Drug Testing Reg Flex Analysis – Deadline for Comments is Approaching

The FAA has notice that is open for comment concerning the regulatory flexibility act analysis for the drug testing rule.  This is the rule that extended the repair station contractor testing rules to all repair stations providing subcontracted services to air carriers, as well as those providing direct maintenance services to air carriers (limited, of course, to those performing “safety-sensitive” functions).  The paucity of support for the cost-benefit analysis, and the failure to provide an honest regulatory flexibility assessment,has been disheartening to anyone who enjoys good government .  The public should be holding the FAA accountable for compliance to the legal requirements for rule making.

The Regulatory Flexibility Act of 1980, 5 U.S.C. §§ 601-12 (RFA) requires that agencies conduct a regulatory flexibility analysis or summary “at the time of the publication of general notice of proposed rulemaking for the rule.” 5 U.S.C. § 603.

In its 2002 Notice of Proposed Rulemaking (NPRM), the FAA proposed to amend the definition of “employee” in existing drug and alcohol testing regulations to cover contractors and subcontractors performing safety-sensitive functions “at any tier.” 67 Fed. Reg. 9366, 9377 (Feb. 28, 2002). It then issued a supplemental NPRM in 2004, containing identical regulatory language and soliciting industry feedback. The resulting final rule in 2006 summarily concluded that the changes would not have a “significant impact on a substantial number of small entities,” seemingly removing the need for a full regulatory flexibility analysis. 75 Fed. Reg. 1666, 1674 (Jan. 10, 2006).

After the Aeronautical Repair Station Association (ARSA) challenged the change for failure to assess the impact on small businesses, the U.S. Court of Appeals for the District of Columbia ordered the FAA to conduct the analysis required under the RFA, paying attention to both contractors and subcontractors. ARSA v. FAA, 494 F.3d 161, 178 (D.C. Cir 2007). To date, even though it is becoming increasingly clear that small businesses will bear the bulk of the rule’s impact, the FAA’s efforts to account for the impact on small businesses of covering contractors at any tier appears to be failing to meet the basic requirements of the RFA.

In the past, the FAA has been accused of being strong on aviation safety but weak on procedural controls that meet minimum due process standards.  This regulatory flexibility analysis on the drug testing rule a great opportunity for the FAA to demonstrate that they are taking their legal obligations seriously, and that they are not going to “pencil-whip” the RFA analysis for this rule.

In order to ensure full compliance with the Regulatory Flexibility Act and to be able to fully understand the impact of the new drug and alcohol rule, it is important for the FAA to conduct a full, thorough Final Regulatory Flexibility Analysis as required by the RFA. Because the FAA still has not completed an accurate Initial Regulatory Flexibility Analysis, however, some additional issues should be discussed in the final version.

Specifically, the FAA must first clearly articulate the purpose and objectives of expanding the drug and alcohol rule to subcontractors at all tiers. Only after it fully explains the benefits of the rule can these benefits be weighed against the impact on small businesses as required by the RFA.

Additionally, although the FAA has provided detailed cost data, it must collect more information to fully contextualize these costs before it can assess the full economic impact of the rule on small businesses. This section should include a comparison of costs to average subcontractor profit margins.

Most importantly, the FAA must identify, explain, and weigh the various alternative means of achieving the goals of this rule, complete with cost estimates for each. Options to adopt performance standards and to take no action should be included among these alternatives.

Overall, we feel that the the FAA should pay close attention to the requirements of the RFA and heed the advice of the Small Business Administration Guide in the future to avoid the costly uncertainty that this inadequate analysis has caused.

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About Jason Dickstein
Mr. Dickstein is the President of the Washington Aviation Group, a Washington, DC-based aviation law firm. He represents several aviation trade associations, including the Aviation Suppliers Association, the Aircraft Electronics Association, the Aircraft Fleet Recycling Association and the Modification and Replacement Parts Association.

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