[Federal Register Volume 86, Number 220 (Thursday, November 18, 2021)]
[Proposed Rules]
[Pages 64419-64438]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-24141]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Parts 61 and 68

[Docket No. FAA-2021-1040; Notice No. 22-02]
RIN 2120-AL51


Medical Certification Standards for Commercial Balloon Operations

AGENCY: Federal Aviation Administration (FAA), Department of 
Transportation (DOT).

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The FAA proposes that airmen hold a valid second-class medical 
certificate when exercising the privileges of a commercial pilot 
certificate in a balloon for compensation or hire except when 
conducting flight training in a balloon. In addition, the FAA proposes 
miscellaneous amendments related to medical certification requirements 
for medical flight tests and a minor change to the BasicMed 
regulations.

DATES: Send comments on or before January 18, 2022.

ADDRESSES: Send comments identified by docket number FAA-2021-1040 
using any of the following methods:
     Federal eRulemaking Portal: Go to https://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 (DOT), 1200 New Jersey Avenue SE, Room 
W12-140, West Building Ground Floor, Washington, DC 20590-0001.
     Hand Delivery or Courier: Take 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.
    Privacy: In accordance with 5 U.S.C. 553(c), 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 https://www.transportation.gov/privacy.
    Docket: Background documents or comments received may be read at 
https://www.regulations.gov at any time. Follow the online instructions 
for accessing the docket or go to the 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.

FOR FURTHER INFORMATION CONTACT: Bradley Zeigler, Airman Training and 
Certification Branch, Federal Aviation Administration, 800 Independence 
Avenue SW, Washington, DC 20591; (202) 267-9601; email 
[email protected].

SUPPLEMENTARY INFORMATION:

List of Abbreviations and Acronyms Frequently Used in This Document

AMCD Aerospace Medical Certification Division
ADHD Attention Deficit Hyperactivity Disorder
AME Aviation Medical Examiner
ASI Aviation Safety Inspector
ATP Airline Transport Pilot
BFA Balloon Federation of America
IRFA Initial Regulatory Flexibility Analysis
LOA Letter of Authorization
NDR National Driver Register
NPRM Notice of proposed rulemaking
NTSB National Transportation Safety Board
PDPS Problem Driver Pointer System
PIC Pilot in Command
SIC Second in Command
SODA Statement of Demonstrated Ability

I. Executive Summary

    This rulemaking proposes amendments in Sec. Sec.  61.3 and 61.23 of 
title 14 of the Code of Federal Regulations (14 CFR) to require 
commercial balloon pilots \1\ conducting operations for compensation or 
hire to hold a valid second-class medical certificate. Additionally, 
this proposed rule would continue to allow pilots to provide flight 
training in balloons without requiring a medical certificate. The 
proposed rule includes related amendments to the table of medical 
certificate duration in Sec.  61.23(d) for consistency with the 
proposed amendments to Sec. Sec.  61.3 and 61.23(a) and (b). The FAA is 
also proposing miscellaneous amendments related to medical 
certification for medical flight tests and a minor change to the 
Alternative Pilot Physical Examination and Education Requirements final 
rule, which amended sections of part 61 and established part 68. In 
this preamble, these regulations will be referred to as BasicMed.
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    \1\ The FAA uses the term ``commercial balloon pilots'' in this 
NPRM to refer to airmen conducting operations in a balloon for 
compensation or hire, including operations involving the carriage of 
persons or property.
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    This rulemaking would implement section 318 (``Commercial Balloon 
Pilot Safety Act of 2018'') of Public Law 115-254, the FAA 
Reauthorization Act of 2018. In addition, this rulemaking responds to 
National Transportation Safety Board (NTSB) Safety Recommendation A-17-
034, which recommends that the FAA remove the medical certification 
exemption in part 61 for commercial balloon pilots receiving 
compensation for transporting passengers.
    The proposed rule would generate costs for balloon pilots to obtain 
a second-class medical certificate and for some pilots to seek 
authorization through special issuance. There would also be costs to 
the FAA to implement this requirement in terms of reviewing and 
processing submissions related to certification. The FAA estimates the 
present value of total costs over ten years is $2.6 million to $17.8 
million with a mid-estimate of $7.5 million at a 7 percent discount 
rate and $3.1 million to $21.7 million with a mid-estimate of $9.1 
million at a 3 percent discount rate. The annualized costs over ten 
years is $0.4 million to $2.5 million with a mid-estimate of $1.1 
million at a 7 percent discount rate and $0.4 million to $2.5 million 
with a mid-estimate of $1.1 million at a 3 percent discount rate. The 
wide range in the cost estimates primarily reflect the uncertainty on 
the number of commercial balloon pilots.\2\
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    \2\ For more detail on the model used to predict the range, 
please refer to the ``Affected Entities'' under section V.A. of this 
preamble.
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    The benefits of the proposed rule include enhanced safety of 
commercial

[[Page 64420]]

balloon operations through reduced risks of accidents, fatalities, and 
injuries caused by medical impairment of balloon pilots.

II. Authority for the Rulemaking

    The FAA's authority to issue rules on aviation safety is 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 issuing this proposal under the authority described in 
Subtitle VII, Part A, Subpart iii, Section 44701, General Requirements; 
Section 44702, Issuance of Certificates; and Section 44703, Airman 
Certificates. Under these sections, the FAA prescribes regulations and 
minimum standards for practices, methods, and procedures the 
Administrator finds necessary for safety in air commerce. The FAA is 
also authorized to issue certificates, including airman certificates 
and medical certificates, to qualified individuals. This rulemaking 
proposal is within the scope of that authority.
    Further, Section 318 of Public Law 115-254, directs the 
Administrator to revise 14 CFR 61.3(c) (relating to second-class 
medical certificates) to apply to an operator of an air balloon to the 
same extent such regulations apply to a pilot flightcrew member of 
other aircraft.

III. Background

A. Current Regulatory Framework

    Under current regulations, a person may serve as a required pilot 
flightcrew member of an aircraft only if that person holds the 
appropriate medical certificate.\3\ There are certain exceptions to 
this requirement, including pilots operating under the provisions of 
BasicMed,\4\ or those flying balloons, gliders, or light sport 
aircraft.\5\ Additionally, part 61 sets forth which operations require 
a medical certificate.\6\
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    \3\ 14 CFR 61.3(c)(1). When referring to a ``medical 
certificate'' in this NPRM, the FAA is referring only to a current 
and valid first-, second-, or third-class FAA airman medical 
certificate issued under 14 CFR part 67, which may have been issued 
under an authorization for special issuance. Under certain 
circumstances, this may include other documentation acceptable to 
the FAA, such as temporary documentation provided to the airman by 
the FAA when that person is awaiting the replacement of a lost or 
destroyed certificate. 62 FR 16220, page 16237 (Apr. 4, 1997).
    \4\ In order to establish medical eligibility to conduct 
operations under BasicMed, a person must meet the requirements of 
Sec.  61.23(c)(3).
    \5\ 14 CFR 61.3(c)(2).
    \6\ 14 CFR 61.23(a).
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    A medical certificate provides validation that a person meets FAA 
medical certification requirements. Airmen must meet the applicable 
medical standards of part 67 to receive an unrestricted medical 
certificate. An aviation medical examiner (AME) makes this 
determination by conducting a physical examination and medical history 
review. In cases where the airman's medical condition does not meet the 
part 67 standard, the airman may be issued a medical certificate by 
authorization for special issuance or statement of demonstrated ability 
(SODA) when the Federal Air Surgeon has determined that the risk 
associated with the medical condition(s) is sufficiently mitigated.\7\
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    \7\ 14 CFR 67.401.
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    Part 67 provides for the issuance of three classes of medical 
certificates--first-, second-, and third-class medical certificates. In 
most cases, a first-class medical certificate is required for 
operations requiring an airline transport pilot (ATP) certificate. At 
minimum, a second-class medical certificate is required for operations 
requiring a commercial pilot certificate. Unless an airman chooses to 
operate under the conditions and limitations of BasicMed, a third-class 
medical certificate is required for operations requiring a private 
pilot certificate, a recreational pilot certificate, a flight 
instructor certificate (when acting as pilot-in-command (PIC) or 
serving as a required flightcrew member in operations other than a 
light sport aircraft, glider, or balloon), or a student pilot 
certificate (other than a light sport aircraft, glider or balloon).\8\
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    \8\ Airmen exercising sport pilot privileges in a light sport 
aircraft without a medical certificate must meet the requirements of 
Sec.  61.23(c)(2).
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    A person obtains a medical certificate by completing an online 
application (FAA form 8500-8, Application for Medical Certificate) 
using the FAA's medical certificate application tool, MedXPress \9\ and 
undergoing a physical examination with an FAA-designated AME. An AME 
may defer an applicant to the FAA for further review when there is 
information indicating the existence or potential of an adverse medical 
finding that may warrant further FAA medical evaluation or oversight.
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    \9\ https://medxpress.faa.gov/.
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    Under Sec.  61.53, all airmen--regardless of whether they are 
required to hold a medical certificate--are prohibited from operating 
an aircraft during a medical deficiency. Specifically, Sec.  61.53(b) 
prohibits a person who is not required to hold a medical certificate 
from conducting operations while that person knows or has reason to 
know of any medical condition that would make him or her unable to 
operate the aircraft in a safe manner. Accordingly, even in the absence 
of an existing requirement for balloon pilots to hold a medical 
certificate, all balloon pilots are currently subject to the 
requirements of Sec.  61.53(b).
    As discussed earlier, pilots conducting operations in a balloon are 
not required to hold a medical certificate. Specifically, under Sec.  
61.3(c)(2)(vi), a person holding a pilot certificate with a balloon 
class rating who is piloting or providing training in a balloon is 
excepted from the requirement to hold a medical certificate.
    A person holding a commercial pilot certificate with a balloon 
class rating is granted privileges to conduct flights for compensation 
or hire and to provide flight training. As described in Sec.  
61.133(a), an airman who holds a commercial pilot certificate may act 
as PIC of an aircraft for compensation or hire, including operations 
involving the carriage of persons or property, provided the person is 
qualified in accordance with part 61 and other parts (such as part 91, 
121 or 135) that apply to the operation. Further, the FAA does not 
issue flight instructor certificates with lighter-than-air category 
ratings.\10\ Flight training privileges in a balloon are included in 
the privileges conveyed to the holder of a commercial pilot certificate 
with a balloon class rating. This approach is unlike other aircraft 
categories such as airplanes, gliders, and rotorcraft, which require a 
person to hold a flight instructor certificate in order to exercise 
such privileges.\11\
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    \10\ There are two classes within the lighter-than-air aircraft 
category: Airship and balloon.
    \11\ Section 61.133(a)(2) sets forth certain additional 
privileges granted to airmen holding commercial pilot certificates 
with a lighter-than-air category rating. Airmen who hold a lighter-
than-air category with balloon class rating on their commercial 
pilot certificate have the following privileges:
    1. Give flight and ground training in a balloon for the issuance 
of a certificate or rating;
    2. Give an endorsement for a pilot certificate with a balloon 
rating;
    3. Endorse a pilot's logbook for solo operating privileges in a 
balloon; and
    4. Give ground and flight training and endorsements that are 
required for a flight review, an operating privilege, or recency-of-
experience requirements of part 61.
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B. Medical Certificate Requirements for Commercial Flight Operations

    While unpowered \12\ commercial operations in balloons and gliders 
currently have no associated medical

[[Page 64421]]

certificate requirement, similar commercial operations in powered 
aircraft require either a first- or second-class medical certificate. 
Powered aircraft operations that require a commercial pilot certificate 
require the airman to hold at least a second-class medical certificate. 
See 14 CFR 61.23(a)(2). Generally, these operations include any 
operation for compensation or hire that does not require an ATP 
certificate (which requires a first-class medical certificate) and does 
not qualify under the compensation or hire exceptions in Sec.  
61.113(b) through (h) for persons holding a private pilot certificate. 
Examples of powered aircraft operations that require a commercial pilot 
certificate with at least a second-class medical certificate include 
sightseeing flights conducted under Sec.  91.147; \13\ commercial 
transportation of skydivers, banner towing, or aerial photography; and 
part 135 non-turbine operations of nine passengers or less.
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    \12\ For the purposes of this rulemaking proposal, the phrase 
``unpowered aircraft'' includes self-launch gliders, which are 
considered by type certificate to be gliders.
    \13\ Section 91.147 is a provision for airplane and helicopter 
operations conducting passenger-carrying flights for compensation or 
hire. This provision requires the operators to obtain a Letter of 
Authorization (LOA) from the FAA, to comply with the various safety 
provisions of part 136, subpart A, and to implement a drug and 
alcohol testing program.
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    Currently, operations in balloons for compensation or hire that may 
be conducted without a medical certificate include, but are not limited 
to, operations for purposes of passenger sightseeing, aerial 
advertising, maintenance test flights, and research and development 
flights. There are no operating rules under part 91 that limit the 
number of passengers an operator may carry. While an operator of a 
sightseeing flight in a powered aircraft conducted under Sec.  91.147 
is required to hold a second-class medical certificate when 
transporting a single passenger, an operator of a balloon carrying any 
number of passengers has no requirement to hold a medical certificate. 
This NPRM includes a proposal to address this disparity.

C. Commercial Balloon Operations 14 in the U.S.
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    \14\ The FAA uses the term ``Commercial Balloon Operations'' in 
this NPRM to refer to the operation of a balloon for compensation or 
hire, including operations involving the carriage of persons or 
property.
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    Approximately 4,870 commercial pilots hold balloon ratings,\15\ and 
approximately 4,940 balloons are registered with the FAA.\16\ The FAA 
does not have a database of commercial balloon operators actively 
operating in the United States. Using commercial sources, the FAA 
estimates there are about 356 individual operators.\17\ The commercial 
balloon industry estimates it conducts 100,000 to 250,000 passenger 
rides annually, as well as aerial advertising and other commercial 
activities.\18\
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    \15\ FAA Airman Registry, as of July 2021. https://www.faa.gov/licenses_certificates/airmen_certification/releasable_airmen_download/.
    \16\ FAA Aircraft Registry, as of October 2019 https://registry.faa.gov/currentreg/.
    \17\ Estimate based on number of commercial operators 
advertising on www.blastvalve.com. Accessed on April 27, 2021.
    \18\ Testimony of Scott Appelman, Representing the Professional 
Ride Operators Division of the Balloon Federation of America to NTSB 
Investigative Hearing, December 9, 2016. Transcript Page 53-54, a 
copy of which has been placed in the docket for this rulemaking.
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    When ballooning was first regulated as an aeronautical activity in 
the 1940s by the predecessor of the FAA, the Civil Aeronautics 
Administration, pilots were required to complete a medical examination 
(CAR part 22).\19\ This requirement continued through the establishment 
of part 61 in 1962.\20\
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    \19\ Amendment 127 to Civil Air Regulations, Part 22 Lighter-
Than-Air Pilot Certificates. Effective September 15, 1941. Section 
22.13 required the holder to complete ``a physical examination 
conducted by an authorized medical examiner of the Administrator.'' 
This requirement was further refined in an October 15, 1942, 
amendment, requiring a free balloon pilot certificate holder to meet 
the third-class physical standards prescribed in CAR part 29.
    \20\ 27 FR 7954 (Aug. 10, 1962), Subchapter D Airmen [New] 
Addition of Subchapter. Effective November 1, 1962, CAR part 22 was 
recodified as 14 CFR part 61. Free balloon pilot certificates were 
prescribed in Sec.  61.181 with a requirement for those certificate 
holders to hold at least a third-class medical certificate issued 
under the newly created part 67.
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    By the late 1960s, sport ballooning had grown significantly.\21\ In 
1973, part 61 was revised substantially. Under the revision, a part 67 
medical certificate was no longer required for either private or 
commercial free balloon \22\ operations.\23\ The medical certificate 
requirements for balloon operations have remained substantively 
unchanged since the 1973 revision.
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    \21\ National Balloon Museum: History of Ballooning https://www.nationalballoonmuseum.com/about/history-of-ballooning/.
    \22\ The term ``free balloon'' was later replaced with 
``balloon'' in April 4, 1997 revision of Part 61. 62 FR 16220.
    \23\ 37 FR 6012, 6018 (Mar. 23, 1972).
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D. FAA Oversight

    In the decades following the 1973 revisions, the FAA generally 
considered commercial balloon operations to be a low-risk and extremely 
small segment of aviation in the United States. Research conducted by 
the Agency revealed 54 commercial hot air balloon accidents between 
2003 and 2013, including four fatal accidents. In 2015, commercial 
sightseeing balloon operations represented .057% of the flight hours of 
total civil aircraft operations.\24\
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    \24\ FAA Docket Submission to the National Transportation Safety 
Board for the investigation of the Heart of Texas Hot Air Balloon 
Accident Balony Kubicek BB85Z balloon, N2469L, Lockhart, Texas; July 
30, 2016, Dated April 19, 2017. Page 6.
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E. 2016 Heart of Texas Hot Air Balloon Accident 25
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    \25\ NTSB accident No. DCA16MA204, Lockhart, TX, July 30, 2016 
Accident Report NTSB/AAR-17/03 PB2018-100161.
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    On the morning of July 30, 2016, a hot air balloon, N2469L, 
operated by Heart of Texas Hot Air Balloon Rides, impacted power lines 
and burst into flames over a pasture near Lockhart, Texas. The pilot 
and all 15 passengers were killed. The balloon was destroyed by impact 
forces and post-crash fire. The flight was conducted under part 91 as a 
sightseeing passenger flight, and the pilot was exercising the 
privileges of a commercial pilot certificate.
    The NTSB determined that forecast information before launch showed 
that weather conditions were marginal and deteriorating. While the 
pilot could have decided to cancel the flight, he opted to launch the 
hot air balloon and continue the flight into worsening weather 
conditions. The NTSB also determined that the pilot had been diagnosed 
with depression and attention deficit hyperactivity disorder (ADHD). 
These medical conditions are known to cause cognitive deficits that may 
affect decision-making and, ultimately, safety of flight. The NTSB 
stated that the medical conditions ``would likely have led an aviation 
medical examiner (AME) to either defer or deny a medical certificate.'' 
In addition, the NTSB reported that medications were found in the 
pilot's system that are known to cause impairment.\26\ The NTSB stated, 
``[a]n AME would likely have deferred or denied a medical certificate 
to a pilot reporting use of these medications.'' \27\
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    \26\ The medications identified by the NTSB are listed on the 
FAA's ``Do Not Issue'' and ``Do Not Fly'' lists found in the AME 
Guide.
    \27\ NTSB accident No. DCA16MA204, Lockhart, TX, July 30, 2016 
Accident Report NTSB/AAR-17/03 PB2018-100161 Executive Summary Page 
vii.
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    The NTSB determined that the probable cause of this accident was 
the pilot's pattern of poor decision-making that led to the initial 
launch, continued flight in fog and above clouds, and descent near or 
through clouds that decreased the pilot's ability to see and avoid 
obstacles. The NTSB further determined that (1) the pilot's impairing 
medical conditions and medications, and (2) the FAA's policy to not 
require a medical certificate for commercial

[[Page 64422]]

balloon pilots, were contributing factors in the accident.\28\
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    \28\ NTSB accident No. DCA16MA204, Lockhart TX, July 30, 2016 
Accident Report NTSB/AAR-17/03 PB2018-100161 Page 49.
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F. NTSB Recommendations Following the 2016 Heart of Texas Balloon 
Accident

    On October 31, 2017, the NTSB made two Safety Recommendations in 
response to the 2016 Heart of Texas balloon accident. Safety 
Recommendation A-17-034 \29\ urged the FAA to ``remove the medical 
certificate exemption in 14 [CFR] 61.23(b) for pilots who are 
exercising their privileges as commercial balloon pilots and are 
receiving compensation for transporting passengers.'' Safety 
Recommendation A-17-045 \30\ urged the FAA to ``analyze your current 
policies, procedures, and tools for conducting oversight of commercial 
balloon operations in accordance with your Integrated Oversight 
Philosophy, taking into account the findings of this accident; [and] 
based on this analysis, develop and implement more effective ways to 
target oversight of the operators and operations that pose the most 
significant safety risks.''
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    \29\ NTSB Safety Recommendation A-17-034 https://www.ntsb.gov/_layouts/ntsb.recsearch/Recommendation.aspx?Rec=A-17-034.
    \30\ NTSB Safety Recommendation A-17-045 https://www.ntsb.gov/_layouts/ntsb.recsearch/Recommendation.aspx?Rec=A-17-045.
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    The FAA agreed with the safety benefits of recommendation A-17-034 
and stated its intention to add the proposed change to its rulemaking 
agenda. The FAA responded to Safety Recommendation A-17-045 by 
initiating a plan to develop and implement more effective ways to 
target oversight of operators posing the most significant safety risk 
to the public. The FAA identified and increased surveillance on the 
operators of the largest classes of balloons using information obtained 
from the Civil Aviation Registry, repair stations, and industry.

G. Industry Efforts and Voluntary Compliance

    Immediately following the 2016 Heart of Texas accident, the FAA 
worked with an industry group, Balloon Federation of America (BFA), to 
support its 2017 Envelope of Safety Program. The program promotes 
safety within the commercial balloon industry by educating consumers 
with information when making balloon ride purchase decisions. The 
program includes voluntary standards for both pilots and operators and 
offers multiple tiers of safety accreditation by the BFA.\31\
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    \31\ BFA Envelope of Safety Program https://www.bfa.net/envelope-of-safety-program.
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    The FAA supports the efforts of the BFA to enhance safety and 
professionalism of the industry while providing consumers with more 
information when choosing a commercial balloon ride operator. The 
agency notes, however, that not all balloon operators are members of 
BFA. Moreover, members are not required to adhere to any specific 
standards in order to maintain professional membership. Consequently, 
the FAA considers BFA's efforts to achieve voluntary compliance with 
industry standards to be insufficient alone to address the need for 
additional oversight of airmen conducting balloon operations for 
compensation or hire.

IV. Discussion of the Proposed Rule

    This proposed rule would amend part 61 to require a person who 
holds a commercial pilot certificate with a lighter-than-air category 
balloon class rating to hold a valid second-class medical certificate 
when exercising the privileges of that certificate in a balloon for 
compensation or hire, unless that person is conducting flight training 
in accordance with Sec.  61.133(a)(2)(ii).

A. Proposed Rule Amendments

    As previously discussed, balloon pilots currently are not required 
to hold a medical certificate when exercising the privileges of a 
commercial pilot certificate. Section 318 (``Commercial Balloon Pilot 
Safety Act of 2018'') of Public Law 115-254, The FAA Reauthorization 
Act of 2018, directed the FAA to ``revise section 61.3(c) of title 14, 
Code of Federal Regulations (relating to second-class medical 
certificates), to apply to an operator of an air balloon to the same 
extent such regulations apply to a pilot flightcrew member of other 
aircraft.'' While the statute specifically directs the FAA to revise 
Sec.  61.3(c), the FAA notes that Sec.  61.23, Medical certificates: 
Requirement and duration, establishes the requirements and exceptions 
for medical certificates based on certain types of operations. The FAA 
proposes to amend Sec.  61.23 in addition to Sec.  61.3(c) for purposes 
of implementing the statutory requirement.
    Section 61.3(c)(1) sets forth the requirement for any person 
serving as a required pilot flightcrew member of an aircraft to hold 
the appropriate medical certificate issued under part 67 and to keep 
evidence of such certificate in the person's physical possession or 
readily accessible in the aircraft. Exceptions to the medical 
certificate requirement are set forth in Sec.  61.3(c)(2). Currently, 
under Sec.  61.3(c)(2)(vi), a person holding a pilot certificate with a 
balloon class rating who is piloting or providing training in a balloon 
is not required to hold a medical certificate.
    Consistent with the legislative directive, the FAA proposes to 
amend the medical certificate requirement exception in Sec.  
61.3(c)(2)(vi) by limiting it to certain balloon operations. 
Specifically, the exception would be amended to reflect that any person 
holding a pilot certificate with a balloon class rating who is (A) 
exercising the privileges of a private pilot certificate in a balloon; 
or (B) providing flight training in a balloon in accordance with Sec.  
61.133(a)(2)(ii) is not required to hold a medical certificate. By 
revising the exception in Sec.  61.3(c)(2)(vi), balloon pilots 
conducting operations for compensation or hire in a balloon (other than 
flight training), such as carrying passengers or property and 
advertising operations, would be required under Sec.  61.3(c)(1) to 
hold a medical certificate issued under part 67.
    Section 61.23 sets forth the specific requirements for when a 
particular class of medical certificate is required. Under Sec.  
61.23(a)(2)(ii), a second-class medical certificate generally is 
required when exercising the privileges of a commercial pilot 
certificate. However, under Sec.  61.23(b)(3), a second-class medical 
certificate is not required when exercising the privileges of a pilot 
certificate with a glider category rating or balloon class rating in a 
glider or balloon, as appropriate.
    The FAA proposes amending Sec.  61.23 to require any person 
exercising the privileges of a commercial pilot certificate for 
compensation or hire in a balloon, except when conducting flight 
training, to hold a second-class medical certificate. First, the FAA 
proposes to amend Sec.  61.23(a)(2) to add a requirement for any person 
exercising the privileges of a commercial pilot certificate for 
compensation or hire in a balloon to hold a second-class medical 
certificate. Second, the FAA proposes to amend Sec.  61.23(b) to remove 
the allowance to exercise the privileges of a balloon pilot certificate 
without a medical certificate. Third and finally, the FAA proposes to 
add an exception at Sec.  61.23(b)(4)-(5) to explain under what 
circumstances balloon operations are excepted from the proposed 
requirement to hold a second-class medical certificate. This exception 
would specify that a medical certificate is not required when 
exercising the privileges of a private pilot certificate

[[Page 64423]]

with a balloon class rating in a balloon or when exercising the 
privileges of a commercial pilot certificate with a balloon class 
rating in a balloon if the PIC is providing flight training in 
accordance with Sec.  61.133(a)(2)(ii).
    Further, Sec.  61.23(d) includes a table providing the duration for 
each class of medical certificate depending on the several factors 
including the certificate privilege that is being exercised. The FAA 
proposes to make related amendments to the table of medical certificate 
durations at Sec.  61.23(d)(1)(iii) and (d)(2)(i). Specifically, the 
FAA proposes to add persons who are exercising the privileges of a 
commercial pilot certificate (other than for flight training) in a 
balloon to the established medical certificate durations in Sec.  
61.23(d).\32\ These proposed amendments are for clarification and 
consistency with the other proposed amendments to Sec. Sec.  61.3 and 
61.23. The FAA does not propose to amend any existing substantive 
requirement to change the duration of a medical certificate.
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    \32\ As a miscellaneous amendment, the FAA has added flight 
engineers to Sec.  61.23(d). Section 65.3(b) requires a person 
serving as a flight engineer of an aircraft to hold a current 
second-class (or higher) medical certificate issued to that person 
under part 67, or other documentation acceptable to the FAA, that is 
in that person's physical possession or readily accessible in the 
aircraft. In developing this rule, the FAA identified that flight 
engineers had been inadvertently omitted from the medical 
certificate duration in Sec.  61.23(d). The FAA proposes to correct 
that error in this rulemaking.
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    All certificated airmen are prohibited from operating an aircraft 
in the national airspace system during a medical deficiency, regardless 
of whether they hold a medical certificate or not. This requirement in 
Sec.  61.53 for medical self-evaluation applies to every flight a 
person conducts as a required flightcrew member. Airmen conducting 
commercial balloon operations are currently subject to the requirements 
of Sec.  61.53(b). Under the proposal, these airmen would be subject to 
Sec.  61.53(a) by virtue of exercising the privileges of a commercial 
pilot certificate in a balloon for compensation or hire.

B. Rationale for Medical Requirement for Commercial Balloons

    Some medical conditions, such as mental health conditions, 
inherently impair the judgement of the person to properly self-evaluate 
their medical condition. A lack of medical knowledge about one's own 
condition may also preclude an airman from effectively determining his 
or her ability to safely operate the aircraft. Lastly, external 
factors, such as economic factors or concerns about customer 
dissatisfaction, may affect the ability of a commercial balloon pilot 
to make an impartial assessment of his or her health.
    Operators conducting flights for compensation or hire are held to a 
higher safety standard with increased oversight. The commercial balloon 
industry has evolved and commercial operators today fly much larger 
balloons carrying many more passengers than in the past. As a result, 
the risk associated with commercial balloon operations has increased. 
This increased risk justifies a level of medical oversight equivalent 
to that of pilots of powered aircraft for certain operations such as 
commercial sightseeing operations.
    The purpose of the FAA medical certification program is to ensure 
that only pilots, who are physically and mentally fit, will be 
authorized to operate aircraft, thereby enhancing aviation safety by 
mitigating the risk of medical factors as a cause of aircraft 
accidents.
    Prior to the Heart of Texas accident, pilots conducted commercial 
balloon operations in the U.S. for decades without any accidents 
attributed to medical deficiencies. However, the FAA agrees with the 
NTSB and Congress that a second-class medical certificate is necessary 
to increase balloon passenger safety and other balloon operations 
conducted for compensation or hire. The Heart of Texas accident 
highlights how the medical certification process could reduce the risk 
of a similar accident in the future by increasing the level of FAA 
oversight of commercial balloon operations.
    For instance, the pilot in the Heart of Texas accident had a 20-
year history of drug and alcohol convictions, which he failed to report 
to the FAA in accordance with Sec.  61.15(e). If the airman had been 
required to hold a medical certificate, he would have been required to 
disclose any history of those arrests and convictions on his medical 
application form, completed through MedXPress. By signing and 
submitting the medical application, the airman authorizes the FAA to 
receive National Driver Register (NDR) pointer data as well as any 
individual state records, as applicable, as part of the medical 
certificate application.\33\
---------------------------------------------------------------------------

    \33\ When applying for a medical certificate in MedXPress, an 
applicant authorizes the National Driver Register (NDR), through a 
designated State Department of Motor Vehicles, to furnish to the FAA 
information pertaining to his or her driving record consistent with 
49 U.S.C. 30305(b)(3).
---------------------------------------------------------------------------

    The NDR Problem Driver Pointer System (PDPS) identifies records on 
individuals whose privilege to operate a motor vehicle has been 
revoked, suspended, canceled or denied, or who have been convicted of 
serious traffic-related offenses. Even if an airman fails to disclose 
these convictions on the application, the FAA receives a report from 
the NDR, providing an additional safeguard and mechanism for verifying 
the accuracy of the information provided by the airman.
    In addition, this pilot had multiple known medical conditions--
notably depression and ADHD--which generally could be disqualifying for 
any class of medical certification under Sec. Sec.  67.107(c), 
67.207(c), and 67.307(c), respectively. Unless the airman was able to 
demonstrate, to the satisfaction of the Federal Air Surgeon, that the 
risk associated with each condition and associated treatment warranted 
an authorization for special issuance, an application for a medical 
certificate with this medical history disclosed would likely have been 
denied, if a medical certificate had been required as provided for in 
this proposal.\34\
---------------------------------------------------------------------------

    \34\ FAA AME Guide: Pharmaceuticals https://faa.gov/go/ameguide.
---------------------------------------------------------------------------

    Finally, the accident pilot was also using medications that 
typically are disqualifying \35\ for use due to sedation and cognitive 
impairment. Had he reported their usage to an AME during a medical 
review, the AME would have discussed this matter with the airman and 
addressed appropriate usage.
---------------------------------------------------------------------------

    \35\ Such medications are typically prohibited for a period of 
five half-lives. A half-life is a pharmacologic term for the period 
of time, based on average human physiology, that 50% of the drug can 
be expected to remain in the body following consumption.
---------------------------------------------------------------------------

    Performance demands of a commercial balloon pilot are very similar 
to the performance demands of a pilot operating a powered aircraft. In 
both contexts, commercial pilots should be required to be both 
physically and mentally fit to operate their respective aircraft. The 
Heart of Texas accident serves as an example of how a lack of medical 
oversight allowed the pilot to continue to operate a balloon for 
compensation or hire in spite of a questionable medical history. The 
FAA therefore concludes the unpowered nature of commercial balloon 
operations no longer justifies excepting operators from holding a 
second-class medical certificate in order to act as PIC.
Flight Training
    Unlike other categories of aircraft, the FAA does not issue a 
flight instructor certificate with a lighter-than-air category rating 
for part 61 subpart H flight instructors. Flight training privileges in 
a balloon are conferred to commercial pilots via a balloon rating

[[Page 64424]]

on the individual's commercial pilot certificate.
    While the FAA considers flight training to be a commercial 
operation, it has--for purposes of medical certification--distinguished 
instructors providing flight training from pilots engaged in other 
commercial operations involving the carriage of passengers or property 
for compensation or hire. For example, under current regulations, 
conducting flight training while serving as PIC in either a glider or 
balloon does not require any medical certification. See Sec. Sec.  
61.3(c)(2) and 61.23(b).
    The FAA acknowledges that a flight instructor serving as PIC in an 
operation other than a glider or lighter-than-air aircraft during which 
private pilot privileges are being exercised must hold a third-class 
medical certificate or opt into the requirements of BasicMed in 
accordance with Sec.  61.23(a)(3) or Sec.  61.23(c). However, section 
318 of Public Law 115-254 specifically directs the FAA to ``revise 
section 61.3(c) of title 14, Code of Federal Regulations (relating to 
second-class medical certificates), to apply to an operator of an air 
balloon to the same extent such regulations apply to a pilot flightcrew 
member of other aircraft'' (emphasis added). Therefore, the FAA has 
determined that Congress did not intend amendments to be made to other 
classes of medical certification. As such, the FAA is not proposing in 
this NPRM to extend third-class medical certification requirements to 
balloon operations during which flight instruction is conducted by an 
airman serving as PIC. However, the FAA invites comment on this issue.
    As previously explained, Sec.  61.23(b)(4) and (5) would specify 
that a medical certificate is not required when exercising the 
privileges of a private pilot certificate with a balloon class rating 
in a balloon or when exercising the privileges of a commercial pilot 
certificate with a balloon class rating in a balloon if the PIC is 
providing flight training in accordance with Sec.  61.133(a)(2)(ii). 
The FAA notes that, in some cases, flight training may be conducted 
concurrently with an operation conducted for compensation or hire.\36\ 
In circumstances such as this, the PIC would be required to hold either 
a first- or second-class medical certificate, as appropriate, for the 
commercial operation being conducted in conjunction with the flight 
instruction.
---------------------------------------------------------------------------

    \36\ An example of this may be an operator who is providing 
flight instruction, but is conducting the instruction in a balloon 
that displays aerial advertising and the operator has received 
compensation to display the advertising.
---------------------------------------------------------------------------

    While the medical certificate requirements in Sec. Sec.  61.3(c)(2) 
and 61.23(b) do not apply to both balloons and gliders, the FAA is not 
proposing to extend the second-class medical certification requirement 
described in this NPRM to commercial glider operations at this time. 
Due to the limited passenger carrying capacity of gliders,\37\ the FAA 
has not identified a safety risk basis for imposing similar medical 
certification requirements on glider operations. However, the FAA 
invites comment on this issue.
---------------------------------------------------------------------------

    \37\ Gliders are typically limited to a capacity of 1-2 
passengers in addition to the pilot in command.
---------------------------------------------------------------------------

C. Invitation for Comment Regarding Options for Enhanced Safety 
Oversight of Commercial Balloon Operations

    As previously discussed, balloon operations conducted for 
compensation or hire-many of which involve passenger-carrying 
operations conducted for purposes of sightseeing-are not required under 
Sec.  91.147 to obtain a Letter of Authorization (LOA) from the FAA. 
Under Sec.  91.147, to obtain an LOA, a sightseeing operator must: (1) 
Identify the business, where it is located, where it principally 
operates from, and who is responsible for management and maintenance; 
(2) identify the type of aircraft used; and (3) implement an Antidrug 
and Alcohol Misuse Prevention Program in accordance with 14 CFR part 
120.
    Following a 2013 non-fatal accident of a commercially operated 
balloon carrying 10 passengers, the NTSB issued Safety Recommendations 
A-14-011 \38\ and A-14-012.\39\ The recommendations urged the FAA to 
require commercial balloon operators to obtain and maintain an LOA 
under Sec.  91.147 to conduct air tour flights and to enhance oversight 
by including commercial balloon operators in general surveillance 
activities. Recommendations A-14-011 and A-14-012 were ultimately 
superseded by Safety Recommendation A-17-045, described previously.
---------------------------------------------------------------------------

    \38\ NTSB Safety Recommendation A-14-011 https://www.ntsb.gov/_layouts/ntsb.recsearch/Recommendation.aspx?Rec=A-14-011.
    \39\ NTSB Safety Recommendation A-14-012 https://www.ntsb.gov/_layouts/ntsb.recsearch/Recommendation.aspx?Rec=A-14-012.
---------------------------------------------------------------------------

    The FAA is not proposing to apply similar requirements to balloon 
operations conducted for compensation or hire in this rulemaking. The 
FAA, however, invites comment on whether the FAA should consider 
rulemaking in the future to expand the definition of an operator under 
Sec.  91.147 to include nonstop passenger-carrying flights in a 
balloon, which would require an LOA and drug and alcohol testing 
requirements for balloon operations conducted for compensation or 
hire.\40\ Specifically, the FAA requests information and data regarding 
the following:
---------------------------------------------------------------------------

    \40\ More information about initiating a Drug and Alcohol 
Testing Program can be found at: http://www.faa.gov/about/office_org/headquarters_offices/avs/offices/aam/drug_alcohol/starting/media/Air_Tour_Operators_Defined_in_Section_91_147_Implementation.pdf.
---------------------------------------------------------------------------

    (1) Should the applicability of Sec.  91.147 LOA and drug and 
alcohol testing requirements be limited to certain thresholds of 
balloon operations? If so, what thresholds, such as passenger capacity, 
number of annual operations, or size of aircraft should be used?
    (2) Currently, operators who are required to comply with drug and 
alcohol testing under part 120 must establish a program that covers all 
individuals performing safety-sensitive functions directly or by 
contract. In the context of balloon operations, this testing would 
include non-pilots, such as persons conducting maintenance of the 
balloon. If the applicability of such testing was extended to operators 
conducting passenger carrying operations in a balloon for compensation 
or hire, what factors might affect the ability of the balloon operator 
to comply with a requirement to test all individuals performing safety-
sensitive functions? How many personnel conducting safety-sensitive 
functions does each operator have and what are their functions?
    (3) What current voluntary drug and alcohol testing is being 
conducted among commercial balloon operators? Do these testing programs 
apply only to persons serving as PIC or to all individuals performing 
safety-sensitive functions?
    (4) What are the incremental initial and recurring costs and 
benefits of implementing and executing drug and alcohol testing and 
complying with LOA requirements?

D. Miscellaneous Amendments

    The FAA is also proposing miscellaneous amendments to alleviate 
confusion and eliminate burdens for persons obtaining medical flight 
tests and for persons operating under BasicMed.
    First, the FAA proposes an amendment to Sec. Sec.  61.3(c)(2) and 
61.23(b) to allow persons to receive medical flight tests authorized 
under part 67 without holding a medical certificate. Some medical 
certificate applicants are

[[Page 64425]]

not qualified for an unrestricted medical certificate due to 
disqualifying medical conditions and therefore require the issuance by 
authorization for a special issuance or SODA as discussed above. In 
most cases, the FAA can determine if an individual is eligible for a 
special issuance or SODA by means of additional medical evaluations. 
However, for some conditions, a medical flight test is necessary to 
determine whether the individual is qualified to hold a medical 
certificate.
    In the past, the FAA issued a medical certificate to applicants for 
the sole purpose of conducting a medical flight test to determine 
whether a special issuance was appropriate. The FAA has determined that 
temporary issuance of medical certificates for this purpose is 
inconsistent with the requirements in part 67. Accordingly, the FAA has 
ceased issuing them. As a result, a person authorized to take a medical 
flight test may not currently act as PIC during the test because he or 
she does not hold a medical certificate (for those aircraft for which a 
medical certificate is required).\41\ This places an unintentional 
burden on the FAA aviation safety inspector (ASI) who conducts the 
medical flight test because to complete the medical flight test, the 
ASI would need to assume the duties of PIC.\42\ To allow persons to 
continue to act as PIC during these medical flight tests, the FAA is 
proposing to amend Sec.  61.3(c)(2) by adding new paragraph (xv), which 
would allow persons to act as PIC during authorized medical flight 
tests without holding a medical certificate.\43\ The FAA has also 
proposed to add a parallel provision in Sec.  61.23(b)(12). This 
proposed change would not apply to any other flight activity for which 
a medical certificate is required. The FAA has determined that this 
action would not compromise safety. First, by policy, the ASI must hold 
a valid medical certificate in order to conduct medical flight tests 
regardless of whether the ASI acts as PIC.\44\ Second, in order for the 
FAA to initiate an LOA for a medical flight test, the applicant must 
have a medical evaluation that determines that the applicant is 
otherwise medically qualified.\45\
---------------------------------------------------------------------------

    \41\ Under the current regulations, a person may act as PIC 
during a medical flight test only if that person holds a medical 
certificate issued under part 67. 14 CFR 61.3(c)(1).
    \42\ A PIC is the person who has final authority and 
responsibility for the operation and safety of the flight. 14 CFR 
1.1. By FAA policy, Aviation Safety Inspectors (ASI) do not 
routinely act as PIC during airman evaluation flights (e.g., 
practical tests, medical flight tests, etc.).
    \43\ The FAA notes that it proposes to remove the ``or'' from 
paragraph (c)(2)(xiii) and relocate it to paragraph (c)(2)(xiv) to 
coincide with the additional paragraph FAA proposes to add to the 
list of exceptions in Sec.  61.3(c)(2).
    \44\ FAA order 8900.1 Volume 5, Chapter 8, Section 1, paragraph 
5-1523(D)(3) and Volume 1, Chapter 3, Section 6.
    \45\ FAA order 8900.1 Volume 5, Chapter 8, Section 1, paragraph 
5-1523(B).
---------------------------------------------------------------------------

    Additionally, the FAA is proposing to amend Sec. Sec.  61.3(c)(2), 
61.23(c)(3), 61.113(i), 68.3, and 68.9 to alleviate certain burdens 
that resulted from the BasicMed final rule.\46\ This rule codified 
section 2307 of the FAA Extension, Safety, and Security Act of 2016, 
(Pub. L. 114-190) (FESSA). Section 2307 directed the FAA to ``issue or 
revise regulations to ensure that an individual may operate as pilot in 
command of a covered aircraft'' without having to undergo the medical 
certification process under part 67. In that final rule, the FAA 
adopted the statutory language set forth in section 2307, without 
interpretation.
---------------------------------------------------------------------------

    \46\ 82 FR 3149 (Jan. 11, 2017).
---------------------------------------------------------------------------

    To accommodate safety pilots \47\ who wish to operate under 
BasicMed, but who are not acting as PIC, the FAA is proposing to expand 
the BasicMed requirements to include persons serving as required pilot 
flightcrew members who are not acting as PIC. Currently, BasicMed 
applies only to PICs, because section 2307 of FESSA applies only to 
PICs.\48\ As a result, BasicMed does not provide relief from the 
requirement to hold a medical certificate under Sec.  61.3(c) to a 
person who is not acting as PIC. Specifically, pilots who are acting as 
safety pilots in accordance with Sec.  91.109(c), but who are not 
acting as PIC, must hold a medical certificate because they are 
required flightcrew members. Instead, a safety pilot who intends to 
operate under BasicMed must agree to act as PIC for the portion of the 
flight in which they will serve as safety pilot.\49\
---------------------------------------------------------------------------

    \47\ A safety pilot is a person who occupies a control seat in 
an aircraft and maintains a visual watch when the pilot manipulating 
the flight controls of the aircraft is using a view-limiting device 
to simulate flight by reference to instruments. See 14 CFR 91.109.
    \48\ There is statutory evidence that the provision creating 
BasicMed was not intended to be limited to only persons acting as 
PIC. One of the attestations that a person intending to operate 
under BasicMed must agree to states ``I understand that I cannot act 
as pilot in command, or any other capacity as a required flight crew 
member [emphasis added], if I know or have reason to know of any 
medical condition that would make me unable to operate the aircraft 
in a safe manner.''
    \49\ In certain circumstances, a person who is qualified to act 
as a safety pilot may not meet the regulatory requirements to act as 
PIC for the flight. Further, a person may not agree to act as PIC 
while acting as safety pilot for several non-regulatory reasons, 
personal limits, operating experience, aircraft rental requirements, 
or insurance coverage.
---------------------------------------------------------------------------

    The FAA encourages pilots to seek opportunities to increase 
proficiency through operations, such as simulated instrument flying. As 
such, the FAA proposes to alleviate the current burden on safety pilots 
by allowing persons to operate under BasicMed while serving as required 
pilot flightcrew members.
    Specifically, the FAA is proposing to amend Sec. Sec.  
61.3(c)(2)(xiv), 61.23(c)(3)(i)(C) through (E), 61.113(i), 68.3(a) and 
(b), and 68.9(a) by expanding the requirements to include required 
pilot flightcrew members. The FAA notes that, in very limited 
circumstances, this amendment would also allow a private pilot to act 
as second-in-command (SIC) of an aircraft type certificated for more 
than one required pilot flightcrew member or in operations requiring a 
SIC flightcrew member while operating under BasicMed, provided the 
aircraft meets the covered aircraft requirements of Sec.  61.113(i)(1).

E. Effective Date

    The FAA proposes that the medical certificate requirement of this 
proposed rule become effective no less than 180 days from publication 
of the final rule. This time span would provide sufficient time for 
affected persons to comply with this rule by obtaining a medical 
certificate in a timely manner. The FAA notes that airman with certain 
medical conditions may be required to obtain an authorization for 
special issuance. The process for obtaining a special issuance may 
require additional time for the FAA to review additional medical 
information provided by the airman. As such, persons who are required 
by this rule provision to obtain a medical certificate should seek to 
obtain a medical certificate in a timely manner in order to avoid a 
loss of operating privileges due to the inability to comply with the 
requirement.
    The FAA proposes that the two miscellaneous amendments of this 
proposed rule related to BasicMed become effective 30 days from 
publication of the final rule.

V. Regulatory Notices and Analyses

    Federal agencies consider impacts of regulatory actions under a 
variety of executive orders and other requirements. First, Executive 
Order 12866 and Executive Order 13563 direct that each Federal agency 
shall propose or adopt a regulation only upon a reasoned determination 
that the benefits of the intended regulation justify the 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

[[Page 64426]]

from setting standards that create unnecessary obstacles to the foreign 
commerce of the United States. Fourth, the Unfunded Mandates Reform Act 
of 1995 (Pub. L. 104-4) requires agencies to prepare a written 
assessment of the costs, benefits, and other effects of proposed or 
final rules that include a Federal mandate that may result in the 
expenditure by State, local, and tribal governments, in the aggregate, 
or by the private sector, of $100,000,000 or more (adjusted annually 
for inflation) in any one year. The current threshold after adjustment 
for inflation is $158,000,000, using the most current (2020) Implicit 
Price Deflator for the Gross Domestic Product.
    In conducting these analyses, the FAA has determined that this 
rule: Is not a ``significant regulatory action'' as defined in section 
3(f) of Executive Order 12866; may have a significant economic impact 
on a substantial number of small entities; will not create unnecessary 
obstacles to the foreign commerce of the United States; and will not 
impose an unfunded mandate on State, local, or tribal governments, or 
on the private sector.

A. Regulatory Impact Analysis

Summary of Benefits and Costs of This Rule
    The proposed rule would generate costs for balloon pilots to obtain 
a second-class medical certification and for some pilots to seek 
authorization through special issuance. There would also be costs to 
the FAA to implement this requirement in terms of reviewing and 
processing submissions related to certification. The FAA estimates the 
present value of total costs over ten years is $2.6 million to $17.8 
million with a mid-estimate of $7.5 million at a 7 percent discount 
rate and $3.1 million to $21.7 million with a mid-estimate of $9.1 
million at a 3 percent discount rate. The FAA estimates the annualized 
costs over ten years is $0.4 million to $2.5 million with a mid-
estimate of $1.1 million at a 7 percent discount rate and $0.4 million 
to $2.5 million with a mid-estimate of $1.1 million at a 3 percent 
discount rate. While lack of data on the effectiveness of the 
rulemaking prevents quantification of benefits, the FAA anticipates the 
rulemaking will enhance safety of commercial balloon operations, 
including reduced risks of accidents, fatalities, and injuries caused 
by medical impairment of balloon pilots. The FAA estimates that it 
would take between 0.4 to 3.0 averted fatalities in the next ten years 
for the benefits to breakeven with the costs of this rulemaking.
    In addition to the requirement for commercial balloon pilots to 
hold a second-class medical certificate, the rule proposes two 
miscellaneous amendments. The first amendment addresses certain 
inconsistencies in current regulations for conducting medical flight 
tests and the second amendment addresses inconsistencies regarding who 
may operate under BasicMed. The FAA does not quantify the effects of 
the two miscellaneous amendments but anticipates there would be minor 
cost savings. By allowing persons to receive medical flight tests under 
part 67 without holding a medical certificate, the FAA ASI will no 
longer have the burden of assuming the responsibility as PIC. This 
would also eliminate the inconsistency of both having to hold a medical 
certificate for the purposes of receiving a medical flight test and 
needing the medical flight test to obtain medical certification. The 
amendment to extend BasicMed eligibility to other pilot flightcrew 
members would reduce the burden for those pilots not acting as PIC of 
having to hold a medical certificate under current regulations and 
would hold them to the same standard as those acting as PIC. This may 
also result in more pilots seeking opportunities to serve as safety 
pilot by lowering the medical certificate barrier without compromising 
safety. It would also increase the number of pilots eligible to serve 
as safety pilot, easing the burden of pilots with instrument privileges 
conducting flights to meet recent flight experience requirements and 
consequently increasing overall safety in the national airspace system.
Statement of Need
    This rulemaking addresses the need for additional oversight of 
airmen conducting balloon operations for compensation or hire by 
implementing the statutory mandate under the Commercial Balloon Pilot 
Safety Act of 2018 and NTSB Safety Recommendation A-17-034 to extend 
second-class medical certification requirements to operators of air 
balloons. As discussed elsewhere in the preamble, the 2016 Heart of 
Texas balloon accident highlights the potential for a pilot's medical 
condition to pose safety risks, which are not necessarily less than 
that of powered aircraft sightseeing operations that require at least a 
second-class medical certificate (e.g., commercial transportation of 
skydivers, banner towing, or aerial photography). Following the 2016 
Heart of Texas accident, there have been voluntary efforts by the 
industry to raise the standard for balloon pilots notably through the 
Envelope of Safety Program. While incentives to ensure a certain level 
of safety exist in the private market for commercial balloon 
operations, it is unlikely in the absence of federal regulation that 
all balloon pilots would choose to comply with the requirements of a 
second-class medical certification. At the same time, consumers may be 
insufficiently aware of the risks associated with balloon pilots 
operating under a lower standard to demand full compliance. Therefore, 
this rulemaking is necessary to achieve a higher level of safety for 
commercial balloon operations.
Data and Assumptions
    This section summarizes key data sources and assumptions used 
throughout the analysis:
     Costs and benefits are estimated over 10 years.
     Costs and benefits are presented in 2020 dollars.
     The present value discount rate of seven and three percent 
is used as required by the Office of Management and Budget.
     The cost for a medical examination fee with an AME is in 
the following range: Low = $100, Mid = $150 or High = $200.\50\
---------------------------------------------------------------------------

    \50\ According to FAA subject matter experts and Phoenix East 
Aviation, https://www.pea.com/blog/posts/the-faa-medical-exam-common-questions/, the cost per medical exam ranges from $100 to 
$200.
---------------------------------------------------------------------------

     The hourly rate of a pilot (VPT) exercising their 
commercial balloon rating varies greatly. Therefore, the FAA used the 
following hourly wages: Low= $15, Mid= $31.50 or High= $48.\51\
---------------------------------------------------------------------------

    \51\ According to the FAA subject matter experts, responses from 
the Balloon Federation of America and online sources, the FAA 
estimates a commercial balloon pilot earns from $15 to $48 an hour. 
Online source: https://www.jobmonkey.com/uniquejobs3/hot-air-balloon-pilot-jobs/.
---------------------------------------------------------------------------

     Vehicle operating cost per mile (VOC) as determined by the 
Internal Revenue Service (IRS) is $0.16.\52\
---------------------------------------------------------------------------

    \52\ https://www.irs.gov/newsroom/irs-issues-standard-mileage-rates-for-2021 Accessed on April 21, 2021.
---------------------------------------------------------------------------

     The FAA assumes 1.5 hour to complete the MedXPress 
form.\53\
---------------------------------------------------------------------------

    \53\ This estimate is consistent with FAA's estimated burden 
hours associated with the MedXPress form 8500-8 approved under OMB 
No. 2120-0034.
---------------------------------------------------------------------------

     The FAA assumes 1 hour to complete a medical examination.
Affected Entities
    At the time of writing, the FAA used 2021 data from the Airmen 
Certification database to identify pilots certified as commercial 
balloon pilots. There are currently 4,869 commercial pilots with 
balloon class ratings. This balloon class

[[Page 64427]]

rating does not have an expiration. Unlike other pilot ratings, a 
person exercising the privileges of a balloon class rating does not 
require an active first-, second-, or third-class medical certificate. 
Because of this, there is uncertainty in the number of active 
commercial balloon pilots actively exercising commercial pilot 
privileges. For this reason, the FAA produced a low, mid, and high 
range estimate of how many pilots would possibly be affected by this 
proposed rule.
    In addition to the current number of certificated pilots with a 
commercial balloon rating, the FAA gathered data from the last 14 years 
to estimate an average growth of newly certificated commercial balloon 
pilots per year. Over the course of the last 14 years from 2007 through 
2020, there was on average 56 newly certificated commercial balloon 
pilots per year.
    As mentioned earlier, there is uncertainty with the number of 
active pilots exercising their commercial balloon privileges. The FAA 
assumes a low estimate of 20%, a mid-estimate of 50% and a high 
estimate of 100% of the 4,869 commercial pilots with a balloon class 
rating would be active. Table 1 displays the potential number of airmen 
that would be affected by the proposed rule over the course of ten 
years. Corresponding to the number of active balloon pilots is the 
number of expected submissions for second-class medical certifications 
each year.

                        Table 1--Low, Middle and High Estimates of Active Balloon Pilots
----------------------------------------------------------------------------------------------------------------
                              Year                                      Low           Middle           High
----------------------------------------------------------------------------------------------------------------
1...............................................................           1,030           2,491           4,925
2...............................................................           1,086           2,547           4,981
3...............................................................           1,142           2,603           5,037
4...............................................................           1,198           2,659           5,093
5...............................................................           1,254           2,715           5,149
6...............................................................           1,310           2,771           5,205
7...............................................................           1,366           2,827           5,261
8...............................................................           1,422           2,883           5,317
9...............................................................           1,478           2,939           5,373
10..............................................................           1,534           2,995           5,429
                                                                 -----------------------------------------------
    Total.......................................................          12,820          27,430          51,770
----------------------------------------------------------------------------------------------------------------

Benefits
    The benefits of this rulemaking come from the value of averted 
accidents attributable to pilots operating commercial balloons with 
medical deficiencies. While under current regulations, balloon pilots 
must comply with Sec.  61.53(b), which states that ``a person shall not 
act as pilot in command, or in any other capacity as a required pilot 
flight crewmember, while that person knows or has reason to know of any 
medical condition that would make the person unable to operate the 
aircraft in a safe manner,'' the second-class medical certification 
requirement would provide greater assurances of safety to balloon 
passengers and other balloon operations conducted for compensation or 
hire. By requiring balloon pilots to undergo a medical certification 
process, an AME should identify potentially impairing medical 
conditions and treatments thereof to ensure sufficient mitigation of 
any associated risks.
    To quantify the benefits from this rule, it is necessary to: (1) 
Forecast a baseline level of accidents attributable to medically 
impaired balloon pilots in the absence of this rule and (2) estimate 
the extent to which the medical certification requirement effectively 
reduces the risk. As previously discussed, based on the FAA's analysis 
of the NTSB accident database during the ten-year period from 2010-
2020, the FAA finds that there has been one accident, the Heart of 
Texas accident, where the medical condition of the pilot was a factor. 
The Heart of Texas accident resulted in 16 fatalities. The commercial 
pilot and all 15 passengers were killed, and the balloon was destroyed 
by impact forces and post-crash fire. For an accident of this 
magnitude, the FAA estimates that the social cost associated with the 
loss of life alone is $185.6 million using a value of statistical life 
of $11.6 million.\54\ Additional costs of a similar accident would 
include non-fatal injuries, the value of property loss and damage as 
well as the cost of the accident investigation and clean-up efforts. 
However, the FAA currently does not have enough information to monetize 
those additional costs.
---------------------------------------------------------------------------

    \54\ Value of a statistical life in 2020 is $11.6 million. 
Letter from Acting Assistant Secretary for Transportation Policy 
April 1, 2021.
---------------------------------------------------------------------------

    The FAA finds that the requirement for a second-class medical 
certification could have prevented the Heart of Texas accident if: (1) 
Information made available through the NDR database as part of the 
medical review process revealed the pilot's history of drug- and 
alcohol-related traffic offenses and resulted in a disqualification, 
(2) a medical review either prompted effective treatment of or 
disqualification for the pilot's medical conditions (depression and 
ADHD), or (3) use of certain medications were discussed with an AME 
would have resulted in the pilot adjusting his behavior to avoid usage 
as a PIC during a balloon operation.
    Due to the infrequency of such events and limitations in the 
available data, it is difficult to quantify and monetize the benefits 
of the rulemaking. The FAA intends to update its estimates of 
quantified benefits for the final rule based on additional information 
and data identified during the comment period. Specifically, the FAA 
requests information and data, including references and sources, that 
can be used to predict the number of similar accidents that may occur 
in the future and the number of accidents that could be averted by this 
rulemaking.
    While the FAA describes the benefits of the rulemaking 
qualitatively, the FAA expects that second-class medical certification 
provides additional screening to reduce the risk of commercial balloon 
pilots operating while medically impaired. In the section below, the 
FAA conducted a breakeven analysis to show that the monetized benefits 
of the rulemaking equates costs if it averts 0.4 to 3.0 fatalities in 
the next ten years.
Costs
    This rulemaking would result in private sector costs to balloon 
pilots for obtaining a second-class medical certificate, including the 
opportunity

[[Page 64428]]

cost of time and fee for the medical exam with an AME. Some balloon 
pilots with certain health conditions that are otherwise disqualifying 
may also incur the cost of obtaining a LOA by special issuance. The FAA 
would incur costs for reviewing and processing the applications (i.e., 
MedXPress forms) and reviewing NDR information for a subset of 
submissions.
Cost to Industry
(1) Costs of Obtaining Second-Class Medical Certification
    To obtain a second-class medical certificate, an applicant would 
need to complete the MedXPress form and a medical exam with an AME. 
Because the second-class medical certificate expires 12 months after 
the date of the medical exam, the FAA assumes that pilots would incur 
these costs on an annual basis. The FAA estimates the opportunity cost 
of time for each applicant would include 1.5 hour to complete the 
MedXPress form, 1 hour for the medical examination, and 1 hour of 
travel time to and from the exam for a total of 3.5 hours.\55\ The FAA 
assumes an hourly wage for a balloon pilot ranges from $15 per hour to 
$48 per hour, with a mid-estimate of $31.50 per hour, to value time for 
the medical exam and completing the MedXPress form. For valuing travel 
time, the FAA uses an estimate of $13.60 per hour consistent with 2016 
DOT guidance (in this analysis, $14.30 was used for year 2020).\56\ 
Multiplying the value of time by the amount of time spent yields an 
estimate of $51.80 to $134.30, with a mid-estimate of $93.05 per 
applicant in opportunity cost of time. FAA subject matter experts 
estimate the cost per medical exam with an AME ranges from $100 to 
$200, with an average of $150. Additional costs arise from vehicle 
operating costs (VOC) of 16 cents per mile for an average of 50 miles 
traveled by vehicle to and from a medical exam, which yields $8 for 
each exam. Taking the sum of the value of time spent, medical exam fee, 
and VOC, the FAA estimates that each applicant would incur costs of 
approximately $160 to $342, with a mid-estimate of $251 to obtain a 
second-class medical certificate each year.
---------------------------------------------------------------------------

    \55\ According to the ``FAA Aerospace Medical Certification 
Services Airman Satisfaction Survey,'' (April 2017), over 60 percent 
of applicants traveled between 0 and 25 miles one way for an exam 
with an AME. (Retrieved from: https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201904-2120-007.)
    \56\ Department of Transportation. ``The Value of Travel Time 
Savings: Departmental Guidance for Conducting Economic Evaluations 
Revision 2 (2016 Update). Available at: https://www.transportation.gov/office-policy/transportation-policy/revised-departmental-guidance-valuation-travel-time-economic. This analysis 
assumes that the value of travel time grows 1% a year. Year 2020: 
$14.30.
---------------------------------------------------------------------------

    Table 2 below shows the range of total costs to industry for 
obtaining a second-class medical certificate. The FAA derives the 
aggregated low, middle, and high costs by multiplying the estimated 
number of active pilots (low, middle, high) as shown in Table 1 by the 
corresponding low, middle, and high costs per applicant by cost 
category.

                                   Table 2--Costs to Industry by Category To Obtain Second-Class Medical Certification
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                       Opportunity cost of time for exam,       Fee for medical exam with AME             Vehicle operating costs
                                           MedXPress form, and travel      -----------------------------------------------------------------------------
                Year                ---------------------------------------
                                         Low         Middle        High         Low         Middle        High         Low         Middle        High
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................      $53,354     $231,788     $661,428     $103,000     $373,650     $985,000       $8,240      $19,928      $39,400
2..................................       56,407      237,355      669,646      108,600      382,050      996,200        8,688       20,376       39,848
3..................................       59,475      242,938      677,879      114,200      390,450    1,007,400        9,136       20,824       40,296
4..................................       62,572      248,563      686,180      119,800      398,850    1,018,600        9,584       21,272       40,744
5..................................       65,685      254,205      694,497      125,400      407,250    1,029,800       10,032       21,720       41,192
6..................................       68,814      259,864      702,831      131,000      415,650    1,041,000       10,480       22,168       41,640
7..................................       71,961      265,540      711,182      136,600      424,050    1,052,200       10,928       22,616       42,088
8..................................       75,124      271,233      719,550      142,200      432,450    1,063,400       11,376       23,064       42,536
9..................................       78,304      276,942      727,934      147,800      440,850    1,074,600       11,824       23,512       42,984
10.................................       81,501      282,668      736,335      153,400      449,250    1,085,800       12,272       23,960       43,432
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The low, middle, and high estimates correspond to the low, middle, and high estimates of the number of active pilots and the range of costs per
  applicant in each category of costs.

(2) Cost of Obtaining a Special Issuance
    For applicants that do not initially meet the requirements of a 
second-class medical certification, there may be an additional cost to 
seek a LOA by special issuance. The FAA assumes that an applicant 
seeking special issuance would incur the same costs and time of a 
second-class medical certification as estimated per applicant above. 
Based on the historical rate of special issuances, the FAA assumes that 
approximately 10 percent of affected balloon pilots would seek special 
issuance. Therefore, the FAA takes the sum of costs in each cost 
category for obtaining a second-class medical certification and 
multiplies by 0.1 to obtain the total industry cost for obtaining 
special issuances. Table 3 below shows the range of special issuance 
costs in each year.

                               Table 3--Total Industry Cost for Special Issuances
----------------------------------------------------------------------------------------------------------------
                                                                      Total private sector costs for special
                                                                                     issuance
                              Year                               -----------------------------------------------
                                                                        Low           Middle           High
----------------------------------------------------------------------------------------------------------------
1...............................................................         $16,459         $62,537        $168,583
2...............................................................          17,369          63,978         170,569
3...............................................................          18,281          65,421         172,558
4...............................................................          19,196          66,869         174,552
5...............................................................          20,112          68,318         176,549
6...............................................................          21,029          69,768         178,547

[[Page 64429]]

 
7...............................................................          21,949          71,221         180,547
8...............................................................          22,870          72,675         182,549
9...............................................................          23,793          74,130         184,552
10..............................................................          24,717          75,588         186,557
----------------------------------------------------------------------------------------------------------------
Present Value at 7%.............................................         140,959         479,339       1,239,310
Annualized at 7%................................................          20,069          68,247         176,450
Present Value at 3%.............................................         173,625         586,001       1,510,442
Annualized at 3%................................................          20,354          68,697         177,070
----------------------------------------------------------------------------------------------------------------

Summary of Total Cost to Industry
    The FAA estimates the present value of total cost to industry 
associated with obtaining a second-class medical certification and 
special issuances to be $1.6 million to $13.6 million, with a mid-
estimate of $5.3 million at a 7 percent discount rate and $1.9 million 
to $16.6 million, with a mid-estimate of $6.4 million at a 3 percent 
discount rate. The annualized value of total cost to industry are $0.2 
million to $1.9 million with a mid-estimate of $0.8 million at a 7 
percent discount rate and $0.2 million to $1.9 million with a mid-
estimate of $0.8 million at a 3 percent discount rate. In Table 4 
below, the FAA shows these total costs to industry for obtaining a 
second-class medical certification and special issuances in each year. 
The low, middle, and high estimates correspond to the range of 
estimates on the number of affected pilots and costs associated with 
obtaining medical certification.

                                          Table 4--Total Industry Costs
----------------------------------------------------------------------------------------------------------------
                                                                              Total cost to industry
                              Year                               -----------------------------------------------
                                                                        Low           Middle           High
----------------------------------------------------------------------------------------------------------------
1...............................................................        $181,053        $687,902      $1,854,410
2...............................................................         191,064         703,759       1,876,263
3...............................................................         201,092         719,633       1,898,133
4...............................................................         211,151         735,554       1,920,076
5...............................................................         221,228         751,493       1,942,038
6...............................................................         231,324         767,451       1,964,018
7...............................................................         241,438         783,427       1,986,017
8...............................................................         251,570         799,421       2,008,034
9...............................................................         261,721         815,434       2,030,070
10..............................................................         271,891         831,466       2,052,124
----------------------------------------------------------------------------------------------------------------
Present Value at 7%.............................................       1,550,549       5,272,731      13,632,413
Annualized at 7%................................................         220,763         750,718       1,940,949
Present Value at 3%.............................................       1,909,876       6,446,015      16,614,860
Annualized at 3%................................................         223,896         755,670       1,947,768
----------------------------------------------------------------------------------------------------------------

Costs to FAA To Implement Requirement for Second-Class Medical 
Certification for Balloon Pilots
(1) FAA Cost of MedXPress Review and Processing
    The FAA would incur costs associated with reviewing and processing 
applications submitted through MedXPress. Based on internal FAA data on 
total personnel costs and benefits attributable to labor hours spent on 
review of airmen medical certification in FY 2019 and FY 2020, the FAA 
estimates an average cost of $30 to review and process each 
application. In Table 5 below, the Agency derives the FAA cost to 
review applications in each year using the estimated range for the 
number of submissions based on the forecasted number of active balloon 
pilots in each year.

                              Table 5--FAA Costs To Review and Process Applications
----------------------------------------------------------------------------------------------------------------
                                                                        FAA costs for review and processing
                              Year                               -----------------------------------------------
                                                                        Low           Middle           High
----------------------------------------------------------------------------------------------------------------
1...............................................................         $30,489         $73,737        $145,786
2...............................................................          32,147          75,394         147,444
3...............................................................          33,805          77,052         149,102
4...............................................................          35,462          78,710         150,759
5...............................................................          37,120          80,367         152,417
6...............................................................          38,778          82,025         154,075
7...............................................................          40,435          83,683         155,732
8...............................................................          42,093          85,340         157,390
9...............................................................          43,751          86,998         159,048

[[Page 64430]]

 
10..............................................................          45,408          88,656         160,705
----------------------------------------------------------------------------------------------------------------
Present Value at 7%.............................................         260,087         563,839       1,069,884
Annualized at 7%................................................          37,031          80,278         152,327
Present Value at 3%.............................................         320,268         689,177       1,303,774
Annualized at 3%................................................          37,545          80,793         152,842
----------------------------------------------------------------------------------------------------------------

(2) FAA Cost of Special Issuance Review
    A MedXPress application that requires a special issuance medical 
certificate is deferred to the Aerospace Medical Certification Division 
(AMCD) of Oklahoma City for further consideration. Based on FAA 
internal data on personnel compensation and benefits attributable to 
labor hours spent on reviewing and processing special issuance medical 
certificates in FY 2019 and FY 2020, the FAA estimates an average cost 
of approximately $126 per special issuance review. The table below 
displays the FAA cost for special issuance review assuming that 10 
percent of the applicants do not initially qualify for second-class 
medical certification.

                                  Table 6--FAA Cost of Special Issuance Review
----------------------------------------------------------------------------------------------------------------
                                                                       FAA costs for special issuance review
                              Year                               -----------------------------------------------
                                                                        Low           Middle           High
----------------------------------------------------------------------------------------------------------------
1...............................................................         $13,018         $31,484         $62,248
2...............................................................          13,726          32,192          62,956
3...............................................................          14,434          32,900          63,664
4...............................................................          15,142          33,608          64,371
5...............................................................          15,850          34,315          65,079
6...............................................................          16,557          35,023          65,787
7...............................................................          17,265          35,731          66,495
8...............................................................          17,973          36,439          67,202
9...............................................................          18,681          37,147          67,910
10..............................................................          19,388          37,854          68,618
----------------------------------------------------------------------------------------------------------------
Present Value at 7%.............................................         111,052         240,749         456,820
Annualized at 7%................................................          15,811          34,277          65,041
Present Value at 3%.............................................         136,748         294,266         556,687
Annualized at 3%................................................          16,031          34,497          65,261
----------------------------------------------------------------------------------------------------------------

(3) Cost of FAA Review of the National Driver Register (NDR) Reports
    Included within the medical certificate application is the 
applicant's authorization for the FAA to receive NDR data, which 
provides a report of applicable motor vehicle actions within the 
preceding three years. Intentional failure to report required drug or 
alcohol motor vehicle actions is grounds for suspension of a pilot 
certificate. NDR checks help to identify persons who may have substance 
abuse or dependence issues. Although the bulk of the process is 
automated, the FAA estimates there is roughly a 3% return rate that 
requires additional review and investigation. The FAA estimates that it 
takes approximately 40 hours of additional review time by a special 
agent for each applicant that is flagged through the NDR database. 
Using a special agent hourly wage adjusted for fringe benefits of 
$60.18 as shown in Table 7 below, the FAA estimates that each 
submission that requires further investigation would cost $2,407. The 
total costs to FAA associated with NDR review is estimated in Table 8 
using the range of estimated submissions.

                                Table 7--Special Agent Wage With Fringe benefits
----------------------------------------------------------------------------------------------------------------
                                                                                      Fringe
                                                      Yearly          Hourly         benefits          Total
----------------------------------------------------------------------------------------------------------------
Special Agent...................................         $91,877          $44.17          $16.01          $60.18
Federal Fringe Benefit Factor \1\ \2\ \3\.......  ..............  ..............          36.25%  ..............
----------------------------------------------------------------------------------------------------------------
\1\ https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/memoranda/2008/m08-13.pdf.
\2\ Percent of position's basic pay.
\3\ Dallas-Fort Worth, TX-OK locality plus fringe benefits, GS-12 Step 4. Retrieved from https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2021/DFW.pdf.


[[Page 64431]]


                                        Table 8--FAA Costs for NDR Review
----------------------------------------------------------------------------------------------------------------
                                                                             FAA costs for NDR review
                              Year                               -----------------------------------------------
                                                                        Low           Middle           High
----------------------------------------------------------------------------------------------------------------
1...............................................................         $74,382        $179,890        $355,664
2...............................................................          78,427         183,934         359,708
3...............................................................          82,471         187,978         363,752
4...............................................................          86,515         192,022         367,796
5...............................................................          90,559         196,066         371,840
6...............................................................          94,603         200,111         375,884
7...............................................................          98,647         204,155         379,928
8...............................................................         102,691         208,199         383,972
9...............................................................         106,735         212,243         388,017
10..............................................................         110,779         216,287         392,061
----------------------------------------------------------------------------------------------------------------
Present Value at 7%.............................................         634,516       1,375,557       2,610,118
Annualized at 7%................................................          90,341         195,848         371,622
Present Value at 3%.............................................         781,334       1,681,335       3,180,721
Annualized at 3%................................................          91,596         197,104         372,877
----------------------------------------------------------------------------------------------------------------

Summary of Total Costs to FAA
    The total costs to the FAA to implement the requirement for 
commercial balloon pilots to hold a second-class medical certificate is 
the sum of the costs for FAA review and processing of MedXPress 
applications, review of special issuances, and review of NDR 
information associated with certain applications. The FAA estimates the 
present value of total costs to the Agency to be $1.0 million to $4.1 
million, with a mid-estimate of $2.2 million at a 7 percent discount 
rate and $1.2 million to $5.0 million, with a mid-estimate of $2.7 
million at a 3 percent discount rate. The annualized value of total 
cost to FAA are $0.1 million to $0.6 million with a mid-estimate of 
$0.3 million at a 7 percent discount rate and $0.1 million to $0.6 
million with a mid-estimate of $0.3 million at a 3 percent discount 
rate.
    These preliminary cost estimates to the FAA are subject to change 
for the final rule and are not intended to inform future rulemakings or 
policies involving user fees since these are point-in-time preliminary 
estimates of additional personnel costs to FAA before the effective 
date of the final rule. The FAA acknowledges the difficulty in 
estimating FAA burden and cost after the effective date of this rule 
given uncertainties in the number of pilot applicants and those pilots 
that would either receive a second-class medical certification or be 
granted a special issuance certification.

                                           Table 9--Total Costs to FAA
----------------------------------------------------------------------------------------------------------------
                                                                                 Total cost to FAA
                              Year                               -----------------------------------------------
                                                                        Low           Middle           High
----------------------------------------------------------------------------------------------------------------
1...............................................................        $117,890        $285,111        $563,698
2...............................................................         124,300         291,521         570,107
3...............................................................         130,709         297,930         576,517
4...............................................................         137,119         304,340         582,927
5...............................................................         143,528         310,749         589,336
6...............................................................         149,938         317,159         595,746
7...............................................................         156,347         323,568         602,155
8...............................................................         162,757         329,978         608,565
9...............................................................         169,167         336,387         614,974
10..............................................................         175,576         342,797         621,384
----------------------------------------------------------------------------------------------------------------
Present Value at 7%.............................................       1,005,655       2,180,145       4,136,823
Annualized at 7%................................................         143,183         310,404         588,991
Present Value at 3%.............................................       1,238,350       2,664,778       5,041,181
Annualized at 3%................................................         145,172         312,393         590,980
----------------------------------------------------------------------------------------------------------------

Total Costs of the Rule
    The total costs are shown in the table below, which include both 
costs to industry and to the FAA. The total costs over the ten years 
include the costs for pilots to obtain their second-class medical 
certificate, special issuances and costs to the Agency for review of 
applications, special issuances, and NDR information. The FAA estimates 
the present value of total costs over ten years is $2.6 million to 
$17.8 million with a mid-estimate of $7.5 million at a 7 percent 
discount rate and $3.1 million to $21.7 million with a mid-estimate of 
$9.1 million at a 3 percent discount rate. The FAA estimates the 
annualized costs over ten years is $0.4 million to $2.5 million with a 
mid-estimate of $1.1 million at a 7 percent discount rate and $0.4 
million to $2.5 million with a mid-estimate of $1.1 million at a 3 
percent discount rate.
    As stated previously, in some cases, where the airman's medical 
condition does not meet the part 67 standard, the airman may still be 
issued a medical certificate by authorization for special issuance when 
the Federal Air Surgeon determines the risk associated with the medical 
condition(s) to be sufficiently mitigated. Based on the rate of special 
issuance for general aviation, the FAA

[[Page 64432]]

assumes that 10% of the commercial balloon pilot applicants would 
require a special issuance. For purposes of this analysis, the FAA 
assumes that most applicants would ultimately either receive a second-
class medical certification or be granted a special issuance 
certification and therefore does not quantify costs associated with not 
meeting the requirements.
    However, the FAA expects some applicants who would have otherwise 
been able to operate as commercial balloon pilots may not meet the 
requirements of a second-class medical certification nor the 
requirements for a special issuance. Furthermore, the opportunity cost 
(including the time and fees) of seeking a second-class medical 
certification for some pilots may outweigh their private gains from 
operating commercially, resulting in some pilots opting not to seek 
medical certification. The FAA does not have sufficient information to 
predict how the supply of commercial balloon pilots would change as a 
result of this rule.
    While the FAA does not expect a significant decrease in the 
availability of balloon pilots, changes in supply of balloon pilots 
could affect prices as well. This analysis does not quantify any 
potential changes in consumer and producer surplus from changes in 
supply. If the rule effectively screens out certain individuals for 
disqualifying medical conditions as intended, any potential adverse 
effects on individual applicants should be offset by the safety gains 
to the public. The FAA requests comment on these assumptions and data 
that would allow the FAA to quantify these potential impacts.

                                        Table 10--Total Costs of the Rule
----------------------------------------------------------------------------------------------------------------
                                                                              Total Cost of the Rule
                              Year                               -----------------------------------------------
                                                                        Low           Middle           High
----------------------------------------------------------------------------------------------------------------
1...............................................................        $298,944        $973,013      $2,418,108
2...............................................................         315,364         995,280       2,446,370
3...............................................................         331,802       1,017,563       2,474,650
4...............................................................         348,270       1,039,894       2,503,003
5...............................................................         364,757       1,062,242       2,531,374
6...............................................................         381,262       1,084,609       2,559,764
7...............................................................         397,785       1,106,995       2,588,172
8...............................................................         414,327       1,129,399       2,616,599
9...............................................................         430,888       1,151,822       2,645,044
10..............................................................         447,467       1,174,263       2,673,508
----------------------------------------------------------------------------------------------------------------
Present Value at 7%.............................................       2,556,204       7,452,875      17,769,236
Annualized at 7%................................................         363,946       1,061,122       2,529,939
Present Value at 3%.............................................       3,148,226       9,110,792      21,656,041
Annualized at 3%................................................         369,068       1,068,063       2,538,749
----------------------------------------------------------------------------------------------------------------

Breakeven Analysis
    Given the uncertainties and limitations in the available data, the 
FAA conducted a breakeven analysis to determine the number of averted 
fatalities necessary to generate benefits equal to costs. The FAA 
divided the present value of total costs of the rule by the present 
value of a statistical life to estimate the number of fatalities needed 
to break even with the costs of the rule over a ten-year time horizon. 
Using a value of statistical life of $11.6 million and the range of 
present value of costs presented in Table 10 above, the monetized 
benefits of this rule will break even with costs if the new medical 
certification requirement averts between 0.4 to 3.0 fatalities under a 
7 percent discount rate and between 0.4 to 2.5 fatalities under a 3 
percent discount rate.\57\
---------------------------------------------------------------------------

    \57\ Departmental Guidance on Valuation of a Statistical Life in 
Economic Analysis https://www.transportation.gov/office-policy/transportation-policy/revised-departmental-guidance-on-valuation-of-a-statistical-life-in-economic-analysis.
---------------------------------------------------------------------------

Regulatory Alternatives
    The FAA considered one alternative to the proposed rule:
    Letter of Authorization (LOA) and Drug and Alcohol Testing. With 
this alternative, the FAA would institute both a medical certificate 
requirement as well as a requirement for obtaining an LOA from the FAA 
and mandatory drug and alcohol testing. This alternative would expand 
the definition of an operator under Sec.  91.147 to include balloons, 
which would require the commercial balloon operators to obtain an LOA 
from the FAA in accordance with Sec.  91.147 prior to conducting 
operations, and implement drug and alcohol testing programs in 
accordance with 14 CFR part 120. This alternative goes beyond the 
statutory mandate and would add the additional administrative costs of 
implementing a drug and alcohol testing program and obtaining a LOA to 
commercial balloon operators and pilots.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) of 1980, Public Law 96-354, 94 
Stat. 1164 (5 U.S.C. 601-612), as amended by the Small Business 
Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 
857, Mar. 29, 1996) and the Small Business Jobs Act of 2010 (Pub. L. 
111-240, 124 Stat. 2504 Sept. 27, 2010), requires Federal agencies to 
consider the effects of the regulatory action on small business and 
other small entities and to minimize any significant economic impact. 
The term ``small entities'' comprises small businesses and not-for-
profit organizations that are independently owned and operated and are 
not dominant in their fields, and governmental jurisdictions with 
populations of less than 50,000.
    The FAA is publishing this Initial Regulatory Flexibility Analysis 
(IRFA) to aid the public in commenting on the potential impacts to 
small entities from this proposal. The FAA invites interested parties 
to submit data and information regarding the potential economic impact 
that would result from the proposal. The FAA will consider comments 
when making a determination or when completing a Final Regulatory 
Flexibility Analysis.
    An IRFA must contain the following:
    (1) A description of the reasons why the action by the agency is 
being considered;

[[Page 64433]]

    (2) A succinct statement of the objective of, and legal basis for, 
the proposed rule;
    (3) A description of and, where feasible, an estimate of the number 
of small entities to which the proposed rule will apply;
    (4) A description of the projected reporting, recordkeeping, and 
other compliance requirements of the proposed rule, including an 
estimate of the classes of small entities which will be subject to the 
requirement and the type of professional skills necessary for 
preparation of the report or record;
    (5) An identification, to the extent practicable, of all relevant 
Federal rules that may duplicate, overlap, or conflict with the 
proposed rule; and
    (6) A description of any significant alternatives to the proposed 
rule which accomplish the stated objectives of applicable statutes and 
which minimize any significant economic impact of the proposed rule on 
small entities.
Description of Reasons the Agency Is Considering the Action
    The FAA is publishing this rulemaking to comply with the Commercial 
Balloon Pilot Safety Act of 2018, which directs the FAA to require 
commercial balloon pilots conducting operations for compensation or 
hire to hold a valid second-class medical certificate. Congress 
introduced this legislation in response to the 2016 Heart of Texas hot 
air balloon accident and the NTSB finding that (1) the pilot's 
impairing medical conditions and medications and (2) the FAA's policy 
to not require a medical certificate for commercial balloon pilots were 
contributing factors in the accident.
    This proposed rule would amend part 61 to require a second-class 
medical certificate for balloon operations conducted for compensation 
or hire, other than flight training. As such, a person who holds a 
commercial pilot certificate with a balloon class rating would be 
required to hold a valid second-class medical certificate when 
exercising the privileges of that certificate in a balloon for 
compensation or hire, unless that person is conducting flight training 
in accordance with Sec.  61.133(a)(2)(ii).
Statement of the Legal Basis and Objectives
    The FAA's authority to issue rules on 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 issuing this rulemaking under the authority described in 
Subtitle VII, Part A, Subpart iii, Section 44701, General Requirements; 
Section 44702, Issuance of Certificates; and Section 44703, Airman 
Certificates. Under these sections, the FAA is charged with prescribing 
regulations and minimum standards for practices, methods, and 
procedures the Administrator finds necessary for safety in air 
commerce. The FAA is also authorized to issue certificates, including 
airman certificates and medical certificates, to qualified individuals. 
This rulemaking proposal is within the scope of that authority.
    Further, this rulemaking is issued under section 318 of the FAA 
Reauthorization Act of 2018, Public Law 115-254, (``Commercial Balloon 
Pilot Safety Act of 2018''). Section 318 directed the FAA to ``revise 
section 61.3(c) of title 14, Code of Federal Regulations (relating to 
second-class medical certificates), to apply to an operator of an air 
balloon to the same extent such regulations apply to a pilot flight 
crewmember of other aircraft.'' While the statute specifically directs 
the FAA to revise Sec.  61.3(c), the FAA notes that Sec.  61.23, 
Medical certificates: Requirement and duration establishes the 
requirements and exceptions for medical certificates based on certain 
types of operations. The FAA proposes to amend Sec.  61.23 in addition 
to Sec.  61.3(c) for purposes of implementing the statutory 
requirement.
Description of the Recordkeeping and Other Compliance Requirements
    The FAA proposes that airmen hold a valid second-class medical 
certificate when exercising the privileges of a commercial pilot 
certificate in a balloon for compensation or hire. A medical 
certificate would not be required for commercial pilots conducting 
flight training in a balloon. As determined by a physical examination 
and review of medical history, airmen must meet the applicable medical 
standards of part 67 in order to receive an unrestricted medical 
certificate. In cases where the airman's medical condition does not 
meet the part 67 standard, the airman may still be issued a medical 
certificate by authorization for special issuance or SODA when the 
Federal Air Surgeon had determined that the risk associated with the 
medical condition(s) is sufficiently mitigated.
    A person obtains a medical certificate by completing an online 
application (FAA form 8500-8, Application for Medical Certificate) 
using the FAA's medical certificate application tool, MedXPress,\58\ 
and undergoing a physical examination with an FAA-designated AME. An 
AME may defer an applicant to the FAA for further review (which may 
include further examination and testing by a specialist physician) when 
there is information indicating the existence or potential of an 
adverse medical finding that may warrant further FAA medical evaluation 
and oversight. Second-class medical certificates held for any 
operations requiring a commercial pilot certificate (including the 
second-class medical certificates that would be required for balloon 
operations under this proposal) expire at the end of the last day of 
the 12th month after the month of the date of examination shown on the 
medical certificate.
---------------------------------------------------------------------------

    \58\ https://medxpress.faa.gov/.
---------------------------------------------------------------------------

All Federal Rules That May Duplicate, Overlap, or Conflict
    There are no relevant Federal rules that may duplicate, overlap, or 
conflict with the proposed rule.
Description and an Estimated Number of Small Entities Impacted
    The proposed rule would affect commercial balloon pilots and 
establishments involved in commercial balloon operations. The FAA does 
not maintain a database of commercial balloon operators actively 
operating in the United States. Using commercial sources, the FAA 
estimates that number to be about 356 \59\ companies. Approximately 
4,870 commercial pilots hold balloon ratings, and approximately 4,940 
balloons are registered with the FAA. The commercial balloon industry 
estimates that 100,000 to 250,000 passenger rides are conducted 
annually, as well as aerial advertising and other commercial 
activities.
---------------------------------------------------------------------------

    \59\ http://www.blastvalve.com/Balloon_Rides/USA/index.shtml.
---------------------------------------------------------------------------

    Businesses affected by this rule would be classified using the 2017 
North American Industry Classification System \60\ under NAICS code 
487990 ``Scenic and Sightseeing Transportation, Other.'' This industry 
comprises establishments primarily engaged in providing scenic and 
sightseeing transportation (except on land and water). The U.S. Small 
Business Administration (SBA) defines entities in this industry as 
``small'' using an average annual revenue threshold of $8 million.\61\ 
With limited information and

[[Page 64434]]

data on sales revenues for each of the affected commercial balloon 
operators, the FAA has uncertainty as to how many entities would meet 
the SBA's small-entity criteria.\62\ Furthermore, the FAA has 
uncertainty as to how the burden associated with the proposed rule 
would be distributed across commercial balloon companies versus 
individual balloon pilots employed by an operator. The FAA requests 
comment and data on the average annual sales revenues for the affected 
small businesses and to what extent the costs of obtaining a second-
class medical certification would be considered an ``out-of-pocket'' 
cost incurred by commercial balloon pilots rather than a cost to the 
commercial balloon operator. As previously described, the FAA estimates 
the cost per pilot to obtain a second-class medical certificate would 
be between $160 and $685 annually, depending on whether a special 
issuance would be necessary.
---------------------------------------------------------------------------

    \60\ https://www.census.gov/naics/?input=487990&year=2017&details=487990.
    \61\ https://www.sba.gov/sites/default/files/2019-08/SBA%20Table%20of%20Size%20Standards_Effective%20Aug%2019%2C%202019_Rev.pdf.
    \62\ Rainbow Ryders is one of the larger Commercial Balloon 
companies and are under the Small Business Administration small-
entity criteria. Therefore, the FAA estimates that all of the 
Commercial balloon companies are a small entity. It's Been a Year of 
Growth for Rainbow Ryders, https://www.abqjournal.com/1095655/its-been-a-growth-year-for-rainbow-ryders.html, September 9, 2019.
---------------------------------------------------------------------------

    For purposes of this initial regulatory flexibility analysis, the 
FAA assumes that the private sector costs of this rule (i.e., the cost 
to obtain a second-class medical certification or special issuance) 
fall entirely on commercial balloon operators. In the absence of data 
on annual receipts specific to the commercial balloon industry, the FAA 
relies on the most recent data available on average revenues for all 
businesses, including commercial balloon operators, classified under 
NAICS 487990 ``Scenic and Sightseeing Transportation, Other'' from the 
2017 Census Bureau's Statistics of U.S. Businesses (SUSB) \63\ to 
inform the analysis. Note that the total number of firms identified for 
this industry is less than the FAA estimated number of commercial 
balloon operators. In this analysis, the FAA uses the SUSB data to 
estimate the proportion of balloon companies for each size category by 
annual receipts.
---------------------------------------------------------------------------

    \63\ Available at: https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html, retrieved on August 15, 2021.
---------------------------------------------------------------------------

    The table below summarizes the total number of firms, employment, 
and estimated annual receipts by annual receipt category for the entire 
industry classified under NAICS 487990 ``Scenic and Sightseeing 
Transportation, Other'' for the year 2017. Note that blanks in the 
table below reflect data that the Census Bureau withheld to avoid 
disclosing data for individual companies, but are included in the 
higher level totals. After adjusting the 2017 dollar values to constant 
2020 dollars using the GDP deflator,\64\ the FAA estimates that 
approximately 93 percent of companies (or about 331 balloon operators 
extrapolating from this percentage) may be considered small entities 
under the SBA definition.
---------------------------------------------------------------------------

    \64\ Available at: https://www.whitehouse.gov/omb/historical-tables/, retrieved on January 15, 2020.
---------------------------------------------------------------------------

    To compare the compliance costs of the rule to the average revenues 
of small entities, for each receipt size category the FAA multiplies 
the proportion of total employment by the annualized private sector 
costs of the rule and divides by the estimated annual receipts in 2020 
dollars.\65\ Assuming that costs are proportional to employment size, 
which may be reasonable given that costs are driven by the number of 
pilots requiring a second-class medical certification, the FAA 
estimates that the costs of the proposed rule would constitute 0.07% to 
0.42% of average annual revenues for small entities. Given the currency 
and level of aggregation of the data available, the FAA requests 
comment on accuracy of these estimates and any other information or 
data that would be relevant for estimating the effects of the rule on 
small entities.
---------------------------------------------------------------------------

    \65\ For this calculation, the FAA uses the mid-estimate of 
$750,718 for the total private sector costs annualized at a 7 
percent discount rate.

   Table 11--Number of Firms, Establishments, Employment, and Estimated Receipts by Enterprise Receipt Sizes for the United States, NAICS 487900: 2017
                                                         (Census Statistics of U.S. Businesses)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                           Cost for all
                                             Number of     Percentage of                   Percentage of     Estimated     firms in size     Cost as a
       Enterprise receipt size [a]           firms [b]         firms        Employment         total         receipts        category      percentage of
                                                                                            employment       ($1,000)        ($1,000)        receipts
--------------------------------------------------------------------------------------------------------------------------------------------------------
<$100,000...............................              53              17              48               1           2,255              10            0.42
$100,000-499,999........................             119              39             192               5          29,644              40            0.13
$500,000-999,999........................              47              15             237               7          32,765              49            0.14
$1,000,000-2,499,999....................              43              14             365              10          63,134              76            0.11
$2,500,000-4,999,999....................              18               6             323               9          65,788              67            0.10
$5,000,000-7,499,999....................               6               2             106               3          29,465              22            0.07
$7,500,000-9,999,999....................               5               2             213               6          41,585              44            0.10
$10,000,000-14,999,999..................               4             1.3             196               5          50,270              41            0.08
$20,000,000-24,999,999..................  ..............  ..............  ..............  ..............  ..............  ..............  ..............
$25,000,000-29,999,999..................               3             1.0              93               3          19,490              19            0.09
$30,000,000-34,999,999..................  ..............  ..............  ..............  ..............  ..............  ..............  ..............
$35,000,000-39,999,999..................  ..............  ..............  ..............  ..............  ..............  ..............  ..............
$50,000,000-74,999,999..................  ..............  ..............  ..............  ..............  ..............  ..............  ..............
$100,000,000+...........................               4               1           1,044              29         251,871             217            0.08
                                         ---------------------------------------------------------------------------------------------------------------
    Total...............................             309             100           3,611             100         762,426             751            0.09
--------------------------------------------------------------------------------------------------------------------------------------------------------
[a] Using the Gross Domestic Product (GDP) deflator, the FAA finds that $7.49 million in 2017 dollars would be approximately $7.97 million in 2020
  dollars. Therefore, the FAA assumes firms with receipts of less than $7.49 million in 2017 dollars would be considered small.
[b] The FAA notes that the number of firms in NAICS 487900 is lower than FAA's estimate of the number of balloon operators. For purposes of this
  analysis, the SUSB data is used to estimate the percentage of small entities and the distribution of costs relative to revenues.

Alternatives Considered To Minimize Any Significant Economic Impact on 
Small Entities
    The FAA has not identified any significant alternative that would 
minimize any significant economic impact on small entities which do not 
conflict with the statutory mandate. The FAA solicits comment on 
potential alternative approaches that could minimize the burden on 
small entities while still accomplishing the objectives of the 
proposal.

[[Page 64435]]

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 as the protection of safety, and does not operate in a 
manner that excludes imports that meet this objective. The statute also 
requires consideration of international standards and, where 
appropriate, that they be the basis for U.S. standards. The FAA has 
assessed the potential effect of this proposed rule and determined that 
it will not create unnecessary obstacles to the foreign commerce of the 
United States.

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 uses an 
inflation-adjusted value of $158.0 million in lieu of $100 million. 
This proposed rule does not contain such a mandate; therefore, the 
requirements of Title II of the Act do not apply.

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 NPRM contains the following proposed amendments to the 
existing information collection requirements previously approved under 
OMB Control No. 2120-0034. In the analysis below, the FAA describes the 
incremental changes in the number of respondents, annual burden, and 
monetized costs of the existing information collection requirement 
previously approved under OMB Control No. 2120-0034. As required by the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), the FAA submitted 
the proposed information collection requirements to OMB for its review. 
Review for the renewal of OMB Control No. 2120-0034 was completed on 
May 29, 2020.
Requirements To Hold a Second-Class Medical Certificate
    The proposed rule would require airmen to hold a valid second-class 
medical certificate when exercising the privileges of a commercial 
pilot certificate in a balloon for compensation or hire. To obtain a 
medical certificate, an airmen would complete an online application 
(FAA form 8500-8, Application for Medical Certificate) using the FAA's 
medical certificate application tool, MedXPress and undergo a physical 
examination with an FAA-designated Aviation Medical Examiner (AME).
    In Table 12 below, the FAA shows the incremental burden of this 
rule to the approved information collection under OMB Control No. 2120-
0034. Additional details on assumptions and calculations used in this 
section are presented elsewhere in the Regulatory Evaluation section of 
this document.
Estimates of the Hour Burden of the Collection of Information
    The mid estimate of the number of applicants in the first year is 
2,491.

                          Table 12--Burden Hours Associated With MedXPress Form 8500-8
----------------------------------------------------------------------------------------------------------------
                                                                     Number of       Hours per
                            Form No.                                applicants       applicant      Total hours
----------------------------------------------------------------------------------------------------------------
8500-8..........................................................           2,491             1.5           3,737
----------------------------------------------------------------------------------------------------------------

Estimate of the Total Annual Cost Burden to Respondents or Record 
Keepers Resulting From the Collection of Information
    Once the information on FAA Form 8500-8 is collected, respondents 
must receive a medical examination in order to be certificated to 
exercise commercial balloon pilot privileges. The average fee for a 
basic medical examination is estimated at $150. The total cost for 
medical exams in the first year is as follows:
    $150 x 2,491 submissions of Form 8500-8 = $373,650
Estimates of Annualized Costs to the Federal Government
    The estimated annualized cost to the Federal Government is between 
$143,183 and $588,991, with a mid-estimate of $310,404 at a 7 percent 
discount rate. The FAA would incur costs associated with reviewing and 
processing applications submitted through MedXPress. It costs about $30 
per medical certification review using the primary estimate for the 
number of applications in the first year, the FAA estimates a total 
cost of $73,747 (= $30 per application x 2,491) in the first year.
    Currently, a MedXPress application that requires a special issuance 
medical certificate is deferred to the AMCD of Oklahoma City for 
further consideration. The FAA assumes that 10 percent of the 
applicants do not initially qualify for second-class medical 
certification and therefore would require special issuance. The average 
cost to FAA for each medical certificate special issuance review is 
approximately $126.
    The total annualized costs for the FAA to review and process 
MedXPress applications from commercial balloon applicants and costs for 
the FAA to conduct Special Issuance Review for commercial balloon 
applicants is between $90,341 and $371,622, with a mid-estimate of 
$195,848 at a 7 percent discount rate over ten years.
    Individuals and organizations may send comments on the information 
collection requirement to the address listed in the ADDRESSES section 
at the beginning of this preamble by January 18, 2022. Comments should 
be submitted to the Office of Management and Budget, Office of 
Information and Regulatory Affairs, Attention: Desk Officer for FAA, 
New Executive Office Building, Room 10202, 725 17th Street NW, 
Washington DC 20053.

F. International Compatibility

    In keeping with U.S. obligations under the Convention on 
International

[[Page 64436]]

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 has identified no differences 
with these proposed regulations.

G. Environmental Analysis

    FAA Order 1050.1F identifies FAA actions that are categorically 
excluded from preparation of an environmental assessment or 
environmental impact statement under the National Environmental Policy 
Act in the absence of extraordinary circumstances. The FAA has 
determined this rulemaking action qualifies for the categorical 
exclusion identified in paragraph 5-6.6 and involves no extraordinary 
circumstances.

VI. Executive Order Determination

A. Executive Order 13132, Federalism

    The FAA has analyzed this rulemaking under the principles and 
criteria of Executive Order 13132, Federalism. The agency has 
determined that this action would not have a substantial direct effect 
on the States, or the relationship between the Federal Government and 
the States, or on the distribution of power and responsibilities among 
the various levels of government, and, therefore, would not have 
federalism implications.

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

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

C. Executive Order 13609, International Cooperation

    Executive Order 13609, Promoting International Regulatory 
Cooperation, (77 FR 26413, May 4, 2012) promotes international 
regulatory cooperation to meet shared challenges involving health, 
safety, labor, security, environmental, and other issues and to reduce, 
eliminate, or prevent unnecessary differences in regulatory 
requirements. The FAA has analyzed this action under the policies and 
agency responsibilities of Executive Order 13609, and has determined 
that this action would reduce differences between U.S. aviation 
standards and those of other civil aviation authorities by bringing 
U.S. regulatory requirements partially into compliance with 
International Civil Aviation Organization (ICAO) standards for medical 
certification.\66\
---------------------------------------------------------------------------

    \66\ The 12th edition of the Annex 1 to the Convention on 
International Civil Aviation, Personnel Licensing, (July 2018), 
specifies that a person exercising the privileges of a Free Balloon 
Pilot License must hold a Class 2 medical. See 2.10.1.5.
---------------------------------------------------------------------------

VII. Additional Information

A. Comments Invited

    The FAA invites interested persons to participate in this 
rulemaking by submitting written comments, data, or views. The Agency 
also invites 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, commenters should send only one copy of written 
comments, or if comments are filed electronically, commenters should 
submit only one time.
    The FAA will file in the docket all comments it receives, as well 
as a report summarizing each substantive public contact with FAA 
personnel concerning this proposed rulemaking. Before acting on this 
proposal, the FAA will consider all comments it receives on or before 
the closing date for comments. The FAA will consider comments filed 
after the comment period has closed if it is possible to do so without 
incurring expense or delay. The agency may change this proposal in 
light of the comments it receives.
    Confidential Business Information: Confidential Business 
Information (CBI) is commercial or financial information that is both 
customarily and actually treated as private by its owner. Under the 
Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from 
public disclosure. If your comments responsive to this NPRM contain 
commercial or financial information that is customarily treated as 
private, that you actually treat as private, and that is relevant or 
responsive to this NPRM, it is important that you clearly designate the 
submitted comments as CBI. Please mark each page of your submission 
containing CBI as ``PROPIN.'' The FAA will treat such marked 
submissions as confidential under the FOIA, and they will not be placed 
in the public docket of this NPRM. Submissions containing CBI should be 
sent to the person identified in the FOR FURTHER INFORMATION CONTACT 
section of this document. Any commentary that the FAA receives which is 
not specifically designated as CBI will be placed in the public docket 
for this rulemaking.

B. Electronic Access and Filing

    A copy of this notice of proposed rulemaking, all comments 
received, any final rule, and all background material may be viewed 
online at https://www.regulations.gov using the docket number listed 
above. A copy of this rulemaking will be placed in the docket. 
Electronic retrieval help and guidelines are available on the website. 
It is available 24 hours each day, 365 days each year. An electronic 
copy of this document may also be downloaded from the Office of the 
Federal Register's website at https://www.federalregister.gov and the 
Government Publishing Office's website at https://www.govinfo.gov. A 
copy may also be found at the FAA's Regulations and Policies website at 
https://www.faa.gov/regulations_policies.
    Copies may also be obtained by sending a request to the Federal 
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence 
Avenue SW, Washington, DC 20591, or by calling (202) 267-9677. 
Commenters must identify the docket or notice number of this 
rulemaking.
    All documents the FAA considered in developing this proposed rule, 
including economic analyses and technical reports, may be accessed in 
the electronic docket for this rulemaking.

List of Subjects

14 CFR Part 61

    Aircraft, Airmen, Alcohol abuse, Aviation safety, Drug abuse, 
Flight instruction, Medical certification, Recreation and recreation 
areas, Reporting and recordkeeping requirements, Security measures, 
Teachers.

14 CFR Part 68

    Aircraft, Airmen, Health, Reporting and recordkeeping requirements.

The Proposed Amendment

    For the reasons discussed in the preamble, the Federal Aviation 
Administration proposes to amend chapter I of title 14, Code of Federal 
Regulations as follows:

[[Page 64437]]

PART 61--CERTIFICATION: PILOTS, FLIGHT INSTRUCTORS, AND GROUND 
INSTRUCTORS

0
1. The authority citation for part 61 is revised to read as follows:

    Authority: 49 U.S.C. 106(f), 106(g), 40113, 44701-44703, 44703 
note, 44707, 44709-44711, 44729, 44903, 45102-45103, 45301-45302.

0
2. Amend Sec.  61.3 by revising paragraphs (c)(2)(vi), (xiii), and 
(xiv) and adding paragraph (c)(2)(xv) to read as follows:


Sec.  61.3   Requirement for certificates, ratings, and authorizations.

* * * * *
    (c) * * *
    (2) * * *
    (vi) Is holding a pilot certificate with a balloon class rating and 
that person--
    (A) Is exercising the privileges of a private pilot certificate in 
a balloon; or
    (B) Is providing flight training in a balloon in accordance with 
Sec.  61.133(a)(2)(ii);
* * * * *
    (xiii) Is exercising the privileges of a student, recreational or 
private pilot certificate for operations conducted under the conditions 
and limitations set forth in Sec.  61.113(i) and holds a U.S. driver's 
license;
    (xiv) Is exercising the privileges of a flight instructor 
certificate and acting as pilot in command or a required flightcrew 
member for operations conducted under the conditions and limitations 
set forth in Sec.  61.113(i) and holds a U.S. driver's license; or
    (xv) Is exercising the privileges of a student pilot certificate or 
higher while acting as pilot in command on a medical flight test 
authorized under part 67 of this chapter.
* * * * *
0
3. Amend Sec.  61.23 by:
0
a. Revising paragraphs (a)(2)(i) and (ii);
0
b. Adding paragraph (a)(2)(iii);
0
c. Revising paragraph (b)(3);
0
d. Redesignating paragraphs (b)(4) through (9) as paragraphs (b)(6) 
through (11);
0
e. Adding new paragraphs (b)(4) and (5);
0
f. Removing the word ``or'' at the end of paragraph (b)(10);
0
g. Revising newly redesignated paragraph (b)(11)(ii);
0
h. Adding paragraph (b)(12); and
0
i. Revising paragraphs (c)(3)(i)(C), (D), and (E), (d)(1)(iii), and 
(d)(2)(i).
    The revisions and additions read as follows:


Sec.  61.23  Medical certificates: Requirement and duration.

    (a) * * *
    (2) * * *
    (i) Second-in-command privileges of an airline transport pilot 
certificate in part 121 of this chapter (other than operations 
specified in paragraph (a)(1)(ii) of this section);
    (ii) Privileges of a commercial pilot certificate in an aircraft 
other than a balloon or glider; or
    (iii) Except as provided in paragraph (b)(5) of this section, 
privileges of a commercial pilot certificate with a balloon class 
rating in a balloon for compensation or hire; or
* * * * *
    (b) * * *
    (3) When exercising the privileges of a pilot certificate with a 
glider category rating in a glider;
    (4) When exercising the privileges of a private pilot certificate 
with a balloon class rating in a balloon;
    (5) When exercising the privileges of a commercial pilot 
certificate with a balloon class rating in a balloon if the person is 
providing flight training in accordance with Sec.  61.133(a)(2)(ii);
* * * * *
    (11) * * *
    (ii) The flight conducted is a domestic flight operation within 
U.S. airspace; or
    (12) When exercising the privileges of a student pilot certificate 
or higher while acting as pilot in command on a medical flight test 
authorized under part 67 of this chapter.
    (c) * * *
    (3) * * *
    (i) * * *
    (C) Complete the medical education course set forth in Sec.  68.3 
of this chapter during the 24 calendar months before acting as pilot in 
command or serving as a required flightcrew member in an operation 
conducted under Sec.  61.113(i) and retain a certification of course 
completion in accordance with Sec.  68.3(b)(1) of this chapter;
    (D) Receive a comprehensive medical examination from a State-
licensed physician during the 48 months before acting as pilot in 
command or serving as a required flightcrew member of an operation 
conducted under Sec.  61.113(i) and that medical examination is 
conducted in accordance with the requirements in part 68 of this 
chapter; and
    (E) If the individual has been diagnosed with any medical condition 
that may impact the ability of the individual to fly, be under the care 
and treatment of a State-licensed physician when acting as pilot in 
command or serving as a required flightcrew member of an operation 
conducted under Sec.  61.113(i).
* * * * *
    (d) * * *

----------------------------------------------------------------------------------------------------------------
                                                                                             Then your medical
                                       And on the date of                                  certificate expires,
            If you hold               examination for your    And you are conducting an   for that operation, at
                                       most recent medical       operation requiring        the end of the last
                                      certificate you were                                      day of the
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
                                     (iii) Any age.........  a commercial pilot           12th month after the
                                                              certificate (other than a    month of the date of
                                                              commercial pilot             examination shown on
                                                              certificate with a balloon   the medical
                                                              rating when conducting       certificate.
                                                              flight training), a flight
                                                              engineer certificate, or
                                                              an air traffic control
                                                              tower operator certificate.
 
                                                  * * * * * * *
 
                                                (2) * * * * * * *
                                     (i) Any age...........  an airline transport pilot   12th month after the
                                                              certificate for second-in-   month of the date of
                                                              command privileges (other    examination shown on
                                                              than the operations          the medical
                                                              specified in paragraph       certificate.
                                                              (d)(1) of this section), a
                                                              commercial pilot
                                                              certificate (other than a
                                                              commercial pilot
                                                              certificate with a balloon
                                                              rating when conducting
                                                              flight training), a flight
                                                              engineer certificate, or
                                                              an air traffic control
                                                              tower operator certificate.
 

[[Page 64438]]

 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

0
4. In Sec.  61.113, revise the introductory text of paragraph (i) to 
read as follows:


Sec.  61.113   Private pilot privileges and limitations: Pilot in 
command.

* * * * *
    (i) A private pilot may act as pilot in command or serve as a 
required flightcrew member of an aircraft without holding a medical 
certificate issued under part 67 of this chapter provided the pilot 
holds a valid U.S. driver's license, meets the requirements of Sec.  
61.23(c)(3), and complies with this section and all of the following 
conditions and limitations:
* * * * *

PART 68--REQUIREMENTS FOR OPERATING CERTAIN SMALL AIRCRAFT WITHOUT 
A MEDICAL CERTIFICATE

0
5. The authority citation for part 68 continues to read as follows:

    Authority: 49 U.S.C. 106(f), 44701-44703; sec. 2307 of Pub. L. 
114-190, 130 Stat. 615 (49 U.S.C. 44703 note).

0
6. Amend Sec.  68.3 by revising paragraphs (a) introductory text and 
(b) introductory text to read as follows:


Sec.  68.3   Medical education course requirements.

    (a) The medical education course required to act as pilot in 
command or serve as a required flightcrew member in an operation under 
Sec.  61.113(i) of this chapter must--
* * * * *
    (b) Upon successful completion of the medical education course, the 
following items must be electronically provided to the individual 
seeking to act as pilot in command or serve as a required flightcrew 
member under the conditions and limitations of Sec.  61.113(i) of this 
chapter and transmitted to the FAA--
* * * * *
0
7. In Sec.  68.9, revise the introductory text of paragraph (a) to read 
as follows:


Sec.  68.9  Special Issuance process.

    (a) General. An individual who has met the qualifications to 
operate an aircraft under Sec.  61.113(i) of this chapter and is 
seeking to act as a pilot in command or serve as a required flightcrew 
member under that section must have completed the process for obtaining 
an Authorization for Special Issuance of a Medical Certificate for each 
of the following:
* * * * *

    Issued in Washington, DC, under authority provided by 49 U.S.C. 
106(f), 44701, 44702, and 44703, and section 318 of Public Law 115-
254 on or about November 1, 2021.
Robert Ruiz,
Acting Deputy Executive Director, Flight Standards Service.
[FR Doc. 2021-24141 Filed 11-17-21; 8:45 am]
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