Private Pilot Reimbursement

Ateaist said:
Just have your policy specify that for purposes of 61.113(b), the water samples collected remain the property of the municipality from where they were collected, and are not deemed the property of the agency. ;)
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I suppose I've never really thought about who "owns" the water samples. I work for a state agency, and the samples are collected from public municipal systems (we don't "buy" the water samples from them, which would be silly anyway, as, based on water prices, would cost less than $0.001 of water collected per site). We own the bottles, but the city owns the water? The samples are just "data" to us.
 
Fly-Fla said:
Fedex the samples back to the office.
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One of the reasons we do travel to the sites ourselves is so we don't have to deal with shipping the samples back (they are temperature-sensitive, so need to be shipped with cold packs in a cooler).
 
DrMack said:
I think this is a good example of a firewall between private and commercial operations that is working. We as a society want it to be hard to offer commercial services. Carriage on a commercial flight CAN be a condition of employment or business contract. Possession of a pilot license (CPL or ATP) CAN be a condition of employment or business contract. The commercial side of the market seems to be working fairly well. My complaint is that the private side is not working because of inept government intervention.

We are denied the freedom to use our private property for PRIVATE benefit by a government prohibition. Government can never grant us freedom, it can only deny us our freedom and that is what has happened to us with 61.113(b). I am just trying to get the freedom restored to us that we possessed not that long ago.
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I don't think I understand the point:

What's the difference between United Airlines charging someone to take them somewhere in the aircraft it owns and operates and you doing so in terms of your "private benefit" analysis?

I don't necessarily disagree with your goal. But, as I've read the various Chief Counsel and NTSB decisions on the subject, with only rare exceptions, they've been used in enforcement actions to get at people performing commercial operations using the famous "duck" test.

I admit I haven't followed this thread too well, so there's an excellent chance I'm missing something. In light of recent developments increasing restrictions in light of well-publicized commercial crashes, I was curious about the thrust of a proposal to limits the FAA's ability to regulate what is considered to be commercial.

Is there a specific regulatory proposal being made that is being discussed for workability in the context of maximum freedom for private pilots while at the same time giving the FAA the tools it needs to go after quasi-commercial ops?
 
Has there ever been an actual case in which a general aviation owner pilot got in trouble with the FAA for a flight in which he or she was reimbursed latter by an employer and had a passenger and/or company property on board?

I kind of of doubt it. How would the FAA even know who got reimbursed for what, or what the purpose of the trip was?
 
JimNtexas said:
Has there ever been an actual case in which a general aviation owner pilot got in trouble with the FAA for a flight in which he or she was reimbursed latter by an employer and had a passenger and/or company property on board?

I kind of of doubt it. How would the FAA even know who got reimbursed for what, or what the purpose of the trip was?
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Some one whined about how much they were charged. And yes it happens.
 
jlberglu3369 said:
I'm glad I found this post - lots of good information on something I'm trying to figure out -

Part of my job is to travel around the state collecting water samples from city wells. This is always a 1-person job, and I usually drive, but I've brought up the possibility of renting a plane to make these trips, on the grounds that some of the sites are so far away that I could visit 2 or more sites in a single day rather than multiple days. I remember from PP training that as long as the flight as incidental, then being reimbursed for flying is alright, as I could just as easily drive, or take a motorcycle, or a boat - my agency has different reimbursement rates for those things. After some digging, I even found they have a reimbursement rate for personal aircraft (to the HR lady's surprise - apparently nobody's used it since she's been here). I've used that personal aircraft reimbursement rate as evidence that, at some point, people have used it before. My supervisor thinks it's a great idea, and I've been tasked with writing an actual agency policy specific regarding use of private aircraft for this kind of fielwork. Everything seemed fine - I'd be flying myself between sites, no passengers, and the airplane is just a mode of transportation.

The one issue that's come to mind (after reading through these posts) would be the water samples. I collect a few bottles of water at each site, and we test them back where I work. Would this then be in violation of Mangiamele's intepretation of 61.113(b)(2)? Are the water samples somehow "delivering freight", even though really I'm just delivering them back to my own agency?
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I don't see a problem, but then again, I was shocked by the Mangiamele interpretation, so unless you ask the FAA CHief Counsel, there's no way to know for sure.
 
Tom-D said:
Some one whined about how much they were charged. And yes it happens.
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I really don't think this is a real problem. I don't think the logbook/travel voucher police are really that busy.

It is an example of how the FAA 'letter' system is used to create half - a**ed pseudo-regs that often have little or no basis in law or real regulations.

For sure if you got a 'call the tower' transmission or bent an airplane on a trip that could be employer reimbursable then out of an abundance of caution I'd suggest you just don't file a travel voucher that includes mileage.
 
The question was whether or not it was legal, not whether the FAA would catch them. Many pilots do many illegal things without getting caught, but that does not change the legality of those things. The fact remains that when the FAA does catch someone violating the rules on compensation (admittedly a rare situation, but a good number of cases on record), the FAA is harsh in its punishments. Choose wisely.
 
Ron Levy said:
The question was whether or not it was legal, not whether the FAA would catch them. Many pilots do many illegal things without getting caught, but that does not change the legality of those things. The fact remains that when the FAA does catch someone violating the rules on compensation (admittedly a rare situation, but a good number of cases on record), the FAA is harsh in its punishments. Choose wisely.
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IOW:

Since ignorance is not a defense anyway, it's probably best to try to understand a rule before deciding it's ok to break it.
 
midlifeflyer said:
IOW:

Since ignorance is not a defense anyway, it's probably best to try to understand a rule before deciding it's ok to break it.
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Once upon a time, I was approached as a commercial pilot by a machine shop owner to pilot his plane and transport his engineers to various vendors. This person had already been quoted a price from an FBO that he found outlandish.

Besides not wanting to pay squat for me to work on a contract basis, there was an outstanding insurance problem and I rejected the offer.

In the end, he found a PP to take the job as an employee of his company. Now you know why the FAA takes such a dim view on these arrangements.
 
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Clip4 said:
In the end, he found a PP to take the job as an employee of his company. Now you know why the FAA takes such a dim view on these arrangements.
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Of course it does. I've always thought there are two policies and one fact of human nature involved in the unfortunate greyness of the rules in this area. This is taken from a FAQ I started working on years ago:

Policy #1: When the business is flying or the pilot is being employed as a pilot, the FAA wants the higher levels of protection of a commercial certificate and when the business is public flying the FAA wants the higher levels of protection afforded by Parts 135 and 121.

Policy #2: In order to limit the incentive for grey charter there needs to be protection of those pilots and operators who spent the time and bucks to comply.

Human nature: Because of the nature of the beast (people, not the FAA), unlike some other FARs where there are clear (although sometimes confusing) answers, this is one of those areas that will almost always be decided on a case-by-case basis. And there will be anomalies, such as the time that the Alaska FAA Region permitted guides to fly patrons to their lodges on the basis that the flights were "merely incidental". The FAA ended up issuing a special notice to stop that one (yep the silliness can go both ways).
 
Since the whole thread is based on hypotheticals, let me throw out a sceanario.

An owner/pilot's is a W-2 employee. His employer will reemburse him a milage rate for flying his airplane to a trade show. In this case our owner pilot is also carrying samples and another employee of the same company.

When our pilot lands at his home base after this trip he inadvertantly crosses an active runway without clearance while taxing.

Fortunately nobody is injured, but he's told to call the tower. He gives his name to the tower and is told that the incident will be reported to the FSDO.

Our pilot does not claim mileage on his travel voucher for this trip.

I don't see how he could be accused receiving improper reimbursement if he in fact received no reimbursement.
 
Jim, so if a private pilot hires himself out to someone under an agreement to be paid $300 to take her to her favorite vacation spot, all he has to do is not take the money in advance and refuse payment if there's a an incident?

I don't know why, but I suspect that won't work to well.

Now, if our pilot turned to the person trying to hire him or to his boss at the very beginning and said, "No, this is a freebie," and it evidence showed it was true, perhaps a different story.

OTOH, the scenario is perfect evidence of the point I made about human nature and the attempt to get around this stuff (usually unsuccessfully).
 
Take the same scenario, but instead of the tower asking you to call you are met by an FAA inspector on the ramp. He interviews you and your passengers who freely tell him this is a business trip and you all work for ABC Corp. He asks if they have flown with you on more than this occassion and asks if you were compensated on other trips ...............
 
I'm going to play devils advocate a bit.

I see it interrupted as it is for two reasons. The first reason is imagine I have 3 sales people that need to go to a conference, normally we don't send an IT guy but we have an IT guy that happens to be a pilot and have a plane. So we allow him to go to help setup the equipment for the conference, and it so happens he flys everyone down there. On the record he's going down as a participant, but off the record, had he not had a PPL and plane, they wouldn't have sent him. I see it being abused easily.

The second reason you see it like this is because of the big carriers. In an atmosphere of "failing" airlines I suspect there is a lot of lobbying being done to keep this from being interpreted any differently. If 4 sales guys go to a conference, one decides to fly them all, suddenly the airlines are out at least 3 maybe all 4 tickets + baggage fees. So someone has a monetary interest in keeping you from being able to do it.

I wish you the best of luck and it would be great to be able to use a ppl + private or rented plane to travel the same as you would a DL + private or rented car, but I fear there are too many people with too much money at stake to let that happen.
 
The absolutely oddball reading of Mangimele is that if my company has a policy that will let me fly to a site for meetings that I have there, that's fine. If I take my wife along for company on the trip, I'm in violation.
 
JimNtexas said:
Has there ever been an actual case in which a general aviation owner pilot got in trouble with the FAA for a flight in which he or she was reimbursed latter by an employer and had a passenger and/or company property on board?

I kind of of doubt it. How would the FAA even know who got reimbursed for what, or what the purpose of the trip was?
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No worries, the LE database in New Mexico will just flag it and you'll be face down on the ramp with a loaded and chambered AR pointed at your head, with your fingers laced behind your head like Martha King. ;) ;) ;)

No need to worry about FAA at all. All their money went to ADS-B and the War on a plant. :) :) :)

That is... if Barney Fife, Tactical Man of Intrigue can find the airport.
 
JeffDG said:
The absolutely oddball reading of Mangimele is that if my company has a policy that will let me fly to a site for meetings that I have there, that's fine. If I take my wife along for company on the trip, I'm in violation.
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You are not alone in that thinking, and I fully support AOPA's efforts to have Mangiamele rescinded.
 
JeffDG said:
The absolutely oddball reading of Mangimele is that if my company has a policy that will let me fly to a site for meetings that I have there, that's fine. If I take my wife along for company on the trip, I'm in violation.
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Not a legal opinion but I don't think so. I would take my wife without a moment's hesitation and be happy to tell the FAA that I did if the question came up.
 
midlifeflyer said:
Not a legal opinion but I don't think so. I would take my wife without a moment's hesitation and be happy to tell the FAA that I did if the question came up.
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If you did take your wife and you were reimbursed, you would be in violation. The biggest concern that I have is that if you have an incident such as a gear failure and then you need an insurance claim to cover the belly landing damage, you are SOL. We should all be outraged though with the interpretation of the FAA and administrative law judges that generating good will is a form of compensation! That's arbitrary law in my opinion. This regulation has been twisted into so many knots by the FAA, the NTSB and the courts that it now means whatever the hell the FAA wants it to mean when they want to stick it to any pilot they don't agree with. That kind of law borders on tyranny.
 
midlifeflyer said:
Not a legal opinion but I don't think so. I would take my wife without a moment's hesitation and be happy to tell the FAA that I did if the question came up.
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Then you need to read the letter again.

The business exception applies only when no passengers or property is carried. Your wife is a passenger.

the allowance for the flight to be conducted for compensation or hire (i.e. reimbursement) under 61.113(b) does not apply. The exception in paragraph (b) allows you to use your private pilot certificate only for compensation or hire if the operation is incidental to your employment and you are not transporting other passengers or property
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http://www.faa.gov/about/office_org.../mangiamele - (2009) legal interpretation.pdf
 
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incident such as a gear failure and then you need an insurance claim to cover the belly landing damage, you are SOL.
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I don't think that would happen. In our club we've had a pilot land nose gear first and damaged an airplane enough to warrant a claim. There were no questions about the purpose of the flight from the insurance company or anyone else. Certainly we would have sued the insurance company had they tried to deny a claim based on an opinion letter.

Anytime you bend an airplane you've almost certainly done enough to be accused of some FAR violation. Yet insurance claims are routinely paid.

Remember, these 'letters' are exactly what they are labeled. They are opinions. Not laws, not regulations. Just a lawyer letter. Take them into account, but don't give them more credit than they deserve.
 
JimNtexas said:
Remember, these 'letters' are exactly what they are labeled. They are opinions. Not laws, not regulations. Just a lawyer letter. Take them into account, but don't give them more credit than they deserve.
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They have the force of law in legal proceedings unless/until a court overturns them. There is a long legal history supporting the concept that absent demonstration that the interpretation is "arbitrary, capricious, or otherwise not according to law," the interpretations of Federal regulations by the Federal agency which administers them are to be accepted by other agencies and the courts. And despite the misguided beliefs of may in aviation, the Pilots' Bill of Rights does not overturn that general and well-established basic legal principle. If you act on the belief that the FAA Chief Counsel "opinions" have no legal weight, you should expect a long and expensive legal fight with very little likelihood of prevailing before the US Court of Appeals.
 
DrMack said:
We should all be outraged though with the interpretation of the FAA and administrative law judges that generating good will is a form of compensation!
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Agreed. Whenever I do something for a client to generate goodwill I try to cash it at the bank and NOT ONCE have they credited my account. Don't think they won't try to tax it though . . . .
 
The concept of "goodwill" as an asset with value in the business world is a generally accepted accounting practice of long standing back far beyond the Chief Counsel's statement of the FAA's position on that point. Ask any CPA for confirmation, and note that the FAA only applies it in cases where the parties involved have a past or existing business relationship (including employer/employee).
 
Ron Levy said:
The concept of "goodwill" as an asset with value in the business world is a generally accepted accounting practice of long standing back far beyond the Chief Counsel's statement of the FAA's position on that point. Ask any CPA for confirmation, and note that the FAA only applies it in cases where the parties involved have a past or existing business relationship (including employer/employee).
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That concept does not apply here. Not a CPA, but pretty sure Goodwill is only put on the balance sheet when you pay cash (or cash equivalent i.e.stock, debt,etc) for an asset over its book value, essentially a plug entry for bookkeeping convenience. Goodwill is not simply created through a journal entry. What would the offsetting liability account be - "Goodwill payback due"?
 
Blatham489 said:
That concept does not apply here. Not a CPA, but pretty sure Goodwill is only put on the balance sheet when you pay cash (or cash equivalent i.e.stock, debt,etc) for an asset over its book value, essentially a plug entry for bookkeeping convenience. Goodwill is not simply created through a journal entry. What would the offsetting liability account be - "Goodwill payback due"?
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The item of value given to the second party with which the goodwill is returned would be the air transportation provided. Hence, there is a quid pro quo. The concept in accounting of goodwill being formed in return for provision of a service without monetary payment is well established in the business world -- just ask your accountant. Note that this only applies to our discussion when the provider of the air transportation has a business relationship with the party benefitting from the transportation. See Administrator v. Murray for more discussion.

And no, I'm not a CPA, either, but I've taken a lot of accounting courses at the undergraduate and graduate level, and the case law on point is publicly available on the NTSB Opinions and Orders web site.
 
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JeffDG said:
Then you need to read the letter again.

The business exception applies only when no passengers or property is carried. Your wife is a passenger.

http://www.faa.gov/about/office_org.../mangiamele - (2009) legal interpretation.pdf
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I've read the letter, thank you. Even a few of the later letters reaffirming Mangiamele (2013's Hurst and the two 2010 Lamb opinions for example*). They're all in my collection.

I would still take my wife and not worry about it if the FAA asked. That is not advice for anyone else. My reason for saying that would be way too close to a legal opinion for my taste, especially since I'll acknowledge that I could be wrong, although I'd bet one or two here would be able to tell you what it is.

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* The second Lamb opinion is especially strong. In that one the Chief Counsel was given a scenario where a group go on a business trip together, sharing expenses under the pro-rata sharing provision. The Chief Counsel was asked whether the pilot could have just his onw pro-rata share reimbursed. The answer, relying on Mangiamele, was as solid "No."
 
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It appears that a "government of laws, and not of men" is dead. John Adams is rolling in his grave. :(
 
That didn't seem to stop him from complaining about the British government not living up to that ideal in its treatment of British subjects in the colonies.
 
Palmpilot said:
That didn't seem to stop him from complaining about the British government not living up to that ideal in its treatment of British subjects in the colonies.
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Or the colonists not living up to that ideal either...he successfully defended a number of British soldiers who the colonists wanted hanged.
 
Ron Levy said:
I don't think John Adams ever took a position on 14 CFR 61.113, so enough.
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On the contrary, John Adams' position is very relevant to arbitrary interpretations like Mangiamele, etc. because they are examples of a 'government of men, and not of laws.' They are thus the exact opposite of the principle he was talking about.
 
JeffDG said:
Or the colonists not living up to that ideal either...he successfully defended a number of British soldiers who the colonists wanted hanged.
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The only reason I mentioned British neglect of the principle was that, according to the source I found, that's what Adams was talking about when he coined the phrase. However, your example is equally applicable. Regardless of which government is involved, there needs to be intregrity in enforcement processes. My view is that FAA interpretions of regulations sometimes stray so far from the wording of the regulations as to be completely lacking in that integrity.
 
Palmpilot said:
The only reason I mentioned British neglect of the principle was that, according to the source I found, that's what Adams was talking about when he coined the phrase. However, your example is equally applicable. Regardless of which government is involved, there needs to be intregrity in enforcement processes. My view is that FAA interpretions of regulations sometimes stray so far from the wording of the regulations as to be completely lacking in that integrity.
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You are spot on! And that is exactly why I have decided to promote a grassroots movement to seek remedy for the abuse of 61.113 in the legislative process. Under the current regime of regulations, agency legal opinions, and associated case law, we are not going to have our freedom to fly for private benefit restored as Congress envisioned when it passed the Act of 1958. Only statutory relief now seems possible.
 
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You keep talking about "private benefit." The Congress and the FAA are pretty clear that when you take money from others in return for providing air transportation to others, that is no longer a case of "private benefit" -- that is now a commercial transaction unless you stay within some very narrow exceptions. We may debate whether or not the conduct proscribed in the Mangiamele letter really does fall outside the exceptions in 61.113 (and personally, I think it does not, and that letter's logic is flawed), but to suggest that taking money in return for providing air transportation to others is merely using your plane for your "private benefit" is disingenuous. The fact is that those others are now benefitting from your use of your plane, and that means the benefit is no longer "private," i.e., yours alone.
 
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