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This rulemaking would apply the requirements of 14 CFR part 5, with appropriate modifications. As a result, this rulemaking would require persons engaged in the design and production of aircraft, engines, or propellers; certificate holders that conduct common carriage operations under part 135; persons engaged in maintaining part 121 aircraft under part 145; and persons conducting certain, specific types of air tour operations under part 91 to implement a Safety Management System.

Statement of Need:

Recent incidents and accidents have indicated the need for action to improve safety in the National Airspace System (NAS). In addition, recommendations from the National Transportation Safety Board (NTSB), mandates in the Aircraft Certification Safety and Accountability (ACSA) Act (Pub. L. 116-260, December 27, 2020), agreements in International Civil Aviation Organization (ICAO) Annexes and Standards and Recommended Practices (SARPs), and recommendations from previous Aviation Rulemaking Committees (ARCs) indicate that expanded application of SMS is needed. Further, the successful implementation of Safety Management Systems (SMS) in part 121 suggests the potential benefit to expansion of SMS into other sectors of the aviation system. Therefore, the Federal Aviation Administration has determined that expanding the application of part 5 is necessary.

Summary of the Legal Basis:

The FAA's authority to issue rules on aviation safety is found in title 49 of the United States Code (U.S.C.). Subtitle I, section 106 describes the authority of the FAA Administrator. This rulemaking is promulgated under the authority described in 49 U.S.C. 106(f), which establishes the authority of the Administrator to promulgate regulations and rules. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority. This rulemaking is also promulgated under 49 U.S.C. 44701(a)(5), 49 U.S.C. 44701(d)(1)(A), 49 U.S.C. 44701(a)(2), 49 U.S.C. 44707(2), 49 U.S.C. 44702 and 49 U.S.C 44704. In addition, the Airport Certification, Safety, and Accountability Act, (the Act), Public Law 116-260, division V, title I, sec. 102 (December 27, 2020) requires the FAA to initiate a rulemaking to require that manufacturers that hold both a type certificate and a production certificate issued pursuant to 49 U.S.C. 44704 have a safety management system consistent with standards and recommended practices established by ICAO. This rulemaking is within the scope of the aforementioned authorities because it requires certain entities to develop and maintain an SMS to improve the safety of their operations. The development and implementation of SMS ensures safety in air transportation, manufacturing, and maintenance by helping certain entities proactively identify and mitigate safety hazards, thereby reducing the possibility or recurrence of accidents in air transportation.

Alternatives:

The proposed expansion of the applicability of part 5 furthers the Administrator's mission of promoting the safe flight of civil aircraft in air commerce and reducing or eliminating the possibility or recurrence of accidents in air transportation. The FAA is currently exploring several alternatives to determine how the revised applicability would extend SMS requirements to parts 21, 91, 135, and 145.

Anticipated Costs and Benefits:

The FAA is in the process of determining the costs and benefits associated with the proposed rule.

Risks:

An SMS is a formalized approach to managing safety by developing an organization-wide safety policy, developing formal methods of identifying hazards, analyzing and mitigating risk, developing methods for ensuring continuous safety improvement, and creating organization-wide safety promotion strategies. An SMS provides an organization's management with a set of decision-making tools that can be used to plan, organize, direct, and control its business activities in a manner that enhances safety and ensures compliance with regulatory standards. Adherence to standard operating procedures, proactive identification and mitigation of hazards and risks, and effective communications are crucial to continued operational safety. The FAA envisions an SMS would provide those covered by the proposed rule with an added layer of safety to help reduce the number of incidents, and accidents.