The cost sharing - reimbursment - flight for hire mess

"Roger Long" om wrote in
message ...
Anyway, here it is. Potshots welcome. I'll be glad to explain my
reasoning
in response to any inquiries not preceded by flames.

I have to admit, I tend to agree with Don's comments that duplicating
regulations seems just to be asking for trouble. Why not just say something
like "all operation of club aircraft is limited to those allowed for the
holder of a Private Pilot certificate, unless otherwise authorized"?
Specific authorizations such as dual instruction by member CFI's can be
called out, but otherwise seems like all the extra rulemaking at best is
redundnant and at worst could create loopholes or additional confusion on
the part of your members.

That said, in the spirit of your question...

Seems to me that in #23, you need "d) Sharing of costs with passengers as
stipulated in #24".

In #24, no allowance is made for fuel. Does the club always reimburse fuel
expenses completely? Where I've rented, there is usually a cap on fuel
price, and the pilot is responsible for any fuel costs above that per-gallon
cap. If your club is similar, you'd want to allow passengers to share in
that additional cost.

Also in #24, no allowance is made for ATC service charges, as one would
incur flying in Canada. Does the club automatically pay those? If they are
billed to the pilot, that should allowed.

I may have missed other direct operating expenses that ought to be allowed,
given the spirit of the rules you've posted, but which are not. This is one
of the problems with writing a new version of existing rules...it's easy to
miss something or to create inconsistencies.

In #24(b), what happens if the cost is not divisible by the number of
passengers? Is the pilot permitted to pay the extra penny or pennies? May
seem like a silly question, but again, when you write language like you've
written, you open the door for this kind of issue.

I find 24(c) to be both vague and potentially overly restrictive. It
appears to allow local flights in which "common purpose" may be defined
however the pilot likes, and yet require 100% synchrony at the destination
for a non-local flight (which would preclude one couple antique shopping and
the other sitting on the beach, even though all are friends and are
otherwise having a nice weekend together, for example).

As for 24(d), a strict interpretation would prohibit pretty much all rentals
by cash-strapped members. When I was first starting out flying, I pretty
much could afford no flying unless I brought a friend or two. I couldn't
afford enough time in the plane to make it worth the drive to the airport.

I agree with Larry that #25 is just plain silly. It's true that the FAA
says a Private Pilot is not allowed to receive free use of an aircraft for
services rendered, since that amounts to compensation. But a) I see no
reason to disallow Commercial pilots from receiving such compensation
(ferry, repositioning, etc. are all legal under Part 91) and b) the club
should not be asking non-commercial pilots to be doing such tasks anyway.

Anyway, I'll reiterate my feeling that your club is going a little overboard
with all these rules. But assuming you want to stick to that plan, the
rules you've posted need some work, I think.

Pete

I have to admit, I tend to agree with Don's comments that duplicating
regulations seems just to be asking for trouble. Why not just say
something
like "all operation of club aircraft is limited to those allowed for the
holder of a Private Pilot certificate, unless otherwise authorized"?
That said, in the spirit of your question...

See reply to Don above.

In #24, no allowance is made for fuel. Does the club always reimburse
fuel
expenses completely?

Yes, rates are wet and club pays for all fuel and oil. If not, fuel and oil
would be included.

Also in #24, no allowance is made for ATC service charges, as one would
incur flying in Canada. Does the club automatically pay those? If they
are
billed to the pilot, that should allowed.

That's never come up for us. Everyone who's ever gone to Canada just paid
it.

I may have missed other direct operating expenses that ought to be
allowed,
given the spirit of the rules you've posted, but which are not. This is
one
of the problems with writing a new version of existing rules...it's easy
to
miss something or to create inconsistencies.


I don't see any compelling reason why the club has to insure that a cost
sharing member get every possible penny. These cover the major expenses,
any others are going to be just spare change and open us up to a long
onerous process of having to justify them. The intent of having flight
rules like this is to give us a little margin so we are clearly on the right
side of the line.

In #24(b), what happens if the cost is not divisible by the number of
passengers? Is the pilot permitted to pay the extra penny or pennies?
May
seem like a silly question, but again, when you write language like you've
written, you open the door for this kind of issue.

Even the FAA is not that silly. Common law and accounting practice
recongnize that the penny is not divisible.

I find 24(c) to be both vague and potentially overly restrictive. It
appears to allow local flights in which "common purpose" may be defined
however the pilot likes, and yet require 100% synchrony at the destination
for a non-local flight (which would preclude one couple antique shopping
and
the other sitting on the beach, even though all are friends and are
otherwise having a nice weekend together, for example).

This has been interpreted both ways by different FSDO's and in different
cases. If I was a single owner planning to got to Podunk for a meeting and
a friend wanted to hitch along and go to a museum, I would let him share the
expenses. I think that, in a club, where we are all effected if someone
else screws up, we need to stay a little clearer. This is an area where
someone could easily get in a jamb. If a member went off the runway, the
passenger might innocently say to an FAA inspector that the pilot "Brought
me down to go to...." Until I know that our FSDO and insurance company
considers going the same place for different reasons to be "commanality of
purpose", I'd think we should stick with this.

As for 24(d), a strict interpretation would prohibit pretty much all
rentals
by cash-strapped members. When I was first starting out flying, I pretty
much could afford no flying unless I brought a friend or two. I couldn't
d enough time in the plane to make it worth the drive to the airport.

I doubt this will crimp anyone's style in our club. If someone decides not
to go flying because they can't find a companion, fine. This is just a
warning not to leave a paper trail or have discussions that might be
repeated in an investigation. There's a good AOPA article on this as well.


I agree with Larry that #25 is just plain silly. It's true that the FAA
says a Private Pilot is not allowed to receive free use of an aircraft for
services rendered, since that amounts to compensation. But a) I see no
reason to disallow Commercial pilots from receiving such compensation
(ferry, repositioning, etc. are all legal under Part 91) and b) the club
should not be asking non-commercial pilots to be doing such tasks anyway.

Yup, it's silly. See reply to Larry above.

Our insurance does not permit uses of the plane that would require a
commercial license. I don't want to split this hair with them.

Speaking of silly, I don't see any reason why a PP member should not make a
flight they would otherwise consider routine just because the oil is going
to be changed at the destination. It's good experience for members to have
exposure to the shop and see under the cowl. We are all owners of the plane
and owners are permitted to move their aircraft around. Since we have an
hourly rate however, we have to insure that no member gains an economic
benefit by flying the plane. FAA, silly or not, says, "no logging, no
compensation". Easier to do it their way than get the rules changed.

Anyway, I'll reiterate my feeling that your club is going a little
overboard
with all these rules. But assuming you want to stick to that plan, the
rules you've posted need some work, I think.

Thanks. This is very helpful preparation for dodging the eggs and tomatoes
tonight.

--
Roger Long

"Roger Long" om wrote in
message ...
Yes, rates are wet and club pays for all fuel and oil. If not, fuel and
oil
would be included.

What do you mean by "if not"? Are you speaking hypothetically, or is there
an actual situation with your club in which fuel and oil would not be paid
for by the club?

Also in #24, no allowance is made for ATC service charges, as one would
incur flying in Canada. Does the club automatically pay those? If they
are billed to the pilot, that should allowed.

That's never come up for us. Everyone who's ever gone to Canada just paid
it.

"That's never come up" isn't a valid answer. The question is "what happens
if it DOES come up?"

I don't see any compelling reason why the club has to insure that a cost
sharing member get every possible penny. These cover the major expenses,
any others are going to be just spare change and open us up to a long
onerous process of having to justify them.

The only "long onerous process" that is caused is due to the extra
rule-making you're attempting. If you simply required members to comply
with the FARs, all would be fine. As for whether the club "has to insure
that a cost sharing member get every possible penny", IMHO you're looking at
it the wrong way. Why should the club restrict the member needlessly?

I don't know the exact nature of your flying club. The flying club of which
I'm a member is more like a regular FBO than a club, due to its size.
However, IMHO even a small flying club has a duty to offer its members the
least restrictive environment practical. The rules you propose seriously
undermine the execution of that duty.

In #24(b), what happens if the cost is not divisible by the number of
passengers? Is the pilot permitted to pay the extra penny or pennies?
May seem like a silly question, but again, when you write language like
you've
written, you open the door for this kind of issue.

Even the FAA is not that silly. Common law and accounting practice
recongnize that the penny is not divisible.

That's not what I mean. The rule clearly states each share must be equal,
which is already self-evidently not always practical. Beyond that, no
stipulation is made for who pays the extra pennies. Is the pilot in
violation if the extra pennies are paid for by the passengers? If not, why
not? If so, why isn't that indicated in the rule?

The funny thing is that the rule could easily be fixed by simply requiring
the pilot to pay *at least* as much as any passenger. Instead, you'd rather
debate "common law and accounting practice". I'm afraid the intent behind
your post may have been more to prepare yourself for other critiques (so you
can dig your heels in further), rather than an actual effort to refine the
proposed rules.

I find 24(c) to be both vague and potentially overly restrictive. It
appears to allow local flights in which "common purpose" may be defined
however the pilot likes, and yet require 100% synchrony at the
destination
for a non-local flight (which would preclude one couple antique shopping
and the other sitting on the beach, even though all are friends and are
otherwise having a nice weekend together, for example).

This has been interpreted both ways by different FSDO's and in different
cases. If I was a single owner planning to got to Podunk for a meeting
and
a friend wanted to hitch along and go to a museum, I would let him share
the
expenses. I think that, in a club, where we are all effected if someone
else screws up, we need to stay a little clearer.

Define "stay a little clearer". If you mean that your rule is somehow more
understandable and clearly written than the FAA rules, I'd have to disagree.
It's just as vague, if not more so. If you mean that your rule keeps the
pilot more "clear" of a violation, I still have to disagree, since the
vagueness of the rule prevents one from really knowing what's allowed and
what's not, and in at least one perfectly valid interpretation, allows what
would probably be construed as a commercial operation by the FAA.

This is an area where
someone could easily get in a jamb. If a member went off the runway, the
passenger might innocently say to an FAA inspector that the pilot "Brought
me down to go to...."

I carry passengers along all the time who could quite properly state that I
"brought me down to go to..." wherever, in spite of the flight not being a
commercial operation. I *did* carry them with the express purpose of
bringing them to wherever I was going. A statement to that effect to an FAA
inspector would be irrelevant.

Where the pilot would get into trouble is if the passenger told the FAA "I
asked the pilot to fly me to such-and-such a place for lunch, so he canceled
his golf plans and took me there". And that's only a problem if the
passenger actually shared expenses with the pilot. *And* all of that is
covered quite adequately by the FAA rules. There's simply no need to
reiterate those in club rules, nor is there a need to be more restrictive
than the FAA rules.

Until I know that our FSDO and insurance company
considers going the same place for different reasons to be "commanality of
purpose", I'd think we should stick with this.

Again, not my point. It's the definition of "different reasons" that I take
issue with. IMHO, just because the pilot and passengers are not doing the
exact same thing at every moment during the rental period does not mean that
they have traveled for "different reasons".

If you don't like the antique shopping/beach sitting example, what about the
same trip (except everyone goes antique shopping), but now it's bedtime. If
one couple stays up late to watch TV or have sex, while the other actually
goes to sleep, do they now have "different reasons" for making the trip? If
the first couple is having sex, is the only way to make the flight legal to
invite the second couple in for the romp?

The bottom line is that your definition of "common purpose" and "different
reasons" is vague, and the issue is already adequately covered by the FAA,
at least as much as your club would ever need it to be covered.

As for 24(d), a strict interpretation would prohibit pretty much all
rentals by cash-strapped members. When I was first starting out flying,
I pretty much could afford no flying unless I brought a friend or two.

I doubt this will crimp anyone's style in our club. If someone decides
not
to go flying because they can't find a companion, fine. This is just a
warning not to leave a paper trail or have discussions that might be
repeated in an investigation. There's a good AOPA article on this as
well.

I doubt there's a "good AOPA article" that suggests pilots who can't afford
to fly without passengers should not fly at all. Furthermore, the reply
that "I doubt this will crimp anyone's style" isn't a valid response. The
rules should not be about what you or someone else *thinks* may or may not
be a problem. They should be about what is reasonable.

While obviously not of the same scale, the "I doubt this will crimp anyone's
style" is just like allowing lawmaking to remain on the books that prohibits
(for example) sodomy just because either a) lawmakers think that such a law
wouldn't affect anyone or b) the law is unlikely to be enforced.

The fact that you don't think a rule will affect anyone isn't justification
for the rule.

Our insurance does not permit uses of the plane that would require a
commercial license. I don't want to split this hair with them.

Your insurance policy prohibits ferry flights, for maintenance,
repositioning, or otherwise? Seems to me you'd be better served by fixing
the silly language in your insurance policy than writing new rules for your
members.

Speaking of silly, I don't see any reason why a PP member should not make
a
flight they would otherwise consider routine just because the oil is going

to be changed at the destination.

Huh? No one's saying the member should not be able to make such a flight.
The rule is that the club cannot pay for the use of the plane in that case.
Since a private pilot would only be permitted to make such a flight if he
had already planned to take the plane to that destination anyway, the pilot
should have no hesitation at all with respect to paying for the use of the
plane himself.

[...] We are all owners of the plane
and owners are permitted to move their aircraft around.

Is that how your club is set up? Each member is genuinely a part owner of
your club's plane? If so, then I especially don't see the problem with
having a member (who is also an owner) pay for moving the plane as required.
After all, when I as the owner of my own plane have to move it for the
purpose of maintenance, I have to pay that expense out of pocket.

If the individual owners of the plane aren't willing to make the occasional
flight out of pocket to get the plane where it needs to be for maintenance,
then the club should be paying a commercial pilot to do so. If your
insurance won't cover such flights, then you'll have to find a commercial
pilot with his own insurance.

Since we have an
hourly rate however, we have to insure that no member gains an economic
benefit by flying the plane. FAA, silly or not, says, "no logging, no
compensation". Easier to do it their way than get the rules changed.

I'm not saying that you shouldn't comply with the FAA rules. I'm saying
that it's silly for you to find it necessary to write rules attemping to
codify your interpretation of the FAA rules.

Pete

It seems to me the club is making it way too complicated. Does a member
need to hire a lawyer to review each flight they make to insure compliance?
Just state that all flights must be made in compliance with FARs and be
done with it. Are the members actually in favor of all this?


"Roger Long" om wrote in
message ...
There have been some disjointed threads on the topic, the most recent of
which I started.

I got interested in this because my flying club board felt that our flight
rules should cover the basics of this issue. A couple days ago, AOPA sent
me
a great book which is a compilation of articles by their chief counsel and
others on the topic. Talking to their hot line people has been less than
satisfactory but it's a complex topic and I can't fault them. It probably
had as much to do with my fuzzy questions and explanations as them. I
give
them the highest marks generally and am proud to be a member.

Having gone through the book and some other material, I've drafted a
proposed rules addition for the club. It should make a great target for
this forum and, who knows, I might even learn something more. These are
rules for a club, an individual owner might skate closer to the line but I
think these are good guidelines for staying legal.

Anyway, here it is. Potshots welcome. I'll be glad to explain my
reasoning
in response to any inquiries not preceded by flames.

----------------------------------

23. Members, including those with commercial ratings, shall not accept
direct or
indirect compensation or expense reimbursement for operation of
club
aircraft or
participate in flights where they have knowledge or expectation of
payments being
made by third parties for the flight. The specific and only
exceptions to this rule a

a) Member CFI's providing dual instruction, BFR's, or checkout
flights to other
members.

b) Charitable flights approved in advance by the board and
conducted in
accordance with FAA regulations covering these events.

c) Members using the aircraft for transportation incidental to
business in
accordance with FAA regulations may accept reimbursement
from their
employer. Employer reimbursement must be limited to
hourly
rate, landing,
and tie down fees and may not exceed the pilot's share if
expenses are shared.


24: Members may share the costs of a flight with passengers only when all
of the
following conditions are met:

a) Shared costs are limited to hourly club rate, landing and tie down
fees.

b) All persons on the flight, including the pilot, pay an
equal
share.

c) All persons on the flight, including the pilot, have a
common purpose in
making the flight. If the flight is to another airport,
the common purpose must
include the activities at the destination.

d) The member's undertaking of the flight must not be, or be
represented to be,
contingent on the participation or cost sharing of the
other passengers.

25. Members who reposition the aircraft for club purposes such as
maintenance or to
transport persons who will perform maintenance may record the time
as
"Club
Time" on the time sheets with the advance approval of the
Maintenance
Officer and
will not be charged for the flight time. Members who accept Club
Time do so with
the understanding that this time will not be entered in their
logbooks.

Club time is only to be approved for maintenance related flights or
for delivery of the
aircraft back to PWM after stranding due to weather or mechanical
problems.

26. Any flight which involves charitable donations, even if the pilot
receives no
reimbursement, shall be reviewed with the board prior to being
undertaken.

--
Roger Long

Having just been through the FAR's, had several phone calls with AOPA, and
read a bunch of stuff, I can tell you that trying to figure it out straight
from the FAR's is what would require a lawyer to review each flight. Easy to
say "Fly in accordance with FAR's", our by-laws already do, but it's
actually very complicated to do in this area. Most of the stuff you need to
know about compensation isn't in the FAR's but buried in case law and
letters of opinion from FAA counsel.

We're making it simple, follow these short, clear rules, and you should be
safe from all but the most over the top FAA action. The club also has an
interest in avoiding any gray areas or pushing the envelope because we don't
want to be volunteering our time to splitting hairs with the FAA or
insurance company.

--
Roger Long

Roger Tracy wrote in message:

It seems to me the club is making it way too complicated. Does a member
need to hire a lawyer to review each flight they make to insure
compliance?
Just state that all flights must be made in compliance with FARs and be
done with it. Are the members actually in favor of all this?

"Roger Long" om wrote in
message ...
b) All persons on the flight, including the pilot, pay an
equal
share.

Surely the pilot should be allowed to pay more than his or her share.
Similarly, any passenger should be allowed to pay less than his or her
share.

d) The member's undertaking of the flight must not be, or be
represented to be,
contingent on the participation or cost sharing of the
other passengers.

I don't see why that restriction is necessary. If the pilot pays a pro rata
share and the trip has a legitimate common purpose, the regs don't prohibit
a contingency on cost sharing.

25. Members who reposition the aircraft for club purposes such as
maintenance or to
transport persons who will perform maintenance may record the time
as
"Club
Time" on the time sheets with the advance approval of the
Maintenance
Officer and
will not be charged for the flight time. Members who accept Club
Time do so with
the understanding that this time will not be entered in their
logbooks.

That strikes me as illegal for private pilots. Undertaking a ferry flight
and being given free flight time is completely equivalent to paying the
normal rate for the flight time, and then being compensated by the same
amount in exchange for the service provided (which is surely illegal for a
private pilot, whether or not any time is logged).

--Gary

Frankly, I would not try to address the issue with club rules. The club
should simply require pilots to abide by the FARs and any insurance
requirements. Attempting to interpret those FARs and putting them in the
club rules puts the club in a funny position.

Let the FAA enforce the rules against pilots flying for hire and keep the
club out of it.