61.113 and expense reimbursements

Recently, Gig 601XL Builder wrDOTgiaconaATsuddenlink.net posted:

Neil Gould wrote:
Recently, Gig 601XL Builder wrDOTgiaconaATsuddenlink.net posted:

Neil Gould wrote:
Recently, BT posted:

As long as the total of reimbursements are less than 50% of the
cost of the flight, it doesn't conflict with the FARs. OTOH, if
someone has a bug up their posterior and wants to hassle you,
they don't have to be right or interpret the FARs correctly.

Neil

As long as their total contribution is not more than their pro
rata share of the cost of the flight.
50% if there is only one person going with you.. but the example
was three others.

Reading of 61.113 (c) is pretty clear:

(c) A private pilot may not pay less than the pro rata share of the
operating expenses of a flight with passengers, provided the
expenses involve only fuel, oil, airport expenditures, or rental
fees.

So, the 50% figure *is* the "pro rata share" that the private
pilot must pay *for the flight*. It doesn't matter how many
contributors there are.

Neil

WHAT! If there are 4 the pro rata share of $100=$25. If there are
100 the pro rata share is $1.

pro ra·ta (pro ra't?, rä'-, rat'?)
adv.
In proportion, according to a factor that can be calculated exactly.

Your generalized application of the term "pro rata" does not account
for the 50% requirement. For example, one could easily "calculate
exactly" 20% of the cost of a flight, but if that is all a private
pilot pays, then the FAA is likely to consider the other 80% paid
compensation.

As long as the private pilot must pay 50% of the cost of the flight,
the sum of all other contributions can't exceed that amount. Now, if
someone can support the notion that the private pilot doesn't have to
pay 50% of the cost of a flight except under the remaining 61.113
guidelines, that is a different matter. However, such a notion would
make 61.113 (c) moot, so it seems a pretty remote possibility to me.

Neil
Who will continue to pay 50% of the cost of the flight.

I just went back a reread all of 61.113. No where can I find the
phrase "greater than 50%" or even 50%. 61.113 (c) as written above is
the only part of the regulation that discusses splitting of costs of
flight among the passengers of a PPL piloted aircraft.

Since there is no definition of "pro rata" in the FAR definition
section we must assume that pro rata is meant to be the common usage
which means, as I've written above, In proportion, according to a
factor that can be calculated exactly. In this case the factor that
can be calculated exactly is the number of passengers.

Yes, but that usage renders 61.113 (c) meaningless without some additional
parameters. One can calculate many things precisely, even without the use
of a calculator. ;-) That might not guarantee compliance with the FARs.

Now in the case of a plane rented wet it is easy (Rental price +
airport fees)/pax. If on the other hand I'm in my plane and I know
the cost of flying includes things like overhaul and maintenance
prepaids I have to deduct those before I do the math as the
regulation specifically says that I can only pro rata the fuel, oil,
airport expenditures and rental fee.

The cost of maintenance etc. is typically factored into a rental fee. But,
I think the purpose of 61.113 is to set guidelines for what might
constitute compensation. You and other travel to a work site, they can
share the cost of fuel, oil, airport expenditures and rental fees. They
can't pay you for the use of your plane and have you ferry them about, so
the closer the financing looks like that's what is going on, the more
likely one is to violating the FARs.

I'm curious where you get the 51% rule?

As has been mentioned by others, the 50% figure has been taught and
tossed around for quite a while. I don't know if its origin is formal, was
established by precedence, or just common practice. I would be happy to
find out that my company could pay the entire cost of a flight without it
becoming an issue of compensation, but that seems a long shot unless
someone can show evidence that it is an acceptable practice. Do you know
of any such evidence?

Neil

Neil Gould wrote:
Yes, but that usage renders 61.113 (c) meaningless without some
additional parameters. One can calculate many things precisely, even
without the use of a calculator. ;-) That might not guarantee
compliance with the FARs.


Pro Rata means a specific thing. It is well defined in law and common usage.
In 61.113 (c)the regulation is quite clear. A pilot may not pay less that
his pro rata share of the allowable expenses.


Now in the case of a plane rented wet it is easy (Rental price +
airport fees)/pax. If on the other hand I'm in my plane and I know
the cost of flying includes things like overhaul and maintenance
prepaids I have to deduct those before I do the math as the
regulation specifically says that I can only pro rata the fuel, oil,
airport expenditures and rental fee.

The cost of maintenance etc. is typically factored into a rental fee.
But, I think the purpose of 61.113 is to set guidelines for what might
constitute compensation. You and other travel to a work site, they can
share the cost of fuel, oil, airport expenditures and rental fees.
They can't pay you for the use of your plane and have you ferry them
about, so the closer the financing looks like that's what is going
on, the more likely one is to violating the FARs.


The purpose of 61.113 (c) is to set the items than can be shared pro rata
among a private pilot and his passengers. And it does it very well.



I'm curious where you get the 51% rule?

As has been mentioned by others, the 50% figure has been taught and
tossed around for quite a while. I don't know if its origin is
formal, was established by precedence, or just common practice. I
would be happy to find out that my company could pay the entire cost
of a flight without it becoming an issue of compensation, but that
seems a long shot unless someone can show evidence that it is an
acceptable practice. Do you know of any such evidence?

Neil


Not a long shot at all. Just read 61.113 (b). Not only can the company pick
up the tab they can pay you while you are doing it.

In article ,
"Gig 601XL Builder" wrDOTgiaconaATsuddenlink.net wrote:

Neil Gould wrote:
Yes, but that usage renders 61.113 (c) meaningless without some
additional parameters. One can calculate many things precisely, even
without the use of a calculator. ;-) That might not guarantee
compliance with the FARs.


Pro Rata means a specific thing. It is well defined in law and common usage.
In 61.113 (c)the regulation is quite clear. A pilot may not pay less that
his pro rata share of the allowable expenses.

There's still an ambiguity here. The obvious way to compute the
pro-rata share is to divide the total cost by the number of passengers.
But that is not the only reasonable way to do it. One could, for
example, assign a pro-rata share according to weight, so that heavier
passengers (or passengers with more bags) pay more than lighter ones.
One could likewise use height, on the theory that taller passengers use
more room inside the plane, or some combination of weight and height.
If all the passengers are owners of the company for which business is
being conducted they might choose to assign their pro-rata shares
according to their percentage ownership in the company. None of these
are unreasonable on their face, and none of them are specifically
excluded by the regs. But I wouldn't want to be the one defending any
of these theories against an FAA enforcement action.

rg

Recently, Ron Garret posted:

In article ,
"Gig 601XL Builder" wrDOTgiaconaATsuddenlink.net wrote:

Neil Gould wrote:
Yes, but that usage renders 61.113 (c) meaningless without some
additional parameters. One can calculate many things precisely, even
without the use of a calculator. ;-) That might not guarantee
compliance with the FARs.


Pro Rata means a specific thing. It is well defined in law and
common usage. In 61.113 (c)the regulation is quite clear. A pilot
may not pay less that his pro rata share of the allowable expenses.

There's still an ambiguity here. The obvious way to compute the
pro-rata share is to divide the total cost by the number of
passengers. But that is not the only reasonable way to do it. One
could, for example, assign a pro-rata share according to weight, so
that heavier passengers (or passengers with more bags) pay more than
lighter ones. One could likewise use height, on the theory that
taller passengers use more room inside the plane, or some combination
of weight and height. If all the passengers are owners of the company
for which business is being conducted they might choose to assign
their pro-rata shares according to their percentage ownership in the
company. None of these are unreasonable on their face, and none of
them are specifically excluded by the regs. But I wouldn't want to
be the one defending any of these theories against an FAA enforcement
action.

I also saw such ambiguities, based on the dictionary definitions of the
terms rather than their basis in law. However, the explanations by
AirplaneSense in other parts of this thread have cleared up the matter for
me. I now see that Gig 601XL Builder's comments are in agreement with the
interpretations of AirplaneSense, but were a bit terse to be enlightening.

Neil

The 51% rule applies to homebuilt aircraft.




"Neil Gould" wrote in message
...
| Recently, Gig 601XL Builder wrDOTgiaconaATsuddenlink.net posted:
|
| Neil Gould wrote:
| Recently, Gig 601XL Builder wrDOTgiaconaATsuddenlink.net posted:
|
| Neil Gould wrote:
| Recently, BT posted:
|
| As long as the total of reimbursements are less than 50% of the
| cost of the flight, it doesn't conflict with the FARs. OTOH, if
| someone has a bug up their posterior and wants to hassle you,
| they don't have to be right or interpret the FARs correctly.
|
| Neil
|
| As long as their total contribution is not more than their pro
| rata share of the cost of the flight.
| 50% if there is only one person going with you.. but the example
| was three others.
|
| Reading of 61.113 (c) is pretty clear:
|
| (c) A private pilot may not pay less than the pro rata share of the
| operating expenses of a flight with passengers, provided the
| expenses involve only fuel, oil, airport expenditures, or rental
| fees.
|
| So, the 50% figure *is* the "pro rata share" that the private
| pilot must pay *for the flight*. It doesn't matter how many
| contributors there are.
|
| Neil
|
| WHAT! If there are 4 the pro rata share of $100=$25. If there are
| 100 the pro rata share is $1.
|
| pro ra·ta (pro ra't?, rä'-, rat'?)
| adv.
| In proportion, according to a factor that can be calculated exactly.
|
| Your generalized application of the term "pro rata" does not account
| for the 50% requirement. For example, one could easily "calculate
| exactly" 20% of the cost of a flight, but if that is all a private
| pilot pays, then the FAA is likely to consider the other 80% paid
| compensation.
|
| As long as the private pilot must pay 50% of the cost of the flight,
| the sum of all other contributions can't exceed that amount. Now, if
| someone can support the notion that the private pilot doesn't have to
| pay 50% of the cost of a flight except under the remaining 61.113
| guidelines, that is a different matter. However, such a notion would
| make 61.113 (c) moot, so it seems a pretty remote possibility to me.
|
| Neil
| Who will continue to pay 50% of the cost of the flight.
|
| I just went back a reread all of 61.113. No where can I find the
| phrase "greater than 50%" or even 50%. 61.113 (c) as written above is
| the only part of the regulation that discusses splitting of costs of
| flight among the passengers of a PPL piloted aircraft.
|
| Since there is no definition of "pro rata" in the FAR definition
| section we must assume that pro rata is meant to be the common usage
| which means, as I've written above, In proportion, according to a
| factor that can be calculated exactly. In this case the factor that
| can be calculated exactly is the number of passengers.
|
| Yes, but that usage renders 61.113 (c) meaningless without some additional
| parameters. One can calculate many things precisely, even without the use
| of a calculator. ;-) That might not guarantee compliance with the FARs.
|
| Now in the case of a plane rented wet it is easy (Rental price +
| airport fees)/pax. If on the other hand I'm in my plane and I know
| the cost of flying includes things like overhaul and maintenance
| prepaids I have to deduct those before I do the math as the
| regulation specifically says that I can only pro rata the fuel, oil,
| airport expenditures and rental fee.
|
| The cost of maintenance etc. is typically factored into a rental fee. But,
| I think the purpose of 61.113 is to set guidelines for what might
| constitute compensation. You and other travel to a work site, they can
| share the cost of fuel, oil, airport expenditures and rental fees. They
| can't pay you for the use of your plane and have you ferry them about, so
| the closer the financing looks like that's what is going on, the more
| likely one is to violating the FARs.
|
| I'm curious where you get the 51% rule?
|
| As has been mentioned by others, the 50% figure has been taught and
| tossed around for quite a while. I don't know if its origin is formal, was
| established by precedence, or just common practice. I would be happy to
| find out that my company could pay the entire cost of a flight without it
| becoming an issue of compensation, but that seems a long shot unless
| someone can show evidence that it is an acceptable practice. Do you know
| of any such evidence?
|
| Neil
|
|