11/9/21

 

8900.1 CHG 758

VOLUME 3  GENERAL TECHNICAL ADMINISTRATION

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CHAPTER 34  CHANGES TO CERTIFICATES OR OPERATING AUTHORITY

Section 3  Amendment, Surrender, Suspension, Revocation, Transfer, or Replacement of Certificates

Source Basis:

    Section 13.19, Certificate Action.

    Section 119.41, Amending a Certificate.

    Section 119.61, Duration and Surrender of Certificate and Operations Specifications.

    Section 125.29, Duration of Certificate.

    Section 133.27, Availability, Transfer, and Surrender of Certificate.

    Section 137.17, Amendment of Certificate.

    Section 137.21, Duration of Certificate.

    Section 141.13, Application for Issuance, Amendment, or Renewal.

    Section 141.17, Duration of Certificate and Examining Authority.

    Section 142.7, Duration of a Certificate.

    Section 142.11, Application for Issuance or Amendment.

    Section 145.55, Duration and Renewal of Certificate.

    Section 145.57, Amendment to or Transfer of Certificate.

    Section 147.7, Duration of Certificates.

    Title 49 U.S.C. § 44701, General Requirements.

    Title 49 U.S.C. § 44709, Amendments, Modifications, Suspensions, and Revocations of Certificates.

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3-3631    GENERAL. This section contains information, direction, and guidance for principal inspectors (PI)/Training Center Program Managers (TCPM) and Federal Aviation Administration (FAA) personnel evaluating a potential amendment, surrender, suspension, revocation, transfer, or replacement of an Air Carrier Certificate, Operating Certificate, Training Center Certificate, or Air Agency Certificate. The basis for these various certificate changes or actions is found in the supporting regulations and United States Code (U.S.C.) sections listed above. These changes or actions can proceed with a full agreement between the PI/TCPM and the certificate holder (CH), or they may be contested. For guidance on compliance and enforcement actions, see Volume 14.

NOTE:  The terms “operator” and “certificate holder (CH)” are used in this section to refer to the holder of an Air Carrier Certificate, Operating Certificate, Training Center Certificate, or Air Agency Certificate. The term “operations specifications (OpSpecs)” applies to any operator that uses the Web-based Operations Safety System (WebOPSS), to include training specifications (TSpecs) and Title 14 of the Code of Federal Regulations (14 CFR) part 141 automated Letters of Authorization (LOA).

NOTE:  The term “person” is defined in 14 CFR part 1, § 1.1 and includes an individual, firm, partnership, corporation, company, association, joint-stock association, or governmental entity.

3-3632    TYPES OF CHANGES TO CERTIFICATES.

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A.    Amendment of a Certificate. The amendment of a certificate is a change to the information on the face of the document, usually as the result of a name change or administrative change. Certificates rarely require an amendment because the details of operating authorizations are contained in the applicable OpSpecs. The involuntary amendment of a certificate is a legal enforcement action. Retain the date of original issuance on the amended certificate.

B.    Surrender of a Certificate. Depending on the circumstances, a voluntary surrender of a certificate is expected when an operator voluntarily ceases operations and is no longer capable of conducting any kind of operations for which it is authorized. When an operator ceases all operations, the responsible Flight Standards office will request that the OpSpecs be surrendered (see Volume 3, Chapter 18, Section 8 for certificates issued under 14 CFR part 119).

1)    Title 14 CFR Part 135. In accordance with part 119, § 119.61(c), a part 135 CH must surrender its certificate and OpSpecs within 30 days of terminating operations.
2)    Part 141. For the applicability of surrendering a certificate under part 141, see Volume 2, Chapter 9.
3)    Title 14 CFR Part 142. If an entity no longer meets the requirements to hold the certificate, they are no longer eligible for the certificate.
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C.    Suspension of a Certificate. The suspension of a certificate is the temporary, involuntary removal of an operator’s operating authority by the FAA.

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D.    Revocation of a Certificate. The revocation of a certificate is the permanent, involuntary removal of an operator’s operating authority by the FAA.

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E.    Replacement of a Certificate. The replacement of a certificate is the reissuance of an original certificate to an operator when the operator’s original certificate has been either lost or destroyed (see paragraph 3-3634).

3-3633    AMENDMENT OF A CERTIFICATE: OPERATOR-INITIATED AMENDMENT.

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A.    Name Change. A change of the CH’s legal name without a change of ownership requires an amended certificate and updated OpSpecs, but does not require a new certificate number. If an operator requests a new certificate number, the PI must coordinate the request with the appropriate Safety Standards division. To avoid administrative burdens and ensure consistency in an operator’s historical records, PIs can process a name change without issuing a new certificate number. PIs must ensure that the CH is not using the certificate number change to circumvent initial certification requirements or conceal the past history of an operator. FAA‑issued certificates, economic authority, and OpSpecs must accurately reflect the CH’s name.

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B.    Change in Ownership. A party (e.g., stockholder) may choose to sell its stock or equity interest in a company that holds an FAA-issued certificate. This type of transaction does not involve the transfer of the FAA-issued certificate because, while the ownership structure of the company that holds the certificate changes, the company itself retains the certificate.

1)    Purchase or Equity Interest. In a scenario involving the purchase of a CH or an equity interest in a CH, the extent of the FAA’s involvement is determined by:

    The extent of the operational changes made by the new owner; and

    Whether the CH is able to continue conducting the kinds of operations it is authorized to engage in under its new ownership (at the time of acquisition and thereafter).

2)    Changes That May Require Additional Action(s). A change in ownership that also involves a change in economic authority, operating authority, required operating personnel, or changes in the principal base of operations may require additional certification. When only the ownership of the organization to which the certificate is issued changes, PIs do not need to arrange for issuance of a new certificate number. Volume 3, Chapter 34, Section 2 contains the FAA’s policy governing major changes to air carrier operating authority. Contact the appropriate Safety Standards division for help with making these determinations.

NOTE:  For information related to changes of ownership of part 141 pilot schools, see Volume 2, Chapter 9, Section 1. For information related to changes of ownership of repair stations, see Volume 2, Chapter 11, Section 7 and refer to 14 CFR part 145, § 145.57.

NOTE:  In accordance with § 119.33(a)(1) and (b)(1), when a change of ownership occurs the PI must ensure that the CH meets the citizenship requirement.

3)    Scenario Involving the Purchase and Sale of a CH’s Stock, Equity Interest, or Membership Interest. Assume Example Airlines, Inc., is a 14 CFR part 121 or 135 CH. Sunshine Entity, LLC, (a holding company) is the lawful, record, and beneficial owner of all of the stock of Example Airlines, Inc. If Buyer Corporation acquires all of the stock of Example Airlines, Inc., from Sunshine Entity, LLC, then Buyer Corporation becomes the owner or parent company of Example Airlines, Inc. The acquisition of shares of Example Airlines, Inc., does not result in the transfer of the Air Carrier Certificate to Buyer Corporation because Buyer Corporation is only a holding company. As a result of the equity transfer, Example Airlines, Inc., retains its Air Carrier Certificate and can continue to operate.

C.    Transfer of Assets.

1)    An organization may sell or transfer assets to another organization. However, a certificate should not be treated as a tradeable asset (i.e., it cannot be purchased or sold) because an FAA-issued certificate is not transferable. The FAA does not recognize a certificate transferred from one entity to another.

NOTE:  For information related to changes of ownership for part 141 pilot schools, see Volume 2, Chapter 9, Section 1. For information related to changes of assets for repair stations, see Volume 2, Chapter 11, Section 7 and refer to § 145.57.

2)    For example, assume Seller Entity, LLC, is a part 121 CH. Seller 1Entity, LLC, owns and operates various aircraft under the Example Airways trade name and meets all regulatory requirements under parts 119 and 121. Seller Entity, LLC, could enter into an asset purchase and sale transaction with Buyer Corporation for the acquisition of some or substantially all of the assets of Seller Entity, LLC, (e.g., airplanes, ground equipment, operating manuals, and intellectual property). However, Seller Entity, LLC, cannot sell or transfer its Air Carrier Certificate to Buyer Corporation because neither Air Carrier Certificates nor Operating Certificates are transferable. If Buyer Corporation wants to become an air carrier or commercial operator, it will have to obtain its own Air Carrier Certificate or Operating Certificate through the FAA certification process.

D.    Department of Transportation (DOT) Considerations for Direct Air Carriers.

1)    Notice of Name Change. A CH with an Air Carrier Certificate issued under part 119 must obtain the appropriate DOT economic authority in accordance with § 119.5(i) (see Volume 2, Chapter 2, Section 2). A CH subject to the DOT’s economic regulations must also provide notice to the DOT of a change in name or ownership in accordance with 14 CFR part 215, § 215.4 and Title 49 U.S.C. § 41110(e). If a CH is requesting to proceed exclusively with a name change, the PI is not required to wait for DOT approval and may amend the Air Carrier Certificate and OpSpecs upon notification and verification that the CH has filed a notice of name change with the DOT.
2)    Transfer of the FAA’s Safety Authority and the DOT’s Economic Authority. A CH may request the transfer of the CH’s Certificate of Public Convenience and Necessity, which the DOT may approve under certain circumstances (refer to 49 U.S.C. § 41105 for information regarding the DOT’s economic authority). PIs should be aware that the DOT’s economic authority and the FAA’s safety authority processes are separate and independent of each other. The transfer of the DOT’s economic authority has no effect on the FAA’s safety authority. Most importantly, a CH’s Air Carrier Certificate or Operating Certificate issued by the FAA under part 119 is not transferable, as discussed in subparagraph 3-3633C1).

E.    Notifications and Actions.

1)    The Aviation Data Systems Branch (AFS-620) must receive notification from PIs at 9-AMC-AFS620-CertInfo@faa.gov when either of the following circumstances occur:
a)    The name shown on the certificate changes, or
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b)    The PI and the appropriate Safety Standards division have determined that the requested change for a new partial or full certificate number may be issued.
2)    As applicable, OpSpecs, manuals, curriculum(s), part 141 training course outlines (TCO), Safety Assurance System (SAS) records, etc., will need to be amended where necessary to update the information.

F.    Change of Certificate Number. Under certain circumstances, AFS-620 could decide not to change the entire certificate number. As an alternative, AFS-620 may leave the designator element intact, but change the numeric and alpha suffix code (e.g., a change from certificate number TWRA118A to TWRA119B). Any change to the certificate number (i.e., a partial or complete change) would require the PIs to amend the Air Carrier Certificate or the Operating Certificate to reflect the correct numeric and alpha suffix code. See Volume 2, Chapter 1, Section 3 for more information on certificate number construction.

3-3634    REPLACEMENT OF A LOST OR DESTROYED CERTIFICATE. A certificate that is lost or destroyed may be replaced by the responsible Flight Standards office using the same information that was on the original certificate. The replacement certificate must have the word “Duplicate” annotated on the front of the certificate. Retain the date of original issuance on the replacement certificate. A copy of the duplicate certificate should be retained in the responsible Flight Standards office files. If a certificate is destroyed, the CH must send any remains of the certificate to the PI with a written request that the certificate be replaced. The request should include a sworn statement describing why the replacement is necessary. The CH, agent for service, or a court-appointed individual authorized to act on behalf of the CH must sign the request and sworn statement.

3-3635    VOLUNTARY SURRENDER OF A CERTIFICATE. The FAA’s regulations provide for the voluntary surrender of FAA-issued certificates for cancellation. The PI/TCPM must enter and save a brief statement of the circumstances surrounding the voluntary surrender of the certificate in the “Comments” section and update all required fields in the enhanced Vital Information Database (eVID) or SAS.

A.    Voluntary Surrender. A PI/TCPM may request, but may not compel, a CH to voluntarily surrender its certificate. A CH may voluntarily surrender a certificate unless it is the subject of an enforcement investigation or enforcement action as described in subparagraph 3‑3635D. To surrender a certificate, the CH should send the certificate to the PI/TCPM with a written request that the certificate be canceled and a statement of why the certificate is being surrendered. The request must be signed by the CH, agent for service, or a court-appointed individual authorized to act for the CH.

B.    Voluntary Surrender of Lost or Destroyed Certificates. If the certificate to be surrendered has been lost or destroyed, the PI will obtain an affidavit of loss as described in paragraph 3-3634. A certificate that has been surrendered should be retained at the responsible Flight Standards office, along with a copy of the CH’s OpSpecs, TSpecs, or equivalent (i.e., authorizations), as applicable, and retained in accordance with the current edition of FAA Order 1350.14, Records Management.

C.    Reinstatement of a Voluntarily Surrendered Certificate. A voluntarily surrendered certificate may not be reinstated. If the operator subsequently decides to reinstate operations, they must apply and qualify for a new certificate.

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D.    Surrendering a Certificate in Lieu of an Enforcement Action. The PI/TCPM should be alert for indications that a CH is attempting to avoid a certificate action through the voluntary surrender of a certificate, including whether the CH is the subject of an enforcement investigation or enforcement action. Consequently, before determining whether to accept a CH’s voluntary surrender of a certificate, the PI/TCPM must review actions in the Enforcement Information System (EIS) and other databases showing investigative or enforcement activity. If the EIS or any other database reveals that the CH is the subject of an enforcement investigation or enforcement action, the PI/TCPM must refuse the CH’s attempt to voluntarily surrender the certificate. If there is an ongoing investigation, it will continue, and enforcement action will be recommended if appropriate. Refer to the current edition of FAA Order 2150.3, FAA Compliance and Enforcement Program.

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3-3636    ADVERSE ACTIONS. In accordance with 14 CFR part 13, § 13.19(b), the FAA may find it necessary to amend, suspend, or revoke all or part of a certificate. When an adverse action is appropriate, the Flight Standards office management will confer with their division manager and coordinate with the Assistant Chief Counsel for the Enforcement Division (AGC-300). They will decide whether legal enforcement action is appropriate. If legal action is appropriate, the PI must prepare the enforcement package in accordance with Volume 14 and Order 2150.3.

A.    Emergency Actions. Where an emergency exists, the order that amends, suspends, or revokes the certificate may be made effective immediately.

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B.    Appeals. The CH may appeal an order amending, suspending, or revoking its certificate to the National Transportation Safety Board (NTSB). Should the CH elect to appeal a certificate action to the NTSB, the effective date of the order is stayed until the NTSB acts on the appeal (unless it is an emergency order).

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3-3637    SUSPENSION OF A CERTIFICATE. To suspend a certificate, AGC-300 will issue the CH an order of suspension. Refer to Order 2150.3 for information concerning legal enforcement actions involving the suspended certificate. CHs must forward suspended certificates to the address contained in the order suspending the certificate, which is typically the address of the enforcement counsel who issued the order. When a certificate has been suspended, the CH’s information in eVID or SAS must be amended to reflect the suspended status.

3-3638    REVOCATION OF A CERTIFICATE. To revoke a certificate, AGC-300 will issue the CH an order of revocation. CHs must forward revoked certificates to the address contained in the order revoking the certificate, which is typically the address of the enforcement counsel who issued the order. The CH’s information in eVID or SAS must be amended to show that the certificate has been revoked and must contain a statement of the reasons for the action in the “Comments” section. Should revocation be appropriate, see paragraph 3-3636.

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3-3639    TRANSPORTATION SECURITY ADMINISTRATION (TSA) NOTIFICATION, AS APPLICABLE. Any time an operator’s certificate is amended, suspended, surrendered, or revoked, the responsible Flight Standards office will notify their TSA principal security inspector (PSI) at charters-aircargo-s@tsa.dhs.gov. Indicate the CH’s name, certificate number, type of change in the certificate, and the effective date of the change. It is important to make this notification in order for the PSI to secure all security-sensitive documents from the operator.

RESERVED. Paragraphs 3-3640 through 3-3655.