not implement a compliant SMS. 
Civil aviation authorities could prohibit their international air 
carriers from serving non-compliant airports. Similarly, the FAA could 
receive unsatisfactory audit findings with additional potential 
unforeseen consequences for failure to conform to international 
standards.
vi. Inactive Airports
    Another Class IV certificate holder and an association requested 
the FAA not require certificate holders in an ``inactive status,'' or 
with a Limited AOC, to have an SMS.
    Placement in an ``inactive'' status simply defers the FAA's annual 
periodic inspections. That way, the agency can focus its efforts on 
certificate holders with active air carrier service. However, 
certificate holders in an inactive status must continue to meet all 
part 139 requirements. As of May 2013, of the fourteen airports in an 
inactive status, only two would fall under the proposed applicability 
standards. If a certificated airport was later placed in an 
``inactive'' status, it would still be required to comply with the 
proposed SMS requirements if it met the applicability requirements of 
this proposal.
    As for the commenters' request about Limited AOCs, the FAA no 
longer issues Limited AOCs. Therefore, this issue is moot.
vii. Adherence to SMS
    This SNPRM also proposes changes to Sec.  139.401(a) to specify 
that the certificate holder must adhere to an airport SMS. While the 
FAA received no comments regarding this issue, the FAA believes that 
adding ``adhere to'' emphasizes the point that an SMS is an ongoing 
obligation and should not be shelved after implementation. Further, it 
adds distinction between the phases of SMS from development to 
implementation to maintenance to adherence.
viii. Scalability
    The majority of commenters, including certificate holders and 
associations, commented both directly and indirectly on the need for 
scalability and flexibility when developing and implementing an SMS.
    To address those comments and harmonize with other FAA rules, the 
FAA proposes a new Sec.  139.401(c) permitting scalability of an SMS 
based on the size, nature, and complexity of the operations, 
activities, hazards and risks associated with the certificate holder's 
operations.

C. Implementation Deadlines and Phasing

    The NPRM included a two-pronged approach to implementation based on 
the certificate holder's AOC class. Certificate holders with a Class I 
AOC would have developed an implementation plan and SMS manual and/or 
ACM update within 6 months and 18 months of the final rule's effective 
date. Under the NPRM, all other certificate holders would have 9 months 
and 24 months, respectively, to develop an implementation plan and SMS 
manual and/or ACM update. The NPRM did not propose any other 
implementation approach.
    Twenty-six commenters, including five associations, twenty 
certificate holders, and one consultant offered comments about the 
FAA's proposed implementation deadlines and the lack of phasing. These 
commenters generally recommended a phased approach, citing pilot study 
findings, ICAO's recommended approach, the Airport Cooperative Research 
Program SMS Guidebook, and the FAA's internal SMS policies. A phased 
approach usually includes implementing SMS through a series of 
management steps, such as (1) planning and organization, (2) basic 
safety management, (3) fully functional SMS, and (4) continuous 
improvement.
    In addition to a phased approach, fourteen commenters, including 
three associations and eleven certificate holders, believed the 
deadlines for submitting the implementation plan and implementing SMS 
were not adequate. Four certificate holders and one association 
believed the proposed deadlines were aggressive. Two other certificate 
holders commented that the implementation plan deadline is not adequate 
based on the complexity and lack of familiarity with SMS concepts. Two 
certificate holders stated that it would be difficult, if not 
impossible, to procure consultant assistance within the proposed 
timeframes associated with the implementation plan.
    Two certificate holders stated that if the FAA includes the non-
movement area in the final rule, the implementation deadlines should be 
extended and phased. Furthermore, an association and several 
certificate holders believed the FAA should require implementation of 
SMS in the movement area, or those areas already covered under part 
139, before requiring SMS in the non-movement area. Doing so would 
allow certificate holders time to renegotiate lease agreements where 
necessary, update airport rules and regulations or minimum standards, 
and use lessons learned for applying SMS to the non-movement area.
    One commenter contended that large airports needed as much time as 
smaller airports to implement SMS, and that two different 
implementation schedules based on AOC class was not justified. 
Similarly, an association did not believe the FAA explained why Class I 
airports need less time to implement SMS than small certificated 
airports that may have a less complex system to analyze and less 
cumbersome requirements to adopt.
    Nine certificate holders, one association, and one consultant 
provided implementation schedules which can be summarized into the 
following three general recommendations:
    (1) Longer deadlines after the effective date of the rule for 
developing implementation plans (ranging from 9 to 18 months for Class 
I certificate holders, and 12 to 18 months for all other certificate 
holders), and SMS manuals and/or ACM updates (ranging from 24 to 60 
months for Class I certificate holders and 36 months for all other 
certificate holders);
    (2) Phased implementation over the course of 63 months for all 
certificated airports; and
    (3) Airport-centric implementation, which would allow each 
certificate holder to propose its own phased approach to implementation 
within reasonable timeframes.
    One certificate holder requested the FAA clarify whether SMS 
programs implemented before the final rule would be automatically 
recognized as complying with the final requirements.
    To facilitate maximum flexibility and scalability, the FAA does not 
propose to mandate a one-size-fits-all implementation approach. A 
certificate holder can phase implementation, either by SMS component or 
by movement versus non-movement area.

[[Page 45880]]

    The FAA agrees that additional time is needed to facilitate the 
effective development and implementation of SMS. This proposal would 
require submission of the implementation plan within 12 months of the 
effective date of a final rule and submission of the SMS manual and/or 
ACM update within 24 months of the effective date of a final rule. The 
FAA believes that 12 months to develop an implementation plan and 24 
months to develop and submit the SMS manual and/or ACM update is an 
acceptable length of time based on lessons learned from the pilot 
studies. In developing these documents, certificate holders will 
benefit from the experience of the pilot study airports. Similarly, the 
FAA plans to incorporate those experiences into advisory circular 
guidance, including templates for development of an implementation 
plan.
    The FAA encourages voluntary implementation of SMS prior to the 
establishment of the requirements in a potential final rule. In 
creating these programs, the FAA encourages each certificate holder to 
establish flexible programs and processes that would allow it to make 
changes if its program differs from the requirements in a final rule. 
Additionally, the proposed implementation deadlines would apply to each 
certificate holder regardless of whether it has a pre-existing program 
or not. Therefore, a certificate holder with a voluntary SMS program 
would have the same 24 months to come into compliance with any 
differences between its program and the requirements of a final rule. 
The certificate holder would provide the FAA with an implementation 
plan identifying the gaps between its existing program and the final 
requirements and timelines for implementing processes or changes to 
close those gaps within the 24 months.
    The FAA anticipates that a certificate holder's SMS will 
continually evolve over time based on lessons learned and best 
practices. Therefore, the certificate holder may find it necessary to 
amend its implementation plan or SMS manual over time.

D. Implementation Plan Approval and Inspector Authority

    The NPRM proposed to require a certificate holder to submit an 
implementation plan describing how it would meet the SMS requirements 
and a schedule for implementing SMS components and elements. The 
proposal called for the FAA to accept the certificate holder's 
implementation plan.
    One association requested inclusion of regulatory provisions for 
FAA review and feedback on the implementation plan, SMS manual, and ACM 
update. Also, related to implementation plan review, one certificate 
holder questioned the role of the FAA inspector in verifying completion 
of the implementation plan and whether the inspector would have 
authority to amend or alter the implementation plan after its approval.
    The intent of an implementation plan is for the certificate holder 
to identify its plan for implementing SMS within the applicable areas 
and map its schedule for implementing the SMS requirements. While the 
FAA originally proposed accepting the implementation plan, the FAA now 
proposes to approve submitted implementation plans. This approval is 
consistent with the FAA's part 121 SMS rule and would provide 
certificate holders with feedback earlier in the development of SMS 
programs.
    While the FAA originally planned to include examples of 
implementation plan content in advisory circular guidance, the FAA has 
chosen to enhance the rule text regarding the implementation plan 
submission, incorporating minimum details the FAA expects when a 
certificate holder submits an implementation plan. These details 
correspond to the key requirements of SMS that a certificate holder 
should be considering early in the implementation process. Developing a 
plan for these details would allow a certificate holder to adequately 
plan for requirements that may present time constraints and allow the 
certificate holder to meet implementation deadlines.
    The FAA does not agree that timelines for feedback should be 
incorporated into regulatory language. Based on the preferred 
alternative and new proposed approach for approving implementation 
plans, the FAA would need to review and approve approximately 268 
implementation plans. The Regional Airports Division Offices have 
experience with reviewing and approving large-scale changes to 
certificate holder documents, including the ACM, from past rulemaking 
actions. The FAA would handle these approvals in a timely manner in 
each Regional Airports Division Office.
    The FAA would review implementation plans using a ``first-in-first-
out'' approach. However, the FAA recognizes that some certificate 
holders may choose to wait until the deadline to submit implementation 
plans for approval. If the majority of implementation plans were 
submitted near the deadline, the FAA may then switch to a more risk-
based approach for approval, reviewing submissions from certificate 
holders with the largest number of passenger enplanements or annual 
operations first. To ensure consistency in these approvals, the FAA 
intends to provide guidance in its Advisory Circulars and training to 
Regional Airports Division Offices on the review of the implementation 
plans.
    The FAA would review an implementation plan to verify that the 
certificate holder identified its timeline for complying with each 
requirement and defined its methods for compliance. A certificated 
airport could proceed with development and implementation of its SMS 
while its implementation plan is under FAA review.
    During the periodic inspection, inspectors would verify that the 
certificate holder continues to comply with the unique deadlines 
approved by the FAA. As more thoroughly discussed in later sections, an 
inspector would develop the inspection checklist based on the unique 
characteristics of the certificate holder's SMS, operations, and past 
compliance.
    The NPRM also proposed that the FAA would approve the certificate 
holder's SMS manual if it chose to develop a manual separate from the 
ACM. Similar to the SNPRM's proposal to approve instead of accept the 
implementation plan, the FAA proposes to accept the SMS manual instead 
of approve it. Airports that participated in the SMS pilot studies 
found it necessary to update SMS manuals numerous times as they 
developed best practices through implementation. Therefore, by the FAA 
accepting the SMS manual, certificate holders would have greater 
flexibility adapting to lessons learned without resubmitting the SMS 
manual for approval. The SNPRM proposes that for a certificate holder 
choosing to maintain an SMS manual, the certificate holder would be 
required to submit any changes made to the SMS manual annually, 
consistent with its inspection schedule. This new proposed requirement 
would ensure that the FAA's copy of the SMS manual is current and 
available for the inspector to review before the certificate holder's 
annual inspection.
    The FAA would continue to approve the ACM and its updates. For a 
certificate holder using an SMS manual, the certificate holder would 
cross-reference the SMS requirements in its FAA-approved ACM. Any 
changes to references in the ACM would require submittal to the FAA for 
approval. However, if the SMS manual changes do not affect the ACM 
cross-references, there would be no need to resubmit the

[[Page 45881]]

ACM pages for FAA-approval. If the certificate holder chooses to 
document the SMS within the ACM instead of a separate SMS manual, it 
would not have the flexibility afforded by the SMS manual. Changes 
would need to be submitted to the FAA for approval. Once the FAA 
accepts the certificate holder's SMS manual and/or approves ACM updates 
detailing the certificate holder's SMS, that document would be the 
primary means of complying with the SMS requirements under the proposed 
rule, not the implementation plan. The implementation plan serves as a 
tool to help the certificate holder develop and implement the various 
components and elements of SMS within the prescribed and/or approved 
deadlines. Once SMS is completely implemented, the implementation plan 
becomes obsolete. The FAA would not use the implementation plan as a 
compliance yardstick.
    Certificate holders would have the opportunity to submit amendments 
to implementation plans, with review and approval being the 
responsibility of the Regional Airports Division Offices.

E. Non-Movement Area

    The FAA received numerous comments regarding the non-movement area 
which can be generally categorized as follows: Definition, 
applicability, and control.
    Based on findings from the pilot studies, the FAA proposed 
extending SMS requirements to the non-movement area of the airport. 
Since the term non-movement area was not previously defined in part 
139, the NPRM included a proposed definition that defined the non-
movement area as the area, other than that described as the movement 
area, used for the loading, unloading, parking, and movement of 
aircraft on the airside of the airport (including without limitation 
ramps, apron areas, and on-airport fuel farms).
    Five certificate holders questioned the FAA's proposed definition. 
One certificate holder stated that the proposed definition did not 
align with existing definitions and could lead to confusion. The 
certificate holder recommended the FAA align the definition with the 
current definition for air operations areas. Two certificate holders 
requested the FAA clarify in the final rule that the non-movement area 
does not include or apply to landside operations.
    Two certificate holders sought clarification on the areas 
identified in the definition and identified inconsistencies within the 
NPRM. Two other certificate holders requested the FAA exclude certain 
areas from the definition, including military and general aviation 
leaseholds and fuel farms. One of those certificate holders stated that 
joint-use airports already have safety systems in place to address 
safety issues and operational concerns, and lease provisions prohibit a 
certificate holder from imposing SMS within the military leasehold. Two 
certificate holders stated that fuel farms should not be included in a 
final rule because they are typically a contracted service and are 
already subject to regulation by DOT and local authorities.
    The FAA has concluded the proposed definition is consistent with 
existing guidance on distinguishing airport areas based on whether 
aircraft are subject to air traffic control. The FAA also determined 
the air operations area definition identified in 14 CFR 153.3 should 
not replace the proposed non-movement area definition since this term 
is associated with security-related issues, rather than operational 
safety issues.
    The FAA previously responded to issues regarding applicability to 
joint-use and general aviation areas, ramps, and bag-makeup areas in 
its Responses to Clarifying Questions. As many of these same issues 
were repeated in comments to the NPRM, a summary of those responses and 
their applicability to the SNPRM follows:
     The proposed rule does not apply to military facilities at 
joint-use airports, but the certificate holder could invite the 
military to participate in SMS activities.
     The proposed rule does not require airport tenants to have 
a separate SMS; it would be applicable to certificate holders of a part 
139 AOC only.
     The definition applies to the entire non-movement area 
regardless of lease arrangements. The proposed rule includes broad 
requirements intended to increase flexibility to implement an SMS for a 
certificate holder's unique operating environment.
     A certificate holder's SMS would apply to any safety 
issues including employee safety, ground safety, vehicle safety, and 
passenger safety to the extent that they are related to aircraft 
operations.
     The definition for non-movement area does not include the 
interior of hangars.
    Regarding general aviation areas of the airport, the proposed 
rule's requirements would give flexibility to each certificate holder 
to scale the implementation to its unique operating environment. A 
certificate holder would need to ensure that individuals authorized to 
access the movement and non-movement areas are aware of, and have the 
opportunity to report hazards to, the certificate holder's hazard 
reporting system. Many certificate holders may find it necessary to 
update airport rules and regulations, revise clauses in lease 
agreements, and renegotiate lease agreements where appropriate to have 
airport tenants participate in the airport's SMS. Therefore, while not 
directly applicable to fixed-base operators (FBOs), a certificate 
holder may need to work with tenants such as FBOs to ensure the 
tenants' employees authorized to access these areas are aware of the 
airport's hazard reporting system.
    Similarly, if bag make-up areas are located outside the landside 
facilities in proximity to air carrier operations, the certificate 
holder would need to assure implementation of relevant portions of this 
proposed requirement, like awareness of the hazard reporting system, 
for individuals working in the external bag make-up area.
    As for on-airport fuel farms, Sec.  139.321(b)-(g) currently 
prescribe requirements applicable to fuel farms for things like 
inspections and training. Therefore, it would be a natural progression 
to implement relevant portions of SMS within the fuel farm environment.
    Over 25 commenters, including certificate holders and industry 
associations, disagreed with or questioned applying SMS to the non-
movement area. The certificate holders stated that applicability to 
these areas would be costly and require time to revise standard leases, 
rules, regulations, and minimum standards. Further, complex geometry, 
lease agreements, and operational agreements make managing the non-
movement area airport-centric. Commenters contended the FAA does not 
have the time or experience to become familiar with each airport's non-
movement areas to judge compliance. One industry association believed 
that inclusion of the non-movement area without regard to airport-
specific considerations undermines the goals of scalability and 
flexibility. Another industry association and certificate holder 
believed that more study and guidance is needed before the FAA applies 
SMS to the non-movement area. These commenters further questioned 
applicability when a tenant or leaseholder is required to implement SMS 
under other FAA regulations.
    The FAA disagrees with the commenters' issues regarding the 
applicability of SMS requirements to the non-movement area. The pilot 
studies found, based on reports from numerous participating airports, 
that it was difficult to apply SMS concepts to only

[[Page 45882]]

the movement area because aircraft and airside personnel routinely flow 
between movement and non-movement areas.
    The FAA also identified a large number of safety accidents and 
incidents occurring in the non-movement area. Analysis of these 
accidents and incidents indicates that safety in the non-movement area 
is a significant concern. The proactive approach to hazard 
identification and analysis of accidents, incidents, or other reported 
or collected data at each individual airport through an SMS would 
likely reduce these incidents. The FAA believes there are significant 
benefits of applying safety management principles to areas not 
previously regulated under part 139.
    While commenters expressed concerns regarding the complexity of 
operations within the non-movement areas and the FAA's ``inexperience'' 
in these areas, the FAA does not propose specific technical 
requirements in the non-movement area. Instead, the FAA plans to learn 
from certificate holders as they implement and maintain SMS. Over time, 
the FAA expects certificate holders and inspectors to share lessons 
learned or best practices that will then be reported nationally. 
Similarly, the FAA expects certificate holders to consult with the FAA 
if they find trends or issues that require a systematic fix.
    The FAA is committed to an interoperable approach to SMS and plans 
to take numerous steps to avoid duplication and enhance cooperation and 
reporting between the SMS efforts. In addition to providing advisory 
circular guidance, the FAA has included similar language regarding 
interoperability and duplication of hazard reporting in the Safety 
Management Systems for Domestic, Flag, and Supplemental Operations 
Certificate Holders (Part 121 SMS) final rule [80 FR 1308 (January 8, 
2015) \13\].
---------------------------------------------------------------------------

    \13\ Correction made to applicability date, see 80 FR 1584 
(January 13, 2015).
---------------------------------------------------------------------------

    The FAA disagrees with the commenters' request for stronger 
language regarding landside operations. The statutory authority 
supporting part 139 limits the agency's purview to issuing certificates 
and minimum safety standards for airports receiving certain passenger 
carrying operations. The agency's past and current standards apply 
minimum safety standards for those areas on an airport where passenger-
carrying operations are conducted. Accidents or incidents within the 
terminal environment have minimal impact on the safety of passenger-
carrying operations. Moreover, local and state safety codes and 
regulations would typically cover issues found within the landside 
environment.
    Several commenters, including three associations and nine 
certificate holders, argued that certificate holders lack sufficient 
authority and control to impose SMS requirements on airport tenants 
operating in the non-movement area. These commenters further noted 
difficulty due to the variety of lease agreements, clauses, and terms. 
One certificate holder contended that most airports, including itself, 
do not have personnel or expertise to oversee safety in the non-
movement area. Another certificate holder recommended the final rule 
recognize the uniqueness of the non-movement area and provide latitude 
based on the activities that occur within the non-movement area, the 
level of control that the certificate holder has over those activities, 
and the extent to which access is within the tenant's control. 
Alternatively, one certificate holder requested the FAA apply or impose 
the proposed SMS requirements on tenants or exclusive leaseholds and 
allow the certificate holders to delegate the proposed requirements for 
shared leaseholds.
    One association opined that, in the past, certificate holders have 
retained some oversight over tenant operations in the non-movement 
area, but that the NPRM pushed certificate holders to assume a primary 
role for safety. If that is the expectation, the association strongly 
disagreed with FAA's vision for SMS in the non-movement area.
    Finally, a certificate holder with multiple part 139 airports 
contended that it would need to renegotiate over 1,500 lease 
agreements, and that even with renegotiations, it still would not 
possess the authority needed to fully implement SMS in the non-movement 
area.
    The FAA disagrees with the comments that certificate holders lack 
control in the non-movement area of their airports. The FAA also 
disagrees with the request to directly apply these proposed airport SMS 
requirements on airport tenants. Part 139 applies only to certificated 
airports. While there may be instances where the certificate holders 
are not the same entity as the airport owner, airport owners who accept 
federal financial assistance (the vast majority of part 139 airports) 
must maintain sufficient rights and powers to operate the airport in 
accordance with grant assurances, which includes both movement and non-
movement areas.

F. Accountable Executive

    The NPRM proposed a requirement for the certificate holder to 
identify the accountable executive for the airport. Consistent with 
ICAO's definition of accountable executive, the FAA's proposed 
definition for accountable executive in the NPRM stated that an 
accountable executive means a single, identifiable person who, 
irrespective of other functions, has ultimate responsibility and 
accountability, on behalf of the certificate holder, for the 
implementation and maintenance of the certificate holder's SMS. The 
accountable executive would also have to have full control of the human 
and financial resources required to implement and maintain the 
certificate holder's SMS. The accountable executive would also have 
final authority over operations conducted under the certificate 
holder's AOC and have final responsibility for all safety issues.
    The FAA acknowledged in the NPRM that it may be difficult for 
publicly-owned and operated airports in the U.S. to identify an 
accountable executive based on this definition and invited comments.
    Twelve commenters, including two associations, nine certificate 
holders, and one consultant, believed the proposed definition is 
impractical and needs revision. One association summarized the variety 
of comments certificate holders had, stating that the definition needs 
to reflect the realities of U.S. airports where an airport director has 
managerial responsibilities but does not have final authority over 
airport operations. The commenter noted that these airports usually 
have a governing body, such as a Board of Commissioners or City 
Council, which has ultimate responsibility for operational and 
financial decisions. Therefore, the highest approving authority may not 
be one individual, as required by the proposed definition. Further, 
this association requested any final rule definition reflect that, at 
the majority of U.S. airports, no single manager has unilateral 
authority to direct actions by tenants and other non-airport employees.
    Other alternative definitions proposed by the commenters included:
     Mirroring the part 121 SMS definition;
     Allowing certificate holders to designate an accountable 
organization structure instead of one executive;
     Redefining the position to account for airport managers 
who do not have complete financial control; and
     Allowing for designation of an SMS or Safety Manager 
because the airport

[[Page 45883]]

manager may not have the time or ability to fulfill the obligations of 
the accountable executive position.
    One certificate holder requested any final rule include a provision 
that the FAA does not intend to hold individuals, including the 
accountable executive, personally liable for safety infractions or 
violations of the SMS.
    The proposed definition eliminates differences between the part 121 
and part 139 definitions. The concept of an accountable executive 
conforms to industry and international safety standards for SMS. The 
accountable executive's role is to instill safety as a core 
organizational value and to ensure that SMS is properly implemented and 
maintained through the allocation of resources and tasks. By 
designating an accountable executive, responsibility for the 
certificate holder's overall safety performance is placed at a high 
level within the organization. The individual should have the authority 
to ensure that the SMS is implemented and effective. Traditionally, 
safety programs were housed within one division of the certificate 
holder's organization. Under a systems approach, the concepts of SMS 
need to permeate throughout the certificate holder's organization to 
ensure that all offices, employees, and tenants with responsibilities 
in the movement and non-movement areas understand their role in SMS.
    However, the FAA appreciates the diversity of certificate holder 
organizations and agrees that the ICAO definition of accountable 
executive could present compliance and operational challenges for many 
publicly-owned and operated airports within the U.S. Therefore, the FAA 
proposes the revised definition in Sec.  139.5 of this proposed rule.
    In practice, the FAA anticipates that most certificate holders 
would designate an airport manager or airport director as the 
accountable executive. Accountability cannot be delegated; therefore, a 
lower-level manager or supervisor could not serve as the accountable 
executive.
    The FAA does not intend to require the designation of additional 
positions to implement the daily operation of the SMS. Such 
designations should be left to the discretion of the certificate holder 
based on its unique operating environment and management structure. A 
certificate holder would have this flexibility in establishing its 
safety organizational structure as identified in proposed Sec.  
139.402(a). The safety organizational structure would identify the 
positions and offices within the certificate holder's organization that 
have responsibility for or play a role in the safety of airport 
operations. This includes the ``chain of command'' and the means by 
which airport employees report safety concerns, hazards, and other 
safety-related information.

G. Data Protection

    The NPRM included numerous proposed requirements for certificate 
holders to develop and maintain documentation for hazard reporting, 
identification, and assessment. While the FAA did not propose a 
requirement for certificate holders to provide those documents to the 
agency, the certificate holder would maintain the documents for 
historical and trend analysis as part of its continuous improvement 
efforts.
    Seventeen commenters, including certificate holders and 
associations, addressed issues of data protection posed by the proposed 
rule. Only one association, which represents trial attorneys, agreed 
with FAA's approach to hazard reporting. This association cautioned the 
FAA from making any changes, claiming that restrictions on the 
disclosure of safety data flies in the face of safety and only serves 
to protect and immunize business entities from responsibility in the 
event of negligence or wrong doing.
    All other commenters believed that, without explicit data 
protections, persons not employed by the certificate holder would be 
reluctant to voluntarily share information or report hazards for fear 
of litigation or public perception if the data is released through 
state or local sunshine laws. Many commenters believed that, without 
protecting SMS-related data, certificate holders would not be able to 
establish effective confidential reporting systems. Commenters made 
numerous recommendations including:
     Make SMS data confidential.
     Protect data in a similar manner that air carriers are 
able to protect safety data, such as a data collected under the Flight 
Operational Quality Assurance Program (FOQA) or the Aviation Safety 
Action Program (ASAP).
     Protect SMS data using Security Sensitive Information 
(SSI) provisions.
     Allow redaction of data.
     Establish a national database to accept voluntary safety 
information from certificate holders and other stakeholders using 
protections under 49 U.S.C. Sec.  40123 and 14 CFR part 193.
     Make SMS data exempt from disclosure under the Freedom of 
Information Act (FOIA) pursuant to 49 U.S.C. Sec.  40123 and part 193.
    One certificate holder disagreed with the FAA's claim that 
certificate holders are in the best position to work with state and 
local legislators to provide additional protection from data 
disclosure. That certificate holder believed it is an unreasonable 
burden on airports to seek legislative exceptions to public records 
laws and will result in a patchwork of legal protection throughout the 
U.S.
    Another certificate holder sought clarification on how the FAA will 
evaluate the certificate holder's program if there is no requirement to 
submit data to the FAA and, if the FAA does take or copy the 
certificate holder's documents, how they will be protected from FOIA.
    Section 44735 of title 49 of the United States Code specifically 
contemplates the protection of SMS data that is voluntarily submitted, 
such as reports, data, or other information produced or collected for 
purposes of developing and implementing an SMS, from FOIA disclosure by 
the FAA. It is important to note, however, such protection could not be 
afforded to SMS information that is required to be submitted to the 
FAA, or is kept to satisfy compliance with other regulatory 
requirements. For these reasons, the FAA is not proposing data 
reporting requirements for safety-related data created under an SMS 
(such as hazard reports, safety risk management documentation, or 
safety assurance documentation). As such, consistent with the authority 
in section 44735, there should be no implications under FOIA for that 
safety-related data. The FAA, through its inspectors, could review a 
certificate holder's documentation to ensure compliance with part 139, 
but the FAA generally would not take possession of those documents 
unless the inspector was investigating an issue of non-compliance.
    To further clarify the extent of protection that may be afforded 
under section 44735, the FAA notes that any record or other 
documentation that is required to show compliance with other regulatory 
requirements would not be protected. Any information protected under 
the statute is only protected from release by the FAA. If the 
information is submitted or released by the certificate holder to 
another government entity, the protections of the statute are not 
binding on these other entities. Nor are these documents necessarily 
protected from discovery in civil litigation, although the certificate 
holder would be free to ask the court for whatever protections would be 
appropriate under the rules of the relevant jurisdiction.
    The FAA acknowledges that most certificate holders are owned by a 
state, a subdivision of the state, or a local governmental body. These 
certificate

[[Page 45884]]

holders are best situated to understand and comply with their 
applicable State laws. The FAA is uncertain whether any FOIA exceptions 
would preclude disclosure requirements under applicable state law. Any 
redaction of SMS data potentially required to be disclosed would be 
subject to applicable state law requirements and not established by the 
FAA.
    The FAA also notes that data protection under SSI provisions is 
inapplicable and may be impermissible because those procedures are for 
information obtained or developed in the conduct of security activities 
as described in 49 CFR part 1520.
    The FAA cannot speculate on how a third party would report to or 
share information with a certificate holder's SMS. This proposed rule 
does not require third parties to turn over SMS data to a certificate 
holder. However, the proposal would require a certificate holder to 
establish a confidential hazard reporting system and encourage hazard 
reporting by all persons accessing the movement and non-movement area. 
The FAA believes an SMS program could be structured in such a manner to 
realize safety benefits while limiting the public release of 
confidential third-party information. Use of third-party servers and 
de-identification of reporter information prior to receipt by the 
certificate holder could be solutions that would limit release, subject 
to applicable state law.
    The FAA believes that individual certificate holders are best 
situated to review and resolve hazard reports related to their unique 
operating environment. As discussed in the FAA's Responses to 
Clarifying Questions, the FAA would use existing regulatory oversight 
processes to ensure that systemic or national compliance issues are 
reported when appropriate. FAA Order 5280.5C, Airport Certification 
Program Handbook, requires coordination with and oversight by the 
Airport Safety and Operations Division for airport certification 
inspection activities. In accordance with that order, inspection 
findings are recorded in national databases by inspectors and reviewed 
by the Airport Safety and Operations Division. Furthermore, enforcement 
activities by Regional Airports Division Offices are required to be 
coordinated with the Airport Safety and Operations Division.
    The FAA is exploring methods to create a national reporting 
database for voluntary reporting of SMS data. The agency requests 
comments from industry on the types of data or other information 
certificated airports could provide under a national reporting 
database. This data could be used for system-wide analysis, the 
development or amendment of standards, and risk-based approach to 
targeted inspections.

H. Liability

    An SMS is a formalized approach to managing safety and includes the 
establishment of many proactive processes and analyses, and the 
creation of documentation that can be used for decision-making and 
trend analysis. The NPRM did not expressly discuss potential liability 
under this new proactive approach.
    Fourteen commenters, including ten certificate holders, two 
associations and one anonymous commenter, raised issues related to 
liability, noting that SMS-related processes and documentation will 
expose certificate holders to additional liability. Eight of those 
commenters went further to claim that there would be increased 
liability for airport management, especially for the accountable 
executive, under the proposed requirements. For example, one 
certificate holder contended compliance with the proposed SMS 
requirements could alter the airport's liability under the standard of 
care laws, which vary from state to state. That certificate holder also 
feared that decisions, safety risk matrices, and other processes and 
documentation could become evidence in litigation or the subject of 
litigation.
    Other commenters, including three certificate holders and an 
association, questioned how a certificate holder's SRM processes could 
be used against the airport if there is an incident on the airport and 
it is found that the certificate holder did not act consistent with its 
own safety risk assessment under its SMS. Furthermore, one association 
believed there would be increased liability for the certificate holder 
and the accountable executive if the standards are not high enough or 
if the standards are not met.
    Another association stated that acceptable level of ``risk'' as is 
established for SRM safety risk assessments, runs counter to U.S. tort 
principles and practice. The association further stated that, by 
identifying a hazard, an airport operator then has a duty to address 
that hazard promptly through mitigation measures. Furthermore, the 
commenter noted that although some airports that are owned by a state 
or municipal entity may be fully or partially protected from negligence 
claims through sovereign immunity, many, if not most, airports are 
subject to suit for negligence under applicable state law. Thus, once 
an airport is aware of a hazard, it is at risk for a negligence claim 
if injury or damage occurs as a result of that hazard.
    Several commenters, including three certificate holders, an air 
carrier, and an association asserted that certificate holders lack 
sufficient control in the non-movement area, and that an SMS could 
result in a certificate holder being held legally responsible for 
personal injury or property damage resulting from hazards identified 
through the airport's SMS in areas not under its control. One 
association argued that airport leases or license agreements transfer a 
certain degree of control from the airport/landlord to the tenant/
licensee. While an airport may retain a certain degree of control, the 
tenant typically has a certain degree of autonomy to run its operations 
within the leased area as it sees fit, subject to legal requirements. 
There may be times where a certificate holder identifies hazards in the 
leased area that are not a violation of any enforceable obligation of 
the tenant. In these cases, the airport will have limited recourse.
    Commenters made a number of recommendations including:
     Commit to join industry groups in seeking modifications to 
federal law;
     Prohibit, by regulation, the testimony of FAA employees in 
litigation against certificate holders where standards of care is an 
issue; and
     Provide explicit protection of the certificate holder.
    The FAA cannot speculate on potential litigation resulting from a 
potential accident at some point in the future, which would be fact-
specific and subject to applicable law that varies throughout the U.S. 
However, the FAA does not intend for this proposed rule to create or 
modify state tort liability law or create a private right of action 
under federal or state law. The FAA does not agree with the assertion 
that SMS increases liability for an airport operator or its accountable 
executive. The availability of additional data and analysis for 
decision-making should support a certificate holder in potential 
litigation. Failure to take action on identified safety hazards, 
regardless of formal analysis under SMS, generally may increase 
litigation risk. Nevertheless, the FAA intends for SMS to assist 
certificate holders in uncovering and mitigating unsafe conditions or 
actions, thus decreasing a certificate holder's litigation risk. A 
certificate holder could effectively use SMS to reduce liability by 
promptly investigating identified hazards and risks, conducting a 
thorough analysis of hazards, and keeping accurate records.
    Furthermore, the new proposed definition for accountable executive

[[Page 45885]]

would clarify that the accountable executive would not be personally 
liable to the FAA, through either certificate action or civil penalty. 
Additionally, the FAA does not intend for the accountable executive to 
have personal liability to any third party; however, issues concerning 
such liability are controlled by state law, not the SMS regulations.
    Finally, the FAA notes that the extent to which SMS data may be 
discoverable in litigation is subject to the state or federal law 
governing the litigation. The FAA believes the certificate holder is in 
the best position to understand and comply with its state's laws.

I. Training

    In the NPRM, the FAA proposed requiring certificate holders to 
provide formal training to all employees and tenants with access to the 
movement and non-movement areas appropriately tailored to the 
individual's role in the airport's SMS. The FAA invited comment 
concerning the practical and economic implications of the proposal, or 
applying the requirement to all individuals with access to those areas.
    Ten commenters, including four certificate holders, three 
associations, one air carrier, one individual and one consultant, 
identified inconsistencies and various interpretations of the proposal. 
These commenters noted that terms like employee, tenant, and personnel 
were used ambiguously throughout the proposal. Three commenters 
requested the FAA coordinate the terms and definitions in the two 
rulemaking proposals for part 139.\14\ An association and certificate 
holder requested that the FAA define these terms.
---------------------------------------------------------------------------

    \14\ During the NPRM comment period, the FAA published the 
``Safety Enhancements, Certification of Airports'' NPRM proposing 
updates to part 139. After reviewing comments, the FAA issued a 
final rule (78 FR 3311, January 16, 2013).
---------------------------------------------------------------------------

    Two certificate holders offered the following alternate 
interpretations of the proposal:
    (1) The certificate holder is required to train only its employees;
    (2) The certificate holder is required to train those personnel who 
are employed at the airport (regardless of the identity of the 
employer); or
    (3) The certificate holder is required to train all individuals 
with access to the movement and non-movement areas of the airfield.
    One certificate holder questioned whether the requirement applies 
to all individuals with access to the movement and non-movement areas 
or only those that have authority to drive in those areas. The 
certificate holder requested the FAA reconsider the timing of the 
training requirement, citing a 2-year cycle instead of annual training 
as being more consistent with airport security badging processes.
    Another certificate holder questioned who is responsible for 
training under the proposed rule and whether the certificate holder is 
responsible for training all airport tenants.
    An association recommended the FAA allow a certificate holder to 
assess who needs training on its airport, and whether training should 
be extended to all individuals accessing the movement and non-movement 
areas. The association believed this would allow certificate holders 
maximum scalability by tailoring their training program and costs to 
reflect their unique operating environment.
    Another association requested the FAA provide more detail on what 
topics should be included in the training program, and how a 
certificate holder would best implement the requirement. Certificate 
holders and one association expressed concerns about the lack of 
expertise of staff to implement such a training program, the magnitude 
of a program that reached all individuals with access to these areas 
(not just airport employees), and the workload associated with 
developing and providing training. To decrease workload, one 
certificate holder requested the FAA develop a basic SMS training 
course for certificate holders which could be augmented by an airport-
specific course.
    Commenters also offered a number of recommendations for scope 
changes including:
     Training personnel with regular, recurring access to the 
airport only;
     Training employees with responsibilities outlined in the 
ACM only;
     Training certificate holder employees only; or
     Allowing train-the-trainer programs.
    Associations representing air carriers and pilots expressed concern 
about the FAA's proposed training requirements in the non-movement 
area, questioning how flightcrew members of airline tenants would be 
able to comply based on dynamic scheduling. One association recommended 
flight crew training remain an airline responsibility. Another 
association rejected the notion of training individuals with access to 
the non-movement area, claiming that existing training requirements are 
sufficient.
    One association recommended the FAA clarify timelines for training, 
suggesting that certificate holders begin training their managers and 
employees within 12 months of the FAA's approval of the SMS manual.
    A consultant observed that training implies an increased level of 
liability, and that the FAA should instead require orientation. This 
orientation should focus on general safety training such as ramp 
markings, airport rules and regulations, hazard reporting, and accident 
and incident response and reporting.
    Finally, a certificate holder requested the FAA not mandate 
recurrent training.
    The NPRM proposed an SMS training requirement for all employees and 
tenants with access to the movement and non-movement areas of the 
airport. To maximize the potential for proactively identifying hazards, 
the intent was to ensure that individuals authorized access to the 
movement and non-movement area received training. This would create a 
broad training requirement, allowing certificate holders flexibility in 
how they trained persons with access to these areas. This flexibility 
included allowing train-the-trainer programs and training specific to 
the person's role in the SMS. This flexibility would allow certificate 
holders to provide orientation to the majority of persons accessing the 
non-movement and movement areas of hazard identification and reporting, 
rather than training on all of their SMS initiatives.
    Commenters appear to have interpreted the proposed training 
requirement to be cumbersome, time consuming, and excessively costly. 
In light of comments and lessons learned from the pilot studies, the 
proposal in this SNPRM offers a two-pronged approach to training: (i) 
Comprehensive SMS training specific to the individual's role and 
responsibility in implementation and maintenance of the SMS and hazard 
awareness; and (ii) reporting awareness orientation for all other 
individuals with access to the movement and non-movement areas.
    The FAA expects each certificate holder to provide training 
appropriately tailored to the person's role in the certificate holder's 
SMS. Persons with responsibilities for implementation or oversight of 
the certificate holder's SMS would be required to receive training 
specific to their roles and responsibilities. For example, those 
persons responsible for analyzing hazard reports to determine action 
should be properly trained in SRM and hazard assessment procedures. 
Individuals, including staff and/or managers, with responsibility for 
daily oversight of the SMS would be trained in all requirements of the 
SMS. Again,

[[Page 45886]]

the certificate holder could use train-the-trainer formats where 
necessary.
    By clarifying this proposed requirement, the FAA anticipates the 
average pool of employees needing this training to be between 3 and 10 
employees or managers per airport. The supplemental initial regulatory 
evaluation uses these estimates in the cost analysis. The FAA requests 
comments on whether these estimates are accurate as an average across 
all airports affected by this proposal. The FAA acknowledges that there 
may be certificate holders included in the preferred applicability 
alternative who have smaller staffs than these numbers take into 
account. In those environments, additional staff may not be necessary 
but rather, existing staff could assume these duties and 
responsibilities within their existing job roles. Thus, the FAA also 
requests comments on the job roles that would require this type of 
specific training.
    For the remaining persons who have access to the movement and non-
movement areas, a certificate holder could use a variety of means to 
provide hazard awareness and reporting orientation. For example, a 
certificate holder could develop a brochure or white paper for 
inclusion in the employee's indoctrination package, or add a reference 
to hazard identification and reporting to existing training programs, 
such as security or driver training.
    The certificate holder would bear the cost of publishing this 
awareness material and keeping it updated. For persons employed by 
tenants, the certificate holder would be responsible for providing the 
materials to the tenants for distribution. Tenants, such as air 
carriers, caterers, fueling agents, and FBOs, all would potentially 
receive this information if their employees access the movement or non-
movement areas. However, the certificate holder could choose to provide 
this material or briefings during badging or security training.
    There should be minimal record keeping costs associated with this 
type of training/awareness orientation. The certificate holder would 
maintain training records for only those individuals receiving 
comprehensive SMS training. For hazard awareness and reporting 
orientation, the FAA anticipates the certificate holder would retain 
copies of materials provided and a distribution log detailing when the 
materials are provided to tenants. The certificate holder would not be 
required to maintain individual training records for hazard awareness 
and reporting orientation.
    The FAA does not intend for the proposed requirement to apply to 
persons escorted by a trained individual. As for an air carrier's 
crewmember training, those individuals authorized to enter the movement 
and non-movement areas unescorted would receive training appropriate to 
their role; in this case, awareness of hazard identification and 
reporting procedures. The air carrier would then distribute the 
materials provided by the certificate holder.
    While the NPRM did not explicitly propose recurrent training, the 
FAA envisions the need for a certificate holder to provide individuals 
with updated information, all in support of a positive safety culture. 
This proposal includes a requirement for recurrent training every other 
year. It also would require the update of publications for the hazard 
awareness orientation requirement on the same schedule.
    This proposal also includes cross-references between the new 
proposed training requirement in Sec.  139.402(d) and existing training 
references in Sec.  139.303(e). It ensures consistent formatting with 
existing requirements in part 139.

J. AIP Eligibility

    Sixteen certificate holders, two associations, and one consultant 
expressed concern that the proposal was not clear on how certificate 
holders should fund SMS development and implementation and whether 
federal financial assistance through the Airport Improvement Program 
(AIP) would be available for SMS-related items. If AIP funding is made 
available, commenters sought clarification on eligibility in general, 
and, specifically, regarding the purchase of software for hazard 
tracking, analysis, and reporting, as well as for SMS manual 
development.
    One certificate holder pointed out that if AIP funds are made 
available and Congress fails to provide additional funding to the 
program, airports would be forced to comply using the same funds that 
are used to make improvements to airport infrastructure.
    Four certificate holders requested the FAA delay a final rule until 
a dedicated funding source for initial and recurring costs related to 
SMS is found.
    The FAA acknowledges that the NPRM was silent about AIP funding for 
development and implementation of the SMS requirements. The question of 
AIP eligibility is not relevant to an estimation of the cost of the 
proposed rule. The question of who pays involves an economic transfer, 
not a societal cost.
    Compliance with part 139 is not dependent on AIP eligibility. 
However, the FAA understands the concerns expressed by the commenters. 
In August 2013, the FAA issued Program Guidance Letter 13-06, Safety 
Management Systems (SMS), which addressed similar issues in more 
detail. This guidance was later canceled when its contents were moved 
to the updated FAA Order 5100.38D, Airport Improvement Program (AIP) 
Handbook.\15\ The following provides a general overview of AIP funding 
of SMS efforts. However, as with any question involving AIP funding, 
the airport sponsor must work directly with the local FAA Airports 
District Office (or Regional Airports Division Office in regions that 
do not have District Offices) in connection with questions about 
eligibility, justification, and availability of funds for specific 
efforts. There are rules associated with the types of funds, projects, 
and airports that can receive AIP funding. With that said, the FAA has 
committed to making some SMS-related costs eligible for federal 
financial assistance under AIP.
---------------------------------------------------------------------------

    \15\ Issued September 30, 2014 and available at http://www.faa.gov/airports/aip/aip_handbook/
---------------------------------------------------------------------------

    In general, the FAA has determined that reasonable costs incurred 
for development of an initial implementation plan and SMS manual are 
eligible for AIP planning grant funds. The portions of the SMS manual 
and implementation plan development that are within the control of the 
airport sponsor, through enforcement of the airport's published Rules 
and Regulations, Minimum Standards, or other existing controls, can be 
funded with AIP. AIP funds can help establish safety protocols that 
affect users of the airport, but AIP funds cannot be used to help users 
of the airport manage their own operations. Revising an ACM to include 
SMS requirements in the ACM would not be eligible for AIP funds.
    SRM activities conducted under the certificate holder's SMS are 
considered a part of the airport's day-to-day activities. Because 
operational costs are not eligible under AIP, these ongoing activities 
and their incurred costs are not eligible. Recommendations from SRM 
activities, including mitigations to decrease risk, are not necessarily 
eligible because a recommendation may be wholly operational, or may 
involve work from ineligible entities (such as the FAA Air Traffic 
Organization or other FAA lines of business that have independent 
operational budgets).
    It is possible that a SRM recommendation may be an allowable cost 
of an AIP-eligible capital project or may be independently eligible as 
an AIP capital project. In these cases, the cost would be part of the 
eligibility priority

[[Page 45887]]

and justification requirements of the project type and airport size 
classification. For example, a certificate holder's SRM process 
recommends relocating a taxiway to eliminate a runway crossing hazard. 
In that case, because taxiway projects are already eligible under AIP, 
the taxiway project recommended through SRM will follow the existing 
published eligibility requirements for taxiway projects.
    Federally-obligated airports are already required under AIP Grant 
Assurance 19, Operation and Maintenance, to operate at all times in a 
safe and serviceable condition and in accordance with the minimum 
standards as may be required or prescribed by applicable federal, 
state, and local agencies for maintenance and operation. This includes 
identifying and mitigating hazards.
    Therefore, although the FAA will continue to provide AIP funding 
for eligible capital improvements, it has always been (and remains) the 
certificate holder's responsibility to mitigate risks regardless of 
whether federal funding is available. Eligible and justified 
improvements are generally physical improvements to the configuration 
of airfield geometry (e.g., physical layout of runways, taxiways, and 
appurtenant facilities), as well as associated signage, marking, and 
lighting. For AIP-eligible projects requiring hazard assessment led by 
the FAA, some of the associated costs for convening a panel may be 
included as allowable under an AIP grant.
    The FAA's proposed requirements should not involve major 
expenditures in new systems, including hazard reporting systems. 
However, some airports that participated in the pilot studies used SMS 
software for development of the plan and SMS manual and/or for actual 
implementation of SMS. Therefore, the FAA will allow AIP funds to be 
used for the one-time (initial) acquisition of airport-owned software 
applications that are specifically designed to support airport SMS 
implementation. Other requirements and limitations may apply, which are 
outlined in the AIP Handbook.
    However, experience from the pilot studies has also shown that 
smaller, less complex airports should be readily able to manage the 
associated steps, processes, and data using existing off-the-shelf, 
end-user spreadsheet or database software. Regardless of the airport's 
size and complexity, costs associated with staffing, training, or 
safety promotion are also not AIP eligible.
    As always, when an airport sponsor requests AIP funding, the FAA is 
required to review the existing conditions, the available alternatives, 
and the criteria by which the sponsor has concluded that a particular 
solution is the preferred course of action. That is why early 
coordination with the local FAA Airports District Office or Regional 
Airports Division Office is crucial.

K. Interoperability

    The FAA is engaged in numerous efforts to require and incorporate 
SMS concepts into industry and its own operations. The practice and 
results of these efforts appear to be meeting in the airport 
environment. For example, besides this proposed rule, the FAA recently 
published a final rule for air carriers operating under part 121, which 
also requires hazard reporting and proactive hazard assessment. See 80 
FR 1306 (January, 8, 2015). Furthermore, the FAA's own internal efforts 
to incorporate formalized hazard assessment into many of its operations 
and approvals will impact part 139 certificate holders and part 121 air 
carriers. Recognizing the interoperability of these efforts would be 
important for the continued success of SMS, the FAA requested comment 
on the interaction between the proposed rule and potential future 
rulemakings.
    The majority of commenters raised issues regarding interoperability 
and how all of the various SMS efforts and requirements will work 
together, avoiding duplication and conflict. These issues can be 
grouped into three themes:
    1. Reporting of hazards, overlap of responsibility and duplication 
of efforts: Seven commenters, including five certificate holders, one 
association, and one air carrier, questioned which hazard reporting 
system should a person use to report an observed airport hazard when 
both an air carrier (or multiple carriers) and the certificate holder 
may have an interest. One commenter noted that air carriers also may be 
reluctant to share safety information with airports because of data 
protection issues. Additionally, reporting into two separate reporting 
systems and separate analyses would be a duplication of effort that is 
inconsistent with SMS philosophy.
    2. Hazard assessments for hazards shared by multiple regulated 
entities: Twenty commenters, including fifteen certificate holders, 
three associations, one air carrier, and one anonymous commenter, 
questioned which entity has responsibility for performing the hazard 
assessment on shared hazards and by which rules the assessment is 
performed. One commenter noted there may be divergent interests among 
the entities as to how to mitigate a particular hazard. For example, an 
airport may not want to bear a costly mitigation when another possible 
mitigation may be more acceptable to it. The airport and air carrier 
could perform individual assessments, but that result would duplicate 
efforts and be contrary to cooperation between the entities, both of 
which are inconsistent with SMS philosophy. Additionally, the airport 
and the air carrier may have different methodologies for assessing risk 
(such as different risk matrices). One commenter also raised the issue 
of which risk matrix would be used and how to resolve disputes over 
which matrix to use (e.g., different severity and likelihood categories 
and definitions).
    Another commenter further questioned how the FAA's internal SMS 
efforts within the Air Traffic Organization, Office of Aviation Safety, 
and Office of Airports will interact with certificate holders. For 
example, one certificate holder believed that conflicts between the 
various efforts could be complex and unavoidable and stated that the 
FAA needs to address resolution including hierarchy and authority in 
the final rule.
    3. Differing definitions and standards: Two commenters, including 
one certificate holder and one anonymous commenter, expressed concern 
regarding differing definitions and standards throughout the various 
SMS efforts. One certificate holder believed the definitions should be 
consistent across the agency so that everyone speaks the same language. 
Examples of inconsistent definitions include the terms hazard, risk, 
risk control, and risk mitigation. One commenter raised concerns that 
because each entity has the flexibility to set its own severity and 
likelihood categories and definitions, it will be difficult to 
understand what these different definitions mean.
    With regard to reporting hazards and overlap of responsibility, the 
FAA has taken efforts to reduce conflict and duplication but 
acknowledges that some overlap may occur. Regardless of overlap, 
certificate holders would be expected to comply with the applicable SMS 
requirements. Certificate holders would address the hazards reported to 
them and also conduct SMS promotion activities to encourage reporting.
    For example, an airline ramp worker identifies a safety issue in 
his work area on the ramp. The worker reports this issue to both the 
airport and airline's hazard reporting system. In this scenario, both 
the airport and the airline have a responsibility for reviewing the 
reported safety issue. However, their responsibility for analyzing and

[[Page 45888]]

possibly mitigating the issue depends on who holds overarching 
responsibility for the issue and/or its mitigation. If it is something 
that only the airport can take action to prevent or mitigate, the 
airline would forward that information to the airport for action. 
Similarly, if only the airline could take action, the airport would 
forward the report to the airline.
    While the FAA cannot regulate relationships between certificate 
holders and other entities, the FAA can include best practices and 
lessons learned to help foster an environment conducive to sharing 
hazard information across industry groups. Although there may be two 
separate regulations addressing SMS, the FAA encourages air carriers 
and airports to communicate with one another when hazards are 
identified through their respective SMS procedures and processes that 
may be addressed by the air carrier or airport. For example, if an air 
carrier's employee identifies a hazard on the movement area of the 
airport, the air carrier employee would likely report the hazard 
through the air carrier's SMS employee reporting system. Once reported, 
the FAA recommends that the air carrier notify the airport of the 
identified hazard so the airport is aware of the issue and may analyze 
the risk accordingly. In addition, the air carrier may also opt to 
analyze the risk of the hazard and determine if it warrants any sort of 
mitigation through the revision or further development of the air 
carrier's procedures. This type of communication would serve to ensure 
that hazards, whether unique to the air carrier, or more systemic to 
the airport, are being addressed effectively by all parties.
    The FAA expects that information sharing will increase over time as 
entities become more familiar with SMS and its benefits. Furthermore, 
the FAA is continually evaluating the implementation of SMS and is 
prepared to address issues as they arise.
    With regard to differing definitions and standards, the FAA 
harmonized definitions in the rules where possible. However, some 
definitions are different based on the different operating 
environments. Some definitions may evolve over time based on lessons 
learned.
    This proposal harmonizes with the part 121 SMS rule definition for 
hazard and risk. These definitions would be added to Sec.  139.5.
    The definition for risk mitigation in this SNPRM does not harmonize 
with the part 121 risk control terminology. ICAO Annex 14 and the FAA 
Office of Airports' internal SMS policy use the term mitigate when 
discussing the fifth step of hazard assessment under SRM. The FAA has 
concluded the term mitigate is straightforward and aligns with other 
guidance certificate holders have received related to FAA SMS 
initiatives. To change terminology here runs the risk of confusion.
    Relative to the separate standards for air carriers, the FAA notes 
that both SMS rules are structured in accordance with the ICAO SMS 
framework. However, the FAA recognizes that there are inherent 
differences in the operation of an airport and of an air carrier. Based 
on a review of these differences, the FAA determined that the 
rulemakings should proceed as separate projects.
    A certificate holder may want to consult with its tenants, 
including air carriers, as it develops its implementation plan and SMS 
manual and/or ACM update. While not required to coordinate or 
incorporate each other's processes, the airport could benefit from the 
experiences of other entities that have already implemented SMS or 
other risk-based approaches.
    The FAA continues to explore options to enhance interoperability 
within the airport environment. Technology solutions used by both the 
air carriers and airports could promote information sharing, enhanced 
communications, and provide cost savings. The FAA is open to 
suggestions from commenters on the use of existing systems to enhance 
interoperability.

L. FAA Oversight

    The NPRM included a lengthy discussion on the FAA's role and 
oversight of certificate holders under the proposed SMS requirements. 
Emphasis was placed on the point that SMS is not a substitute for 
compliance with existing regulations or FAA oversight activities. The 
FAA provided examples of possible inspector activities to verify 
compliance with the requirements.
    Fourteen commenters, including associations, certificate holders, 
and one consultant, commented on the FAA's oversight activities related 
to the proposal. Comments focused on three main areas: compliance and 
enforcement, inspections, and training.
    Three associations and two certificate holders expressed concern 
about how the FAA would enforce compliance with the new SMS 
requirements and requested the FAA include measures or tools that a 
certificate holder or the FAA would use to ensure compliance with SMS 
requirements. While acknowledging that the FAA stated inspectors would 
not second guess certificate holder decisions, but would assess 
compliance with SMS-approved processes and procedures, one certificate 
holder requested the FAA include this language in the regulatory text. 
The other certificate holder expressed concern regarding the potential 
for ``double jeopardy,'' whereby a violation of an airport's SMS 
procedures as detailed in the SMS manual or ACM could also result in a 
violation of existing part 139 requirements. An association wanted the 
FAA to define which FAA office has responsibility for compliance and 
oversight and suggested it be a headquarters function to ensure 
consistent enforcement. A consultant argued that any enforcement action 
is inconsistent with the SMS philosophy of a non-punitive approach to 
safety.
    An SNPRM is not a place to establish compliance and enforcement 
policies and procedures, which must be able to be adapted as conditions 
dictate. Nevertheless, the FAA believes it would be helpful to discuss 
some general expectations about inspections in an SMS environment.
    The FAA does not plan to initially alter its inspection methodology 
if an SMS rule is adopted. Inspectors would continue to review and 
conduct annual, surveillance, and special inspections of part 139 
certificate holders to determine whether the certificate holder is 
complying with applicable statutory and regulatory requirements. The 
FAA agrees that adding SMS-related items to an inspection would add 
time. However, the FAA believes that SMS is a vital means to enhance 
safety into the future and is prepared to absorb those resource costs.
    In general, seven commenters wanted more clarification on how an 
inspector's review of SMS documentation or processes would fit into the 
existing part 139 annual inspection. Three certificate holders 
questioned how inspectors would inspect for SMS-related items in an 
already budget- and time-restricted inspection environment and what 
items will be of interest during the inspection (like hazards and 
mitigations identified during SRM analyses) or whether the certificate 
holder is complying with its implementation plan. One association 
requested the FAA incorporate additional reviews to assist certificate 
holders instead of waiting until an airport's annual inspection.
    Again, the FAA does not plan to immediately change its inspection 
or oversight process as a result of this revised proposal. Regional 
Airports Division Offices would maintain responsibility for conducting 
inspections and the Airport Safety and Operations Division at FAA

[[Page 45889]]

Headquarters would maintain national program oversight. An inspector 
would evaluate whether a certificate holder is implementing SMS in 
accordance with its approved implementation plan.
    The FAA currently inspects using traditional surveillance methods 
which focus on determining regulatory compliance using direct 
inspections of a certificate holder's personnel, facilities, and 
responses. This type of surveillance provides a snapshot of compliance.
    As stated earlier, SMS considers safety from a systematic 
perspective (e.g., assessments and process-oriented inspections rather 
than standard technical checklist-driven inspections). The FAA 
envisions that airport inspections would change to a system-based 
approach to harmonize with the certificate holder's systematic approach 
under SMS; this would allow an inspector to focus on areas of greater 
risk.
    Unlike traditional checklist-driven inspections, a systems-based 
approach would verify the certificate holder has processes in place to 
proactively identify hazards, mitigate risk, and address non-compliance 
issues. The FAA would evaluate whether the certificate holder has 
effective SMS policies, processes, and procedures to identify, analyze, 
and mitigate safety hazards and risks. Corrective actions for 
certificate holders in the future would not be limited to fixing 
discrepancies found but also fixing the processes that should have 
proactively identified the discrepancy before the FAA inspection.
    The evolution to a systems-based approach would not happen 
overnight. The FAA envisions a gradual transition, but one that would 
not completely replace traditional oversight. The inspector would 
continue to verify compliance with existing part 139 technical 
standards, and these items would continue to be included on the 
inspection checklist. Under SMS, the inspector would also be 
responsible for inspecting the certificate holder's SMS policies, 
processes, and procedures.
    Typically, the inspector would start by reviewing the certificate 
holder's Safety Assurance program since this component includes 
processes to verify the effectiveness of the certificate holder's SMS. 
Using the required elements of a certificate holder's Safety Assurance 
program, the inspector would review documents related to the 
certificate holder's safety performance to verify it is meeting its 
safety objectives and complying with its SMS manual and/or ACM. 
Similarly, the inspector could review submissions to the airport's 
hazard reporting system and verify that the certificate holder has 
analyzed the safety risk of hazards reported consistent with the issue 
reported. This level of assessment of the certificate holder's hazard 
reporting system and processes could be simply a spot-check.
    The purpose of this review would not be to second guess the 
certificate holder's actions, but rather to ensure the certificate 
holder is following its own processes as documented in the SMS manual 
and/or ACM. The FAA could also review any trend analysis conducted by 
the certificate holder in an effort to determine whether the 
certificate holder is actively detecting root causes of safety issues. 
The inspector's review of this documentation is meant not only to find 
potential violations of standards but also to determine whether the 
certificate holder is taking appropriate action to evaluate the root 
cause of that non-compliance.
    The inspector would also sample the certificate holder's SRM 
documentation. While not conducting this review to second-guess the 
certificate holder's actions, the inspector would evaluate whether the 
certificate holder is following the processes and procedures identified 
in its SMS manual and/or ACM and whether the certificate holder has 
implemented the mitigations identified. If during the review, the 
inspector found that the certificate holder had used its SRM processes 
to circumvent existing requirements under part 139, the FAA could look 
more extensively into the certificate holder's analysis because part 
139 applies regardless of SRM processes. Avoiding part 139 requirements 
is not the purpose of the SRM program.
    The inspector would sample training and communication documentation 
as required by the certificate holder's Safety Promotion program. The 
inspector would determine if the certificate holder is complying with 
its SMS manual and/or ACM with regards to its Safety Promotion program.
    To verify compliance with the certificate holder's Safety Policy 
program, the inspector would verify that the certificate holder has a 
process in place to verify that the SMS manual and/or ACM is maintained 
and that information is kept up to date. If necessary, the inspector 
could validate information in these manuals to verify compliance.
    If an inspector found discrepancies, the inspector could determine 
the need to conduct a more in-depth assessment of the certificate 
holder's processes and procedures for compliance. If the inspection 
uncovered a noncompliant condition that the certificate holder had 
previously identified and is in the process of analyzing that 
condition, the FAA could have ongoing involvement in the analysis to 
ensure the non-compliant condition is corrected and mitigations are put 
in place to prevent a reoccurrence.
    Prior to inspection, the inspector could review the airport's 
inspection history to develop a risk profile specific to the airport. 
Using templates in FAA Order 5280.5, the inspector would develop an 
inspection checklist unique to the airport for that year's inspection. 
The checklist would be based on existing part 139 technical 
requirements, past compliance history, national programmatic 
priorities, and any additional factors the inspector believes 
necessary. In each case, the inspector would tailor parts of the 
evaluation and checklist to the certificate holder's unique SMS 
processes and operations. Moreover, the inspector could continue to 
review the ACM, SMS manual, or other records to verify compliance, as 
is done today. The FAA does not believe clarification of inspection 
items or processes is appropriate for rule text.
    In addition to developing templates for the inspection checklist, 
the FAA would also amend FAA Order 5280.5, Airport Certification 
Program Handbook, to provide guidance to inspectors on documenting 
their inspection findings. Inspectors would craft a detailed narrative 
of their inspection findings rather than short responses as are typical 
in traditional inspections. Inspectors would describe in detail what 
they did and what they found that constitutes non-compliance rather 
than listing the discrepancies and conditions. Detailed narratives 
would afford the FAA more specific data, information, and examples to 
use for programmatic and system-wide reviews and analyses.
    The FAA expects a certificate holder's SMS to be implemented when 
it would submit its SMS manual and/or ACM update. During the 
inspection, the inspector would verify that the certificate holder is 
following its approved implementation plan, updated FAA-approved ACM, 
and SMS manual (where applicable).
    While not including SMS review in the annual inspection until a 
certificate holder's compliance date, inspectors could still offer 
guidance and assistance to the certificate holder. In the past, regions 
have offered workshops to assist certificate holders with 
understanding, implementing, and reviewing new requirements or 
standards. The FAA would highly encourage certificate holders to 
discuss implementation with

[[Page 45890]]

their inspector and submit drafts of their implementation plan for 
review before the final deadline for submission.
    One association and five certificate holders commented on the FAA's 
timeline for training its inspectors on the implementation and 
oversight of the rule and how FAA plans to continuously train 
inspectors after implementation. One certificate holder requested the 
FAA ensure consistency in developing, writing, reviewing, and approving 
airport SMS documents through training programs. One association asked 
for the opportunity to be briefed and comment on the inspector training 
program.
    Guidance and training would be provided to all regional inspectors 
on how to determine if a certificate holder's processes and 
documentation meets the regulatory requirement for SMS. Furthermore, 
inspectors could always request additional information or policy 
guidance from the Airport Safety and Operations Division. If this 
proposed rule becomes effective, the FAA intends to include SMS in 
recurrent inspector training and would look for ways to be transparent 
and include industry input regarding training.

M. Safety Risk Management (SRM)

    The NPRM included a requirement for certificate holders to 
establish a systematic process for analyzing hazards and their risks 
using a standard five-step process and standard documentation and 
record retention requirements. The NPRM clarified the use of the five-
step process and provided examples for means of compliance. While the 
NPRM did not propose to require use of a predictive risk matrix for 
hazard assessment, it suggested its use through example.
    One commenter questioned whether a certificate holder could deviate 
from the FAA's proposed five-step process.
    Ten commenters, including one association, seven certificate 
holders, one consultant, and one anonymous commenter, raised concerns 
regarding the predictive risk matrix. However, there was no consensus 
within these comments regarding the use of predictive risk matrices. 
Several certificate holders wanted the FAA to require a standard 
predictive risk matrix, while others believed certificate holders 
should have the flexibility to establish their own.
    Several commenters, including an association and certificate 
holders, shared the concern that the establishment and use of a 
predictive risk matrix increases liability. The association wanted the 
FAA to explicitly state that predictive risk matrices are unique to 
each certificate holder and should be treated as confidential.
    The NPRM proposed minimum requirements for SRM, including 
establishing a systematic process to analyze hazards and their 
associated risks through a standard five-step process. Those five steps 
include (1) describing the system; (2) identifying hazards; (3) 
analyzing the risk of identified hazards and/or proposed mitigations; 
(4) assessing the level of risk associated with identified hazards; 
and, (5) mitigating the risks of identified hazards, when appropriate. 
As stated in the NPRM, these five steps represent the minimum 
requirements for this element of SRM. A certificate holder is not 
precluded from developing additional steps to facilitate its 
identification, analysis, and mitigation of hazards and risk. However, 
the certificate holder would need to incorporate at least these five 
steps at a minimum in its SRM processes.
    The NPRM did not include a requirement to use a predictive risk 
matrix as part of the SRM process. The preamble suggested a risk matrix 
as an effective method to analyze and prioritize risk based on the 
likelihood and severity of a hazard's consequence. Although the FAA 
believes that the use of a predictive risk matrix meets the rule 
requirements, this proposed rule does not require its use. Each 
certificate holder would have flexibility and scalability to perform 
hazard assessments in a manner suitable to its unique operating 
environment. Furthermore, as stated in FAA's Responses to Clarifying 
Questions, to properly analyze the risk of identified hazards, a 
certificate holder would need to define its levels of likelihood, 
severity, and risk with which it is comfortable. The FAA intends to 
include examples of risk matrices in guidance materials.
    The FAA acknowledges that not requiring the use of a specific risk 
matrix and standard severity and likelihood definitions may result in 
various risk matrices being utilized by certificate holders. The FAA 
believes this issue is outweighed by the benefits associated with 
maximizing flexibility and scalability to address these issues as each 
certificate holder chooses.
    Regarding documentation and record keeping, a consultant requested 
the FAA develop a standardized template to document hazard assessment 
findings. One certificate holder requested the FAA revise its SRM-
related records retention policy. That certificate holder contended any 
final rule should include 24 months instead of 36 months, claiming that 
the lesser is consistent with existing record retention requirements 
under part 139.
    Again, the FAA acknowledges that not requiring the use of a 
standardized template for documenting SRM processes may result in 
varying SRM documents. The FAA believes this issue is outweighed by the 
benefits associated with maximizing flexibility and scalability to 
address this issue as each certificate holder chooses. However, the FAA 
intends to include a sample template for SRM documentation in guidance 
materials.
    While the FAA recognizes that most existing part 139 record 
retention requirements are between 12 and 24 months, the FAA believes a 
longer retention is necessary for trend analysis to gain lessons 
learned, and for continual improvement under the certificate holder's 
SMS. The FAA proposed in the NPRM a requirement for the certificate 
holder to establish a system for identifying safety hazards. After 
further consideration, the FAA believes the term hazard is confusing 
and does not adequately address the genesis of the requirement. Each 
certificate holder and individual operating on the airport could have 
vastly different definitions of what constitutes a hazard, and such 
differences could limit what is identified. Under this proposed 
requirement, the FAA expects the certificate holder to have a system 
that proactively identifies issues that could lead to unsafe conditions 
within the movement and non-movement areas of the airport. Therefore, 
the FAA is proposing in Sec.  139.402(b)(1) to require a certificate 
holder to establish a system for identifying operational safety issues.

N. Acceptable Level of Safety

    The NPRM proposed that a certificate holder would establish and 
maintain safety objectives and an acceptable level of safety under the 
certificate holder's Safety Policy. However, the preamble did little to 
elaborate on the proposed requirement other than how to establish 
safety objectives.
    Five commenters, including one association, three certificate 
holders, and one consultant, questioned the proposed requirement to 
establish an acceptable level of safety. One certificate holder wanted 
more clarification on how the FAA would ensure consistency throughout 
the industry (e.g., to peg one airport against another) and questioned 
whether the different levels of acceptable risk would expose 
certificate holders to additional liability. Two certificate holders 
and one association wanted clarification of

[[Page 45891]]

(or a definition of) acceptable levels of safety or how they are 
established, and on liability associated with defining an acceptable 
level of safety.
    The FAA agrees with the commenters. The FAA no longer proposes to 
require establishment of an acceptable level of safety. The recently 
published ICAO Annex 19 instead requires member states to establish a 
State Safety Program for the management of safety in the state, in 
order to achieve an acceptable level of safety performance in civil 
aviation. Therefore, this requirement is applicable to the U.S. and the 
FAA, not to a certificate holder.

O. Safety Assurance

    One certificate holder requested the FAA require a ``Comprehensive 
Information System,'' an integrated information technology 
infrastructure, claiming that it serves as the foundation to support 
all of the SMS components and that without it, the SMS would be 
ineffective.
    Neither the NPRM nor the SNPRM include a proposal requiring 
software. The FAA's proposal recognizes that certificate holders are in 
the best position to determine how they would meet the basic components 
and elements proposed. A certificate holder is not precluded from 
developing information management systems to support its SMS. The FAA 
would allow AIP funds to be used for the one-time (initial) acquisition 
of airport-owned software applications that are specifically designed 
to support airport SMS implementation. Other requirements may apply, 
which are outlined in the AIP Handbook.\16\
---------------------------------------------------------------------------

    \16\ See Section V(J), AIP Eligibility, for further discussion.
---------------------------------------------------------------------------

    While not directly addressed through comments, the FAA proposes 
amending Sec.  139.402(c)(1) to clarify safety performance monitoring. 
This change will also better link safety performance monitoring under 
Safety Assurance back to the safety objectives required under Safety 
Policy and Sec.  139.402(a)(6). The FAA also proposes amending Sec.  
139.402(c)(3) to include compliance with part 139, subpart D 
requirements, in the regular report of safety information to the 
accountable executive.

P. Applicability to Other Airports and Out of Scope Issues

    The proposal limited its applicability to holders of a part 139 AOC 
only. It appears, based on comments received, that some airport 
operators, owners, and associations confused the proposal with other 
SMS initiatives underway within the FAA and the FAA's Office of 
Airports. In addition, the FAA received comments on how it is currently 
applying SMS concepts to its own operations and approvals.
    This proposed rule would not apply to airports that are not 
certificated under part 139. Further, comments received specific to the 
FAA's internal SMS efforts, including its publication of FAA Order 
5200.11, are out of scope and have been forwarded for consideration 
under those efforts. As stated earlier, certificated airports may be 
affected by both this proposed rule and the FAA's internal SMS efforts, 
including proactive hazard assessment on approval actions before the 
agency. The FAA is developing these efforts to avoid duplication and 
enhance communication.

V. Regulatory Notices and Analyses

A. Regulatory Evaluation

    Changes to Federal regulations must undergo several economic 
analyses. First, Executive Order 12866 and Executive Order 13563 direct 
that each Federal agency shall 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. In 
developing U.S. standards, this Trade Act requires agencies to consider 
international standards and, where appropriate, that they be the basis 
of U.S. standards. 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 likely to result in the expenditure by State, 
local, or tribal governments, in the aggregate, or by the private 
sector, of $100 million or more annually (adjusted for inflation with 
base year of 1995; current value is $155 million). This portion of the 
preamble summarizes the FAA's analysis of the economic impacts of this 
proposed rule. We suggest readers seeking greater detail read the full 
regulatory evaluation, a copy of which we have placed in the docket for 
this rulemaking.
    In conducting these analyses, the FAA has determined that this 
proposed rule: (1) Has benefits that justify its costs, (2) is not an 
economically ``significant regulatory action'' as defined in section 
3(f) of Executive Order 12866, (3) is ``significant'' as defined in 
DOT's Regulatory Policies and Procedures; (4) would have a significant 
economic impact on a substantial number of small entities; (5) would 
not create unnecessary obstacles to the foreign commerce of the United 
States; and (6) would not impose an unfunded mandate on state, local, 
or tribal governments, or on the private sector by exceeding the 
threshold identified above. These analyses are summarized below.
i. Total Benefits and Costs of This Rule
    The FAA considered multiple alternatives for which part 139 
certificate holders would be required to implement an airport SMS. The 
FAA analyzed the following alternatives:
     All part 139 airports;
     Airport operators holding a Class I AOC;
     Certificated international airports;
     Large, Medium, and Small hub airports and certificated 
airports with more than 100,000 total annual operations; and
     Large, Medium, and Small hub airports, certificated 
airports with more than 100,000 total annual operations, and 
certificated international airports.
    Although an airport may belong in more than one grouping, the 
analysis did not double count the benefits and costs for any airport. 
The goal of analyzing these alternatives is to maximize safety benefits 
in the least burdensome manner. While the FAA is proposing a preferred 
alternative, each alternative presents various trade-offs of interest 
to the public.
    The following table shows benefits and costs of the alternatives 
over 10 years.

[[Page 45892]]



                                 Comparison of Costs and Benefits Over 10 Years
                                                 [2014 Dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                                     Preferred
                                                                                                   alternative:
                                                                   International    L, M, S and   L, M, S, >100K
            Base case                 All ($)       Class I ($)         ($)        >100K ops ($)     ops, and
                                                                                                   international
                                                                                                        ($)
----------------------------------------------------------------------------------------------------------------
Benefits........................    $382,987,281    $368,096,671    $360,907,166    $356,128,301    $370,788,457
Costs...........................     471,104,787     341,021,606     215,010,997     163,760,850     238,865,692
                                 -------------------------------------------------------------------------------
    Net Benefits................     -88,117,506      27,075,065     145,896,169     192,367,451     131,922,764
                                 -------------------------------------------------------------------------------
PV Benefits (7%)................     233,282,770     224,210,033     219,830,291     216,919,352     225,850,869
PV Costs (7%)...................     307,842,595     223,584,687     141,796,001     108,819,973     157,496,312
PV Net Benefits (7%)............     -74,559,825         625,346      78,034,290     108,099,379      68,354,557
PV Benefits (3%)................     307,499,272     295,542,114     289,769,378     285,932,407     297,704,052
PV Costs (3%)...................     389,440,320     282,304,199     178,432,284     136,340,226     198,211,977
                                 -------------------------------------------------------------------------------
    PV Net Benefits (3%)........     -74,559,825         625,346      78,034,290     108,099,379      68,354,557
----------------------------------------------------------------------------------------------------------------
Mitigation Costs: Not quantified, estimates not included.
Given the range of mitigation actions possible, it is difficult to quantify potential benefits.

    The estimated costs of this rule do not include the costs of 
mitigations that operators could incur as a result of conducting the 
risk analysis proposed in this rule. Given the range of mitigation 
actions possible, it is difficult to provide a quantitative estimate of 
both the costs and benefits of such mitigations. We anticipate that 
operators will only implement mitigations where benefits of doing so 
exceed the costs of the mitigations. In order for the estimated 
benefits to exceed the costs of the rule, the mitigation costs must be 
below $68.4 million over 10 years (discounted at 7%). The FAA requests 
comments on this assumption, as well as data regarding costs and 
benefits associated with any mitigations implemented through a 
voluntary SMS program.
ii. Who is Potentially Affected by This Rule?
    Part 139 certificated airports
iii. Assumptions
     Discount rates--7% and 3% as required by the Office of 
Management and Budget.
     Period of analysis--2016 through 2025.
     The rule would take effect in 2016.
     The baseline value of a statistical life (VSL) for 2014 is 
$9.4 million.\17\
---------------------------------------------------------------------------

    \17\ Office of the Secretary of Transportation Memorandum, 
``Treatment of the Value of Preventing Fatalities and Injuries in 
Preparing Economic Analyses--Revised Departmental Guidance 2015,'' 
May 2015.
---------------------------------------------------------------------------

     VSL in future years were estimated to grow by 1.03 percent 
per year before discounting to present value.
     The value of a serious injury is $987,000.\18\
---------------------------------------------------------------------------

    \18\ Id.
---------------------------------------------------------------------------

     The value of a minor injury is $28,200.\19\
---------------------------------------------------------------------------

    \19\ Id.
---------------------------------------------------------------------------

iv. Benefits for the Preferred Alternative
    The benefit estimates begin two years after implementation begins. 
The objective of SMS is to proactively manage safety, to identify 
potential hazards or risks, and to implement measures that mitigate 
those risks. The FAA envisions airports being able to use all of the 
components of SMS to enhance the airport's ability to identify safety 
issues and spot trends before they result in a near-miss, incident, or 
accident. Airports have already seen immediate benefits from increased 
communication and reporting that are all fundamental components of SMS. 
These efforts are expected to prevent accidents and incidents. These 
benefits are a result of identifying safety issues, spotting trends, 
implementing necessary safety mitigations, and communicating findings 
before they result in a near-miss, incident, or accident. Over the 10-
year period of analysis, the potential benefits of the proposed rule 
for the preferred alternative would be $370.8 million ($225.9 million 
or $297.7 million in present value terms at 7% and 3%).
v. Costs for the Preferred Alternative

------------------------------------------------------------------------
                                                             Preferred
                                                           alternative:
                        Base case                         L, M, S, >100K
                                                             ops, and
                                                           international
------------------------------------------------------------------------
Benefits................................................    $370,788,457
Costs...................................................     238,865,692
                                                         ---------------
  Net Benefits..........................................     131,922,764
PV Benefits (7%)........................................     225,850,869
PV Costs (7%)...........................................     157,496,312
PV Net Benefits (7%)....................................      68,354,557
PV Benefits (3%)........................................     297,704,052
PV Costs (3%)...........................................     198,211,977
                                                         ---------------
    PV Net Benefits (3%)................................      68,354,557
------------------------------------------------------------------------
Mitigation Costs: Not quantified, estimates not included.

vi. Total Costs
    Excluding any mitigation costs, which have not been estimated, the 
total costs of the SNPRM equal the sum of SMS manual/implementation 
plan development, staffing, equipment/material, training, update 
training records, and recording potential hazards over 10 years. The 
total cost of this rule for the preferred alternative is about $157.5 
million in present value terms.
vii. Alternatives Considered
     All part 139 certificated airports--This alternative is 
not cost-beneficial.
     Class I airports--This alternative is not cost-beneficial.
     Certificated international airports--This alternative is 
cost-beneficial but does not capture all certificated airports with 
complex operations.
     Large, Medium, Small hub airports and certificated 
airports with total annual operations greater than 100,000--This 
alternative is cost-beneficial but does not harmonize with ICAO Annex 
14.

[[Page 45893]]



                                 Comparison of Costs and Benefits over 10 Years
                                                 [2014 Dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                                     Preferred
                                                                                                   alternative:
                                                                   International    L, M, S and   L, M, S, >100K
            Base case                 All ($)       Class I ($)         ($)        >100K ops ($)     ops, and
                                                                                                   international
                                                                                                        ($)
----------------------------------------------------------------------------------------------------------------
Benefits........................    $382,987,281    $368,096,671    $360,907,166    $356,128,301    $370,788,457
Costs...........................     471,104,787     341,021,606     215,010,997     163,760,850     238,865,692
                                 -------------------------------------------------------------------------------
    Net Benefits................     -88,117,506      27,075,065     145,896,169     192,367,451     131,922,764
PV Benefits (7%)................     233,282,770     224,210,033     219,830,291     216,919,352     225,850,869
PV Costs (7%)...................     307,842,595     223,584,687     141,796,001     108,819,973     157,496,312
PV Net Benefits (7%)............     -74,559,825         625,346      78,034,290     108,099,379      68,354,557
PV Benefits (3%)................     307,499,272     295,542,114     289,769,378     285,932,407     297,704,052
PV Costs (3%)...................     389,440,320     282,304,199     178,432,284     136,340,226     198,211,977
                                 -------------------------------------------------------------------------------
    PV Net Benefits (3%)........     -74,559,825         625,346      78,034,290     108,099,379      68,354,557
----------------------------------------------------------------------------------------------------------------
Mitigation Costs: Not quantified, estimates not included.
Given the range of mitigation actions possible, it is difficult to quantify potential benefits.

B. Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (RFA) establishes ``as a 
principle of regulatory issuance that agencies shall endeavor, 
consistent with the objective of the rule and of applicable statutes, 
to fit regulatory and informational requirements to the scale of the 
business, organizations, and governmental jurisdictions subject to 
regulation.'' To achieve that principle, the RFA requires agencies to 
solicit and consider flexible regulatory proposals and to explain the 
rationale for their actions. The RFA covers a wide range of small 
entities, including small businesses, not-for-profit organizations, and 
small governmental jurisdictions.
    Agencies must perform a review to determine whether a proposed or 
final rule will have a significant economic impact on a substantial 
number of small entities. If the agency determines that it will, the 
agency must prepare a regulatory flexibility analysis as described in 
the Act.
    The FAA identified at least 28 part 139 airports that meet the 
Small Business Administration definition of a small entity (which 
includes small governmental jurisdictions such as governments of 
cities, counties, towns, townships, villages, school districts, or 
special districts with populations of less than 50,000) out of the 268 
part 139 airports considered in the preferred alternative. The FAA 
considers this a substantial number of small entities.
    Of the 28 small entities, 25 are classified as small airports 
whereas the remaining 3 are large airports. In the regulatory 
evaluation, we estimated the costs over 10 years for all part 139 
airports (we did not disaggregate costs by small airports and large 
airports). For this analysis, the FAA estimated the separate costs over 
10 years for small airports and for large airports by taking an average 
across each of the two groups. Based on these 10-year cost estimates, 
the FAA projects the annual peak cost for small airports and for large 
airports at about $101 thousand; the FAA estimates the annualized costs 
over ten years at about $77 thousand and $81 thousand for small 
airports and large airports, respectively.\20\ Because the relationship 
between the annual peak cost and the annualized cost for both airport 
groups suggests a moderately uniform cash flow stream, the FAA used the 
annualized cost to estimate the economic impact significance on small 
entities.
---------------------------------------------------------------------------

    \20\ Annualized using a capital recovery factor of 0.14238, over 
10 years, using a 7 percent rate of interest.
---------------------------------------------------------------------------

    The FAA found the individual revenue for 22 airports out of the 28 
small entities. The 2011 revenue ranges from about $97 thousand to 
$14.9 million.\21\ Using the preceding information, the FAA estimates 
that their ratio of annualized costs to annual revenues is higher than 
2 percent for 12 small airports. Therefore, the FAA performed a 
regulatory flexibility analysis for these 12 small entities.
---------------------------------------------------------------------------

    \21\ Revenue data from Compliance Activity Tracking System 
(CATS) accessed on June 10, 2013 from http://cats.airports.faa.gov.
---------------------------------------------------------------------------

    Under section 603(b) of the RFA (as amended), each regulatory 
flexibility analysis is required to address the following points: (1) 
Reasons the agency considered the proposed rule, (2) the objectives and 
legal basis for the proposed rule, (3) a description of and an estimate 
of the number of small entities affected by the proposed rule (4) the 
reporting, recordkeeping, and other compliance requirements of the 
proposed rule, and (5) all Federal rules that may duplicate, overlap, 
or conflict with the proposed rule.
i. Reasons the FAA Considered the Proposed Rule
    The FAA remains committed to continuously improving safety in air 
transportation. The FAA believes that an SMS can address potential 
safety gaps that are not completely eliminated through existing FAA 
regulations and technical operating standards. The certificate holder 
best understands its own operating environment and, therefore, is in 
the best position to address safety issues through improved management 
practices.
    Both the NTSB and ICAO support SMS as a means to prevent future 
accidents and improve safety. The NTSB has cited organizational factors 
contributing to aviation accidents and has recommended SMS for several 
sectors of the aviation industry, including aircraft operators. The FAA 
has concluded those same organizational factors and benefits of SMS 
apply across the aviation industry, including airports. In 2001, ICAO 
adopted a standard in Annex 14 that all member states establish SMS 
requirements for airport operators hosting international operations. 
During the 2007 Universal Safety Audit Program evaluation of the U.S. 
implementation of ICAO standards and recommended practices, ICAO cited 
the FAA for failing to conform to the SMS standard and recommended 
practice in Annex 14. The FAA supports conformity of U.S. aviation 
safety regulations with ICAO standards and recommended practices.

[[Page 45894]]

    Moreover, in November 2007, the U.S. Government Accountability 
Office recommended the FAA develop a strategic plan to reduce accidents 
involving workers, passengers, and aircraft on airport ramps. The 
applicability of SMS to the non-movement area, including airport ramps, 
would help airports proactively identify and mitigate hazards; thereby, 
reducing the likelihood of future accidents and incidents.
ii. The Objectives and Legal Basis for the Proposed Rule
    The FAA's authority to issue rules regarding aviation safety 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.
    The FAA is proposing this rulemaking under the authority described 
in Subtitle VII, part A, subpart III, section 44706, ``Airport 
operating certificates.'' Under that section, Congress charges the FAA 
with issuing AOCs that contain terms that the Administrator finds 
necessary to ensure safety in air transportation. This proposed rule is 
within the scope of that authority because it requires certain 
certificated airports to develop and maintain an SMS. The development 
and implementation of an SMS ensures safety in air transportation by 
assisting these airports in proactively identifying and mitigating 
safety hazards.
iii. Description of the Number of Small Entities Affected by the 
Proposed Rule
    The FAA identified at least 28 part 139 airports that meet the SBA 
definition of a small entity. Their 2011 revenue \22\ ranges from about 
$97 thousand to $14.9 million. Using the preceding information, the FAA 
estimates that their ratio of annualized costs to annual revenues is 
higher than 2 percent for 12 small airports.
---------------------------------------------------------------------------

    \22\ Accessed on June 10, 2013 at http://cat.airports.faa.gov.
---------------------------------------------------------------------------

iv. The Reporting, Recordkeeping, and Other Compliance Requirements of 
the Proposed Rule
    As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)), the FAA will submit a copy of these sections to the Office of 
Management and Budget (OMB) for its review. The following costs apply 
to the Paperwork Reduction Act.
[GRAPHIC] [TIFF OMITTED] TP14JY16.014

v. All Federal Rules That may Duplicate, Overlap, or Conflict With the 
Proposed Rule
    There may be some overlap between the proposed rule and existing 
Occupational Safety and Health Administration (OSHA) requirements, 
specifically record keeping and reporting requirements. However, the 
purpose and focus of this proposal is different. OSHA requirements 
focus on employee and workplace safety whereas proactive hazard 
mitigation and analysis under SMS focuses on safety in the movement and 
non-movement areas related to aircraft operations. Further, the FAA 
believes this proposed rule may have secondary benefits of improving 
employee safety.
vi. Other Considerations
a. Affordability Analysis
    For the purpose of this analysis, the degree to which small 
entities can afford the cost of the rule is predicated on the 
availability of financial resources. Costs can be paid from existing 
assets such as cash, by borrowing, or through the provision of 
additional equity capital.
    Commercial service airports that have accepted federal financial 
assistance under the AIP are required to report their financial 
information to the FAA. The FAA defines commercial service as airports 
with 2,500 or more enplanements in the preceding calendar year (see 49 
U.S.C. 47102). Therefore, if a part 139 airport's enplanements fall 
below 2,500, its financial data would not be captured in the FAA's

[[Page 45895]]

Compliance Activity Tracking System (CATS) database.
    One means of assessing affordability is by determining the ability 
of each small entity to meet its short-term obligations by looking at 
net income, working capital, and financial strength ratios. However, 
the FAA was unable to find this type of financial information for the 
affected entities and used an alternative way of analyzing 
affordability. The approach used by the FAA was to compare annual 
revenue (reported in the CATS database) with the annualized compliance 
costs. The ratio of annualized costs to annual revenues ranges from 
0.54% to 79.6%. Thus, the FAA expects that some of these small entities 
may have difficulty affording this rule.
    The costs used by the FAA are averages. Therefore, it is reasonable 
to expect that an airport could have less annualized costs than those 
depicted in this analysis. The proposed rule establishes broad 
requirements, affording maximum scalability and flexibility for 
airports to comply. Therefore, smaller airports have a variety of ways 
to comply with the broad requirements proposed under SMS. For example, 
to establish a confidential hazard reporting system, a smaller airport 
could simply establish drop-boxes around the airport and a schedule to 
check the boxes for submissions. Feedback could be given through memos 
posted in high traffic areas around the airport or near the drop-boxes.
    The FAA intends to provide various templates in advisory circular 
guidance that smaller airports could use to establish their programs. 
The FAA anticipates offering a sample ACM update, SMS Manual, and 
templates for conducting SRM and reporting forms. A smaller airport 
would be able to easily modify these templates as necessary.
    Smaller airports could also request federal financial assistance 
through AIP for costs incurred for development of the SMS Manual and 
implementation plan. The FAA also anticipates that certain costs 
associated with implementation of the SRM and Safety Assurance 
components may be AIP eligible.
    It should be noted that multiple smaller airports in the pilot 
studies found ways to successfully develop and implement SMS within the 
constraints of their operations and budget. While these airports 
received AIP funding to conduct the studies, many established scalable 
programs that they are able to maintain without federal financial 
assistance.
    Lastly, the proposed implementation plan requirements would allow 
small airports maximum flexibility in establishing their airport SMS. 
The certificate holder can phase implementation, either by SMS 
component or by movement versus non-movement area. Smaller airports 
would be able to spread the implementation costs over a longer period 
of time, thereby lessening the impact of this proposal.
b. Alternatives
    The FAA considered the economic impacts on airports across multiple 
alternatives for which part 139 certificate holders would be required 
to implement an airport SMS:
     All Part 139 airports;
     Airport operators holding a Class I AOC;
     Certificated international airports;
     Large, medium, and small hub airports and certificated 
airports with more than 100,000 total annual operations; and
     Large, Medium, and Small hub airports, certificated 
airports with more than 100,000 total annual operations, and 
certificated international airports.
    While the FAA is proposing the last alternative as its preferred 
alternative, each alternative presents various trade-offs of interest 
to the small entities (see the following table).
[GRAPHIC] [TIFF OMITTED] TP14JY16.015

    As the table shows alternative 4 is the least burdensome for small 
entities. However, the FAA did not consider this to be an acceptable 
alternative because in addition to reducing the impact of the rule on 
small entities there were other competing goals including:
    1. Choosing an alternative that provides high airport coverage; and
    2. Harmonizing the alternative with the intent of international SMS 
standards. Alternative 5 in the table was the best alternative for 
meeting all such goals.
vii. Conclusion
    This rule will have a significant economic impact on a substantial 
number of small entities. The FAA identified 12 small entities for 
which the rule will have a significant economic impact.

[[Page 45896]]

[GRAPHIC] [TIFF OMITTED] TP14JY16.016

C. 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 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 effect of this proposed rule and determined that 
it has legitimate domestic objectives and uses ICAO international 
standards as its basis and, therefore, is in compliance with the Trade 
Agreements Act.

D. Unfunded Mandates Assessment

    Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4) requires each Federal agency to prepare a written statement 
assessing the effects of any Federal mandate in a proposed or final 
agency rule that may result in an expenditure of $100 million or more 
(in 1995 dollars) in any one year by State, local, and tribal 
governments, in the aggregate, or by the private sector; such a mandate 
is deemed to be a ``significant regulatory action.'' The FAA currently 
uses an inflation-adjusted value of $155 million in lieu of $100 
million.
    This SNPRM would require certificate holders to implement an SMS to 
proactively identify, analyze, and mitigate safety issues in the 
movement and non-movement areas. It is not a significant regulatory 
action under the Unfunded Mandates Reform Act of 1995. Estimated costs 
do not exceed $155 million in any year of the 10-year analysis. 
Accordingly, the FAA has determined that this action does not have a 
substantial direct effect on the States. Moreover, this proposal would 
have low costs of compliance compared with the resources available to 
airports.
    The provisions of this proposal are under existing statutory 
authority to regulate airports for aviation safety. The proposal would 
not alter the relationship between certificate holders and the FAA as 
established by law. Accordingly, there is no change in either the 
relationship between the Federal Government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.
    The FAA mailed a copy of the NPRM to each State government 
specifically inviting comment on federalism issues. The FAA received 
responses from two attorneys general, both indicating no comment. The 
FAA will mail a copy of the SNPRM to each state government specifically 
inviting comment on federalism implications.

E. 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 additional proposed amendments to the existing 
information collection requirements previously approved under OMB 
Control Number 2120-0675. As required by the Paperwork Reduction Act, 
the FAA has submitted these additional proposed information collection 
amendments to OMB for its review.
    The NPRM contained estimates of the burden associated with the 
additional collection requirements proposed in that document. The FAA 
did not receive any comments specifically on these estimates. However, 
the FAA received comments on other areas in the initial regulatory 
evaluation that affect these estimates. These comments are discussed in 
the supplemental regulatory evaluation. In addition, these

[[Page 45897]]

estimates have been adjusted in response to comments and due to changes 
in the proposed SMS requirements from the NPRM to this SNPRM (e.g., 
applicability of the rule).
    Title: Safety Management System for Certificated Airports.
    Summary: The FAA proposes a rule to require certain certificate 
holders to establish an SMS for the entire airfield environment 
(including movement and non-movement areas) to improve safety at 
airports hosting air carrier operations. An SMS is a formalized 
approach to managing safety by developing an organization-wide safety 
policy, developing formal methods for identifying hazards, analyzing 
and mitigating risk, developing methods for ensuring continuous safety 
improvement, and creating organization-wide safety promotion 
strategies.
    The proposal would require a certificate holder to submit an 
Implementation Plan within 12 months of the issuance of the final rule. 
The intent of the Implementation Plan is for a certificate holder to 
identify its plan for implementing SMS within the applicable areas, and 
map its schedule for implementing requirements.
    In addition, a certificate holder would describe its means for 
complying with the proposed requirements by either developing an SMS 
Manual and updating its Airport Certification Manual (ACM) with cross-
references, or documenting the SMS requirements directly in the ACM.
    Finally, a certificate holder would be required to maintain records 
related to formalized hazard identification and analysis under Safety 
Risk Management, training records under Safety Promotion, and other 
Safety Promotion materials (also referred to as safety communications).
    Use: While the implementation plan's main purpose is to guide a 
certificate holder's implementation, the plan also provides the basis 
for the FAA's oversight during the development and implementation 
phases. The FAA's review and approval of the implementation plan 
ensures that a certificate holder is given feedback early and before it 
may make significant capital improvements as part of its SMS 
development and implementation.
    The ACM update and/or the SMS Manual establishes the foundation for 
an SMS. Like the implementation plan, the FAA would approve the ACM 
update. However, the FAA would accept the certificate holder's SMS 
Manual. Collection and analysis of safety data is an essential part of 
an SMS. Types of data to be collected, retention procedures, analysis 
processes, and organizational structures for review and evaluation 
would all be documented in either the ACM or the SMS Manual, with 
cross-references in the ACM. These records would be used by a 
certificate holder in the operation of its SMS and to facilitate 
continuous improvement through evaluation and monitoring. While the 
proposal does not require a certificate holder to submit these records 
to the FAA, it would be required to make these records available upon 
request.
    Respondents: Application of these proposed requirements is limited 
to a certificated airport (i) classified as a Small, Medium, or Large 
hub airport in the NPIAS; (ii) identified as an international airport, 
or (iii) identified as having more than 100,000 total annual 
operations.
    Frequency: The requirement to develop an implementation plan would 
be a one-time, initial occurrence. The requirement to create an SMS 
manual and/or update the ACM would be an initial occurrence. Updates to 
the SMS manual would occur on an as needed, ongoing basis, with annual 
submissions to the FAA. Other records would be created on an as needed, 
ongoing basis.
    Burden Estimate:
a. Initial Burden--Certificate Holders--Draft Manual and Implementation 
Plan (Sec. Sec.  139.401(d) and 139.403(a))
     Number of large airports \23\: 138.
---------------------------------------------------------------------------

    \23\ For the purposes of this analysis, the FAA has defined 
``large airports'' as Large, Medium, and Small hub airports.
---------------------------------------------------------------------------

     Number of small airports \24\: 130.
---------------------------------------------------------------------------

    \24\ For the purposes of this analysis, the FAA has defined 
``small airports'' as all certificated airports that are not Large, 
Medium, or Small hubs.
---------------------------------------------------------------------------

     Estimated time needed to create an SMS document and 
implementation plan per large airport: 508 hours per year for first two 
years.
     Estimated time needed to create an SMS document and 
implementation plan per small airport: 334 hours per year for first two 
years.
     Wage for SMS manager/coordinator: $66.28 per hour.

[[Page 45898]]

[GRAPHIC] [TIFF OMITTED] TP14JY16.017

b. Initial Burden--FAA--Review Manual and Implementation Plan
     Number of large airports: 138.
     Number of small airports: 130.
     Estimated time needed to review an implementation plan per 
large airports: 16 hours in first year.
     Estimated time needed to review an implementation plan per 
small airport: 4 hours in first year.
     Estimated time needed to review an SMS document per 
airport: 8 hours in second year.
     Wage for inspector: $66.76 per hour.

[[Page 45899]]

[GRAPHIC] [TIFF OMITTED] TP14JY16.018

c. Annual Burden--Certificate Holders
i. SMS Manual Revisions (Sec.  139.401(d)(2)(i))
     Number of airports: 268.
     Estimated time needed to revise SMS manual per airport: 12 
hours per year starting in third year.
     Wage for clerical: $19.41 per hour.

[[Page 45900]]

[GRAPHIC] [TIFF OMITTED] TP14JY16.019

ii. Promotional Material (Sec.  139.402(d)(5))
     Number of airports: 268.
     Estimated time needed to create SMS promotional material 
per airport: 25.76 hours every other year starting in third year.
     Wage for SMS manager/coordinator: $66.28 per hour.
    [GRAPHIC] [TIFF OMITTED] TP14JY16.020
    
iii. Recording Potential Hazards (Sec.  139.402(b)(1))
     Number of airports: 268.
     Estimated time needed to record potential hazard per 
airport: 15 minutes per year starting in third year.
     Estimated potential hazards per airport: 52 per year 
starting in third year.
     Wage for clerical: $19.41 per hour.

[[Page 45901]]

[GRAPHIC] [TIFF OMITTED] TP14JY16.021

iv. Hazard Awareness and Reporting Orientation Materials (Sec.  
139.402(d)(1))
     Number of airports: 268.
     Estimated time needed to develop hazard awareness 
orientation per airport: 8 hours in second year.
     Estimated time needed to update orientation per airport: 2 
hours every other year starting in fourth year.
     Wage for SMS manager/coordinator: $66.28 per hour.
    [GRAPHIC] [TIFF OMITTED] TP14JY16.022
    
v. Update Distribution Log for Hazard Awareness and Reporting 
Orientation Materials (Sec.  139.402(d)(2))
     Number of large airports: 138.
     Number of small airports: 130.
     Average number of tenants per large airport: 50.
     Average number of tenants per small airport: 10.
     Estimated time needed to update distribution log per large 
airport: 0.25 hours every other year starting in second year.
     Estimated time needed to update distribution log per small 
airport: 0.08 hours every other year starting in second year.
     Wage for clerical: $19.41 per hour.

[[Page 45902]]

[GRAPHIC] [TIFF OMITTED] TP14JY16.023

vi. Update SMS Training Records (Sec.  139.402(d)(4))
     Number of large airports: 138.
     Number of small airports: 130.
     Estimated time needed to update training records per 
airport: 5 Minutes per record every other year starting in second year.
     Average number of employees per large airport: 10.
     Average number of employees per small airport: 3.
     Wage for clerical: $19.41 per hour.

[[Page 45903]]

[GRAPHIC] [TIFF OMITTED] TP14JY16.024

vii. Documenting Safety Risk Management (Sec.  139.402(b)(3))
     Number of airports: 268.
     Estimated number of hazards documented per airport: 52 per 
year starting in third year.
     Estimated time needed to document SRM per airport: 0.5 
hours per year starting in third year.
     Wage for clerical: $19.41 per hour.

[[Page 45904]]

[GRAPHIC] [TIFF OMITTED] TP14JY16.025

viii. Reporting Safety Information Under Safety Assurance (Sec.  
139.402(c)(3))
     Number of airports: 268.
     Estimated time needed to report safety information per 
report per airport: 1 hour per year starting in third year.
     Estimated number of reports per airport: 2 per year 
starting in third year.
     Wage for operational research analyst: $46.62 per hour.
    [GRAPHIC] [TIFF OMITTED] TP14JY16.026
    
d. Annual Burden--FAA
i. Review of SMS Manual Revisions
     Number of airports: 268.
     Estimated time needed to review an SMS manual revision per 
airport: 1.25 hours per year starting in third year.
     Wage for inspector: $66.76 per hour.

[[Page 45905]]

[GRAPHIC] [TIFF OMITTED] TP14JY16.027

e. Summary of All Burden Hours and Costs--Certificate Holders
[GRAPHIC] [TIFF OMITTED] TP14JY16.028

f. Summary of All Burden Hours and Costs--FAA
[GRAPHIC] [TIFF OMITTED] TP14JY16.029


[[Page 45906]]



F. International Compatibility and Cooperation

    In keeping with U.S. obligations under the Convention on 
International Civil Aviation, it is FAA policy to conform to 
International Civil Aviation Organization (ICAO) Standards and 
Recommended Practices to the maximum extent practicable. The FAA has 
reviewed the corresponding ICAO Standards and Recommended Practices and 
believes its proposal corresponds with the intent of ICAO Annexes 14 
and 19 standards.

G. Environmental Analysis

    FAA Order 1050.1E defines the FAA actions that are categorically 
excluded from preparation of an environmental assessment or 
environmental impact statement under the National Environmental Policy 
Act (NEPA) in the absence of extraordinary circumstances. The FAA has 
determined this proposed rulemaking action qualifies for the 
categorical exclusion identified in Chapter 3, paragraph 312d and 
involves no extraordinary circumstances.

VI. Executive Order Determinations

A. Executive Order 13132, Federalism

    The FAA has analyzed the proposal under the principles and criteria 
of Executive Order 13132, Federalism. Most airports subject to this 
proposal are owned, operated, or regulated by a local government body 
(such as a city or council government), which, in turn, is incorporated 
by or as part of a state. Some airports are operated directly by a 
state. The FAA does not believe this proposed rule has a significant 
adverse effect on Federalism. The FAA will mail a copy of the SNPRM to 
each state government specifically inviting comment on Federalism 
implications.

B. Executive Order 13211, Regulations That Significantly Affect Energy 
Supply, Distribution, or Use

    The FAA analyzed this SNPRM under Executive Order 13211, Actions 
Concerning Regulations that Significantly Affect Energy Supply, 
Distribution, or Use (May 18, 2001). The agency has determined that it 
is not a ``significant energy action'' under the executive order, and 
it is not likely to have a significant adverse effect on the supply, 
distribution, or use of energy.

VII. How To Obtain Additional Information

A. Comments Invited

    The FAA invites interested persons to participate in this 
rulemaking by submitting written comments, data, or views. We also 
invite comments relating to the economic, environmental, energy, or 
federalism impacts that might result from adopting the proposals in 
this document. The most helpful comments reference a specific portion 
of the proposal, explain the reason for any recommended change, and 
include supporting data. To ensure the docket does not contain 
duplicate comments, please send only one copy of written comments, or 
if you are filing comments electronically, please submit your comments 
only one time.
    We will file in the docket all comments we receive, as well as a 
report summarizing each substantive public contact with FAA personnel 
concerning this proposed rulemaking. Before acting on this proposal, we 
will consider all comments we receive on or before the closing date for 
comments. We will consider comments filed after the comment period has 
closed if it is possible to do so without incurring expense or delay. 
We may change this proposal in light of the comments we receive.
Proprietary or Confidential Business Information
    Do not file in the docket information that you consider to be 
proprietary or confidential business information. Send or deliver this 
information directly to the person identified in the FOR FURTHER 
INFORMATION CONTACT section of this document. You must mark the 
information that you consider proprietary or confidential. If you send 
the information on a disk or CD-ROM, mark the outside of the disk or 
CD-ROM and also identify electronically within the disk or CD-ROM the 
specific information that is proprietary or confidential.
    Under 14 CFR 11.35(b), when we are aware of proprietary information 
filed with a comment, we do not place it in the docket. We hold it in a 
separate file to which the public does not have access, and we place a 
note in the docket that we have received it. If we receive a request to 
examine or copy this information, we treat it as any other request 
under the Freedom of Information Act (5 U.S.C. 552). We process such a 
request under the DOT procedures found in 49 CFR part 7.

B. Availability of Rulemaking Documents

    An electronic copy of a rulemaking document may be obtained by 
using the Internet--
    1. Search the Federal eRulemaking Portal (http://www.regulations.gov);
    2. Visit the FAA's Regulations and Policies Web page at http://www.faa.gov/regulations_policies/ or
    3. Access the Government Printing Office's Web page at http://www.gpoaccess.gov/fr/index.html.
    Copies may also be obtained by sending a request (identified by 
notice, amendment, or docket number of this rulemaking) to the Federal 
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence 
Avenue SW., Washington, DC 20591, or by calling (202) 267-9680.

C. Comments Submitted to the Docket

    Comments received may be viewed by going to http://www.regulations.gov and following the online instructions to search the 
docket number for this action. Anyone is able to search the electronic 
form of all comments received into any of the FAA's dockets by the name 
of the individual submitting the comment (or signing the comment, if 
submitted on behalf of an association, business, labor union, etc.).

D. Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 
1996 requires 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 http://www.faa.gov/regulations_policies/rulemaking/sbre_act/.

List of Subjects in 14 CFR Part 139

    Air carriers, Airports, Aviation safety, Reporting and 
recordkeeping requirements.

The Proposed Amendment

    In consideration of the foregoing, the Federal Aviation 
Administration proposes to amend Chapter I of Title 14, Code of Federal 
Regulations as follows:

PART 139--CERTIFICATION OF AIRPORTS

0
1. The authority citation for part 139 is revised to read as follows:

    Authority: 49 U.S.C. 106(f), 106(g), 40113, 44701-44702, 44709, 
44719.

0
2. Amend Sec.  139.5 by adding in alphabetical order the definitions of 
the terms ``Accountable executive'', ``Airport Safety Management System 
(SMS)'', ``Hazard'', ``Non-movement area'', ``Risk'', ``Risk 
analysis'', ``Risk mitigation'', ``Safety assurance'', ``Safety 
policy'', ``Safety promotion'', and

[[Page 45907]]

``Safety risk management'' to read as follows:


Sec.  139.5  Definitions.

* * * * *
    Accountable executive means an individual designated by the 
certificate holder to act on its behalf for the implementation and 
maintenance of the Airport Safety Management System. The Accountable 
Executive has control of the certificate holder's human and financial 
resources for operations conducted under the Airport's Operating 
Certificate. The Accountable Executive has ultimate responsibility to 
the FAA, on behalf of the certificate holder, for the safety 
performance of operations conducted under the certificate holder's 
Airport Operating Certificate.
* * * * *
    Airport Safety Management System (SMS) means an integrated 
collection of processes and procedures that ensures a formalized and 
proactive approach to system safety through risk management.
* * * * *
    Hazard means a condition that could foreseeably cause or contribute 
to an aircraft accident as defined in 49 CFR 830.2.
* * * * *
    Non-movement area means the area, other than that described as the 
movement area, used for the loading, unloading, parking, and movement 
of aircraft on the airside of the airport (including ramps, apron 
areas, and on-airport fuel farms).
* * * * *
    Risk means the composite of predicted severity and likelihood of 
the potential effect of a hazard.
    Risk analysis means the process whereby a hazard is characterized 
for its likelihood and the severity of its effect or harm. Risk 
analysis can be either a quantitative or qualitative analysis; however, 
the inability to quantify or the lack of historical data on a 
particular hazard does not preclude the need for analysis.
    Risk mitigation means any action taken to reduce the risk of a 
hazard's effect.
* * * * *
    Safety assurance means the process management functions that 
evaluate the continued effectiveness of implemented risk mitigation 
strategies; support the identification of new hazards; and function to 
systematically provide confidence that an organization meets or exceeds 
its safety objectives through continuous improvement.
    Safety policy means the statement and documentation adopted by a 
certificate holder defining its commitment to safety and overall safety 
vision.
    Safety promotion means the combination of safety culture, training, 
and communication activities that support the implementation and 
operation of an SMS.
    Safety risk management means a formal process within an SMS 
composed of describing the system, identifying the hazards, and 
analyzing, assessing, and mitigating the risk.
* * * * *


Sec.  139.101  [Amended]

0
3. Amend Sec.  139.101 by removing paragraph (c).
0
4. Amend Sec.  139.103 by revising paragraph (b) to read as follows:


Sec.  139.103  Application for certificate.

* * * * *
    (b) Submit with the application, two copies of an Airport 
Certification Manual, Safety Management System Implementation Plan (as 
required by Sec.  139.403(b)), and Safety Management System Manual 
(where applicable) prepared in accordance with subparts C and E of this 
part.
0
5. Amend Sec.  139.203 by redesignating paragraph (b)(29) as (b)(30) 
and adding a new paragraph (b)(29) to read as follows:


Sec.  139.203  Contents of Airport Certification Manual.

* * * * *
    (b)* * *

                                 Required Airport Certification Manual Elements
----------------------------------------------------------------------------------------------------------------
                                                                         Airport certificate class
                     Manual elements                     -------------------------------------------------------
                                                             Class I      Class II      Class III     Class IV
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
29. Policies and procedures for the development of,                 X             X             X             X
 implementation of, maintenance of, and adherence to the
 Airport's Safety Management System, as required under
 subpart E of this part. Section 139.401(a) prescribes
 which certificate holders are subject to this
 requirement............................................
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

0
6. Amend Sec.  139.301 by revising paragraph (b)(1) and adding 
paragraphs (b)(9) and (b)(10) to read as follows:


Sec.  139.301  Records.

* * * * *
    (b) * * *
    (1) Personnel training. Twenty-four consecutive calendar months for 
personnel training records and orientation materials, as required under 
Sec. Sec.  139.303, 139.327, and 139.402(d).
* * * * *
    (9) Safety risk management documentation. Thirty-six consecutive 
calendar months or twelve consecutive calendar months, as required 
under Sec.  139.402(b).
    (10) Safety communications. Twelve consecutive calendar months for 
safety communications, as required under Sec.  139.402(d).
* * * * *
0
7. Amend Sec.  139.303 by revising paragraphs (e)(5) and (e)(6) and by 
adding paragraph (e)(7) to read as follows:


Sec.  139.303  Personnel.

* * * * *
    (e) * * *
    (5) Sec.  139.337, Wildlife hazard management;
    (6) Sec.  139.339, Airport condition reporting; and
    (7) Sec.  139.402, Components of airport safety management system.
* * * * *
0
8. Add subpart E to part 139 to read as follows:
Subpart E--Airport Safety Management System
Sec.
139.401 General requirements.
139.402 Components of Airport Safety Management System.
139.403 Airport Safety Management System implementation.

[[Page 45908]]

Subpart E--Airport Safety Management System


Sec.  139.401  General requirements.

    (a) Each certificate holder or applicant for an Airport Operating 
Certificate meeting at least one of the following criteria must 
develop, implement, maintain and adhere to an Airport Safety Management 
System:
    (1) Is classified as a Large, Medium, or Small hub in the National 
Plan of Integrated Airport Systems;
    (2) Is classified as a port of entry (under 19 CFR 101.3), 
designated international airport (under 19 CFR 122.13), landing rights 
airport (under 19 CFR 122.14), or user fee airport (under 19 CFR 
122.15); or
    (3) Has more than 100,000 total annual operations.
    (b) The scope of an Airport Safety Management System must encompass 
aircraft operation in the movement area, aircraft operation in the non-
movement area, and other airport operations addressed in this part.
    (c) The Airport Safety Management System may correspond in size, 
nature, and complexity to the operations, activities, hazards, and 
risks associated with the certificate holder's operations.
    (d) Each certificate holder required to develop, implement, 
maintain, and adhere to an Airport Safety Management System under this 
subpart must describe its compliance with the requirements identified 
in Sec.  139.402 either:
    (1) Within a separate section of the certificate holder's Airport 
Certification Manual titled Airport Safety Management System; or
    (2) Within a separate Airport Safety Management System Manual. If 
the certificate holder chooses to use a separate Airport Safety 
Management System Manual, the Airport Certification Manual must 
incorporate by reference the Airport Safety Management System Manual.
    (e) On an annual basis, the certificate holder shall provide the 
FAA copies of any changes to the Airport Safety Management Manual.


Sec.  139.402  Components of Airport Safety Management System.

    An Airport Safety Management System must include:
    (a) Safety Policy. A Safety Policy that, at a minimum:
    (1) Identifies the accountable executive.
    (2) Establishes and maintains a safety policy statement signed by 
the accountable executive.
    (3) Ensures the safety policy statement is available to all 
employees and tenants.
    (4) Identifies and communicates the safety organizational 
structure.
    (5) Describes management responsibility and accountability for 
safety issues.
    (6) Establishes and maintains safety objectives.
    (7) Defines methods, processes, and organizational structure 
necessary to meet safety objectives.
    (b) Safety Risk Management. Safety Risk Management processes and 
procedures for identifying hazards and their associated risks within 
airport operations and for changes to those operations covered by this 
part that, at a minimum:
    (1) Establish a system for identifying operational safety issues.
    (2) Establish a systematic process to analyze hazards and their 
associated risks by:
    (i) Describing the system;
    (ii) Identifying hazards;
    (iii) Analyzing the risk of identified hazards and/or proposed 
mitigations;
    (iv) Assessing the level of risk associated with identified 
hazards; and
    (v) Mitigating the risks of identified hazards, when appropriate.
    (3) Establish and maintain records that document the certificate 
holder's Safety Risk Management processes.
    (i) The records shall provide a means for airport management's 
acceptance of assessed risks and mitigations.
    (ii) Records associated with the certificate holder's Safety Risk 
Management processes must be retained for the longer of:
    (A) Thirty-six consecutive calendar months after the risk analysis 
of identified hazards under paragraph (b)(2)(iv) of this section has 
been completed; or
    (B) Twelve consecutive calendar months after mitigations required 
under paragraph (b)(2)(v) of this section have been implemented.
    (c) Safety Assurance. Safety Assurance processes and procedures to 
ensure mitigations developed through the certificate holder's Safety 
Risk Management processes and procedures are adequate, and the 
Airport's Safety Management System is functioning effectively. Those 
processes and procedures must, at a minimum:
    (1) Provide a means for monitoring safety performance including a 
means for ensuring that safety objectives identified under paragraph 
(a)(6) of this section are being met.
    (2) Establish and maintain a hazard reporting system that provides 
a means for reporter confidentiality.
    (3) Report pertinent safety information and data on a regular basis 
to the accountable executive. Reportable data includes:
    (i) Compliance with the requirements under subpart D of this part;
    (ii) Performance of safety objectives established under paragraph 
(a)(6) of this section;
    (iii) Safety critical information distributed in accordance with 
paragraph (d)(5)(ii) of this section;
    (iv) Status of ongoing mitigations required under the Airport's 
Safety Risk Management processes as described under paragraph (b)(2)(v) 
of this section; and
    (v) Status of a certificate holder's schedule for implementing the 
Airport Safety Management System as described under paragraph (b)(2) of 
this section.
    (d) Safety Promotion. Safety Promotion processes and procedures to 
foster an airport operating environment that encourages safety. Those 
processes and procedures must, at a minimum:
    (1) Provide all persons authorized to access the airport areas 
regulated under this part with a hazard awareness orientation, which 
includes hazard identification and hazard reporting. These orientation 
materials must be readily available and be updated at least every 24 
calendar months.
    (2) Maintain a record of all hazard awareness orientation materials 
made available under paragraph (d)(1) of this section including any 
revisions and means of distribution. Such records must be retained for 
24 consecutive months after the materials are made available.
    (3) Provide safety training on those requirements of SMS and its 
implementation to each employee with responsibilities under the 
certificate holder's SMS that is appropriate to the individual's role. 
This training must be completed at least every 24 months.
    (4) Maintain a record of all training by each individual under 
paragraph (d)(3) of this section that includes, at a minimum, a 
description and date of training received. Such records must be 
retained for 24 consecutive calendar months after completion of 
training.
    (5) Develop and maintain formal means for communicating important 
safety information that, at a minimum:
    (i) Ensures all persons authorized to access the airport areas 
regulated under this part are aware of the SMS and their safety roles 
and responsibilities;
    (ii) Conveys critical safety information;
    (iii) Provides feedback to individuals using the airport's hazard 
reporting system required under paragraph (c)(2) of this section; and
    (iv) Disseminates safety lessons learned to relevant airport 
employees or other stakeholders.

[[Page 45909]]

    (6) Maintain records of communications required under this section 
for 12 consecutive calendar months.


Sec.  139.403  Airport Safety Management System implementation.

    (a) Each certificate holder required to develop, implement, 
maintain, and adhere to an Airport Safety Management System under this 
subpart must submit an implementation plan to the FAA for approval on 
or before [DATE 12 MONTHS AFTER EFFECTIVE DATE OF THE FINAL RULE].
    (b) An implementation plan must provide:
    (1) A detailed proposal on how the certificate holder will meet the 
requirements prescribed in this subpart.
    (2) A schedule for implementing SMS components and elements 
prescribed in Sec.  139.402. The schedule must include timelines for 
the following requirements:
    (i) Developing the safety policy statement as prescribed in Sec.  
139.402(a)(2) and when it will be made available to all employees and 
tenants as prescribed in Sec.  139.402(a)(3);
    (ii) Identifying and communicating the safety organizational 
structure as prescribed in Sec.  139.402(a)(4);
    (iii) Establishing a system for identifying operational safety 
issues as prescribed in Sec.  139.402(b)(1);
    (iv) Establishing a hazard reporting system as prescribed in Sec.  
139.402(c)(2);
    (v) Developing, providing, and maintaining hazard awareness 
orientation materials as prescribed in Sec.  139.402(d)(1);
    (vi) Providing SMS specific training to employees with 
responsibilities under the certificate holder's SMS as prescribed in 
Sec.  139.402(d)(3); and
    (vii) Developing, implementing, and maintaining formal means for 
communicating important safety information as prescribed in Sec.  
139.402(d)(5).
    (3) A description of any existing programs, policies, or procedures 
that the certificate holder intends to use to meet the requirements of 
this subpart.
    (c) Each certificate holder required to develop, implement, 
maintain, and adhere to an Airport Safety Management System under this 
subpart must submit its amended Airport Certification Manual and 
Airport Safety Management System Manual, if applicable, to the FAA in 
accordance with its implementation plan but not later than [DATE 24 
MONTHS AFTER EFFECTIVE DATE OF THE FINAL RULE].

    Issued in Washington, DC, under the authority provided by 49 
U.S.C. 106(f) and 44706, on July 8, 2016.
Michael J. O'Donnell,
Director, Office of Airport Safety and Standards.
[FR Doc. 2016-16596 Filed 7-12-16; 11:15 am]
 BILLING CODE 4910-13-P


