A pilot school that holds examining authority may only recommend the issuance of a pilot, flight instructor, or ground instructor certificate and rating to a person who does not take an FAA knowledge test or practical test, if the recommendation for the issuance of that certificate or rating is in accordance with the following requirements:

(a) The person graduated from a training course for which the pilot school holds examining authority.

(b) Except as provided in this paragraph, the person satisfactorily completed all the curriculum requirements of that pilot school's approved training course. A person who transfers from one part 141 approved pilot school to another part 141 approved pilot school may receive credit for that previous training, provided the following requirements are met:

(1) The maximum credited training time does not exceed one-half of the receiving school's curriculum requirements;

(2) The person completes a knowledge and proficiency test conducted by the receiving school for the purpose of determining the amount of pilot experience and knowledge to be credited;

(3) The receiving school determines (based on the person's performance on the knowledge and proficiency test required by paragraph (b)(2) of this section) the amount of credit to be awarded, and records that credit in the person's training record;

(4) The person who requests credit for previous pilot experience and knowledge obtained the experience and knowledge from another part 141 approved pilot school and training course; and

(5) The receiving school retains a copy of the person's training record from the previous school.

(c) Tests given by a pilot school that holds examining authority must be approved by the Administrator and be at least equal in scope, depth, and difficulty to the comparable knowledge and practical tests prescribed by the Administrator under part 61 of this chapter.

(d) A pilot school that holds examining authority may not use its knowledge or practical tests if the school:

(1) Knows, or has reason to believe, the test has been compromised; or

(2) Is notified by an FAA Flight Standards District Office that there is reason to believe or it is known that the test has been compromised.

(e) A pilot school that holds examining authority must maintain a record of all temporary airman certificates it issues, which consist of the following information:

(1) A chronological listing that includes --

(i) The date the temporary airman certificate was issued;

(ii) The student to whom the temporary airman certificate was issued, and that student's permanent mailing address and telephone number;

(iii) The training course from which the student graduated;

(iv) The name of person who conducted the knowledge or practical test;

(v) The type of temporary airman certificate or rating issued to the student; and

(vi) The date the student's airman application file was sent to the FAA for processing for a permanent airman certificate.

(2) A copy of the record containing each student's graduation certificate, airman application, temporary airman certificate, superseded airman certificate (if applicable), and knowledge test or practical test results; and

(3) The records required by paragraph (e) of this section must be retained for 1 year and made available to the Administrator upon request. These records must be surrendered to the Administrator when the pilot school ceases to have examining authority.

(f) Except for pilot schools that have an airman certification representative, when a student passes the knowledge test or practical test, the pilot school that holds examining authority must submit that student's airman application file and training record to the FAA for processing for the issuance of a permanent airman certificate.