Private Pilot Reimbursement

Discussion in 'Flight Following' started by DrMack, Feb 13, 2012.

  1. poadeleted20

    poadeleted20 Deleted

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    I gather you're the CFO's boss.

    None of that is the FAA's concern.

    That's only the IRS's concern, not the FAA's. However, there is no IRS-approved mileage rate for using private aircraft on business. The rate to which you refer only applies to reimbursement of government employees or contractors by the Federal government. The IRS allows only actual cost, which may be higher or lower than that ratem and requires documentation of that cost.

    If you take others in the plane with you, you cannot accept any reimbursement from your employer at all. See the Mangiamele interpretation.

    As a lawyer, you must be aware the US Court of Appeals has held that the NTSB and courts are required to defer to the FAA's interpretations of its own regulations unless that interpretation is "arbitrary, capricious, or otherwise not according to law." See Administrator v. Merrell and NTSB, 190 F.3d 571 (D.C. Cir. 1999). So far, the US Court of Appeals has not found the Mangiamele interpretation or its derivatives to be "arbitrary, capricious, or otherwise not according to law," but since you are a lawyer, you are indeed welcome to try, and I wish you good luck, because I, too, think it's a bad interpretation. However, until that happens, the Mangiamele interpretation has force of law, and your pilot certificate is at risk if you accept reimbursement in violation of 61.113 as the FAA Chief Counsel has interpreted that regulation in that letter.

    Good luck. There are a lot of folks who feel it's a bad interpretation, but until you manage to get it overturned by the US Court of Appeals, your ticket is at risk if the FAA finds out you're receiving reimbursement for business flights with others aboard.

    Again, good luck. However, in my opinion, for you to offer legal advice as an attorney that it's OK for a client of yours to violate the reimbursement restrictions in the Mangiamele interpretation would constitute legal malpractice. Anyone who accepts reimbursement in such circumstances is betting that the US Court of Appeals will overturn the Mangiamele interpretation, and that Court rarely overturns the FAA's interpretations of its own rules.
     
    Last edited: Mar 18, 2012
  2. ridgebackpilot

    ridgebackpilot Filing Flight Plan

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    You've nicely illustrated our fundamental problem: That we, as pilots, are too willing to accept clearly erroneous or overbroad interpretations of regulations by the FAA. Fear of losing our pilot certificates keeps us in line. But one of the great things about living in a country that follows the rule of law is that we are free to disagree with the government and have our case heard in court.

    The case in question simply cites the relevant law: 49 U.S.C.A. § 44709(d)(3), which says in part, "When conducting a hearing under this subsection, the NTSB is not bound by findings of fact of the FAA but is bound by all validly adopted interpretations of laws and regulations the Administrator carries out and of written agency policy guidance available to the public related to sanctions to be imposed under this section unless the Board finds an interpretation is arbitrary, capricious, or otherwise not according to law." (Emphasis added)

    The Court of Appeals went on to point out, "Deference, of course, does not mean blind obedience. The agency's interpretation still must not be “plainly erroneous or inconsistent with the regulation” it is interpreting. And even if the interpretation meets this standard, the NTSB need not follow it if it 'is arbitrary, capricious, or otherwise not according to law.'”

    This makes my earlier point: Not only is the FAA interpretation of FAR 61.113 in Mangiamele contrary to its own definition of "compensation or hire" in FAR 1.1, but it flies in the face of the plain meaning of the regulation as well as common sense. In other words, Mangiamele is an "arbitrary and capricious" intepretation.

    It's not uncommon for Federal agencies to misinterpret law and regulation. The problem with the FAA's interpretations is that over time, they take on the aura of law and become accepted dogma because they're repeatedly cited in future opinions by the Chief Counsel. And the law requires the NTSB to defer to the FAA's intepretation of its own rules in most cases.

    Nothing in our body of law says that we are required to go along with a clearly erroneous or overbroad interpretation of the FARs. Just because a particular interpretation has never been tested in court doesn't mean that it's correct!
     
    Last edited: Mar 18, 2012
  3. TMetzinger

    TMetzinger Final Approach

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    Yep. Now go study some more, and see how often the NTSB or Appeals court actually behave that way and do what we'd all like them to do. And betting your own ticket on the way you read the regs is fine... Not sure advising others to do it would be smart.
     
  4. poadeleted20

    poadeleted20 Deleted

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    OTOH, an attorney suggesting to others that they try something which the FAA Chief Counsel says is illegal, and thus is by law assumed to be illegal until a court says otherwise, just because you think a court will find it legal upon appeal does not sound like something of which the attorney's canon of ethics would approve.

    So let's put it plainly. You and I both feel that the Mangiamele interpretation should not survive appeal to the USCA. No problem there. However, as a flight instructor, I will make sure my trainees understand the regulation as the FAA interprets it, and that if they do what the interpretation says is prohibited, they risk loss of their pilot certificate. I should hope that as an attorney, you do the same for your clients, and that you don't give them legal advice to do things just because you think the law which prohibits those things will not stand up on appeal. The way to handle that is to sue for a declaratory judgement, not by encouraging people to become the test case.
     
  5. DrMack

    DrMack Line Up and Wait

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    These arguments underscore my belief that we will not obtain relief in the courts with the regulation as it is worded and the FAA Chief Counsel's opinion of it. A change in the statute is necessary.

    The bottom line is that engaging in personal aviation must be protected by the law as a basic right of citizens in the same way that freedom of movement on the streets and highways must be protected. My use of my airplane for my own private benefit, in accordance with regulations that ensure the safety of the public, and as long as I am not engaged in commercial common carriage, is my own private concern and i consider this egregious trample on my right to use my personal property for private purpose as a frontal assault on my fundamental liberty.

    The general aviation infrastructure in the United States is one of the most underemployed capital deployments in human history. If we don't do something now to stimulate the use of it we will lose it and it would be a century before another generation of Americans could restore it, if ever (much is due to expansion during WWII and we certainly don't want to repeat that experience). Returning the freedom to fly for private benefit as a legitimate private business expense would have an immediate and profound macroeconomic impact on our nation and we owe it to ourselves, our forebears who built it, and our children, to take action now.
     
  6. Tom-D

    Tom-D Taxi to Parking PoA Supporter

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    The FAA does not go looking for private pilots that take money. They have bigger fish to fry. but when some body whines they will look.
     
  7. DrMack

    DrMack Line Up and Wait

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    The point is that corporate lawyers and insurance companies read the regulation and the Mangiamele opinion and thereby prohibit reimbursement. Now imagine if such a regulation existed for the reimbursement of expenses for the incidental use of your personal automobile while conducting private business. Why should it be any different for privately owned and operated airplanes? Do you want to hold your car out for hire? Fine, get a CDL, chauffer's license or a taxi medallion and abide by the regulations designed to protect the safety of the public. No different for airplanes. If you want to do the same with an airplane get your commercial ticket and abide by 121, 135 or other FARs applicable to your commercial common carriage operation. But don't tell me as a private citizen that I can't use my private property for private benefit even if I don't hold out the use of my services to the public as a common carrier.

    We have allowed ourselves to be raped by the federal bureaucracy. It's time for us in the aviation community to grab our metaphorical pitchforks and to start gathering our resources to do battle in the halls of the US House and Senate office buildings if we want our right to fly for private benefit restored.
     
    Last edited: Mar 19, 2012
  8. dell30rb

    dell30rb Final Approach PoA Supporter

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    If you have a private and an instrument rating (assuming you have this if you are flying frequently for business) the commercial is really an easy add-on.

    Does anyone have experience with this? I am kinda in the same situation - my company does not want me flying myself due to liability BS. Just curious if having a commercial rating would change anything.
     
  9. DrMack

    DrMack Line Up and Wait

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    The catch-22 with a commercial is that you need to be careful that you don't run afoul of the common carriage regulations. That is a whole 'nother bag of worms in which I have no interest in the present context.

    This is also not about risk management (the legal kind). There is a healthy insurance industry all set up for that and if on a case by case basis a business can't see that the benefits of general aviation outweigh the costs of insuring against those risks then so be it.

    What I am trying to accomplish with the lobbying effort to amend 61.113(b) is to restore the right of private citizens to use their private property (airplane) for private benefit in the same way we are allowed by law to use our privately owned automobiles without having to hold ourselves out as commercial enterprises in order to get reimbursed for incidental business use of our private property.
     
    Last edited: Mar 19, 2012
  10. dell30rb

    dell30rb Final Approach PoA Supporter

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    Right, i understand the common carriage deal to mean that unless you deal exclusively with a few companies or individuals, you are providing an air taxi service and must have an operator's certificate...
     
  11. RotorAndWing

    RotorAndWing Final Approach

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    So what's stopping you? There is a process in place if you want to change the rules.

    Do your homework and proceed.
     
  12. wabower

    wabower Touchdown! Greaser!

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    Highly doubtful. The "no travel by private aircraft" policy has been in place since 1962, or perhaps longer. Companies aren't interested in pilot qualifications, only in the potential liability that they might incur.


     
  13. DrMack

    DrMack Line Up and Wait

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    We really have two challenges. The first is to build a an economic benefits case, both micro and macro, and the other is the process of gathering a plurality of interests to prod legislators into action. Such interests would include the usual suspects in the aviation community such as AOPA, GAMA, NBAA, EAA, etc. and the others would be virtually every sector of the economy that would benefit from the use of the grossly underemployed general aviation infrastructure. I believe that the key to unlocking the potential of this infrastructure is an overhaul of 14 CFR 61.113(b) with direct legislation rather than try to continue to wage a losing battle with bureaucrats and courts.

    If anyone would be interested in participating in the effort to build the case I would welcome your input. We must prepare for a marathon however, not a sprint. But I think the effort will be well worth the outcome.

    Timothy F. McDonough, Ph.D.
    Dallas, TX
    DrMack911@gmail.com
     
  14. RotorAndWing

    RotorAndWing Final Approach

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    So go for it. Instead of arguing your point on a web board do your homework and start the process.

    Best of luck!

    No thanks, I don't have any interest as this doesn't affect me.
     
  15. JeffDG

    JeffDG Touchdown! Greaser!

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    Feel free to write a letter to the local FSDO explaining that you are not in compliance with Mangimele and you'll get your hearing before the NTSB and the Court of Appeals if you wish.

    The "arbitrary or capricious" standard is a HUGE hill to climb.

    I have classified Mangimele as a "nutso" interpretation, however, the justification in the letter shows thought by the writer of the letter. I strongly disagree with where the writer's logic took her, but overcoming a standard of "arbitrary" is not that difficult, you just have to show you had some (not necessarily the best, just some) basis for your interpretation.

    For me, not worth risking my ticket for...you're free to make up your own mind on that score. And let me know, I might even contribute to a legal defense fund for you!:yes:
     
  16. DrMack

    DrMack Line Up and Wait

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    Are you a pilot? If yes, you are greatly affected unless you do not use the aviation infrastructure in the United States.
     
  17. RotorAndWing

    RotorAndWing Final Approach

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    Yep, I'm a pilot (ATP), and no, it doesn't affect me whatsoever.

    But I do wish you well with it if you decide to pursue this.
     
  18. poadeleted20

    poadeleted20 Deleted

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    The biggest problem is finding a complex plane in which to do the training and practical test. This was almost squashed about 18 months ago, but for reasons I cannot fathom, the ALPA and other air carrier groups powered in with negative comments and the proposed change to 61.129 was cancelled.

    It might. Your company's insurer might be more willing to write insurance coverage for the company if the pilots flying on company business held CP or better. At the end of the day, the corporate issues are primarly related to risk management, and cheaper or more available insurance helps lower the risk to the company.
     
  19. poadeleted20

    poadeleted20 Deleted

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    That's not an issue if the company (not the pilot) provides the aircraft and you don't carry anyone who pays for their flight. The first part is covered by the company renting the plane (you don't use your own plane) and the second is just common sense.
     
  20. poadeleted20

    poadeleted20 Deleted

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    AOPA's Legal and Government Affairs/Regulations people have been working on this for some time, so far without success, but I've heard they feel they are making progress.
     
  21. poadeleted20

    poadeleted20 Deleted

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    R&W's employer not only permits him to fly on the job, it requires him to do that, and pays for the flying, too. It's entirely legal per 61.113, even when he carries fellow employees.
     
  22. ronnieh

    ronnieh Cleared for Takeoff

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    Even if this is changed it will have little impact overall in GA. Unless you own the company in question, most companies are not going to allow it. Insurance companies shy away from this because they know the risk and the cost for coverage will be high. I know the argument that driving is dangerous, which is true. But conveyance by automobile is accepted by the general public and private planes are seen as a rich man's toy. The general public makes up ther jury. I am not saying it is fair, I don't believe it is a good interpretation, it is just not going to save GA. The accident rate of GA will keep it hamstrung for that purpose. Dr. Mack I cheer anybody that will even consider taking on the feds. Best of luck.
     
  23. denverpilot

    denverpilot Tied Down

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    Side thought just hit me, more out of curiosity than anything...

    Is the FAA's bizjet flying under Part 135 or Part 91? Pro crew?
     
  24. RotorAndWing

    RotorAndWing Final Approach

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    Part 135.
     
  25. wabower

    wabower Touchdown! Greaser!

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    Even some of the GA aircraft manufacturers won't permit their employees to travel in non-company-owned airplanes. Go figure.

     
  26. denverpilot

    denverpilot Tied Down

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    Proof-positive that tort reform for GA manufacturers didn't go far enough in the 80s? ;)

    You'd think their Marketing department wouldn't like that being pointed out in public.
     
  27. wabower

    wabower Touchdown! Greaser!

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    Proof to me that the risk-avoidance mentality that prevented me from traveling in my plane to remote locations (to do audit and tax work for a Big-8 accounting firm) in 1962 hasn't changed.

     
  28. gismo

    gismo Touchdown! Greaser!

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    Ron, could you outline the procedure for this?
     
  29. denverpilot

    denverpilot Tied Down

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    Well, that's pretty much all of what "management" is these days, really. It's rarely mixed with "leadership". In fact, managers showing any real signs of leadership is downright discouraged at some companies.

    They give it lip service and send the middle-managers to "team building" events that discuss "leadership traits", while making sure they're on a tight leash with far more responsibility than authority.

    It's practically religious to manage risk instead of lead people, if you're from Harvard Business School.
     
  30. wabower

    wabower Touchdown! Greaser!

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    Sick-Sigma training?

     
  31. denverpilot

    denverpilot Tied Down

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    ROFL... "Sick-Sigma"! I like it!

    Hearing rumblings of ISO again around here... I need to dig out the article showing the Firestone plant that made all those tires that killed lots of people, was ISO certified. ISO certified to make every single deadly tire the same, consistently.

    Business "intelligence"... ain't it impressive? :)
     
  32. wabower

    wabower Touchdown! Greaser!

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    When long-term planning is defined as meeting the street's EPS expectations for the next quarter, everything else makes sense.

     
  33. Tom-D

    Tom-D Taxi to Parking PoA Supporter

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  34. RotorAndWing

    RotorAndWing Final Approach

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    A few years ago there was a FAA Flightcheck KingAir operating Part 91 that crashed in Virginia.

    The aftermath and NTSB investigation questioned why the FAA wasn't following their own rules as they required operators to follow. Shortly thereafter the FAA aircraft were placed under 14 CFR Part 135 operating certificates and corresponding rules.
     
  35. poadeleted20

    poadeleted20 Deleted

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    No, but ridgebackpilot should be able to.
     
  36. dell30rb

    dell30rb Final Approach PoA Supporter

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    Disgusting ain't it. I'm in the process of getting a company with 6 employees into iso13485.
     
  37. dell30rb

    dell30rb Final Approach PoA Supporter

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    If not for this rule, I could finish my commercial license in a few weekends for about $2500. Instead its going to be about 5k and 3 months or so.

    Funny thing is - If I were to start instructing at my flying club - the club will pay for me to checkout in the mooney... but i'll have to pay my own way for 10 hours in it so that I can meet the requirements for commercial
     
  38. DrMack

    DrMack Line Up and Wait

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    Getting good buzz and feedback for the proposal from many corners of the industry, including pilots, aircraft owners, flight schools, repair stations, parts manufacturers & distributors, aircraft dealers, FBOs, industry associations, and airport managers. Somewhere along the way hopefully soon we'll set up a social media presence and may decide to establish a 501(c)(3). Here is the latest, but I'm certain not the last, revision to the language for the proposal:

     
  39. DrMack

    DrMack Line Up and Wait

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    This refinement prevents a passenger or property from being carried if the passenger's or property owner's consent to the carriage is a condition of their employment or business, i.e., no one can be compelled to fly with a private pilot by their employer nor can a property owner be compelled to consent to the carriage of their property on an aircraft operated by a private pilot as a condition of their employment or doing business. It also firms up the same protection for the pilot.

     
  40. onwards

    onwards Pattern Altitude

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    I like it. This revision makes sense. Any chance of it becoming the rule?