Highlights of the 5 Year FAA Reauthorization Act

There were several proposals put forward for the Federal Aviation Administration (FAA) Reauthorization Act of 2018 (HR 302),but not all of them made it through. While privatizing air traffic control will not be happening, the rules regarding re-registration have once again been changed. The bill also includes an edict that all documents will be digitized soon, along with opening records electronically to the public for the first time. The 462-page bill passed on October 3rd, 2018 contains many provisions, a few of which we’ve highlighted here. There are changes on the horizon, and while the overall effects are uncertain, we can surmise some of the possibilities. 

Re-registration

In years past, registration was only required once per owner of the aircraft. In 2010 that changed, in an attempt to make FAA records more current, with re-registration required every 3 years. While this involved more work, the change served to update and maintain more accurate information on aircraft owners and improve FAA security measures. In Section 556 of the Reauthorization Act, re-registration is changed to every 7 years, to be enacted within 180 days of the bill passing. We can’t be sure why the FAA is modifying the requirement to less frequent updates once again but are optimistic that the integrity of registration records will not be affected. 

Digitization

There are already a lot of FAA documents consistently digitized, making some functions involving registration and record searches more efficient. What isn’t electronically maintained is held in the public documents room at the FAA and available for those who have access to that room. Section 546 of the new bill states that everything will now be digitized in the next 3 years, including all registry information such as paper documents, microfilm images and photographs, as well as the registry manual, business operations and functions, and all paper-based processes. It’s certainly an earth-friendly endeavor but could produce some complications of its own regarding access and security.

Public Electronic Database

Possibly the most significant aspect covered in Section 546 and happening within 3 years is that the FAA records will be made electronically available to the public.  For the first time in history, the general public will be able to view any record and/or file any document at the FAA.   Furthermore, anyone using the public documents room to perform any acts that could have been done with the same efficiency by electronic means will be charged a fee. The implications of this switch could be quite far reaching.

The ability to perform a title search and submit documents electronically might make it more appealing for anyone to do so individually, but it does not mean they should. While the FAA is opening their records, they are not changing the rules for submitting them. Regarding title searches, an outstanding lien or break in the title can be easily missed without an experienced eye, resulting in the need for Clearing Clouded Aircraft Titles. Similarly, with the extensive rules in place for filing documents, there is a good chance it won’t be done correctly without industry knowledge of FAA rules and regulations for filing and recording of documents, as briefly discussed in our blog, The Difference Between Filed and Recorded FAA Documents.  Allowing the general public to file their own documents is likely toresult in numerous unrecorded documents. 

Escrow’s Role

For the buyer and seller of an aircraft, the possibilities abound for error if either were to take on the process individually, increasing the amount of time and money spent. The role of escrow itself is to represent all interests, handling the funds involved and ensuring their transfer at the same time documents are filed. It’s a complicated process that requires experts for an error-free and timely transaction. (For great information on escrow’s importance read our blogsBorn in a Pool Halland Escrows in Aviation.)

In sum, the changes coming forward could be both helpful and harmful. We’re hopeful that all will go smoothly for the FAA and progress will continue. The risks involved with registration, title searches, filing documents and conducting escrow transactions will not change though, and representation by an experienced title and escrow company is key. 

One question remaining: what will happen to the public documents room? Will it become a part of a bygone era where people and paper mixed?

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