61.113 and expense reimbursements

"Neil Gould" wrote:
Thanks, and I understand the logic of your interpretation. It
clarifies the 50% notion that I've been taught, but it seems to make
the regulation rather pointless so long as there is some rationale to
the application of "pro rata" (for example, shares of ownership in the
aircraft or number of club members). If the FAA agrees with this usage
then the matter is settled! However, I'm still skeptical, given the
precedence of such as free ferrying to be considered "compensation".

The following web page titled "Traps For The Unwary: Business Flying
And The 'Compensation Or Hire' Rule" discusses "pro rata" issues, among
others (such as the judicial invention of the "common purpose" test):

http://www.aviationlawcorp.com/content/traps.html

On Wed, 21 Nov 2007 22:42:22 -0000, Jim Logajan wrote:

"Neil Gould" wrote:
Thanks, and I understand the logic of your interpretation. It
clarifies the 50% notion that I've been taught, but it seems to make
the regulation rather pointless so long as there is some rationale to
the application of "pro rata" (for example, shares of ownership in the
aircraft or number of club members). If the FAA agrees with this usage
then the matter is settled! However, I'm still skeptical, given the
precedence of such as free ferrying to be considered "compensation".

The following web page titled "Traps For The Unwary: Business Flying
And The 'Compensation Or Hire' Rule" discusses "pro rata" issues, among
others (such as the judicial invention of the "common purpose" test):

http://www.aviationlawcorp.com/content/traps.html

It's too bad that article does not discuss the premise of the OP's
situation -- that of an employee flying himself, and possibly some other
employees, to a business meeting which he, and they, would be attending
anyway; and being reimbursed for that trip.
--ron

In article ,
Ron Rosenfeld wrote:

On Wed, 21 Nov 2007 22:42:22 -0000, Jim Logajan wrote:

"Neil Gould" wrote:
Thanks, and I understand the logic of your interpretation. It
clarifies the 50% notion that I've been taught, but it seems to make
the regulation rather pointless so long as there is some rationale to
the application of "pro rata" (for example, shares of ownership in the
aircraft or number of club members). If the FAA agrees with this usage
then the matter is settled! However, I'm still skeptical, given the
precedence of such as free ferrying to be considered "compensation".

The following web page titled "Traps For The Unwary: Business Flying
And The 'Compensation Or Hire' Rule" discusses "pro rata" issues, among
others (such as the judicial invention of the "common purpose" test):

http://www.aviationlawcorp.com/content/traps.html

It's too bad that article does not discuss the premise of the OP's
situation -- that of an employee flying himself, and possibly some other
employees, to a business meeting which he, and they, would be attending
anyway; and being reimbursed for that trip.
--ron

Exactly. The problem here is the precise meaning of the word
"compensation" and whether or not compensation is distinct from
"reimbursement." There are two ways to look at the situation. One is
that I paid the entire cost of the flight and was reimbursed for a
travel expense. The second is that the company paid the entire cost of
the trip and therefore I did not meet the "pro-rata share" requirement.

rg

On Wed, 21 Nov 2007 18:00:49 -0800, Ron Garret
wrote:

Exactly. The problem here is the precise meaning of the word
"compensation" and whether or not compensation is distinct from
"reimbursement." There are two ways to look at the situation. One is
that I paid the entire cost of the flight and was reimbursed for a
travel expense. The second is that the company paid the entire cost of
the trip and therefore I did not meet the "pro-rata share" requirement.

Fortunately, when I was flying on business -- which was solely to attend
meetings and the business had nothing to do with aviation -- the
"structure" was that the corporation leased the a/c and paid all of the
operating expenses. I would occasionally (rarely) carry a passenger to the
meeting, but the passenger would not be charged. In addition, and perhaps
critically so in view of the controversy regarding logging time as
compensation, I have a commercial certificate and, at the time I made these
flights, a 2nd class medical.

But when I made those flights, the FAA ruling concerning logging time as
compensation had not been promulgated, and the general opinion was that
those flights would have been legal even if I only had a private
certificate or a third class medical.
--ron

On Nov 21, 9:00 pm, Ron Garret wrote:
Exactly. The problem here is the precise meaning of the word
"compensation" and whether or not compensation is distinct from
"reimbursement."

Can you explain why you think that matters here? If your travel
reimbursement is "compensation or hire", then you're fine because
61.113(b) permits a private pilot to fly for compensation or hire in
that situation. Alternatively, if (implausibly) the reimbursement is
*not* "compensation or hire", then you're still fine because in that
case, there is no violation of 61.113(a).

There are two ways to look at the situation. One is
that I paid the entire cost of the flight and was reimbursed for a
travel expense.

Yup, or compensated. Makes no difference.

The second is that the company paid the entire cost of
the trip and therefore I did not meet the "pro-rata share" requirement.

The pro rata requirement is irrelevant here. It's in a different
clause (61.113(c)) and spells out a different exception to the no-
compensation rule.

It's true that there's a slight ambiguity in the form of the clauses
(though it has nothing to do with "compensation" vs. "reimbursement").
As written, it might seem that 61.113(c) could apply simultaneously
with 61.113(b), forcing you to pay a pro rata share of the business
flight. But common sense easily resolves that ambiguity. The FAA can't
intend both clauses to apply to a business flight, because if they
did, then your pro rata share if there were *no* passengers would
be100%. Therefore, you'd be allowed to receive compensation *only if
you carried passengers*, which is exactly the opposite of the
constraint that the FAA is trying to impose (they don't want private
pilots to carry passengers for compensation; 61.113(b)(2) says so).

So there's really no ambiguity. Compensation is permitted in that
situation (unless you're being paid *extra* to take passengers along;
that would violate 61.113(b)(2)).

In article
,
wrote:

On Nov 21, 9:00 pm, Ron Garret wrote:
Exactly. The problem here is the precise meaning of the word
"compensation" and whether or not compensation is distinct from
"reimbursement."

Can you explain why you think that matters here? If your travel
reimbursement is "compensation or hire", then you're fine because
61.113(b) permits a private pilot to fly for compensation or hire in
that situation.

Hm, maybe the word I should be getting hung up on is "incidental."

It's true that there's a slight ambiguity in the form of the clauses
(though it has nothing to do with "compensation" vs. "reimbursement").
As written, it might seem that 61.113(c) could apply simultaneously
with 61.113(b), forcing you to pay a pro rata share of the business
flight.

Yes, that's what was running through my mind.

But common sense easily resolves that ambiguity. The FAA can't
intend both clauses to apply to a business flight, because if they
did, then your pro rata share if there were *no* passengers would
be100%. Therefore, you'd be allowed to receive compensation *only if
you carried passengers*, which is exactly the opposite of the
constraint that the FAA is trying to impose (they don't want private
pilots to carry passengers for compensation; 61.113(b)(2) says so).

Heh, good point.

rg

On Nov 23, 2:12 am, Ron Garret wrote:
Hm, maybe the word I should be getting hung up on is "incidental."

The test I use is: would an honest description of your job
responsibilities include piloting? If not, then the flying is
incidental to your job. That rule may not properly categorize a few
obscure, borderline cases. But the case under discussion--where you
choose to fly, rather than drive, to a business meeting--isn't
borderline. On the contrary, it's literally the textbook case of a
business flight that's incidental to one's job. If that didn't count
as incidental, nothing would

In article
,
wrote:

On Nov 23, 2:12 am, Ron Garret wrote:
Hm, maybe the word I should be getting hung up on is "incidental."

The test I use is: would an honest description of your job
responsibilities include piloting? If not, then the flying is
incidental to your job. That rule may not properly categorize a few
obscure, borderline cases. But the case under discussion--where you
choose to fly, rather than drive, to a business meeting--isn't
borderline. On the contrary, it's literally the textbook case of a
business flight that's incidental to one's job. If that didn't count
as incidental, nothing would

That works for me. Thanks!

rg

Recently, Jim Logajan posted:

"Neil Gould" wrote:
Thanks, and I understand the logic of your interpretation. It
clarifies the 50% notion that I've been taught, but it seems to make
the regulation rather pointless so long as there is some rationale to
the application of "pro rata" (for example, shares of ownership in
the aircraft or number of club members). If the FAA agrees with this
usage then the matter is settled! However, I'm still skeptical,
given the precedence of such as free ferrying to be considered
"compensation".

The following web page titled "Traps For The Unwary: Business Flying
And The 'Compensation Or Hire' Rule" discusses "pro rata" issues,
among others (such as the judicial invention of the "common purpose"
test):

http://www.aviationlawcorp.com/content/traps.html

This article does seem to embody some of my earlier notions of the
interpretation of this FAR. However, I think AirplaneSense's explanation
is more concise and precise than the article.

Neil