AFS

- 15

- 0 85

- E Exemption No. 111 88

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

FEDERAL AVIATION ADMINISTRATION WASHINGTON, DC 20591

GRANT OF EXE MPTION

By letter dated October 15, 2014

, Mr. Jack Weekes, Operations Vice President for State Farm Mutual Automobile Insurance Company (hereinafter Petitioner or Operator), One

State Farm Plaza , Bloomington, I L 61710

- 0001, petitioned the Federal Aviation Administration (FAA) for an exemption part 21 Subpart H

, §§ 21.191(a), 45.23(b)

, 45.27

, 61. 113 (a) and (b)

, 91.119(c)

, 91.121

, 91.151 (a)

, 91.405(a)

, 91.407(a)(1)

, 91.409(a)( 1 ) and (2)

, and 91.417(a) and (b) of Title 14, Code of Federal Regulations (14 CFR). The exemption would allow the petitioner to commercially operate the Aerialtronics Altura Zenith ATX8 and

Altavian Nova F6500 unmanned aircraft system s (UAS) for outdoor research and development related to use of UAS for civil operations for insurance fu nctions including using imagery and analytics in underwriting

, re

- underwriting

, catastrophe response

, roof inspection, and claim resolutions settings.

T he pet itioner requests an exemption from the following regulations:

Part 21 prescribes, in pertinent part, the procedural requirements for issuing and changing design approvals, production approvals, airworthiness certificates, and airworthiness In the matter of the petition of

STATE FARM MUTUAL AUTOMOBILE

INSURANCE COMPANY

for an exemption from part 21 Subpart H ; 21.191(a), §§ 45.23(b); 45.27 ; §§ 61. 113 (a) and (b) ; §§ 91.119(c); 91.121; 91.151 (a) ; 91 .405(a); 91.407(a)(1); 91.409(a)( 1 ) and (2) ; and 91.417(a) and (b) of Title 14, Code of Federal Regulations Regulatory Docket No. FAA

– 20 14

– 0856approvals. Subpart H prescribes procedural requirements for the issu e of airworthiness

certificates and § 21.1 91(a) addresses r esearch and development including t esting new aircraft design concepts, new aircraft equipment, new aircraft installations, new aircraft operating techniques, or new uses for aircraft.

Section 45.23(b) prescribes, in pertinent part, that w hen marks include only the Roman capital letter “N” and the registration number is displayed on limited, restricted or light

- sport category aircraft or experimental or provisionally certificated aircraft, the operator must also display on

that aircraft n ear each entrance to the cabin, cockpit, or pilot station, in letters not less than 2 inches nor more than 6 inches high, the words “limited,” “restricted,” “light

- sport,” “experimental,” or “provisional,” as applicable.

Section 45.27 prescri bes, in perti nent part, that each operator of a rotorcraft must display on that rotorcraft horizontally on both surfaces of the cabin, fuselage, boom, or tail the marks required by §45.23.

Section 61.113(a) and (b) prescribes that

—

(a) No person who holds a private pilot certificate may act as a pilot in command (PIC) of an aircraft that is carrying passengers or property for compensation or hire; nor may that person, for compensation or hire, act as PIC of an aircraft.

(b) A private pilot may, for compensation or hire, act as PIC of an aircraft in connection with any business or employment if

—

(1) The flight is only incidental to that business or employment; and

(2) The aircraft does not carry passengers or property for compensation or hire.

Section 91.119 (c) prescribes that, ex cept when necessary for takeoff or landing, no person may operate an aircraft below the following altitudes:

(c) Over other than congested areas. An altitude of 500 feet above the surface, except over open water or sparsely populated areas. In those cases, the aircraft may not be operated closer than 500 feet to any person, vessel, vehicle, or structure.

Section 91.121 requires , in pertinent part, each person operating an aircraft to maintain cruising altitude by reference to an altimeter that is set “ to th e elevation of the departure airport or an appropriate altimeter setting available before departure. ”

Section 91.151(a) prescribes that no person may begin a flight in an airplane under visual flight rules (VFR) conditions unless (considering wind and for ecast weather conditions) there is enough fuel to fly to the first point of intended landing and, assuming normal cruisingspeed

, (1) D uring the day, to fly after that for at least 30 minutes; or (2) At night, to fly after

that for at least 45 minutes.

S e c tion 91.405 (a ) re qui re s, in p er tin e nt p ar t, th a t a n a i rcraf t op era tor or own e r sh a ll h a ve th a t

a i rcraf t insp ec t e d a s p re s cr ib e d in subp ar t E of the s a me p ar t a nd sh a ll, b e tw ee n re qui re d insp ec tions, e x ce pt a s p r ovid e d in p ara g ra ph (c ) of the s a me s ec tion, h a ve dis cre p a n c i e s

re p a i re d a s p re s cr ib e d in p ar t 43 of the c h a pt er

.

Section 91.407(a)(1) prescribes that no person may operate any aircraft that has undergone maintenance, preventive maintenance, rebuilding, or alteration unless it has been approved for return to service by a person authorized under § 43.7 of the same chapter.

Section 91.409(a) (1) and (2) prescribes, in pertinent part, that

–

(a) Except as provided in paragraph (c) of this section, no person may operate an aircraft unless, within the prec eding 12 calendar months, it has had

—

(1) An annual inspection in accordance with part 43 of this chapter and has been approved for return to service by a person authorized by §43.7 of this chapter; or

(2) An inspection for the issuance of an airworthiness certificate in accordance with part 21 of this chapter.

Section 91.417(a) and (b) prescribe s , in pertinent part, that

—

(a) Each registered owner or operator shall keep the following records for the periods specified in paragraph (b) of this section:

(1) Record s of the maintenance, preventive maintenance, and alteration and records of

the 100

- hour, annual, progressive, and other required or approved inspections, as appropriate, for each aircraft (including the airframe) and each engine, propeller, rotor, and app liance of an aircraft. The records must include

—

(i) A description (or reference to data acceptable to the Administrator) of the work performed; and

(ii) The date of completion of the work performed; and

(iii) The signature and certificate number of the person appr oving the aircraft for

return to service.

(2) Records containing the following information:(i) The total time in service of the airframe, each engine, each propeller, and each

rotor.

(ii) The current status of life

- limited parts of each airframe, engine, propelle r, rotor, and appliance.

(iii) The time since last overhaul of all items installed on the aircraft that are required to be overhauled on a specified time basis.

(iv) The current inspection status of the aircraft, including the time since the last inspection requir ed by the inspection program under which the aircraft and its appliances are maintained.

(v) The current status of applicable airworthiness directives (AD) and safety directives including, for each, the method of compliance, the AD or safety

directive number and revision date. If the AD or safety directive involves recurring action, the time and date when the next action is required.

(vi) Copies of the forms prescribed by § 43.9(d) for each major alteration to the airframe and currently installed engines, rotors, propellers, and appliances.

(b) The owner or operator shall retain the following records for the periods prescribed:

(1) The records specified in paragraph (a)(1) of this section shall be retained until the work is repeated or superseded by other work or for 1 year after the work is performed.

(2) The records specified in paragraph (a)(2) of this section shall be retained and

transferred with the aircraft at the time the aircraft is sold.

(3) A list of defects furnished to a registered owner or operator under § 43.11 shall be retained until the defects are repaired and the aircraft is approved for return to

service.

The petitioner supports its request with the following information:

The petitioner proposes to operate the Aerialtronics Altura Zenith ATX8 and Altavian Nova

F6500 UAS t o conduct commercial operations for outdoor research and development related to use of UAS for civil operations for insurance functions including using imagery and analytics in underwriting

, re

- underwriting

, catastrophe response

, roof inspe ction, and claim resolutions settings. See Appendix A for the petition submitted to the FAA describing the proposed operations

.

The Altura Zenith ATX8 is a quad rotor aircraft built with a monocoque carbon airframe. TheZenith’s maximum operating weight i s less than 15 pounds.

The Nova F6500 Aircraft is an electric fixed wing UAS with a wingspan of 108 inches and a maximum operating weight of less than 20 pounds.

The petitioner has provided the following information to support its request for an exempti on, which includes these proprietary supporting documents:

1 ) Training Syllabus, 2) Operations Manual including: a) Appendix A: Nova F6500 Operator Manual, b) Appendix B: Nova F6500 Maintenance Manual, c) Appendix C: Nova MP32 Field Guide, d) Appendix D: Nova VP 23 Field Guide, e) Appendix E: Aerialtronics Operations Manual, f) Appendix E: Aerialtronics System Description Manual

Discussion of Public Comments:

A summary of the petition was published in the Federal Register on November 14 , 2014, (79

FR 68346 ). The FA A received three comments on the petition for exemption. The Small UAV Coalition (Coalition) supported the petition and the Air Line Pilots Association, International (ALPA) and the National Agricultural Aviation Association (NAAA) opposed it.

In suppor t of the petition, the Coalition state d the petitioner has proposed to abide by stronger safety measures than hobby and modeler groups operating similar aircraft. The Coalition

state d that it does not believe that heightened safety measures should be req uired for the petitioner simply because of the commercial nature of its operations. The Coalition urged the FAA to adopt an evaluation framework for UAS operations under section 333 of Pub. L. 112

– 95 that weighs the relative safety issues and risks of UAS by class and operational circumstances, rather than adopting artificial distinctions among unmanned aerial vehicles based on commercial and noncommercial operations. The Coalition suggested FAA safety regulations be proportionate to the risks posed by th e particular proposed UAS operations by distinguishing between UAS. 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 1 in section 333 as a minimum. The Coalition stated the petition shows the FAA should consider factors other than those

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

- 95 states, in part: “In making the determination under subsection (a), the Secretary shall determine, at a minimum

-- (1) which types of unmanned aircraft systems, if any, as a result of the ir size, weight, speed, operational capability, proximity to airports and populated areas, and operation within visual line of sight do not create a hazard to users of the national airspace system or the public or pose a threat to national security; ...”specified in section 33 3, such as the location and altitude of its small UAV operations. The Coalition maintained that the petitioner’s proposed operations satisfy the seven factors in section 333 and include several additional mitigating factors to ensure the safety and securi ty of the proposed UAS operations. The Coalition emphasized the FAA must evaluate each factor within the context of the petitioner’s proposed UAS operations.

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

an airman’s certificate, but stated that at a minimum the FAA should provide an exemption

from part 61 and approve training, experience, and testing regiments that pertain to UAS commercial operations pertinent to the aircraft and operation proposed. The Coa lition also asserted that Congress intended the section 333 national security criterion to focus on the operation rather than on the pilot and that shifting that focus imposes an unnecessary burden.

In response, as discussed in the grant of exemption to T rimble Navigation Ltd. (No. 11110), neither section 333 nor the FAA’s authority to exempt from its regulations found in

49 USC § 44701(f), authorizes the FAA to provide exemption to the statutory requirement to hold an airman certificate as prescribed in 4 9 USC § 44711. The FAA notes that under this exemption the petitioner proposed to use pilots holding private certificates and it will be able to use the training program it proposed. Finally, the FAA does not agree that relying on the pilot certificate f or a national security finding poses an unnecessary burden because pilots under this exemption, and the exemptions granted previously to section 333 requests, are already required to hold a pilot certificate to satisfy 4 9 USC § 44711.

The Coalition comme nted that a visual observer (VO) should not be required for all small UAS operation. The Coalition further asserted that the presence of one or more VOs may allow the UAS to be operated beyond visual line of sight ( VLOS ) of the pilot in command ( PIC ) and t hat the petitioner’s proposal to operate the unmanned aircraft ( UA ) within VLOS of the PIC and/or VO should be permitted. The FAA notes that one of the determinations for operations under section 333 is operation within visual line of sight. As the PIC is determined to be in command of the UA, he or she must maintain VLOS while operating the UA. The

FAA also notes that a visual observer complements the PICs capability to see and avoid other aircraft, including when the PIC may be mo mentarily attending to other flying tasks. The VO provides an additional level of operational safety.

The Coalition state d that submitting a plan of activities “in all cases” should not be required of sUAS operators and notifying the FAA should be necessary only when there is a potential conflict with manned aircraft operations because of the altitude of the UAV operaton or its proximity to airports. Although the petitioner has volunteered to submit a written Plan of

Activities to the local FSDO

, this is not required by this grant of exemption.

The Coalition also commented that in the case of State Farm’s proposed operation over State Farm property at least 5 miles from any airport that it is not necessary to obtain a letter of agreement when in proximity of non

- towered airpo rts, rather, that State Farm be mindful ofany nearby airfields and knowledgeable about arrival and departure paths. These comments are addressed in the FAA’s analysis and conditions and limitations below.

ALPA expresse d concern regarding several aspec ts of the petition. ALPA note d the petitioner’s reference to operations conducted within “limited or predetermined” sterile areas is not defined, nor does the petitioner detail procedures for controlling the airspace or area of operation. Specifically, A LPA state d “there must be means both to ensure that the sUAS remains within the defined airspace 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

ope rate (i.e. VLOS and at or below 400 feet above ground level ( AGL ) with a VO ) are sufficient mitigations to this risk so that the operations will not adversely affect safety. Additionally, State Farm will utilize geo

- fencing at test sites to ensure the UA S remain within

defined boundaries.

Regarding the petitioner’s statement that the PIC and observer will be able to communicate by voice or text, ALPA state d that the pilot and observer should be able to maintain a visual

observation of the aircraft and ar ea of operation when using voice communication. NAAA states UAS observers must be present and able to communicate with the operator from the most minimal distance possible. The FAA has inserted a condition regarding PIC and VO

communications.

ALPA assert ed the UAS’s lithium polymer batteries 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 FAA notes, that the referenced study was primarily conducted to determine how certain battery cells react in a fire situation aboard manned airpl anes. Given the size of the battery and the operating conditions of the UAS, the FAA concludes that the use of a lithium polymer battery will not pose an undue safety risk for the proposed operations.

ALPA comment ed that command and control (C2) link fai lures are one of the most common failures on a UAS, and that lost link mitigations should require safe modes to prevent fly

aways or other scenarios. The FAA agrees and carefully examined the proposed operation to ensure that the vehicle design and the pe titioner’s operating documents addressed potential hazards related to C2 failure. The FAA finds that the UAS to be operated by the petitioner has sufficient design features to address these hazards. The FAA also finds that the operating

documents have inco rporated safety procedures to be followed by all operational participants should a C2 failure occur. Further detail is contained in the analysis of the UAS below.

Although the petitioner did not request an exemption from § 91.203, ALPA states the UAS

sho uld be certified to the same level of safety under § 91.203 as other commercially operated aircraft in the National Airspace System (NAS). The FAA has addressed this comment in the

conditions and limitations below.ALPA also notes that the petitioner’s p roposed operations are for “compensation or hire,” and argues the pilot must 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 train ing on the UAS make and model intended to be used. Similarly, ALPA

asserts a current second

- class airman medical certificate should be required. The National Agricultural Aviation Association (NAAA) also commented on pilot qualification, stating

—

Just as manned aircraft pilots are required to undergo a rigorous training curriculum and show that they are fit to operate a commercial aircraft, so too must UAS operators. Holding a com mercial certificate holds UAS operators to similar high standards as comm ercial aircraft operators and ensures they are aware of their responsibilities as commercial operators within the NAS. Medical requirements ensure they have the necessary visual and mental acuity to operate a commercial aircraft repeatedly over a sustaine d period of

time.

The FAA has reviewed the knowledge and training required by holders of both private and

commercial certificates. Additional details are available in the ensuing analysis of this issue with regards to 14 CFR § 61.113.

ALPA also commente d on14 CFR § 91.109 Flight Instruction, stating the petitioner intends to conduct flight instruction. ALPA state d , “ [ w ] hile the petitioner’s rationale for this may have some merit, the broader issue is that the petitioner makes no reference to any attempts to comply with (or request a waiver to) 14 CFR 61.195 which defines the requirements for flight instructors. Thus there is no indication at all regarding what the qualifications of persons, who may be providing instruction, will be.”

R egarding ALPA ’s co mments on 14 CFR § 61.195, Flight instructor limitations and qualifications

, which defines the requirements for flight instructors , a certificated flight instructor is authorized to provide the instruction required for the certificates o r ratings or

curren cy listed in 14 CFR § 61.193. A person instructing on how to operate the UAS under the petitioner’s training program would not need to be a certificated flight instructor because the instruction is not being provided for a certificate or rating listed in § 61.193. We note that none of the UAS operations 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 and class rating. Instruction p rovided toward obtaining the pilot certificate required by this exemption would need to be provided by a certificated flight instructor

.

A LPA notes the petitioner must specify a means to meet see and avoid requirements in § 91.113 given the absence of an onboard pilot. This comment is addressed in detail in the FAA analysis below.ALPA expressed concern regarding the petitioner’s waiver request for 14 CFR § 91.119 (c)

. ALPA believes all aircraft in the National Airspace System (NAS) must operate to the s ame high level of safety, this include maintaining a safe altitude for both airplanes and helicopters. These comments are addressed in the FAA’s analysis and conditions and limitations below.

ALPA mentioned the aircraft may not have a barometric altimeter as required by 14 CFR § 91.121, stating the ability to accurately maintain altitude must be addressed, and processes or mitigations, such as redundant control capability, fail

- safe systems, backups and specific, validated procedures for system and equipme nt failures must be in place. The FAA addresses this concern in its analysis of the exemption from 14 CFR § 91.121, finding that the alternative means of compliance proposed by the petitioner does not adversely affect safety.

Regarding the fuel requireme nts of § 91.151, ALPA argue d that using batteries as the only source of an aircraft’s power is a substantial shift from traditional methods of propulsion, and requires further research to determine best safety practices. This comment is addressed in

detai l below.

Regarding §§ 91.405(a), 91.407(a)(1), 91.409(a)(2), and 91.417(a) and (b), ALPA oppose d the petitioner’s “ attempt to avoid compliance with established aircraft maintenance and record keeping ” requirements. ALPA state d the UAS should comply with the same level of safety as other aircraft operated commercially in the NAS. This comment is addressed in detail below.

ALPA also expresse d concern that the petitioner’s waiver request is not for a single specific operation or location, but for all opera tions of the same general type. ALPA state d this results in a considerable increase in the FAA’s oversight tasks. The FAA notes ALPA ’ s concern and in order to minimize potential impact to the NAS, the FAA requires each operator secure a

COA which covers s pecific details of the petitioners operation. The FAA recognizes that UAS integration will generate new NAS access demand and will review and adjust accordingly.

NAAA state d it represents the interests of small business owners and pilots licensed as

comme rcial applicators. NAAA explain ed that its members operate in low

- level airspace, and

a clear flight path in low

- level airspace is vital to the safety of these operators. The FAA

believes an equivalent level of safety can be maintained through strict adhe rence to the petitioner’s operating documents, the additional conditions and limitations identified below, as well as requirements incorporated in the Air Traffic Organization (ATO) issued COA.

NAAA state d that seeing and avoiding other aircraft and hazar dous obstructions is the backbone for agricultural safety, and agricultural pilots depend on pilots of other aircraft to perform their see

- and

- avoid functions needed to prevent collisions. NAAA believes UA operations at low altitudes will increase the pot ential of collision hazards with agricultural

aircraft. NAAA argue d that until adequate see

- and

- avoid technology is developed, the FAA should require UAS operators to post a Notice to Airmen (NOTAM) 48 to 72 hours before operations. NAAA proposes UAS air craft be painted a highly visible color, be equipped with strobe lights, and use Automatic Dependent Surveillance

– Broadcast (ADS

– B) or other similar location reporting technology. To address these concerns the FAA has incorporatedassociated conditions an d limitations into this exemption, including: a) NOTAMs issued for all operations, b) operations conducted within VLOS of the PIC and the VO, and c) the UAS PIC must always yield right

- of

- way to manned aircraft.

NAAA also propose d a number of operating li mitations and requirements for UAS operators.

NAAA state d UAS operators should have procedures to immediately ground the UAS if

another low

- flying aircraft is within 2 miles; be attending/monitoring UAS at all time and attentive to surroundings (no headpho nes, etc., or other distractions); comply with all applicable regulations, policies, and procedures; be equipped with aviation radios set to a locally defined frequency; have a separate VO with a second

- class medical certificate and perform duties for only one UAS at a time; maintain line

- of

- sight operations; and be well

versed in the UAS operator document. NAAA further state d the UAS should be properly maintained; have a registered N

- Number on an indestructible and unmovable plate; and be required to have an airworthiness certificate and liability insurance. These comments are addressed in the FAA’s analysis and conditions and limitations.

The petitioner filed a response to ALPA’s and NAAA ’s comments. The petitioner noted that

its use of UAS for researc h and development addresses the safety concerns voiced by ALPA and NAAA.

Concerns raised in this comment section are addressed in the FAA’s analysis below and where necessary appropriate risk mitigations are implemented through the conditions and limitati ons on the operations.

The FAA’s analysis is as follows:

The FAA has organized its analysis into four sections: (1) U nmanned Aircraft System (U AS )

, (2) the UAS pilot in command (PIC), (3) the UAS operating parameters, and (4) the public

interest.

U nmann ed Aircraft System (U AS )

The petitioner requested relief from 14 CFR part 21, Subpart H Airworthiness Certificates

. In accordance with the statutory criteria provided in Section 333 of P.L. 112

- 95 in reference to 49 USC § 44704, and in consideration of t he size, weight, speed, and limited operating area associated with the aircraft and its operation, the Secretary of Transportation has determined that this aircraft meets the conditions of Section 333. Therefore, the FAA finds that the requested relief fro m 14 CFR part s 21

, and any associated noise certification and testing requirements of part 36, is not necessary.

Manned helicopters conducting aerial surveying can weigh 6,000 lbs. or more and are operated by an onboard pilot, in addition to other onboar d crewmembers, as necessary. The petitioner’s UA will weigh less than 20 lbs. with no onboard pilot or crew. The pilot and crew will be remotely located from the aircraft. The limited weight significantly reduces thepotential for harm to participating and nonparticipating individuals or property in the event of an incident or accident. The risk to an onboard pilot and crew during an incident or accident is eliminated with the use of a UA for the aerial filming operation.

Manned aircraft are at risk of fu el spillage and fire in the event of an incident or accident. The petitioner’s UA carries no fuel, and therefore the risk of fire following an incident or accident due to fuel spillage is eliminated.

This exemption does not require an electronic means to monitor and communicate with other aircraft, such as transponders or sense and avoid technology. Rather the FAA is mitigating the risk of these operations by placing limits on altitude, requiring stand

- off distance from clouds, permitting daytime operatio ns only, and requiring that the UA be operated within VLOS

, utilize a visual observer for all flights, and yield right of way to all other manned operations. Additionally, the exemption provides that the operator will request a NOTAM prior to operations to alert other users of the NAS. These mitigations address concerns raised by NAAA and ALPA regarding awareness of UAS operations occurring in the airspace.

The petitioner’s two UAS ha ve the capability to operate safely after experiencing certain in

flight contingencies or failures and uses an auto

- pilot system to maintain UAS stability and

control. The UAS are also able to respond to a loss of global positioning system ( GPS ) or a lost

- link event with a pre

- coordinated, predictable, automated flight maneuve r. These safety features provide an equivalent level of safety compared to a manned aircraft performing a similar operation and address ALPA ’ s comment on mitigating risk of command and control

link failures.

Regarding the petitioner’s requested relief fr om 14 CFR §§ 45.23(b), Display of marks

, and

21.191 Experimental certificates

, the petitioner requests this relief under the assumption that marking with the word “experimental” will be required as a condition of a grant of exemption. However, this marking is reserved for aircraft that are issued experimental certificates under § 21.191. The petitioner’s UAS will not be certificated under § 21.191, and therefore the “experimental” marking is not required. Since the petitioner’s UAS will not be certificated under § 21.191, a grant of exemption for § § 45.23(b) and 21.191 is not necessary.

The petitioner has also requested relief from 14 CFR § 45.27(a), L o c ation of m ar k

s . Given that an exemption from § 45.23(b) is not necessary, an exemption from § 45.27(a) is also not necessary. Markings must be as large as practicable per § 45.29(f).

Regarding the petitioner’s requested relief from 14 CFR §§ 91.405 (a) Maintenance required

, 91.407(a)(1) O peration after maintenance, preventive maintenance, rebuilding, or al teration

, 91.409(a)(1) and (a)(2) Inspections , and 91.417(a) and (b) Maintenance records , the FAA has carefully evaluated the petitioner’s request and determined that cause for granting the exemption is warranted. The FAA notes that the petitioner’s UAS op erating documents contain detailed preflight checks, as well as routine maintenance, preventative maintenance, replacement/overhaul of component parts and alterations for the UAS. The FAA finds thatadherence to the petitioner’s operating documents, and t he conditions and limitations below are sufficient to ensure that safety is not adversely affected. In accordance with the petitioner’s UAS maintenance, inspection, and recordkeeping requirements, the FAA finds that exemption

from 14 CFR §§ 91.405(a), 91.4 07(a)(1), 91.409(a)(1) and (2), and 91.417(a) and (b) is warranted subject to the conditions and limitations below.

UAS P ilot in Command (P IC )

Regarding the petitioner’s requested relief from 14 CFR § 61.113(a) and (b) Private pilot privileges and limita tions , the petitioner proposes to operate its UAS with a pilot holding, at a minimum, a private pilot certificate and at least a current third

- class medical certificate for its Phase I R&D operations

. However, for Phase II R&D operations, the petitioner re quests use of “PICs holding third

- class medical certificates” with certif icated pilots acting in a supervisory capacity. Although Section 333 provides limited statutory f lexibility relative

to 49 USC § 44704 for the purposes of airworthiness certification , it does not provide flexibility relative to other sections of 49 USC. Therefore, t he FAA does not possess the authority to exempt from the statutory requirement to hold an airman certificate, as prescribed in 49 USC § 44711. For further information see E xemption No. 11110, Trimble Navigation,

Ltd.

The FAA is also requiring a pilot certificate for UAS operations because pilots holding an FAA issued private or commercial pilot certificate are subject to the security screening by the Department of Homeland Security that certificated airmen undergo. As previously determined by the Secretary, the requirement to have an airman certificate ameliorates security concerns over civil UAS operations conducted in accordance with Section 333.

Given these grounds, the FAA must determine the appropriate level of pilot certification for the petitioner’s proposed operation.

Under current regulations, civil operations for compensation or hire require a PIC holding a commercial pilot certificate per 14 CFR part 61. Based on the private pilot limitations in accordance with pertinent parts of 14 CFR § 61.113(a) and (b), a pilot holding a private pilot certificate cannot act as a PIC of an aircraft for compensation or hire unless the flight is only

incidental to a business or employment. However, in Grant of Exemption No. 11062 to Astraeus Aerial (Astraeus), the FAA determined that a PIC with a private pilot certificate operating the Astraeus UAS would not adversely affect operations in the NAS or present a hazard to persons o r property on the ground.

The FAA has analyzed the petitioner’s proposed operation and has determined that it does not differ significantly from the situation described in Grant of Exemption No. 11062 (Astraeus Aerial). The petitioner plans to operate ov er private property with controlled access in the NAS. Given: 1) the similar nature of the petitioner’s proposed operating environment to that of Astraeus, 2) the parallel nature of private pilot aeronautical knowledge requirements to

those of commercial r equirements [ref: Exemption No. 11062], and 3) the airmanship skillsnecessary to operate the UAS, the FAA finds that the additional manned airmanship experience of a commercially certificated pilot would not correlate to the airmanship skills necessary fo r the petitioner’s specific proposed operations. Therefore, the FAA finds that a PIC holding a private pilot certificate and a third

- class airman medical certificate is appropriate for the proposed operations.

With regard to the airmanship skills necessa ry to operate the UAS (item #3 stated above), the petitioner has proposed that “prior to operations, the pilot must have accumulated and logged a minimum of 200 flight cycles, or more as required by the FAA, and 25 hours of total time as a UAS rotorcraft p ilot.” “The pilot must also have accumulated and logged prior to operations at least ten hours as a UAS pilot with a similar UAS type (single blade or multi

- rotor).” The conditions and limitations below stipulate that t he petitioner may not permit any PIC to operate unless that PIC has demonstrated through t he petitioner’s training and currency requirements that the PIC is able to safely operate the UAS in a manner consistent with how the UAS will be operated under this exemption, including evasive and emer gency maneuvers and maintaining appropriate distances from people, vessels, vehicles and structures.

In conclusion, the FAA finds that a PIC holding a private pilot certificate and a third

- class airman medical certificate, and who has completed t he petit ioner’s UAS training and currency requirements, can conduct the proposed UAS operations without adversely affecting the safety of the NAS and persons or property on the ground. Upon consideration of the overall safety case presented by the petitioner and t he concerns of the commenters, the FAA finds that granting the requested relief from 14 CFR § 61.113(a) and (b), is warranted.

The F A A c onsid er s the P I C to be d e si g n a t e d f or t h e du ra tion of the f l i g ht. Th eref o re
, p e r the

c onditions a nd limit a tio n s b e low, the P I C must be d e si g n a t e d b ef o r e the f li g ht a nd ca nnot

t ra ns fe r his or h e r d e si g n a tion f or the du ra tion of t he f li g ht.

The petitioner has also indicated it will supplement his proposed operation(s) with a VO. The conditions and limitations below stipula te that the PIC must ensure that the VO can perform the functions prescribed in the operating documents. Additionally, as discussed in Exemption No. 11109 to Clayco, Inc., there are no regulatory requirements for visual observer medical

certificates. Altho ugh a medical certificate is not required for a VO, the UA must never be operated beyond the actual visual capabilities of the VO, and the VO and PIC must have the ability to maintain VLOS with the UA at all times. It is the responsibility of the PIC to be aware of the VO’s visual limitations and limit operations of the UA to distances within the visual capabilities of both the PIC and VO. Moreover, the VO will not be operating the aircraft. Therefore, as in Grant of Exemption No. 11062 to Astraeus, the FA A does not consider a medical certificate necessary for the VO.

UAS Operating Parameters

Although t he petitioner did not seek relief from 14 CFR § 91.7(a) Civil aircraft airworthiness

, the FAA finds that relief from § 91.7 is necessary . While the UAS wil l not require anairworthiness certificate in accordance with 14 CFR part 21, Subpart H, the FAA considers the petitioner’s compliance with its operating documents to be sufficient means for determining an airworthy condition in accordance with § 91.7(a). Therefore, relief from § 91.7(a) is granted. The petitioner is still required to ensure that its aircraft is in an airworthy

condition

– based on compliance with manuals and checklists identified above

– prior to every flight.

Additionally, in accordance 14 CFR § 91.7(b), the PIC is responsible for determining whether the aircraft is in a condition for safe flight. The FAA finds that the PIC can comply with this requirement.

Regarding the petitioner’s requested relief from 14 CFR § 91.119(c) Minimum saf e altitudes: Over other than congested areas, relief is sought because the petitioner states that operations will only be conducted within “a restricted area where buildings and people will not be exposed to operations without their pre

- obtained consent.” The petitioner proposes to operate

the UA no more than 4 00 feet AGL

.

T he FAA is requiring that prior to conducting UAS specific operations, all persons not essential to flight operations (nonparticipating persons) must remain at appropriate distances.

In open areas this requires the UA to remain 500 feet from all persons other than essential flight personnel (i.e. the PIC and VO). The FAA has also considered that each UA will weigh

2 0 pounds or less. If barriers or structures are present that can sufficien tly protect nonparticipating persons from debris in the event of an accident

, then the UA may operate closer than 500 feet to persons afforded such protection. The operator must ensure that nonparticipating persons remain under such protection. If a situat ion arises where nonparticipating persons leave such protection and are within 500 feet of the UA, flight operations must cease immediately. The primary concern, when considering how to immediately cease operations, is the safety of those nonparticipating persons. In addition, the FAA finds that operations may be conducted closer than 500 feet to vessels, vehicles and structures when the land owner/controller grants such permission and the PIC makes a safety assessment of the risk of operating closer to tho se objects. P r ov i d e d a dh e r e n c e to the

p r o ce du re s in the op era ti n g do c um e nts a nd the a ddition a l c onditions a nd limit a tions outlin e d

b e low, the F A A f inds th a t re li e f f r om § 91.119 (c ) is w a rra n t e d.

Regarding the petitioner’s requested relief from 14 CFR § 9 1.121 Altimeter s ettings , the FAA believes that an altitude reading is a critical safety component of the petitioner’s proposed operation. Although the petitioner will not have a typical barometric altimeter onboard the aircraft, the FAA finds the petition er’s intention to operate the UA within VLOS and at or

below 4 00 feet AGL, combined with the petitioner’s intention to provide altitude information to the UAS pilot via a radio communications telemetry data link, which downlinks from the

aircraft to the PI C for active monitoring of the flight path, to be a sufficient method for ensuring the UAS operations do not adversely affect safety. The altitude information will be generated by GPS equipment installed onboard the aircraft, and /or a static pressure sens or (barometer) which aids in estimating the altitude. Prior to each flight, a zero altitude initiationpoint will be established and confirmed for accuracy by the UAS PIC. The FAA has determined that good cause exists for granting the requested relief to 1 4 CFR § 91.121 and this approach satisfies ALPA ’ s concern about the ability of the UAS to accurately maintain

altitude.

Regarding the petitioner’s requested relief from § 91.151 (a) Fuel requirements for flight in

VFR conditions , prior relief has been gr anted for manned aircraft to operate at less than prescribed minimums, including Exemption Nos. 2689, 5745, and 10650. In addition, similar

UAS

- specific relief has been granted in Exemption Nos. 8811, 10808, and 10673 for daytime, VFR conditions. The pet itioner states i n the event that the UAS should run out of power, it would simply land within the access controlled operating area. Given its weight and construction material, the risks are less than contemplated by the current regulation

.

Regarding the A TX8, as stated in the UA specifications in the operating documents, the UA batteries provide 35 minutes of powered flight on average

. The operating documents indicate that at 30% reserve, the UA will enter a return and land sequence and at 20% reserve, the UA will land immediately. Therefore, the FAA has determined that the PIC will be prohibited from beginning a flight unless (considering wind and forecast weather conditions) there is enough power to fly at a normal cruising speed to the intended landing point and land the UA with not less than 30% battery power remaining

.

Regarding the F6500, as stated in the UA specifications in the operating documents, the UAS

i ndicates current remaining battery power measured in volts . The indication is located above

the HUD. There are two UA failsafes contingent upon b attery voltage:

• Low battery failsafe 1: Battery voltage is 20.4V or less. The UA will fly to rally if the battery remains at 20.4V or lower for 5 seconds

.

• Low battery failsafe 2: Battery voltage is c ritically low battery at 19.4V or less. The UA will land regardless of location

.

Therefore, the FAA has determined that the PIC will be prohibited from beginning a flight unless (considering wind and forecast weather conditions) there is enough power to fly at a normal cruising speed to the intended landing point and land the UA with not less than 20.4 volts battery power remaining.

Therefore, the FAA grants the relief from 14 CFR § 91.151(a) to the extent necessary to comply with the conditions and limi tations below.

Additionally, in evaluating the petitioner’s proposed operating parameters with regard to VLOS and a safe operating perimeter, the FAA considered operations from a moving device or vehicle. Since the petitioner did not discuss provisions fo r these circumstances, the conditions and limitations below preclude operations from moving devices or vehicles.Regarding an ATO issued COA, the majority of current UAS operations occurring in the NAS are being coordinated through Air Traffic Control (A TC) by the issuance of a COA. This is an existing process that not only makes local ATC facilities aware of UAS operations, but also provides ATC the ability to consider airspace issues that are unique to UAS operations. The COA will require the operator t o request a NOTAM, which is the mechanism for alerting other users of the NAS to the UAS activities being conducted. Therefore, the FAA believes that adherence to this process is the safest and most expeditious way to permit the petitioner to

conduct their proposed UAS operations. The conditions and limitations below prescribe the requirement for t he petitioner to obtain an ATO

- issued COA.

Public Interest

The FAA finds that a grant of exemption is in the public interest. The enhanced safety and

reduced en vironmental impact achieved using a UA with the specifications described by the petitioner and carrying no passengers or crew, rather than a manned aircraft of significantly greater proportions, carrying crew in addition to flammable fuel, gives the FAA go od cause to find that the UAS operation enabled by this exemption is in the public interest. The FAA also finds that UAS provide an additional tool for aerial imagery in support of the insurance industry, adding a greater degree of flexibility and enhanced safety, which supplements the current capabilities offered by manned aircraft.The following table summarizes the FAA’s determinations regarding the relief sought by the petitioner:

Relief considered (14 CFR) FAA determination (14 CFR)
21 Subpart H Rel ief not necessary

21.191(a) Relief not necessary

45.23(b) Relief not necessary

45.27 Relief not necessary

61.113(a) and (b) Relief g ranted with conditions and

limitations

91.7(a) Relief g ranted with conditions and

limitations

91.119(c) Granted wit h conditions and limitations

91.121 Granted with conditions and limitations

91.151(a) Relied granted for 91.151(a)(1), day,

with conditions and limitations

91.405(a) Relief g ranted with conditions and

limitations

91.407(a)(1) Relief g ranted with condit ions and

limitations

91.409(a)(1) and (2) Relief g ranted with conditions and

limitations

91.417(a) and (b) Relief g ranted with conditions and

limitations

The FAA’s Decision

In consideration of the foregoing, I find that a grant 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, State Farm Mutual Automobile Insurance Company is granted an exemption from 14 CFR §§ 61.113(a) and (b), 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 allow the petitioner to operate a UAS for the purpose of outdoor research and development related to the use of UAS for civil o perations for insurance functions including: using imagery and analytics in underwriting

, re

- underwriting

, catastrophe response

, roof inspection, and claim resolutions settings . This exemption is subject to the conditions and

limitations listed below.Co nditions and Limitations

Relative to this grant of exemption
, State Farm Mutual Automobile Insurance Company is hereafter referred to as the operator.

The petition and the following supporting documentation are hereinafter referred to as the operating d ocuments:

1 ) Training Syllabus, 2) Operations Manual including: g) Appendix A: Nova F6500 Operator Manual, h) Appendix B: Nova F6500 Maintenance Manual, i) Appendix C: Nova MP32 Field Guide, j) Appendix D: Nova VP23 Field Guide, k) Appendix E: Aerialtronics Opera tions Manual, l) Appendix E: Aerialtronics System Description Manual

Failure to comply with any of the conditions and 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 following aircraft described in the operat ing documents which are the Aerialtronics Altura Zenith ATX8 Unmanned Aircraft System, a quad rotor aircraft weighing less than 18 pounds maximum takeoff weight, and t he Altavian Nova F6500, an all electric fixed wing UAS with a wingspan of 108 inches and a maximum operating weight of less than 20 pounds. Proposed operations of any other aircraft will require a new petition or a petition to amend this grant.

2. UAS opera tions under this exemption are limited to outdoor research and development

related to the use of a UAS for insurance functions including: using imagery and analytics in underwriting

, re

- underwriting

, catastrophe response

, roof inspection, and

claim resolut ions settings

.

3. The UA s may not be flown at an indicated airspeed exceeding 5 0 knots

.

4. The UA ’s must be operated at an altitude of no more than 4 00 feet above ground level (AGL), as indicated by the procedures specified in the operator’s manual. All altit udes reported to ATC must be in feet AGL.

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.

6. All operations must utilize a visual observer (VO). The VO may be used to satisfy the VLOS requirement as long as the PIC always maintains VLOS capability. The VO andPIC must be able to communicate verbally at al l times. Electronic messaging or texting is not permitted during flight operations. The PIC must be designated before the flight and cannot transfer his or her designation for the duration of the flight.

7. The VO must not perform any other duties beyond as sisting the PIC with seeing and avoiding other air traffic and other ground based obstacles/obstructions and is not permitted to operate the camera or other instruments.

8. The operating documents and this grant of exemption must be accessible during UAS

ope rations and made available to the Administrator upon request. If a discrepancy exists between the conditions and limitations in this exemption and the procedures outlined in the operating documents, the conditions and limitations herein take precedence and must be followed. Otherwise, the operator must follow the procedures as outlined in its operating documents. The operator may update or revise its operating documents. It is the operator’s responsibility to track such revisions and present updated and re vised documents to the Administrator upon request. The operator must also present updated and revised documents if it petitions for extension or amendment. If the operator determines that any update or revision would affect the basis upon which the FAA gra nted this exemption, then the operator must petition for amendment to their exemption. The FAA’s UAS Integration Office (AFS

- 80) may be contacted if questions arise regarding updates or revisions to the operating documents.

9. Prior to each flight the PIC m ust inspect the UAS to ensure it is in a condition for safe flight. 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 i s found to be in a condition for safe flight. The Ground Control Station must be included in the preflight inspection. All maintenance and alterations must be properly documented in the aircraft records.

10. Any UAS that has undergone maintenance or alteratio ns that affect the UAS operation or flight characteristics, e.g. replacement of a flight critical component, must undergo a functional test flight in accordance with the operating documents. The PIC who conducts the functional test flight must make an ent ry in the UAS aircraft records of the flight. The requirements and procedures for a functional test flight and aircraft record entry must be added to the operating documents.

11. The preflight inspection must account for all discrepancies, i.e. inoperable

com ponents, items, or equipment, not covered in the relevant preflight inspection sections of the operating documents.

12. The operator must follow the manufacturer’s UAS aircraft/component, maintenance, overhaul, replacement, inspection, and life limit requirem ents, with particular attention to flight critical components that may not be addressed in the manufacturer’s manuals.13. The operator must carry out their maintenance, inspections, and record keeping requirements, in accordance with the operating documents. Maintenance, inspection, and alterations must be noted in the aircraft logbook, including total flight hours, description of work accomplished, and the signature of the authorized UAS technician returning the UAS to service.

14. Each UAS operated under thi s exemption must comply with all manufacturer Safety

Bulletins.

15. The authorized person must make a record entry in the aircraft record of the corrective action taken against discrepancies discovered between inspections.

16. The PIC must possess at least a pri vate pilot certificate and a current third

- class airman

medical certificate

. The PIC must also meet the flight review requirements specified in 14 CFR § 61.56 in an aircraft in which the PIC is rated on his or her pilot certificate.

17. Prior to operations, t he PIC must have completed the operator’s training and currency requirements as prescribed in the operating documents. During that training, the PIC must have accumulated and logged, in a manner consistent with 14 CFR § 61.51(b), the minimum hours prescrib e in the operating documents as UAS pilot operating the make and model of the UAS to be utilized for operations under the exemption. Training, proficiency, and experience

- building flights can be conducted under this grant of exemption to qualify the opera tor’s PIC(s), VO(s) and other essential personnel as defined in the operating documents. However, said training operations may only be conducted during dedicated training sessions. During training, proficiency, and experience

- building flights the PIC is required to operate the UA with appropriate distances in accordance with 14 CFR § 91.119.

18. The operator may not permit any PIC to operate unless that PIC has demonstrated through the operator’s training and currency requirements that the PIC is able to saf ely operate the UAS in a manner consistent with how the UAS will be operated under this exemption, including evasive and emergency maneuvers and maintaining appropriate distances from people, vessels, vehicles and structures.

19. UAS operations may not be con ducted during night, as defined in 14 CFR § 1.1. All operations must be conducted under visual meteorological conditions (VMC). Flights under special visual flight rules (SVFR) are not authorized.

20. The UA may not operate within 5 nautical miles of the airp ort reference point of an airport as denoted on a current FAA

- published aeronautical chart. The UA may not operate within 3 nautical miles from any city or densely populated area.

21. 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.22. If the UAS loses communications or loses its GPS signal, the UA must return to a pre

determined location within the private or controlled

- access property and land or be recovered in accordance with the operating documents.

23. The PIC must abort the flight in the event of unpredicted obstacles or emergencies in accordance with the operating documents.

24. The PIC is prohibited from beginning a UAS flight unless (considering wind and forecast weather conditions and assuming normal cruising speed) there is enough power to fly to the intended landing point and land the UA :

a. When operating the ATX

- 8: with 30 % battery power remaining.

b. When operating the F6500: with battery voltage not less than 20.4 volts.

25. The operator must obtain an Air Traffic Organization (ATO) issued Certificate of Waiver or Authorization (COA) prior to conducting any operations under this grant of exemption. This COA will also require the operator to request a Notice to Airman (NOTAM) not more than 72 hours in advance, but not less than 48 hours prior to the operation , but may provide for a shorter time period in emergency response situations

. All operations shall be conducted in accordance with airspace requi rements in the ATO issued COA including class of airspace, altitude level and potential transponder requirements.

26. All operations shall be coordinated with state or local government agenc ies having jusidictional authority over the emergency response.

27. Al l aircraft operated in accordance with this exemption must be identified by serial number, registered in accordance with 14 CFR part 47, and have identification (N

Number) markings in accordance with 14 CFR part 45, Subpart C. Markings must be as large as practicable.

28. Before conducting operations, the radio frequency spectrum used for operation and control of the UA must comply with the Federal Communications Commission (FCC) or other appropriate government oversight agency requirements.

29. The documents req uired 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 the Administrator or any law enforcement official upon request.

30. The U A must remain clear and yield the right of way to all other manned aviation operations and activities at all times.31. The UAS may not be operated by the PIC from any moving device or vehicle.

32. The UA may not be operated over congested or densely populated a reas.

33. Flight operations must be conducted at least 500 feet from all nonparticipating persons (persons other than the PIC or VO), vessels, vehicles, and structures unless:

a. Barriers or structures are present that sufficiently protect nonparticipating

pers ons from 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 operation s must cease immediately and/or;

b. the aircraft is operated near vessels, vehicles or structures where the land owner/controller has granted permission and the PIC has made a safety assessment of the risk of operating closer to those objects and;

c. operations near the PIC or VO do not present an undue hazard to the PIC or VO, per § 91.119(a).

34. All operations shall be conducted over private or controlled

- access property with permission from the property owner/controller or authorized representative.

Permission f rom property owner/controller or authorized representative will be obtained prior to the beginning of every flight.

35. 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 Safety Board (NTSB) per instructions

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

.

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

This exemption terminates on Febru ary 2 8 , 201 7 , unless sooner superseded or rescinded.

Issued in Washington, DC, on February 25, 2015.

/s/

J ohn B ar b a g a llo

A c ting D e pu t y Di r e c to r
, F li g ht S t a nd ar ds Se r vi c e