April 2, 2015

Exemption No. 11274 Regulatory Docket No. FAA

− 2014

− 0796

Mr. Michael Burns

Assistant Vice President

USAA 9800 Fredericksburg Road San Antonio, TX 78288

Mr. Greg Cirillo

Counsel for USAA Wiley Rein LLP 7925 Jones Branch Drive, Suite 6200 McLean, VA 22102

Dear Mr. Burns and Mr. Cirillo:

This letter is to inform you that we have gran ted your request for exemption. It transmits our decision, explains its basis, and gives you th e conditions and limitations of the exemption, including the date it ends.

The Basis for Our Decision

By letter dated October 2, 2014 1 , you petitioned the Federal Av iation Administration (FAA) on behalf of United Services Automobile Association (hereinafter petitioner or operator) for an exemption. The exemption would allow the petitioner to operate an unmanned aircraft system (UAS) to conduct re search and development.

1 By letter dated December 19, 2014, and posted to the p ublic docket, USAA responded to the FAA’s request for

information.2

See Appendix A for the petition submitted to the FAA describing the proposed operations and the regulations that the petitioner seeks an exemption.

Discussion of Public Comments:

A summary of the petition was published in the Federal Register on October 28, 2014, (79 FR 64241). Three comments were receiv ed. The Small UAV Coalition (Coalition) commented in support of the petition. The Air Line Pilots Associati on, International (ALPA) and the National Agricultural Aviati on Association (NAAA) opposed it.

In support of the petition, the Coalition stated the petitioner has proposed to abide by stronger safety measures than hobby and modeler gr oups operating similar aircraft. The Coalition

stated that it does not believ e that heightened safety meas ures should be required for the petitioner simply because of the commercial na ture of its operations. The Coalition urged the FAA to adopt an evaluation framework for UAS operations under Section 333 of Public Law 112–95 that weighs the relative sa fety issues and risks of UAS by class and operational circumstances, rather than adopting artificial distinctions among unmanned aerial

vehicles based on commercial and noncomme rcial operations. The petitioner’s UAS pose considerably less safety risk than larger UAS. The Coalition asserted that because UAS operations like the petitioner’s pose minimal risk to safety, they should be subject to minimal and appropriate regulations.

The Coalition noted the FAA is to consider the seven factors 2 in Section 333 as a minimum. The Coalition stated the peti tion shows the FAA should consider factors other than those specified in Section 333, such as location, altitude of its UAS, restricted operating areas, and

the Certificates of Authorization the Hawk Eye UAV has received from the FAA. The Coalition maintained that the petitioner’s pr oposed operations satisfy the seven factors in Section 333 and include several additional mitigati ng factors to ensure the safety and security of the proposed UAS operations. The Coalit ion emphasized the FAA must evaluate each

factor within the contex t of the petitioner’s proposed UAS operations.

The Coalition also commented that the FAA s hould grant relief from the requirement to hold

an airman certificate. The Coa lition further stated that if an airman certificate is required then, at a minimum the, FAA should provide an exception from the training and testing requirements in part 61 in favor of requireme nts pertinent to the aircraft and operation proposed. The Coalition also asse rted that in section 333 Congress intended for the FAA to consider national security with respect to the operation as opposed to addressing it through pilot certification.

2 Section 333(b) of P.L. 112

− 95 states, in part: “In making the determin ation under subsection (a), the Secretary shall determine, at a minimum-- (1) which types of unmanned aircraft systems, if any, as a result of their size, weight, speed, operational capability, proximity to airports and populated areas, and operation within visual line of sight do not create a hazar d to users of the national airspace system or the public or pose a threat to national security; ...”3

The FAA notes that, as discussed in the gran t of exemption to Trimble Navigation Ltd. (Exemption No. 11110), neither secti on 333, nor the FAA’s exemption authority 3 allows the FAA to exempt pilots from th e statutory requirement to hol d an airman certificate as prescribed in 49 USC § 44711.

The Coalition commented that a visual observer (VO) should not be required for all small UAS operations. The Coalition fu rther asserted that the presen ce of one or more VOs may allow the UAS to be operated beyond visual li ne of sight (VLOS) of the pilot in command (PIC) and that the petitioner’s proposal to operate the unmanne d aircraft (UA) within VLOS

of the PIC and/or VO should be permitted.

The FAA notes that one of th e determinations for operation s under section 333 is operation within visual line of sight. The PIC must maintain VLOS while operating the UA. The FAA finds that a VO complements the PIC’s capabilit y to see and avoid other aircraft, including when the PIC may be momentarily attending to other flying tasks. The VO provides an

additional level of operational safety.

ALPA expressed concern regardi ng several aspects of the petition. ALPA stated “there must

be means both to ensure that the sUAS remains within the defined airsp ace and to ensure that the hazard of other aircraft intruding on the operation is mitigated.”

The FAA believes the limitations under which the petitioner will operate (i.e. VLOS and at or below 400 feet above ground level (AGL)) are suffici ent mitigations to this risk so that the operations will not adversely affect safety.

ALPA noted the petition does not detail how the pilot and observer will be able to

communicate. ALPA stated the pilot and observer s hould be able to maintain a visual

observation of the aircraft and area of operation when using voice communication. NAAA stated UAS observers must be present and ab le to communicate with the operator from the most minimal distance possible. The FAA has in serted a condition rega rding PIC and visual

observer communications.

ALPA asserted the UAS’s lithium polymer batte ries have numerous associated fire and explosion hazards as outlined in DOT/FAA/AR

− 09/55, “Flammability Assessment of Lithium-Ion and Lithium-Ion Polymer Battery Cell Designed for Aircraft Power Usage (January 2010),” and that the safe carriage of the batteries and the mitigations in place for

known risks should be addressed. The referenced study was primarily conducted to determine how certain battery cells react in a fire situa tion aboard manned airpla nes. Given the size of the battery and the operating conditions of th e UAS, the FAA concludes that the use of a lithium polymer battery will not pose an undue safety risk for the proposed operations.

3 49 USC § 44701(f)4

ALPA commented that command and control (C2) link failures are one of the most common failures on a UAS, and that lost link mitigations should require safe modes to prevent flyaways or other scenarios. The FAA has inserted conditions and limitations in this exemption to mitigate the risk associated with such failures.

Regarding the petitioner’s request for exemption from part 21, § 91.7, and § 91.203, ALPA stated the UAS should be certified and operate to the same level of safety as other commercially operated aircraft in the National Airspace System (NAS). ALPA also stated they oppose the attempt to avoid certif ying the airworthiness of the sUAS.

ALPA also noted that the petitioner’s proposed operations are for “comp ensation or hire,” and therefore contends the pilot mu st hold at least a current FAA commercial pilot certificate with an appropriate category and class rating for the type of aircraft being flown, as well as specific and adequate training on the UAS make and mo del intended to be used. Similarly, ALPA

asserted a current second-class airman medi cal certificate should be required. NAAA also commented on pilot qual ification, stating—

Just as manned aircraft pilots are requir ed to undergo a rigorou s training curriculum and show that they are fit to operate a comm ercial aircraft, so too must UAS operators. Holding a commercial certificate holds UAS operators to similar high standards as commercial aircraft operators and ensures th ey are aware of thei r responsibilities as commercial operators within the NAS. Medi cal requirements ensure they have the necessary visual and mental acuity to opera te a commercial aircra ft repeatedly over a sustained period of time.

The FAA has reviewed the knowledge and training requirements of sport, recreational, private

and commercial certificates and concluded that a UAS PIC holding a minimum of a sport pilot certificate, and operating under this exemption, would not adversely affect operations in the NAS or present a hazard to persons or prope rty on the ground. Additional discussion of the

FAA’s review is found in the FAA’s An alysis section of this exemption.

Although the petitioner did not request an exemption from § 91.113, ALPA noted the petitioner must specify a mean s to meet see and avoid requ irements in § 91.113 given the absence of an onboard pilot. The FAA notes that all flights must be operated within VLOS of

the PIC and VO.

ALPA mentioned the aircraft will not have a barometric altimeter as required by 14 CFR § 91.121. ALPA stated that processes or mitigations must be in place to ensure the UA can accurately maintain altitude including engineering processes, software development and control, electronic hardware development and control, configuration management, and design assurance to ensure the ai rcraft and its control system(s) operate to the same level of safety as other aircraft operated commercia lly in the National Airspace System (NAS).5

Regarding the fuel requirements of § 91.151, ALPA argued that using batteries as the only source of an aircraft’s power is a substantial shift from trad itional methods of propulsion, and requires further research to de termine best safety practices. This comment is addressed in

detail below.

ALPA stated that the petitioner did not spec ify requirements for flight instructors. A certificated flight instructor is authorized to provide th e instruction re quired for the certificates or ratings or cu rrency listed in 14 CFR § 61.193. A person instructing on how to operate the UAS under the petitioner’s training pr ogram would not need to be a certificated flight instructor because the in struction is not being provided fo r a certificate or rating listed in § 61.193. We note that none of the UAS operati ons proposed by the petitioner require such flight instruction because § 61.31( l ) allows for operation of the UAS by an airman who is current per 14 CFR § 61.56 without a category an d class rating. Instru ction provided toward obtaining the pilot certificate required by this exemption would need to be provided by a certificated flight instructor.

Regarding the minimum safe altitude requirement s of § 91.119, ALPA stated all aircraft in the NAS must operate to the same high level of safety. ALPA argued this includes the

maintenance of a safe altitude for both airplanes and helicopters.

Regarding §§ 91.405(a), 91.407(a)(1), 91.409(a)(2), and 91.417(a) and (b), ALPA opposed the petitioner’s attempt to avoid compliance with established aircraft maintenance and recordkeeping requirements. ALPA states the UAS should comply with the same level of safety as other aircraft operated commercially in the NAS. The FAA finds that adherence to the petitioner’s operating documents, as require d by the conditions and limitations below, is

sufficient to ensure that safe ty is not adversely affected.

ALPA also expressed concern th at the petitioner’s waiver reque st is not for a single specific operation or location, but for all operations of th e same general type. ALPA stated that this

results in a considerable increase in the FAA’s oversight tasks. The FAA notes ALPAs concern and in order to minimize potential impact to the NAS, the FAA requires each operator secure a Certificate of Authorization or COA which c overs specific details of the petitioners operation. The FAA recognizes that UAS integration will generate new NAS access demand and will review and adjust accordingly.

NAAA noted that its members operate in low-le vel airspace, and ther efore clear low-level airspace is vital to the safety of these operato rs. NAAA stated that seei ng and avoiding other

aircraft and hazardous obstructions is the backbone for agricultural safety, and that agricultural pilots depend on pilots of other ai rcraft to perform their see-and-avoid functions to prevent collisions. NAAA believes UAS opera tions at low altitude s will increase the potential for collision with agricultural aircraft.

The FAA recognizes these concerns and has incorporated associated conditions and limitations into this exemption, including: (a) a Notice to Airmen (NOTAM) issued for all6

operations; (b) operations conducted within VLOS of the pilot in command (PIC) and the VO; and (c) the UAS PIC must always yiel d right-of-way to manned aircraft.

NAAA stated that FAA airworthiness certifica tion should be a requirement for all unmanned aircraft to operate within the NAS. NAAA recommended UAS be equipped with ADS-B or similar identification and positioning systems, st robe lights, high-visibility markings and registration numbers. NAAA also recommended UAS be operated st rictly within the line-ofsight of the ground controller, w ith the assistance of a VO and clear of any low-flying manned

aircraft.

As discussed below, Section 333 of the FAA Modernization and Reform Act of 2012 authorizes the Secretary of Tran sportation to determine, consider ing a number of factors laid out in the statute, that an airworthiness certific ate is not necessary for certain operations. The Secretary has made that determination in this case and therefore the aircraft operated by the petitioner will not need to be certificated by the FAA.

Airworthiness Certification

The UAS proposed by the petitioner is a PrecisionHawk Lancaster HawkEye.

The petitioner requested relief from 14 CFR part 21, C ertification procedures for products and parts, Subpart H—Airworthiness Certificates . In accordance with the statutory criteria provided in Section 333 of Public Law 112

− 95 in reference to 49 U.S.C. § 44704, and in consideration of the size, weight, speed, a nd limited operating area associated with the aircraft and its operation, the S ecretary of Transportation has de termined that this aircraft meets the conditions of Section 333. Therefore, th e FAA finds that the re quested relief from 14 CFR part 21, and any associated noise certific ation and testing requirements of part 36, is

not necessary.

The Basis for Our Decision

You have requested to use a UAS for aerial da ta collection. The FAA has issued grants of exemption in circumstances similar in all materi al respects to those pr esented in your petition. In Grants of Exemption No s. 11062 to Astraeus Aerial ( see Docket No. FAA

− 2014

− 0352), 11109 to Clayco, Inc. ( see Docket No. FAA

− 2014

− 0507), 11112 to VDOS Global, LLC ( see Docket No. FAA

− 2014

− 0382), and 11213 to Aeryon Labs, Inc. ( see Docket No.

FAA

− 2014

− 0642), the FAA found that the enhanced safety achieved using an unmanned aircraft (UA) with the specifica tions described by the petition er and carrying no passengers or crew, rather than a manned aircraft of signi ficantly greater proporti ons, carrying crew in addition to flammable fuel, gi ves the FAA good cause to find th at the UAS operation enabled by this exemption is in the public interest.7

Having reviewed your reasons for re questing an exemption, I find that—

 They are similar in all material respects to relief previously re quested in Grant of Exemption Nos. 11062, 11109, 11112, and 11213;

 The reasons stated by the FAA for granting Exemption Nos. 11062, 11109, 11112, and 11213 also apply to the situ ation you present; and

 A grant of exemption is in the public interest.

Our Decision

In consideration of the foregoing, I find that a gr ant of exemption is in the public interest. Therefore, pursuant to the authority contained in 49 U.S. C. 106(f), 40113, and 44701, delegated to me by the Administrator, United Se rvices Automobile Association is granted an exemption from 14 CFR §§ 61.23(a) and (c), 61.101(e)(4) and (5), 61.113(a), 61.315(a), 91.7(a), 91.119(c), 91.121, 91.151(a)(1), 91.405(a), 91.407(a)(1), 91.409(a)(1) and (2), and 91.417(a) and (b), to the extent necessary to a llow the petitioner to operate a UAS to perform aerial data collection. This exemption is subject to the conditions and limitations listed below.

Conditions and Limitations

In grant of exemption, United Services Automob ile Association is hereafter referred to as the operator.

Failure to comply with any of the conditions an d limitations of this grant of exemption will be grounds for the immediate suspension or rescission of this exemption.

1. Operations authorized by this grant of exemption are limited to the PrecisionHawk Lancaster HawkEye when weighing less than 55 pounds including payload. Proposed operations of any other aircraft will require a new petition or a petition to amend this exemption.

2. Operations for the purpose of closed-set motion picture and television filming are not permitted.

3. The UA may not be operated at a speed exceeding 87 knots (100 miles per hour). The exemption holder may use either groundspeed or calibrated airspeed to determine compliance with the 87 knot speed restricti on. In no case will the UA be operated at airspeeds greater than the maximum UA operating airspeed recommended by the

aircraft manufacturer.

4. The UA must be operated at an altitude of no more than 400 feet above ground level (AGL). Altitude must be reported in feet AGL.8

5. The UA must be operated within visual line of sight (VLOS) of the PIC at all times. This requires the PIC to be able to use human vision unaided by any device other than corrective lenses, as specified on the PIC’s FAA-issued airman medical certificate or

U.S. driver’s license.

6. All operations must utilize a visual observer (VO). The UA must be operated within the visual line of sight (VLOS) of the PI C and VO at all times. The VO may be used to satisfy the VLOS requirement as long as the PIC always maintains VLOS capability. The VO and PIC must be able to communicate verbal ly at all times; electronic messaging or texting is not perm itted during flight operations. The PIC must be designated before the flight and cannot transfer his or her designation for the duration of the flight. The PIC must en sure that the VO can perform the duties required of the VO.

7. This exemption and all documents needed to operate the UAS and conduct its operations in accordance with the conditions and limitations stated in this grant of exemption, are hereinafter referred to as the operating documents. The operating documents must be accessible during UAS operations and made available to the Administrator upon request. If a discrepa ncy exists between the conditions and limitations in this exemption and the pro cedures outlined in the operating documents,

the conditions and limitations herein ta ke precedence and must be followed. Otherwise, the operator must follow the pr ocedures as outlined in its operating documents. The operator may update or revi se its operating documents. It is the operator’s responsibility to track such revisions and pr esent updated and revised documents to the Administrator or any la w enforcement official upon request. The operator must also present updated and revise d documents if it petitions for extension or amendment to this grant of exemption. If the operator determines that any update or revision would affect the basis upon which the FAA granted this exemption, then the operator must petition for an amendment to its grant of exemption. The FAA’s UAS Integration Office (AFS-80) may be contacte d if questions arise regarding updates or revisions to the operating documents.

8. Any UAS that has undergone maintenance or alterations that aff ect the UAS operation or flight characteristics, e .g. replacement of a flight cr itical component, must undergo a functional test flight prio r to conducting further opera tions under this exemption. Functional test flights may only be conducted by a PIC with a VO and must remain at least 500 feet from other people. The functi onal test flight must be conducted in such a manner so as to not pose an undue hazard to persons and property.

9. The operator is responsible for maintaining and inspecting the UAS to ensure that it is in a condition for safe operation.

10. Prior to each flight, the PIC must conduct a pre-flight inspection and determine the UAS is in a condition for safe flight. Th e pre-flight inspection must account for all9

potential discrepancies, e .g. inoperable components, items, or equipment. If the inspection reveals a condition that affects the safe operation of the UAS, the aircraft is prohibited from operating until the necessary maintenance has been performed and the

UAS is found to be in a condition for safe flight.

11. The operator must follow the UAS manu facturer’s maintenance, overhaul, replacement, inspection, and life limit requ irements for the aircraft and aircraft

components.

12. Each UAS operated under this exemption mu st comply with all manufacturer safety

bulletins.

13. Under this grant of exemption, a PIC mu st hold either an airline transport, commercial, private, recreational, or sport pi lot certificate. The PIC must also hold a

current FAA airman medical certificate or a valid U.S. driver’s license issued by a state, the District of Colombia, Puerto Rico, a territory, a possession, or the Federal government. The PIC must also meet the f light review requirements specified in 14 CFR § 61.56 in an aircraft in which the PIC is rated on his or he r pilot certificate.

14. The operator may not permit any PIC to ope rate unless the PIC demonstrates the ability to safely operate the UAS in a ma nner consistent with how the UAS will be operated under this exemption, including evasive and emergency maneuvers and maintaining appropriate distan ces from persons, vessels, vehi cles and structures. PIC qualification flight hours and currency must be logged in a manner consistent with 14 CFR § 61.51(b). Flights for the purposes of training the operator’s PICs and VOs (training, proficiency, and e xperience-building) and determining the PIC’s ability to safely operate the UAS in a manner consistent with how the UAS will be operated under this exemption are permitted under the terms of this exemption. However, training operations may only be conducted dur ing dedicated training sessions. During training, proficiency, and expe rience-building flights, al l persons not essential for flight operations are considered nonpartic ipants, and the PIC must operate the UA with appropriate distance from nonparti cipants in accordance with 14 CFR § 91.119.

15. UAS operations may not be conducted during night, as defined in 14 CFR § 1.1. All operations must be conducted under visual meteorological conditi ons (VMC). Flights under special visual flight rule s (SVFR) are not authorized.

16. The UA may not operate within 5 nautical mile s of an airport reference point (ARP) as denoted in the current FAA Airport/Facil ity Directory (AFD) or for airports not denoted with an ARP, the center of the ai rport symbol as denoted on the current FAApublished aeronautical chart, unless a lett er of agreement with that airport’s management is obtained or otherwise permitted by a COA issued to the exemption holder. The letter of agreement with the ai rport management must be made available to the Administrator or any law enforcement official upon request.10

17. The UA may not be operated less than 500 feet below or less than 2,000 feet horizontally from a cloud or when visibility is less than 3 statute miles from the PIC.

18. If the UAS loses communications or loses it s GPS signal, the UA must return to a predetermined location within the priv ate or controlled-access property.

19. The PIC must abort the flight in the even t of unpredicted obstacles or emergencies.

20. The PIC is prohibited from beginning a f light unless (considering wind and forecast weather conditions) there is enough available power for the UA to conduct the intended operation and to operate after that fo r at least five minutes or with the reserve power recommended by the manufacturer if greater.

21. Air Traffic Organization (ATO) Certificate of Waiver or Author ization (COA). All operations shall be conducted in accorda nce with an ATO-issued COA. The exemption holder may apply for a new or amended COA if it intends to conduct operations that cannot be conducted unde r the terms of the attached COA.

22. All aircraft operated in accord ance with this exemption must be identified by serial number, registered in accordance with 14 CFR part 47, and have identification (NNumber) markings in accordance with 14 CF R part 45, Subpart C. Markings must be as large as practicable.

23. Documents used by the operator to ensure th e safe operation and flight of the UAS and any documents required under 14 CFR §§ 91.9 and 91.203 must be available to the

PIC at the Ground Control Station of the UAS any time the aircraft is operating. These

documents must be made available to th e Administrator or any law enforcement official upon request.

24. The UA must remain clear and give wa y to all manned aviation operations and

activities at all times.

25. The UAS may not be operated by the PIC from any moving device or vehicle.

26. All Flight operations must be conducted at least 500 feet from all nonparticipating persons, vessels, vehicles, and structures unless:

a. Barriers or structures are present that sufficiently pr otect nonparticipating persons from the UA and/or debris in the event of an accident. The operator must ensure that nonparticipating persons remain under such protection. If a situation arises where nonparticipating persons leave such protection and are within 500 feet of the UA, flight operations must cease immediately in a manner ensuring the safety of nonparticipating persons; and11

b. The owner/controller of any vessels, vehicles or struct ures has granted permission for operating closer to those objects and the PIC has made a safety assessment of the risk of operating closer to those objects and determined that it does not present an undue hazard.

The PIC, VO, operator trainees or es sential persons are not considered nonparticipating persons under this exemption.

27. All operations shall be conducted over priv ate or controlled-access property with permission from the property owner/cont roller or authorized representative. Permission from property owner/controller or authorized representative will be obtained for each flight to be conducted.

28. Any incident, accident, or flight operation that transgresses the lateral or vertical boundaries of the operational area as defined by the applicable COA must be reported to the FAA's UAS Integration Office (AFS- 80) within 24 hours. Accidents must be reported to the National Transportation Sa fety Board (NTSB) per instructions

contained on the NTSB Web site: www.ntsb.gov

.

If this exemption permits operations for th e purpose of closed-set motion picture and television filming and production, the following additional conditions and limitations apply.

29. The operator must have a motion picture and television operations manual (MPTOM)

as documented in this grant of exemption.

30. At least 3 days before aerial filming, the operator of the UAS affected by this exemption must submit a written Plan of Activities to the local Flight Standards District Office (FSDO) with jurisdiction ove r the area of proposed filming. The 3-day notification may be waived w ith the concurrence of the FSDO. The plan of activities must include at least the following:

a. Dates and times for all flights;

b. Name and phone number of the operator for the UAS aerial filming conducted under this grant of exemption;

c. Name and phone number of the person res ponsible for the on-s cene operation of the UAS;

d. Make, model, and serial or N- Number of UAS to be used;

e. Name and certificate number of UAS PI Cs involved in the aerial filming;

f. A statement that the operator has obtain ed permission from property owners

and/or local officials to conduct the filming production event; the list of those who gave permission must be made av ailable to the inspector upon request;

g. Signature of exemption holde r or representative; and

h. A description of the flight activity, includi ng maps or diagrams of any area, city, town, county, and/or state over which film ing will be conducted and the altitudes essential to accomplish the operation.12

31. Flight operations may be conducted closer th an 500 feet from pa rticipating persons consenting to be involved and necessary for the filming production, as specified in the exemption holder’s MPTOM.

Unless otherwise specified in this grant of exemption, the UAS, the UAS PIC, and the UAS operations must comply with al l applicable parts of 14 CFR including, but not limited to, parts 45, 47, 61, and 91.

This exemption terminates on April 30, 2017, unless sooner superseded or rescinded.

Sincerely,

/s/

John S. Duncan Director, Flight Standards Service7925 Jones Branch Drive, Suite 6200 9800 Fredericksburg Road

McLean, Virginia 22102 San Antonio, Texas 78288

Michael P. Huerta, Administrator
Office of the Administrator

Federal Aviation Administration 800 Independence Avenue SW October 2, 2014 Washington, D.C. 20591

Reference: USAA Petition for Section 333 Exemption: Re: Research & Development of Methods to Use Small Unmanned Aircraft Systems in P roperty and Casualty Insurance

Dear Administrator Huerta,

Pursuant to Section 333 of the FAA Modernization an d Reform Act of 2012 (FMRA), United Services Automobile Association (USAA) is petitioni ng for an exemption from the Federal Aviation Regulations and other rules/statutes perta ining to unmanned aircraft systems. Section 333 of the FMRA addresses special rules for certain unmanned aircraft systems and grants the FAA authority to allow for the safe operation of ce rtain unmanned aircraft systems (UAS) within the national airspace.

Since 1922, United Services Automobile Association has served the military community and their families providing a full range of highly com petitive financial products and services to our membership. We have world class employees that are personally committed to delivering excellent service and guidance regarding insurance, banking and investments. USAA focuses its innovation on developing products and new techn ology to assist its membership from policy inception to fulfilling our service commitment duri ng a claims event. USAA has over ten million members that look to USAA to help them restore and rebuild after a wide range of natural and other disasters, and USAA is always seeking ways to improve the timing and quality of its responses to members’ needs. Property and casualty insurers play a major role in funding the restoration of businesses and communities after maj or incidents, and the integration of unmanned aircraft into USAA’s operations will have immediate, positive effects on the lives of Americans and the business community.

We have identified the unmanned aircraft system as a technology which can alleviate safety concerns associated with manned inspections in the air and on the ground, and provide enhanced service and experience to our membership i n a safe and efficient environment. At USAA’s Innovation Lab in San Antonio, Texas, since 2010, we have been thoroughly researching new small unmanned aircraft systems tec hnology to improve our existing processes, invent new ones to benefit our membershi p, and improve efficiency and safety. Over the last four years, we have conducted significant research and developed business plans for utilization of unmanned aircraft systems within our organization, including, but not limited to:

• Identifying operational areas where unmanned aircr aft systems will improve safety relative to manned operations;Federal Aviation Administration

October 2, 2014 Page 2 of 7

• Research regarding privacy best practices and exis ting laws;

• Research and development of small unmanned aircraf t systems in partnership with the manufacturers to develop excellent safety protocols and procedures; and

• Development of an internal research and developmen t team at USAA with a wide expertise in aeronautics, flight instruction, mecha nical and software engineering and business applications, along with external partners hips with public entities that further our knowledge in robotics, aerospace, and engineeri ng.

USAA shares Congress’s vision of integrating small unmanned aircraft systems for civil use into our national airspace and providing economic benefi ts and growth from this rapidly developing technology. Current law does not provide adequate a uthority to extend these research and development activities, and this application seeks interim authority from the FAA to allow USAA to continue the activities it began in 2010.

USAA has also partnered with other public entities, such as the FAA UAS Test Sites and selected universities, to further our research and development as well as seeking to obtain a Special Airworthiness Certification in the Experime ntal Category with the collaboration of the Test Sites and our UAS manufacturer. Obtaining a Se ction 333 exemption would allow USAA the authority to do further research and developmen t in a safe and efficient manner without burdening the FAA with additional requests for each of our UAS platforms and operations. Currently, the FAA does not allow civil operations (meaning operations other than public aircraft operations or model aircraft / “hobbyist” activitie s which include research and development); therefore USAA has not been able to fully develop i ts UAS flight research.

Through this petition, USAA seeks an exemption to o perate small unmanned aircraft systems to further develop its research and development of thi s emerging technology.

USAA’s small unmanned aircraft systems are aircraft weighing significantly less than 55 lbs (details are provided within). They operate at slow speeds (under 45kts) and within line of sight within the areas described in this petition. Such o perations will ensure that the small unmanned aircraft systems operated by USAA will not create a hazard to other aircraft operating in the national airspace, to the general public or pose a threat to national security as dictated by the Federal Aviation Regulations.

One of USAA’s business partners and UAS platforms i s PrecisionHawk, and its Lancaster HawkEye. PrecisionHawk is a leader in the small UAS community and through their impressive research and development have successfully obtained several FAA Certificates of Authorization for their platform through various FAA UAS test sit es and public entities. This demonstrates the confidence in operation and safety that the FAA alr eady has for this UAS manufacturer and its platform. PrecisionHawk continues its advancement i n safety and UAS integration into the national airspace by researching and developing sen se and avoid technology to benefit the UAS community, the FAA and other users of the national airspace.Federal Aviation Administration

October 2, 2014 Page 3 of 7

14 CFR 11.81 (a) – Name and address of the Petition er :

United Services Automobile Association 9800 Fredericksburg Road San Antonio, Texas 78288

Phone: 703.905.2808 E-mail: gcirillo@wileyrein.com

14 CFR 11.81 (b) – Exemptions Requested:

The FAA considers unmanned aircraft as “aircraft” f lown by a “pilot” regardless of the location of the pilot. All aircraft and pilots must comply with applicable sections of Title 14 of the Code of Federal Regulations (14 CFR) to operate within the National Airspace. Unmanned aircraft are unable to comply with certain sections of 14 CFR as the regulations were written prior to the consideration of small UAS operating within the nat ional airspace. Therefore USAA is requesting an exemption from certain parts of 14 CF R cited below in addition to such further exemptions and relief as the FAA may determine is n ecessary to permit the operations

described herein

.

14 CFR Part 21.191 (a) – Experimental Certificates 14 CFR Part 45.23 (b) – Display of marks; general 14 CFR Part 61.113 (a) and (b) – Private pilot priv ileges and limitations: Pilot in command
14 CFR Part 91.7 – Civil Aircraft Airworthiness 14 CFR Part 91.9 (b) – Civil aircraft flight manual , marking and placard requirements 14 CFR Part 91.109 – Flight Instruction
14 CFR Part 91.119 – Minimum safe altitudes 14 CFR Part 91.121 – Altimeter settings 14 CFR Part 91.151 – Fuel requirements for flight i n VFR conditions 14 CFR Part 91.203 (a) and (b) – Civil Aircraft; Ce rtifications Required 14 CFR Part 91.405 – Maintenance required 14 CFR Part 91.407 – Operation after maintenance, p reventive maintenance, rebuilding or

alteration 14 CFR Part 91.409 – Inspections
14 CFR Part 91.417 – Maintenance Records

14 CFR Part 11.81 (c) – The extent of relief USAA s eeks, and the reason USAA seeks the

relief:

USAA seeks relief pursuant to this exemption from a pplicable parts of the Federal Aviation Regulations to the extent necessary to permit civil flight operations within the national airspace
and USAA seeks authorization to conduct small UAS f light operations within the perimeters of this exemption request.Federal Aviation Administration

October 2, 2014 Page 4 of 7

14 CFR Part 11.81 (d) – The reasons why granting US AA’s request would be in the public interest; that is, how it would benefit the public as a whole:

Granting the exemption for USAA would allow the org anization to safely and efficiently conduct small UAS flight operations to gain valuable inform ation and experience with USAA’s research and development in this technology. Gaining this in formation and experience would enable USAA, in the future, to utilize UAS technology to c onduct safe and efficient operations both

before and after claim events to assist its members hip in preparing for natural disasters and post-disaster recovery and relief operations, and r educe the time it takes communities to rebuild after natural disasters. Without this exemption, US AA would be unable to conduct the proper research and development to build a successful smal l UAS operation which would assist its
over ten million members and their communities. US AA believes such UAS research can lead to safer, quicker, and more economical and effectiv e claims service for its policy holders and

their communities.

14 CFR Part 11.81 (e) – The reasons why granting th e exemption would not adversely affect safety, or how the exemption would provide a level of safety at least equal to that provided by the rule from which USAA seeks the exem ption:

USAA requests that the exemption be granted with th e following limitations and operational conditions. These limitations and conditions will p rovide an enhanced level of safety and will be the guiding principles when USAA is conducting R&D operations under this exemption:

A. The small unmanned aircraft systems maximum take -off weight will be less than 55 lbs. Detailed specifications are included in the attachm ents. USAA is willing to have its

authorization restricted below the 55 lb. threshold to the operating weight of the
unmanned aircraft identified. One of the fixed win ged UAS platforms that USAA is seeking to utilize through this exemption is curren tly operating safely within the national airspace pursuant to several Certificates of Author ization (COA) granted by the FAA to Texas A&M College Station and other public entities . One of the COAs was for the PrecisionHawk Lancaster HawkEye to provide aerial i magery and mapping for authorities at the recent Washington state mudslide s in Oso, WA. Other COAs have been approved for this particular platform through other public entities demonstrating the
confidence that the FAA has for this manufacturer’s operational and safety protocol. USAA has attached and will be operating in accordan ce with PrecisionHawk Lancaster’s Flight Manual, Maintenance Schedule, and training d ocuments for review within this exemption application. Although this platform is on e that USAA is utilizing within its current research and development, USAA asks that th e exemption be granted with respect to this aircraft and other aircraft of like size, weight and capabilities; however, we want to demonstrate our commitment to safety and th e continuance of strong UAS partnerships.

B. All pilot in command (PIC) and ground observers (also known as the air crew) will receive FAA certified private pilot ground school a nd have taken and passed the FAA

Private Pilot Written Exam. This ensures that all a ir crew members (PIC and groundFederal Aviation Administration

October 2, 2014 Page 5 of 7

observers) have the knowledge regarding the Federal Aviation Regulations, Airspace, and other pertinent knowledge to conduct safe opera tions of small unmanned aircraft systems. A USAA employee with a FAA commercial pilo t certificate and flight instructor certificate that has been trained on UAS operations will oversee all training and ensure all air crew receive proper training and abide by a ll pertinent regulations. All pilot in command and ground observers will be trained in det ail to each of the unmanned aircraft system platform’s operations, systems and emergency procedures. Every air crew
member will obtain an FAA Class 2 medical certifica te.

C. All flight operations will be operated at an alt itude of no more than 400 ft above the ground (AGL) and within Class G (uncontrolled airsp ace) and some Class E (with prior approval). No flight operations will be operated wi thin Class A, B, C, or D airspace or special use airspace. All flight operations are to be conducted during daylight hours, under 30 mph winds and within line of sight. Areas of operation will be on USAA’s secured campus in San Antonio, Texas and other desi gnated remote, unpopulated areas around the San Antonio, Texas area within Cla ss G airspace. These areas are located a sufficient distance from any airport, hel iport, military base/airspace or other location with aviation activity. All flights will b e communicated to FAA Flight Service with posted NOTAMS prior to the flight(s).

D. All flight operations will be conducted within l ine of sight of the pilot in command and ground observer(s). Maximum total flight time for e ach flight will be 90 minutes or less in duration. All flight operations will be terminated when the aircraft has less than 20% battery life remaining.

E. Flight operations and safety briefings will be c onducted prior to all planned small unmanned aircraft system flights and will be mandat ory for all air crew. Briefings will include weather reviews, take off, landing and airc raft performance data for those real time conditions, and full pre- and post-flight insp ections/checklists and briefings for each specific unmanned aircraft system being operated.

F. In the event of a communication lost link, the U AS will return to a specific predetermined location and once the UAS is safely recovered, all flight operations will cease until any communication/data link issues are properly resolve d.

G. Regarding privacy concerns, USAA will have land use agreements in place for all areas of operations. The land utilized is USAA-owned or p rivately owned remote/unpopulated land with owner agreements in place for UAS operati ons.Federal Aviation Administration

October 2, 2014 Page 6 of 7

14 CFR Part 11.81 (f) A summary the FAA can publish in the Federal Register, stating:

(1) The rule from which you seek the exemption

Petitioner: United Services Automobile Association Sections of 14 CFR that USAA seeks an exemption:

14 CFR Part 21.191 (a) 14 CFR Part 45.23 (b) 14 CFR Part 61.113 (a) and (b)
14 CFR Part 91.7 14 CFR Part 91.9 (b)
14 CFR Part 91.109
14 CFR Part 91.119
14 CFR Part 91.121
14 CFR Part 91.151 14 CFR Part 91.203 (a) and (b)
14 CFR Part 91.405
14 CFR Part 91.407
14 CFR Part 91.409
14 CFR Part 91.417

(2) A brief description of the nature of the exemption you seek:

USAA seeks relief from the applicable parts of 14 C FR 21, 45, 61 and 91 as requested within this petition to allow USAA to safely and efficient ly conduct commercial UAS flight operations on its secure campus and other remote private land wit hin Class G and Class E (with prior approval) airspaces for R&D purposes.

14 CFR Part 11.81 (g) – Any additional information, views or arguments available to support USAA’s request:

Allowing USAA this exemption would give USAA the ab ility to continue our UAS research and development beyond the limits imposed today. Additi onal testing would benefit not only USAA and its membership, but would serve as a partnershi p with the FAA and others within the UAS community to advance this new and emerging technolo gy in a safe and controlled environment.

Recently, USAA employees in partnership with Texas A&M Roboticists Without Borders were invited to the Oso, Washington mudslide area to ass ist Snohomomish County and other public entities with aerial surveys and mapping. Under the approval of an FAA COA (Certificate of Authorization), USAA and Roboticists Without Border s were able to fly their platforms successfully and provided valuable data to governme nt entities. This demonstrates the value of our request to continue our UAS research and develo pment to help communities rebuild after disasters and maintain the safety of our employees, business partners and the general public.Federal Aviation Administration

October 2, 2014 Page 7 of 7

14 CFR Part 11.81 (h) – Request to exercise the pri vileges of the exemption outside the United States, the reason why the petitioner needs to do so:

USAA does not seek to exercise the privileges of th is exemption, should it be granted, outside the United States. Our request is strictly to be gr anted authority for civil UAS R&D operations at specified locations within the national airspace sy stem.

Sincerely,

Greg Cirillo Wiley Rein LLP
Counsel for USAA 

# Michael Burns

Michael Burns

Assistant Vice President
USAA

Attachments: PrecisionHawk Flight Manual, Maintenan ce Schedule and training documents.