When does the inspection authorization cease to be effective?

The correct answer indicates that the inspection authorization ceases to be effective when the holder no longer has available facilities. This is because an inspection authorization requires the holder to have appropriate facilities and tools to perform the inspections and to ensure that all work is completed in accordance with Federal Aviation Administration (FAA) regulations. If the holder cannot provide a suitable environment for inspections and repairs, then they cannot maintain the standards necessary for an IA, thus rendering the authorization ineffective.

Facilities play a crucial role not just in performing inspections but also in ensuring compliance with safety and regulatory standards. Without access to these facilities, the holder would be unable to guarantee the work quality required for maintaining airworthiness, leading to the cessation of the inspection authorization.