KL3 2999375.1 UNITED STATES DEPARTMENT OF TRANSPORTATION FEDERAL AVIATION ADMINISTRATION

__________________________________________ ) Petition for Rulemaking ) to Adopt 14 C.F.R. Part 107 ) to Implement Operational Requirements ) for Micro Unmanned Aircraft Systems ) ) __________________________________________)

PETITION OF UAS AMERICA FUND, LLC (“UAS FUND”) TO ADOPT 14 C.F.R. PART 107 TO IMPLEMENT OPERATIONAL REQUIREMENTS FOR MICRO UNM ANNED AIRCRAFT SYSTEMS

Dated: December 18, 2014

Please address all communications with respect to this Petition to:

Matthew S. Bieschke Brendan M. Schulman President Kramer Levin Naftalis & Frankel LLP UAS America Fund, LLC 1177 Avenue of the Americas 2020 K Street NW, Suite 520 New York, NY 10036 Washington, DC 20006 Phone: (212) 715-9247 Phone: (202) 499-5070 Fax: (212) 715-8220 Fax: (202) 499-5124 Counsel for Petitioner Email: bieschke@uasamericafund.com UAS America Fund, LLC

Email: bmschulman@kramerlevin.com2 In order to promote a framework for the sa fe operation of very light weight unmanned aircraft in the United States, and to address the h uge economic opportunities and growing demand for unmanned aircraft systems (“UAS”) technolo gies across many industries, UAS America Fund, LLC (“UAS Fund”) hereby petitions the Federal Aviation Administration (“FAA”) pursuant to 14 CFR §§ 11.17, 11.25(a)(5), 11.39(c), and 11.61 through 11.75 to adopt 14 C.F.R. part 107 (and amend other parts requiring conforming amendments ) so as to implement operational requirements for micro unmanned aircraft (“mUA”). The spec ific regulation and amendments proposed by UAS

Fund are set out in Attachment A.

In light of the national interest in assuring American leadership in this field, promoting economic development, and providing a safety fra mework for UAS operation in what is currently an absence of specific regulation, UAS Fund petiti ons that its proposed rules be implemented immediately, by final direct rule, rather than by no tice of proposed rulemaking. A final direct rule is permitted by 14 C.F.R. §§ 11.29 and 11.31, and was also expressly authorized by Congress in

Section 333 of the 2012 FAA Modernization and Re form Act which contemplates that the FAA would designate specific “types of unmanned ai rcraft systems” for ope ration in the national airspace system in advance of the lengthy ongoing notice of pr oposed rulemaking (NPRM) process for other categories of unmanned aircraft systems, based on criteria includi ng “their size, weight, [and] speed.” Public Law 112-95 at § 332(b)(1). 1 The FAA certainly can proceed with a direct

1 The FAA has treated Section 333 as a waiver-granting directive although it is entitled “special rules for certain unmanned aircraft systems.” The provision contemplates that the Administrator can determine

“ whether a certificate of waiver” is needed (emphasis adde d). In other words, the FAA is empowered to identify types of UAS that may be operated immediately and establish rules for them without requiring operators to seek individual case-by-case waivers.3 rule when lengthy notice and comment procedur es are “contrary to the public interest.” 2 In the 2012 statute, Congress specifically asked for rules to be put into place immedi ately with respect to certain “types” of UAS.

I. Statement of Interest of UAS America Fund, LLC UAS America Fund, LLC is a privately-fina nced platform working to unlock the

benefits of the commercialization of unmanned ai rcraft systems, including economic development, technical research, innovation, and job creation in the Unite d States. The UAS Fund was established in early 2014 by NE XA Capital Partners, LLC (“NEXA Capital”). NEXA Capital, established in 2007, is an investment banking and financial advisory firm focusing predominantly in the aerospace sector. Its staff includes a rang e of professionals with significant experience and expertise across all of aviation in cluding air traffic control and airspace issues, infrastructure finance and banking, the legislative process, rulemaking, and governmental oversight. NEXA Capital’s staff includes former FA A officials as well as professiona ls with broad experience across government, finance, the aerospace supply chain, and national infrastructure, all focused on

aviation.

NEXA Capital and its staff have a long history of successfully investing in aerospace and infrastructure companies and projec ts, and bring all this knowledge and expertise together to support UAS Fund and, more broadl y, furthering commercial ization of the UAS industry in the United States. The UAS America Fund was incorporated sp ecifically to provide infrastructure financing to the emerging comme rcial UAS industry. UAS Fund is partnering with major aerospace companies, and state and local governments, to accelerate UAS development and

2 5 U.S.C. § 553(b)(3)(B).4 deployment nationwide. UAS Fund also expects to partner with the FAA to ensure that new UAS

infrastructure serves the nationa l interest as it supports th e broad economic and job creation

benefits of UAS commerciali zation across the United States.

This Petition is the first phase of a segm ented approach to UAS regulation that UAS Fund plans to propose to the FAA. As shown in Attachment B, UAS Fund has developed a reasonable and logical market segmentation for UAS operations that is risk-based and will allow for an incremental regulatory framework to be app lied so as not to overly burden the safest types of operation, while also ensuring adequate regulator y, technical, and certifi cation requirements for more complex operations. This Petition covers only the regulatory requirements and environment concerning commercial and other non-recreationa l unmanned aircraft (“UA”) flights for the lightest category of UAS, deemed Category 1A in our segmentation model or “micro” unmanned aircraft (mUA). The framework would govern clos e-proximity operations with the pilot operating the micro UA within visual line of sight. (S uch close-in operations are useful for aerial photography, infrastructure inspection, pr ecision agriculture, mapping/photogrammetry, and, perhaps most importantly, operator training and certification, among many others.) UAS Fund expects to lead further commerc ialization efforts by driving the industry forward with proposing additional regulatory actions, with supporting safety and technical analysis, to further unlock the

full benefits of commercial UAS applications in a thoughtful risk -based approach to regulation across a full segmentation of the market.

UAS Fund has coordinated with parties acr oss all segments of the UAS industry including FAA, legislators, university and other academic institutions, private companies, industry associations, and civilian governmental agencies , all of whom are in agreement that some5 segments of the UAS market are appropriate for a minimally-burdensome regulatory environment. One such segment is the one we present here: micro UA weighing 3 pounds or less.

II. Summary of Petition This Petition and its attachments establish a comprehensive operational framework and pilot qualification standard fo r UAS that are extremely light we ight (3 pounds or less, what we refer to as a “micro” class), move at relatively low speed, are operated at low altitudes (below 400 feet AGL), outside of controlled airspace, at le ast 5 nautical miles from airports, and operated by pilots with a demonstrated level of aeronautical knowledge. These operations present not just an equivalent, but better leve l of safety compared to current operat ions. The Petition is strongly in the public interest because it unlocks the benefits of one class of UAS technology while presenting virtually no safety risk to the national airspace system.

This Petition is supported by an aviation safety study prepared by subject matter expert Dr. Adam Dershowitz of Exponent Engin eering P.C. concluding that operation of UAS within the proposed parameters will not pose a signi ficant increase in risk to manned aircraft. Dr. Dershowitz’s analysis, based upon decades of the F AA’s own bird strike data, establishes that there is virtually no risk of an injury-causing or fatal mid-air collision when an mUA weighing 3 pounds or less is operated below 400 feet a nd at least 5 miles from airports.

III. The Safety Study We submit with this Petition, as Attachme nt C, the expert report of Dr. Adam Dershowitz, Managing Engineer in Exponent’s Therma l Sciences practice where he specializes in aeronautical and astronautical engi neering. Dr. Dershowitz is a licen sed pilot and certified flight instructor, and has expertise in manned a nd unmanned aircraft and spacecraft systems,6 instrumentation, and failure analysis, and he has investigated accidents involving a wide range of aerospace vehicles.

Dr. Dershowitz has undertaken an analysis that we believe has not been done previously by anyone, namely studying the actu al risks posed to bot h general aviation and

commercial air traffic of airborne objects three pounds or less that are located at least five miles from airports and below 400 feet above ground le vel. Dr. Dershowitz observes that, in those locations, despite the presence of an estimated 10 billion birds in th e United States, there has never been a reported injury or death attributed to a bird strike invo lving small or medium birds (3.8 pounds and under). Indeed, in the past 25 years ther e have been are only two cases of any damage

to aircraft from bird strikes in these locations, both reported as “moderate.” When “en route” reports (which do not specify an airport distan ce) are included in the data analysis on the assumption that those flights may be greater than five miles from an airport, the result remains remarkably small: only six injuries and no fatalities. Thus, according to the risk assessment matrix often utilized by the FAA and other agencies, both the likelihood of an occurrence, and the severity of an occurrence are extraordinarily low, even in the absence of th e additional regulatory safeguards that we have included in our proposal. See FAA Risk Management Handbook (FAAH-8083-2) (2009) at Figure 1-5. 3

3 Available at http://www.faa.gov/regulations_policies/handbo oks_manuals/aviation/media/faa-h-8083- 2.pdf7 We believe this is the only study of its kind that provides the FAA with actual safety data, rather than conj ecture, concerning the risks of very light-weight UA to existing airspace users in the United States.

IV. Main Operational Safety Parameters With this understanding that a lightwe ight UA flown at low altitudes and at significant distances from airports poses no significant increase in risk to manned aircraft, UAS Fund has created a regulatory fram ework consisting of main operational parameters, as well as an added layer of safety provided by secondary operati onal standards. Together, these standards set out in our proposed Part 107 provi de for the safe operation of mi cro UA in the United States, and

that can and should be implemented immediately.

A. Weight UAS Fund proposes 3 pounds maximum take off weight or (MTOW) as the upper limit for this proposed category, which we refer to as “micro” UA or “mUA.” The safety of such a lightweight UA is established in a number of different ways.

First , as set out above, the safety of a 3-pound UAS for other airspace users is supported by Dr. Dershowitz’s study establishing th at small and medium birds of the same weight as a micro UA pose little hazard to manned aircraft.8 Second , three pounds is less than the weight of 2 kilograms (4.4 pounds) that civil aviation authorities in peer c ountries have identified as a very low risk category for UAS warranting a permissive regulatory approach. See Australian Civil Aviation Safety Authority NPRM 1309OS - Remotely Piloted Aircraft System s; Transport Canada Advisory Circular No. 600-004 (Nov. 27, 2014). France’s DGAC also makes a distinction at the 2 kilogram threshold, and the United Kingdom’s CAA has a regulatory thre shold at 7 kilograms. (UAS Fund views its three-pound weight parameter as c onservative and has no objection to modification of its proposal to increase the parameter to 2 kilograms ( 4.4 pounds) to match the emerging international standard.)

Third , current FAA regulations allow any pers on to operate an ultralight vehicle weighing up to 254 pounds (plus the person’s wei ght) at or even above 10,000 feet above ground level. 14 CFR 103. Those airborne vehicles, wi th a life on board, are not required to meet airworthiness certification standards nor are operator s of ultralight vehicles required to meet any aeronautical knowledge, age, or expe rience requirements to operate those vehicles or to have

airman or medical certificates. See 14 CFR 103.7.

Fourth , the FAA has for decades not imposed airworthiness or pilot certification requirements upon operators of recreational mode l aircraft even though they may weigh 55 pounds (or more), nearly 20 times heavier than UAS Fund’s proposed “micro” category. Since 1981, the FAA has recommended that model aircraft operato rs operate below 400 feet and at least three miles from airports (or cont act the airport manager). See Advisory Circular 91-57. Those basic operational parameters have been established as safe for decades, with no known collisions9 between manned aircraft and model aircraft ope rated pursuant to them. UAS Fund’s proposal offers a far more conservative approach than operations long permitted by the FAA.

B. Altitude UAS in this category shall be operated below 400 feet AGL, which will provide for

a 100 foot buffer between 14 CFR 91.119 minimums and mUA operations. Ceilings of 400 feet have been shown to be safe by the FAA si nce 1981 guidance in AC 91-57 concerning model aircraft, particularly when coupled with the proposed distance requirements for flights from airports (see below). This ceili ng requirement limits micro UA opera tions to low-risk altitudes and is consistent with restrictions imposed by othe r civil aviation authoriti es. Furthermore, FAA regulations allow for kites and moored balloon s to be operated up to 500 feet AGL, even though those devices are far more difficult for the operato r to control or land in the limited period of time available in the event that the operator observes an approaching manned aircraft. See 14 CFR § 101.13.

C. Distance from Airports UAS in this category shall be operated at least 5 nautical miles from the geographical center of towered and non-towered airports, as shown on current FAA charts. Commercial micro UA flights near any airports defined on then-c urrent FAA charts as Abandoned and/or Closed will be allowed as long as all othe r relevant regulatory requirements are met. Under the proposal, mUA flights are prohib ited from operating in any class of controlled airspace, and therefore only allowed to operate in uncontro lled (Class G) airspace, unless there is prior

authorization.10 Restricting mUA operation to sufficien t distances from airports (absent authorization) is practical and a necessary step to ensure the sa fety of manned airc raft. Integration of commercial UAS into controlled airspace, es pecially that surrounding airports, needs further study and analysis. UAS Fund is in the process of further analyzing these issues as it relates to additional more complex categories (as shown in A ttachment B). The restrictions noted above for micro UA flight away from airpor ts coupled with the 400 foot ha rd ceiling requirement will constrain those mUA operations to areas with extr emely low probability of conflicts with other air traffic, as concluded in Attachment C.

D. Visual line of sight Under our proposal, micro UA shall be flown at all times in locations and a manner that allows for unaided (apart from corrective lenses) visual contact of the UAS such that operational control of the UAS can be maintained and its position and location known. The pilot must be able to and actively scan airspace to see and avoid other air traffic. Regardless of visual acuity, micro UA shall not be flown beyond one half mile from the pilot at any time.

V. Additional Safety Operational Parameters The above basic operational parameters already provide a high degree of safety simply by virtue of the low weight and ope rational locations of the micro UA. To these basic parameters UAS Fund has added various additional safety requirements, includ ing a pilot knowledge requirement. Many of these additional parameters are common-sense, non-burdensome requirements that prudent commer cial operators would likely adopt on their own as good business practices. By codifying these in the FARs, our proposal sets a high but reasonably attainable safety standard for commercial micro UA operators.11 A. Pilot Qualification / Certification The UAS Fund agrees that even micr o UA operators who are engaged in

commercial or other non-recreationa l activities should be required to obtain and demonstrate basic aeronautical knowledge. However, as set out belo w, UAS Fund disagrees th at existing private pilot license or commercial pilot license schemes ar e the appropriate certifi cation standard for this category of UA. Below we discu ss some legal and policy issues re lating to pilot certification, and then present our proposal for a micr o UA pilot certification requirement.

1. Legal and policy matters The FAA has suggested in various recen t exemption documents that 49 U.S.C. § 44711 requires UAS operators (oth er than hobbyists) to obtain a pilot’s certificate. UAS Fund disagrees that the existing types of pilot certifi cates are a legally mandated requirement for future UAS regulation or that such a requirement is a sound policy position for either the Department of Transportation or the United States as a whole, for a variety of reasons.

First , the statute only requires certificates for “air commerce” which has a specific definition that does not apply to UAS operations conducted under the parameters in this Petition. 4

4 Section 40102 defines “air commerce” to mean “f oreign air commerce, interstate air commerce, the transportation of mail by aircraft, the operation of airc raft within the limits of a Federal airway, or the operation of aircraft that directly affects, or may enda nger safety in, foreign or interstate air commerce. In turn, “interstate air commerce” means “the transportation of passengers or property by aircraft for compensation, the transportation of mail by aircraft, or the operation of aircraft in furthering a business or vocation— (A) between a place in— (i) a State, te rritory, or possession of the United States and a place in the District of Columbia or another State, territory , or possession of the United States; (ii) a State and another place in the same State through the airspace over a place outside the State; (iii) the District of Columbia and another place in the District of Columb ia; or (iv) a territory or possession of the United States and another place in the same territory or possessi on; and (B) when any part of the transportation or operation is by aircraft.” The line-of-sight operati ons addressed herein will not cross state lines, do not involve the transportation of mail or passengers, do not take place in Federal airways, and do not endanger the safety of those types of operations.12 Second , Congress in 49 U.S.C. § 44701(f) pe rmitted the FAA discretion to grant exemptions from any requirements in sections 44702 through 44716 of Title 49, including the pilot certificate requirement in Sec tion 44711, in its discretion.

Third , it is abundantly clear that pilot certi ficates already are not required for operation of certain types of “aircraft,” even when operated for commercial purposes. The operation of amateur rockets, moored balloons, kites and unmanned free balloons are all permitted, for commercial or any other purpose, w ithout any pilot certif icate at all. See 14 CFR § 101. Ultralight vehicles (used for r ecreation) and powered parachutes are similarly not subject to FAA pilot certification requirements, see parts 103 and 105, although they arguably could “endanger safety” of air commerce for purposes of appl ying 49 USC § 40102. The FAA has taken the position, and the NTSB Board recently ruled in a penalty adjudication case, that all of these devices fall into the statutory de finition of “aircraft” under Title 49. 5 If the FAA is correct that no aircraft may be operated for a bus iness purpose without a private or commercial pilot certificate, the decades-long license-free operati on of devices listed in Part 101 is incomprehensible. The better explanation is that not every operation of an “aircraft” requires a pilo t certificate and that the FAA is not mandated by statute to impose a pilot “ce rtificate” requirement for the new category of devices known as unmanned aircraft systems, but is free to waive the requirement.

Fourth , in the 2012 FAA Modernization and Re form Act, Congress directed the FAA to implement rulemaking for unmanned aircraft systems but did not refe r to a pilot certificate requirement. Rather, the rulemaki ng that is contemplated instruct ed the FAA to “(iii) establish

5 Administrator v. Pirker , Docket CP-217 (NTSB Order No. EA-5730, Nov. 18, 2014) at 10 (“Though they are subject to special operating rules, the unma nned devices covered under part 101 nonetheless are ‘aircraft.’”)13 standards and requirements for the operator a nd pilot of a civil unma nned aircraft system, including standards and requirements for regist ration and licensing.” Public Law 112-95 § 332. By asking the FAA to “establish” standards and requirements, Congress si gnaled that the existing certification framework does not appl y. Indeed, the statute does not even refer to pilot certificates, but to the more general concepts of “registration and licensing.”

Fifth , although the existing pilo t certification process invol ves security screening by the Department of Homeland Security, such screen ing does not enhance national security interests in the context of mUA because any person who seeks to use an mUA for purposes that could adversely impact national security can do so simp ly by obtaining and operating the same type of device without regard to FAA regul ations. Moreover, recreational hobbyists are not required to be security-screened in this manner, so it make s little sense to impose such a requirement upon American businesses just because the purpose of their operation is comm ercial rather than recreational. A pilot licensi ng requirement for micro UA will not enhance national security.

Sixth , the private pilot and comme rcial pilot certificates cu rrently available involve substantial expense and hours of time learning actual flying skills within a passenger aircraft cockpit, but those skills do not have relevance to UAS operations , particularly for the micro UA category. Micro UA are operated from the ground, l ooking up. Skills learned inside an aircraft cockpit including those for in-flight maneuvers, aircraft systems, emergency procedures, and navigation are of minimal utility but impose signifi cant burdens. The financial burden associated with micro UA pilots obtaining and maintaining a private pilot or commercial license would significantly impact business operati ons and will drastically reduce profits expected when forming14 a business, with no measurable benefit. There al so will be a substantial burden on the FAA in issuing and maintaining pilot records for UA ope rators who will never fly a manned aircraft.

Seventh , imposing upon micro UA operators the existing pilo t certification standards is unnecessarily discriminatory against Americans with disabilities because it would, for example, preclude persons who cannot maneuver themselv es into or out of an airplane cockpit, or who do not have leg functionality sufficient to operate rudder pedals, from obtaining the needed certificate. Yet such persons are fully capable of operating a micro UA using a ground station or radio control, which typically involves control by moving sticks or buttons using hands and fingers. A certificate requirement involving time spent flying a manned aircraft would exclude persons with irrelevant disabilities from th ese new jobs and economic opportunities in the UAS field, in the absence of any rational basis for doing so.

2. Proposed certification standard Notwithstanding the ability of the FAA to forego a micro UA pilot certification requirement, the UAS Fund agrees that UA operators even in th e “micro” category, should obtain and demonstrate basic aeronautical knowledge pr ior to commercial (or other non-recreational) operations. Such knowledge will allow the UAS pilo t to be familiar with airspace configuration, read and interpret aeronautical charts to de termine airspace classification, understand NOTAM reports, meteorological condi tions, fundamentals of aerodynami cs, and the operation of the national airspace system in general. It is proposed, therefore, that pilots of micro UA be required only to pass the written FAA Private Pilot Know ledge Test, also known as “ground school.”

The FAA written exams actually cover far more information than is relevant to UAS operations, but they do cover the key topic areas important to UA operations. Until such15 time as streamlined UA-specific pilot certification programs are established by the FAA, the successful passing of a written “g round school” exam should be more than adequate for micro UA pilots to gain the aeronautical knowledge needed to ensure their safe operation of micro UA in harmony with existing airspace users.

Under our proposal, this “certificate” will be subject to suspension or revocation in the same manner as a pilot certificate, so that th e FAA may exercise enforcement in the event of regulatory violations.

B. Distance from Uninvolved Persons We understand that the FAA is also concer ned about the safety of persons on the ground. Although those risks are often mitigated by state tort laws, reckless endangerment statutes, and use restrictions put into place by m unicipalities and other legi slative bodies, we have incorporated into our framework for micro UA pa rameters intended to address the safety of persons on the ground.

It is proposed that operators of micro UA shall operate at least 100 feet from persons who are not involved in the specific UAS operation. Additionally, no person may operate a micro UA over an open-air assembly of persons.

Additionally, micro UA flight s are only to be conduc ted over the operator’s own property or over the property of others where either express or implicit consent has been granted by the property owner or tenant. This enhances sa fety as well as protecting privacy interests.16 UAS Fund has incorporated the same standard as found in 14 CFR § 91.13 concerning careless or reckless oper ation. In our proposal, the standa rd has been made enforceable by Part 13, including civil penalties and suspension or revocation of the micr o UA pilot certificate.

C. Use of Aural Cues A micro UA operator has an additional sens e that can be used to avoid other air traffic: hearing. In contrast, p ilots of manned aircraft in either open or enclosed cockpits are never

able to use sound to detect and avoid other air traffic because of their own engine noise, radio headsets, and the cockpit enclosure (hence the term “ see and avoid” – reflecting a limitation in the senses available to a conventional pilot). Ou r proposal recognizes that a person on the ground operating a micro UA within visual line of sight can and should us e auditory cues to detect and

avoid other air traffic.

D. Meteorological Conditions All UAS flights in this “micro” cat egory shall be conducted in Visual Meteorological Conditions (“VMC”) and may not be operated less than 500 feet below, less than 2,000 feet horizontally from, or above, a cloud or when visibility is less than 3 statute miles from the operator. These are the same operational pa rameters allowed for kites weighing 5 pounds or

more.

All UAS flights shall be conducted during da ylight (defined as between the hours of

local sunrise and sunset at the time of the UAS flight), unless the UAS is equipped with an operating anti-collision light visibl e for at least 3 statute miles, in which case the UAS may be operated during the twilight periods 30 minutes before official lo cal sunrise and 30 minutes after17 official local sunset at the time of the UAS flight, or, in Alaska, during the pe riod of civil twilight. This is the same parameter used for ultralight vehicles.

E. Medical Because of the lack of persons on boar d whose lives would be endangered by a pilot’s unexpected medical issue, and the extrem ely limited flight time of UAS in the micro UA category, UAS Fund proposes that no medical certificate be required for operation of this category

of UAS.

Unlike a manned aircraft that, upon a pilot’ s medical emergency, must be navigated back to an airport potentially a long distance away or dangerously ditched in water, a field, or a roadway, a micro UA pilot operating within line of sight can very easily land the UA in seconds, in the operating area, in the event of emergent medi cal issues. Additionall y, operation of a micro UA does not require significant physical strength as these UAS are typi cally controlled using remotecontrol sticks or buttons, and many are equipp ed with “auto-hover,” “return to home,” or “autoland” features that further mitigate risks relating to medical contingencies or in low-battery

states.

Micro UA pilots shall not operate the UAS under the influence of any drug or

alcohol.

F. Age requirement In order to operate an mUA for commercial purposes, the primary pilot shall be at least 18 years’ old on the date of the operation.18 G. Experience with Equipment Operators of micro UAs are required to ga in experience and confidence with their specific UA equipment before conducting for-hire operations, as reflected in our proposal to require at least 5 hours of flight time and 25 takeo ff-and-landing sequences. Th is step requires that persons familiarize themselves with their equipment while not unduly burdening experienced operators who are simply switching from one type of micro UA to another.

VI. Insurance Requirement In order to assure th e public about the safety of mi cro UA operations, the ability of operators to provide compensation in the event of damage or injury, and to encourage the insurance industry to develop its own safety standards for UAS operation based on underwriting principles and risk modeling, UAS Fund proposes that micro UA operators who are engaged in commercial operations be required to obtain liability insurance cove ring bodily injury and property damage.

In consideration of the minimal risk pos ed by micro UA, we propose that, initially, the very minimum level of insurance coverage required by regulation correspond to the minimum liability coverage required by law for the operation of a motor vehicl e in the state(s) in which the UAS operation takes place. However, to ensure th e appropriate terms and conditions for this type of operation, as well as the appr opriate minimum insurance levels for the type of intended UA operation, the insurance policy must be issued specifically for UA operation by an aviation insurance carrier. The carriers may, of course, o ffer their own minimum polic y levels that exceed the regulatory minimum. UAS Fund plans to work with the av iation insurance industry and UAS operators to develop industry-standard insu rance minimums, terms, and conditions.19 VII. Privacy Considerations Issues surrounding individuals’ privacy and the potential violations made possible through the use of unmanned aircraft cannot be ignored. It will be important for commercial UAS users to be respectful of others and to comply with laws protecting individuals from illegal

surveillance and other violati ons of civil liberties.

It is expected that indivi dual state and local governments will continue to set the legal framework for acts involvi ng physical invasions of priv acy, and should be the primary enforcement mechanism given the FAA’s primary ro le as an aviation safety body. Further, we

understand that the National Tele communications and Information Administration and Department of Commerce are anticipated to craft federal privacy guidelines for commercial UAS in the near

future.

VIII. Economic Benefits Micro UA applications are prevalent in key industries pushing for the growth and adoption of transformational UAS technologies capable of generating direct and immediate benefits to domestic businesses, including imme diate opportunities in i ndustries, such as the following: aerial photography, real estate, news gathering and reporting, small-scale farming inspections and monitoring, infrastructure inspec tions, search and rescue, firefighting response, training and certification, among others. With the focus of many micro UA a pplications being to either increase efficiencies through cost sa vings or reducing risk to people and property, commercial interests fall in direct alignment w ith the FAA’s position on public safety and risk aversion, alleviating the need for burde ning regulation and associated costs.20 The new business opportunities and economic development enabled by micro UA technologies will only be realized in an accommod ating commercial environment that encourages adoption by limiting the placement of overburdening regulation. Liberating a micro UA class of operations from unnecessary regulatory burdens will favorably accelerate benefits by fast-tracking pathways to operationally-compliant and low-ri sk applications under minimal regulation, while upholding and emphasizing the FAA’s primar y mission of ensuring public safety.

The current void of regulations for UAS operations (notwithst anding a handful of individual “Section 333” exemptions that each take months to issue) significantly influences the decisions of UAS operators in such a way that the market size and economic impact of the business activity falling under the proposed micro UA regulation is difficult to quantify. However, with the industries mentioned above, the market impact, both with and without regulation, can be estimated as a fraction of the overall industry, am ounting to billions of dollars of lost economic development. For example, if UAS were to re present only 2% of 2013 GDP for selected NAICS Code categories (i.e., agricultur e, forestry, mining, secondary education, insurance, and motion picture/video industries) the economic impact a ttributable to UAS woul d be over $12.6 billion.

Further, substantial cost savings thro ughout the FAA can be realized with the adoption of micro UA regulations such as that proposed herein. Abse nt regulation allowing commercial and other non-recreational UAS operations , such as the current environment set forth by the FAA in its recent “Interpr etation of the Special Rule for Model Aircraft,” presents an environment where operators skirt safety consid erations and present FAA with a significant enforcement challenge. By opening up this low we ight and operationally-rest ricted segment of the market, FAA safety inspectors, attorneys, and ot her staff will be freed from the burden of pursuing21 persons who are operating pursuant to a clear set of safety regulations. Related, there should be significant savings by introducing risk -based rules, starting with the smallest, safest operations and progressing to more complex opera tions requiring more complicat ed and restrictive regulatory frameworks in due course, and these savings wi ll be bolstered by enormous economic benefits

afforded at little cost to the government. Additional information relative to the economic benefits expected through the adoption of micro UA re gulations can be found in Attachment D.

IX. Statement Pursuant to 14 CFR § 11.71 We set out the following information with regard to 14 CFR § 11.71(a): (1) The name and mailing address of petitione r is indicated on th e first page of the petition.

(2) Petitioner proposes to add to and ame nd the federal aviation regulations in the manner set out in Attachment A. The purpose is to establish a regulatory framework for the operation of a specified category of un manned aircraft in the United States.

(3) The language petitioner proposes for the new rule is set out in Attachment A.

(4) As set out in detail above as well as Attachment D, the proposed action is in the public interest because it unlocks the tremendous economic benefits of lightweight unmanned aircraft systems, provides a specific safety fr amework for commercial operators to comply with (compared to the absence of specific safety para meters today), and relieves the FAA to focus on rulemaking for larger and more comp licated unmanned aircraft systems.

(5) Information and arguments supporting petitioner’s proposed action are set out above in detail, and include the UAS Safety An alysis performed by Dr. Adam Dershowitz annexed22 as Attachment C and the economic impact analysis annexed as Attachment D. We also note recent testimony at Congressional committee hearings in which lawmakers and witnesses testified to the

tremendous benefits to the nati on that will be realized by th e operation of commercial unmanned aircraft systems.

(6) We have set out above specific facts and circumstances supporting and demonstrating the need for this proposed rulemaki ng action. We highlight he re the fact that other countries are moving forward with less stringent regul ation of smaller unmanned aircraft as well as

the tremendous demand across countless industries for access to this technology within a clearly defined and reasonable set of safety parameters (that do not currently exist). The current framework, in which the FAA requires case-by-case waiver applications requiring at least 4 months to be processed as well as specific COA approval for airspace thereafter, is insufficient to support the economic needs of the nation and create s an unnecessary administrative burden on the FAA along with substantial budgetary requirements. The fact that the FAA’s notice of proposed rulemaking for UAS up to 55 pounds is estimated to take at least 18 months to two years to be finalized is a specific circumstance calling for im mediate implementation of our proposal by final

direct rule.

We set out the following information with regard to 14 CFR § 11.71(b): (1) The benefits of our proposed action to society in general are enormous. We have included an economic impact study as A ttachment D. The proposal will also offer environmental benefits in applications i nvolving agriculture, w ildlife monitoring and environmental studies. The costs to society are zero because operation of micro unmanned aircraft pursuant to the parameters we propose adds no signifi cant risk to airspace users, protects persons23 on the ground, and includes an insurance requirem ent. On the contrary, by providing a safety framework for commercial operations, our proposal reduces existing costs to society by creating a specific safe operating framework as well as redu cing the burden on government to investigate or

take enforcement action.

(2) The regulatory burden of our propos ed action on small businesses, small organizations, small governmental jurisdictions, and Indian tribes was specifically designed to be minimal while maintaining conservative safety sta ndards. For example, we have addressed micro UA pilot certification standard so as to keep th e cost and burden minimal and therefore within reach of small businesses. The insurance requir ements track what is required by states for

automobile drivers and is th erefore a reasonable burden.

(3) There are minimal recordkeeping and reporting burdens. A log book of training as well as operational flights is a straightforward and familiar requirement. Once an operator is qualified by possessing the written-test micro UA license, reporting is only required in the event of significant third-party pr operty damage or serious injury.

(4) The proposed action will benefit natu ral and social environments. Batterypowered micro UA can achieve many important, valuable tasks with no impact on the environment, particularly compared with nois y, fuel-consuming manned ai rcraft operations (if such operations are even possible) . The proposal also is benefici al for social environments by establishing safety parameters fo r micro UA operations at social and sporting ev ents or near other gatherings of people.24 X. Considerations under 14 C.F.R. § 11.73 The UAS Fund’s petition satisfies all cr iteria set out in 14 C.F.R. § 11.73 with respect to regulations of amendments based on a petition for rulemaking. 6

A. The immediacy of the safety or security concerns Currently, there are no specific regulations focused upon or applicable to unmanned aircraft systems. A notice of proposed rulema king has been drafted, but finalization is not anticipated to occur until 2016 at the earliest. In the interim, countless individuals and businesses have proceeded with UAS operations for commer cial, scientific, resear ch and other purposes because of the extraordinarily compelling benefits of the technology as applied. In the absence of specific regulations, these operators lack any specific operational gui dance or safety standards to aspire to. This Petition provides one such stan dard, expressly establishing a framework for UAS operations in a 3-pound or below category, requ iring that pilots obt ain a reasonable and demonstrated level of aeronautical knowledge , and insurance prior to operation, among other requirements, in very controlled and limited cond itions. This Petition al so addresses concerns voiced recently by the FAA Administ rator and Members of Congress 7 that the lack of any specific UAS regulatory framework poses an immediate safe ty concern for users of the national airspace system.

6 UAS America Fund requests that this Petition be treated as a separate acti on from the current NPRM process concerning small unmanned aircraft systems because, we believe, that rulemaking concerns regulations pertaining to UAS below 55 pounds and is subject to lengthy notice and comment procedures. This Petition requests adoption of a direct final ru le concerning UA that weigh 3 pounds or less.

7 Hearing of the House Committee on Transportation, December 10, 2014.25 B. The priority of other issues the FAA must deal with Among its many other obligations, the F AA is occupied with the task of establishing a regulatory framewor k for UAS that are 55 pounds and below. UAS Fund agrees that as UAS weight and altitude increase, additional regulatory safeguards are called for. Those ought to be the focus of the agency’s rulemaking atte ntion. The operation of very lightweight UAS at very low altitudes and away from airports are a relatively low priority for the FAA because those operations pose such little risk compared to othe r UAS operations at higher altitudes or closer to airports where conflicts with general and comm ercial aviation air traffic are more likely.

C. The resources the FAA has availa ble to address these issues The Petition is designed to conserve FAA resources by segmenting the UAS regulatory framework based on risk. Exempti on applications under FMRA Section 333 have already created a significant burden on commercial co mpanies seeking the ability to operate in the U.S., as well as a large burden on the FAA in or der to review, respond to, and ultimately grant operations to take place. The category addresse d by this Petition is the one requiring the least oversight by the FAA, conserving agency resources (with respect to rule making, pilot certification and enforcement). Not only will opening up this segment to commercial operations relieve the significant on the FAA such as the efforts n ecessary to maintain the Section 333 exemption program, but it will importantly allow FAA to redire ct those resources to fu rther define and focus activities around other more comple x segments of the market. Moreover, UAS Fund has enclosed a safety study establishing the low risk posed by very small UAS.26 XI. Conclusion As noted throughout this Petition, the implications for allowing commercial operations of micro UA weighing no more than three pounds operating below 400 feet and wellclear of airports, other air traffic, and uninvol ved persons/property on th e ground, along with the

other restrictions and consideratio ns stated throughout, is reasonabl e and a practical first step for opening up the United States to UAS opportunities fo r commercial users, and in a safe manner. Implementation of an incremental-based rule-making environment will allow for consideration of more complex operations and operating environmen ts to be complemented with appropriate technical, regulatory, and certifi cation requirements, but there should be no delay in allowing commercial UAS operations to proceed immediately.

In addition, the ability for non-recrea tional UAS operations specifically for research, development, and product innovation is critical to UAS Fund’s ability to make investments, along with other capi tal partners, in such a manner as to significantly drive the industry forward. These operations, as restricted as noted herein, pose no little to no additional threat to aircraft or persons and property on th e ground compared to small and medium sized birds that are already present in the airspace system today. The ability for governments, companies, and

individuals to utilize UAS for non-recreational purposes will create considerable economic development even at this very small micro UA segment of the full market.

Industry, academia, and most importantly the U.S. Congress have been demanding quicker action on the FAA’s part relative to regulation of UAS, and only a portion of the items required by Congress of the FAA in the 2012 FAA Modernization and Reform Act have been achieved on the schedule defined in that legisl ation. Delays by the F AA and its uncertainty27 disseminated to the industry on rules governing UAS operations is causing tens of millions of dollars in lost economic development for our nation’ s economy, an inability for citizens to benefit from the impacts that UAS can bring such as those in law enforcement and public safety as well as the risks to the public from non-sanctioned commercia l operators flying in the absence of specific regulations, and a real slippage in the United States’ position as the industry leader in aerospace research, development, and techno logical innovation, a pathfinder ro le the USA has held since the

birth of aviation itself.

UAS Fund plans to work closely with FAA to continue to assist in developing a rulemaking process to continue to allow further commercial applications and uses of UAS while promoting a safe environment for all and leveraging technological improvements and advancements to ensure public safety. The ma rket segmentation offered by UAS Fund and shown in Attachment B highlights one method for in cremental risk-based legislative action.

Filed: December 18, 2014ATTACHMENT A

PROPOSED REGULATIONS FOR MICRO UNMANNED AIRCRAFT

PROPOSED 14 CFR Part 1071 UAS America Fund, LLC KL3 2998678.5 UAS America Fund LLC Micro Unmanned Aircraft Proposed Part 107 §107.1 Applicability. This part prescribes rules governing th e operation of micro unmanned aircraft in the United States. For purposes of this pa rt, a micro unmanned aircraft means a device capable of sustaining its own powered flight in the air, that is operated without the possibility of direct human intervention from within or on the device, and that: (a) weighs 3 pounds or less gross take off weight, including power source and payload; (b) is powered by an electric batter y or other non-combustion power source; (c) is operated for a business, commercia l, scientific, academic , research or other non-recreational purpose; and (d) is not a “model aircraft” subject to Public Law 112-95 § 336. §107.3 Waivers. No person may conduct operations that requi re a deviation from this part except under a written waiver issu ed by the Administrator. §107.5 Careless or reckless operations. (a) No person may operate a micro unma nned aircraft in a careless or reckless manner so as to endanger the life or property of another. (b) No person may allow an object to be dropped from a micro unmanned vehicle if such action creates a hazard to other persons or property. §107.7 Certification, registra tion and other requirements. (a) Notwithstanding any other section pertaining to certification of aircraft or their parts or equipment, micro unmanned aircraft and their component parts and equipment (including ground station or ra dio control systems) are not required to meet the airworthiness certification standards specified for aircraft or to have certificates of airworthiness. (b) Notwithstanding any othe r section pertaining to regi stration and marking of aircraft, micro unmanned aircraft are not required to be registered or to bear markings of any type, except that the name, address, a nd telephone number of the owner or operator2 UAS America Fund, LLC KL3 2998678.5 shall be affixed to at least two externa lly visible locations on the micro unmanned aircraft. (c) Notwithstanding any ot her section, micro unmanned aircraft operated pursuant to this part are not subject to any othe r federal aviation regul ation, including any provision of parts 21, 45, 47, 61, or 91. §107.9 Daylight operations. (a) No person may operate a micro unma nned aircraft except between the hours of sunrise and sunset. (b) Notwithstanding paragraph (a) of th is section, micro unmanned aircraft may be operated during the twilight periods 30 minu tes before official sunrise and 30 minutes after official sunset, or, in Al aska, during the period of civil twilight as defined in the Air Almanac, if: (1) The micro unmanned aircraft is equipped with an operating anticollision light visible for at least 3 statute miles; and (2) All operations are conducte d in uncontrolled airspace. §107.11 Operation near aircraft; right-of-way rules. (a) Each person operating a micro unmanne d aircraft shall continually maintain vigilance so as to see and avoid aircraft a nd shall yield the right- of-way to all manned aircraft. (b) No person may operate a micro unma nned aircraft in a manner that creates a collision hazard with respect to any aircraft. (c) Each person operating a micro unmanne d aircraft, upon hearing engine, rotor, or propeller sounds from an aircraft uninvolved in the ope ration, shall take precautionary steps to identify the altitude and flight direct ion of the uninvolved ai rcraft and yield right of way. §107.13 Operating limitations: alti tude, airspace and locations. (a) No person may operate a micro unma nned vehicle at an altitude greater than 400 feet above ground level (AGL). (b) No person may operate a micro unm anned vehicle within Class B, Class C, or Class D airspace or w ithin the lateral boundaries of the surface area of Class E airspace designated for an airport, unless th at person has prior authorization from the ATC facility having jurisdic tion over that airspace.3 UAS America Fund, LLC KL3 2998678.5 (c) No person may operate a micro unmanned aircraft within 5 nautical miles of the geographic center of an airport as denoted on a current FAA-published aeronautical chart unless that person has prior wri tten authorization from that airport’s management. This restriction does not apply to airports that are cl osed or abandoned. (d) No person may operate a micro unma nned aircraft beyond his or her visual line of sight (VLOS). During th e flight operation, the operator must be able to view the micro unmanned aircraft at all times using hi s or her own natural vi sion (which includes the use of vision corrected by standard eyegla sses or contact lenses but excludes the use for flight navigation purposes of vision-enha ncing devices such as binoculars, night vision goggles, powered vision ma gnifying devices, or video glasses designed to provide a “first person view” from a camera mounted on the micro unmanned aircraft), and must visually scan the surrounding airspace to see and avoid other air traffic. The maximum operating distance of a micro unmanned aircra ft system from the operator under this subsection is 2,640 feet, regardless of the visual acuity of the operator. (e) No person may operate a micro unmanned aircraft closer than 100 feet from any persons uninvolved in the operation. (f) No person may operate a micro unmanned aircraft over an open-air assembly of persons. (g) No person may operate a micro unmanned aircraft in special use airspace designated under Part 73 unle ss that person has permission fr om the using or controlling agency, as appropriate. (h) No person may operate a micro unm anned aircraft over privately-owned property without the express or implied permi ssion from the property owner, tenant in possession, or an authorized representative thereof. (i) No person may operate a micro unmanned aircraft system within 5 nautical miles of any forest fire without au thorization from the incident commander. (j) Prior to operating a micro unmanned aircraft under this part, the operator shall become familiar with all pertinent information concerning the proposed operational location, including but not limited to review of relevant NOTAMs. (k) Any person intending to operate a micro unmanned aircraft within one mile of any active emergency shall firs t check for any NOTAMs with respect to restrictions on operation s in that location. § 107.15 Meteorological conditions. All flights under this part must be conducted under visual meteorological conditions. A micro unmanned aircraft may not be operated under this part less than 5004 UAS America Fund, LLC KL3 2998678.5 feet below, or less than 2,000 f eet horizontally from, a cloud, or when visibility is less than 3 statute miles from the operator. §107.17 Operating limitations: ground speed. No person may operate a micro unmanned aircraft in excess of 40 knots ground speed. §107.19 Operator qualifications. (a) An operator of a micro unmanned airc raft system under this part must be at least 18 years of age. (b) No person may operate a micro unmanned aircraft system under this part without first passing the FAA private pilot wr itten airman knowledge test administered by an FAA-accredited pilot school or test center. Prior to any operation under this part, the operator shall send written notification to the FAA evidencing the test results together with the operator's name and contact info rmation, which submission the Administrator will acknowledge in writing as constituting th e operator's micro unmanned aircraft pilot certificate for purposes of 49 USC § 44711. Th is subsection shall not apply to micro unmanned aircraft systems ope rated as public aircraft. (c) The FAA may pursue investigation a nd enforcement procedures set out in part 13 with respect to the operator of a micro unmanned aircraft systems, including potential suspension or revocat ion of a micro unmanned aircra ft pilot certificate held by its operator. (d) Any other FAA pilot certificate that has as a requisite a written airman knowledge test may, if said certificate is current and in good standing, serve as a micro unmanned aircraft pilot certifi cate under subsection (b) even if the operator is unable to provide evidence of his or her written test resu lts. Such pilot certif icates will constitute the operator's micro unmanned aircraft pilo t certificate for purposes of 49 USC § 44711 and part 13. (e) No person shall operate a micro unmanned aircraft for hire or for a commercial purpose (other than research and development activates relating to the micro unmanned aircraft or its rela ted systems and components), wi thout first undertaking and documenting the following steps to gain e xperience and proficiency with the micro unmanned aircraft model: (1) Review of the micro unmanne d aircraft manufacturer's operating manuals and any instructional vide os provided by the manufacturer; (2) at least 5 hours of total operating flight time; and (3) at least 25 takeoff-and-landing sequences.5 UAS America Fund, LLC KL3 2998678.5 (f) All operations unde r this part (including traini ng) shall be documented and recorded in a permanent place such as a log book. For the purposes of meeting the minimum requirements of this subsection, each person must record the following information for each micro unmanned aircraft flight: (1) Date and time (2) Micro unmanned aircraft type, make, model (3) Route and boundaries of flight (4) Total duration of flight (5) Weather conditions of flight (6) Number of landings (7) Total flight time and/or lesson time (8) Remarks or other pertinent details §107.21 Alcohol or drugs. (a) No person may operate a micro unmanned aircraft — (1) Within 8 hours after the consum ption of any alc oholic beverage; (2) While under the in fluence of alcohol; (3) While using any drug that affects the person's faculties in any way contrary to safety; or (4) While having an alcohol concentr ation of 0.04 or greater in a blood or breath specimen. Alcohol concentra tion means grams of alcohol per deciliter of blood or grams of al cohol per 210 liters of breath. §107.23 Insurance. (a) No person shall operate a micro unmanned aircraft for hire or for a commercial purpose (other than for research and development of the micro unmanned aircraft or its systems and components) unless he or she has in effect liability insurance coverage that at a minimum meets or ex ceeds the minimum motor vehicle insurance coverages for both property damage and bodily in jury required in the state in which the operation occurs, and that has been issued sp ecifically to insure against risks of the operation of the micro unmanned aircraft. (b) Insurance coverage to meet the requir ements of this part shall be obtained from one or more of the following: (1) An insurer licensed to issue airc raft accident liability policies in any State, Commonwealth, or Territory of th e United States, or in the District of Columbia; or6 UAS America Fund, LLC KL3 2998678.5 (2) Surplus line insurers named on a cu rrent list of such insurers issued and approved by the insurance regul atory authority of any State, Commonwealth, or Territory of the Unite d States or of the District of Columbia. (c) All person who have operated micro unmanned aircraft under this part must present their logbook, proof of insurance, and evidence of submission to the FAA Administrator their written test results or thei r valid pilot certificate, or any other record required by this part for inspecti on upon a reasonable request by— (1) The Administrator; (2) An authorized representative of the National Transportation Safety Board; or (3) Any Federal, State, or local law enforcement officer. §107.25 Accident reporting. In connection with any operation under this part, any incide nt involving $1,000 or more in third-party property damage, and a ny accident involving any bodily injury, must be reported to the nearest FAA Flight Sta ndards District Office within three business days. Accidents involving a serious injury or death shal l be reported to the NTSB pursuant to 49 CFR § 830.ATTACHMENT B

UAS AMERICA FUND MARKET SEGMENTATION FOR UNMANNED AIRCRAFT SYSTEMSRegulatoryRequirements TechnicalRequirementsCertificationRequirementsExampleApplications Low Altitude (below 400' AGL) High Altitude (above 400') Micro UA (< 3 lbs) Small/Large (>3 lbs) Non ‐ populated Area Populated Area Public Property Private Property with Permission

Line of Sight Beyond Line of Sight Daytime VFR Nighttime IFR Insurance Necessary Geo ‐ fencing Return to Orgin / Fix Collision Avoidance System Constant Position Reporting Descent Control Pilot (UAS

‐ specific) Aircraft (UAS

‐ specific) Operator (UAS

‐ specific)Acrossallcategories,thefollowingareassumed:‐Common‐senseoperatingrules‐Nocarelessorrecklessflight‐Flyingoodweatherconditions‐Respectothers'privacy‐No‐flyrestrictions:nearairports,overcrowds,etc.IncrementalcharacteristicsofeachcategoryRecreationalFlights:MinimalRegulationsHobbyistandrecreationalflights   Basehobby/recreationcategoryRecreationalFlights:Certification&TechnicalRequirementsHobbyistandrecreationalflights     AddsFPV/BLOSCommercialFlights‐Category1A(MicroUnmannedAircraft):MinimalRegulationsClose‐proximityandLine‐of‐Sightcommercialoperationssuchas:‐Training&certification‐Aerialphotography‐Infrastructureinspection‐Small‐scaleprecisionagriculture‐Firefighting,discrete‐areaSAR‐Insuranceinvestigation      BasecommercialCategory1A‐MicroUnmannedAircraftAdditionalcommercialcategories(1B,1C,etc)expectedtobeaddedincrementally,overtimeandwithsufficientsupportinginformationtojustifyeconomicimpactsandsafetyconcerns.Anticipatedfuturecategories:‐Increasedweightthresholds(5#,10#,25#,etc)‐Highertieredaltitudelimits(floorofClassEorD)‐IncreasinglyrobustPilotcertificationrequirementsUAS‐specificpilotcertificatewillberequiredCommercialFlights‐Category2:MinimalCertification/RegulationandTechnicalRequirementsAerialimaging,Surveys,Photogrammetry,Agriculture,etc      Addsallowanceforflightsoverpopulatedareas,withgeo‐fencingandreturntechnology,andnighttimeflightsCommercialFlights‐Category3:Pilot,Aircraft,&OperatingCertificationsNecessaryandTechnicalRequirementsDispersed‐areaoperationssuchaslong‐distanceBLOSflightsfor‐Search&Rescue‐Infrastructureinspection‐Agriculturemonitoring,etc     AddsallowanceforBLOSwhenpilot,aircraft,andoperatorobtainUAS‐specificcertification;AddslargeaircraftoperationswhenobtainingUAS‐specificaircraftcertification;Addsrequirementforon‐boardconstantpositionreportinganddescentcontrolCommercialFlights‐Category4:FullCertificationNecessaryandfullsuiteofTechnicalRequirementsrequiredNorestrictions‐governedbyOperatingCertificate(s)andaircraftlimitations  AddshighaltitudeandIFRallowances;NASintegrationnecessaryifflyingincontrolledairspaceInitially, reasonable and logical market segmentations, andtheir associated regulatory requirements, are possibleATTACHMENT C

UAS SAFETY ANALYSIS

## UAS Safety Analysis

December 1 6 , 2014 Exponent Project No. 1408989.EX0December 1 6 , 2014

Mr. Matthew Bieschke UAS America Fund , LLC 2020 K St. NW, Suite 520 Washington, DC 20006

Mr. Brendan Schulman Kramer Levin Na f talis & Frankel LLP 1177 Avenue of the Americas New York NY 10036

Subject: UAS Safety Analysis Exponent Project No. 1408989 .EX0

Dear Mr. Bieschke and Mr. Schulman: Attached please find the UAS Safety Analysis report, prepared at the request of UAS America Fund, LLC and Kramer Levin Na f talis & Frankel, LLP. Sincerely,

Adam Dershowitz, Ph.D., P.E. Managing Engineer

© Exponent, Inc.

1408989.EX0

- 15201408989.EX0

- 1520 2 

## Introduction

At your request, Exponent Failure Analysis Asso ciates (Exponent) has conducted a preliminary analysis of some of the risk s related to micro Unmanned Aerial Vehicles (UAVs) operating in the National Airspace System (NAS). While currently there is little data available for any impacts that might have oc curred, there is significant data available on bird strikes on aircraft. Accordingly, birds were used as an analog to UAVs for the purposes of this analysis. This report sets forth the conclusions reached from the analysis.1408989.EX0

- 1520 3 

## Background

UAVs, commonly refe rred to as “drones,” are unmanned flying vehicles. The FAA is currently going through the process of developing new regulations for the use of these vehicles in the NAS. However, there is a dearth of data about the risks posed by the o peration of these vehicles. As the vehicles, by definition, do not have anyone on board, there is no risk to any passengers. However, there is potential risk to others that might be presented by Unmanned Aerial Systems (UASs 1 ). One of the large concerns relates to the interactions between UAVs and manned aircraft in the NAS, and the risk posed by these interactions. It is common for aerospace vehicles to be segregated by weight for analysis and regulation. In many countries that have adopted or proposed regulations for UAS s , the regulations are governed by weight category. For the purpose of this report, a weight of three (3) pounds and below is used to define this category of vehicle (micro UAVs)

. In order to assess the risk to existing manned aircraft posed by micro UAVs, some data is required. D ata is currently lacking as to damage caused by micro UAVs ; however, there is a large FAA Wildlife Strike Database ( http://wildlife.faa.gov/ ). The full FAA database in cludes both military and civilian reports. While this database does not include every bird strike, the FAA estimates that it represents 39% of all bird strikes. 2 It is likely that less significant events are more highly under

- reported. No attempt was ma de to adjust for any such potential bias that might occur in the database. The database was downloaded in August of 2014, and includes bird strike data going back to 1990. Since the inception of the b i rd strike database, the FAA has encouraged reporting of wildlife aircraft strikes. On 12/22/04 it issued Advisory Circular 150/5200

- 32A which “explains the importance of reporting collisions between aircraft and wildlife”. On 5/31/2013 it was updated as 150/5200

- 32B which states, “Studies have shown t hat strike reporting has steadily increased over the past two decades

. ” As birds are similar in weight to micro UAVs, Exponent decided to assess whether birds could be used as a surrogate for UAVs in evaluating collisions , and then to use the birdstrike d atabase to analyze the risk presented to aircraft by micro UAVs until better data becomes available

. Using birdstrike data is reasonable because w hile there are many factors involved in the detailed impact dynamics between two objects, the most important is kinetic energy. The kinetic energy (KE) of an impact is defined as: KE=1/2*m*V^2 Where m is the mass of the incoming object, and V is the closing velocity. The specifications of several current micro UAVs were reviewed and found to have a maximum spe ed of approximately 35 MPH. Maximum bird speeds are generally higher, although like UAVs they have a very wide range depending on the species 3 and do not often fly at maximum speed

.

1 A “UAS” represents the system made up of components including such things as the ve hicle (UAV), the operator and the radio control system 2 http://www.nbaa.org/ops/safety/20120921

- dot

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- faa

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- strikes.php 3 https://web.stanford.edu/group/stanfordbirds/text/essays/How_Fast.html1408989.EX0

- 1520 4 While specific collision geometry is important , the closing speed of the se impacts is dominated by aircraft flight speed. Similar sized birds and UAVs are thus likely to have similar impact kinetic energy. The details of the impact can be relevant, but the primary determination of damage is the KE. The Wildlife Strike Databa se divides birds by size into three categories. Instead of providing strict weight divisions, the FAA presents examples of each. A sparrow is considered small, a gull is considered medium , and a vulture is considered large. As gulls can weigh up to 3.8 p ounds, the small and medium birds in the database were used to represent the micro UAVs of interest, with a maximum weight of 3 pounds

. While the FAA has not yet released proposed rules for UAS operation, several options for proposed rules have been d iscussed. For this analysis, it was assumed that initial regulations would require that micro UAVs, at or below 3 pounds ., would operate 5 miles or more from airports and would remain at or below 400 feet. Most civilian airplanes operate at or above 5 00 feet from the ground. It should be noted that some aircraft types have certification requirements for safety against bird strikes. Transport category turbine powered aircraft are certified to continue flying safely after receiving an 8 lb bird strike to the tail and a 4 lb bird strike to the windshield or other structure at specified velocities . The engines m ust not have a “hazardous engine effect” after ingesting up to an 8.03 lb bird (the specific bird weight depends on engine inlet throat area). 4 Recent transport category rotorcraft are certified for at least a safe landing after impact with a 2.2 lb bird 5

. , M ost General Aviation aircraft and helicopters do not have any bird strike resistance or testing as part of their certification basis. They are not required to have engines or canopies/windshields resistant to any particular size, weight, or closing velocity of birds.

4 Federal Aviation Regulations 25.5 71, 25.631, 25.775 and 33.76 5 Federal Aviation Regulation 29.6311408989.EX0

- 1520 5 

## Analysis

The FAA Wildlife Strike Database was found to contain a total of 151,305 strike reports for the 24.5 years catalogued from 1990 to the present

. Of these, 136 , 624 (90%) included small or medium sized birds. There are 13 ,906 (9%) reports where there was an indication of damage to an aircraft and there are 230 (0.15%) reports with an injury or a fatality involved. The database was used to analyze the number of collisions reported in the database that occurred where UAVs would be allowed to operate under the proposed regulations discussed above. The initial database searches were for to small

- and medium

- size birds strike reports that occurred 5 or more miles from airports and at or below 400 ft. Using those parameters, no injuries or fatalities were caused by small or medium birds in the database. That same search shows two cases of damage to aircraft, both reported as minor (“simple repairs or replacements”) . In one of the instances with damage, there was a hole in the chin bubble of a helicopter, and in the other there was delamination of the radome of an airplane. For completeness t he search was also repeated with a reduced exclusion area of three miles from airports, and reproducing the altitude thresho ld of 400 ft. For small

- and medium

- size birds, there are no fatalities and no injuries. This search finds five reports of damage to aircraft, all minor . (Note that these five include the two listed above for the five

- mile radius search.) There are 15 reports of any impacts, with or without damage, occurring 3 or more miles from airports and at or below 400 feet, and 3 for the 5 mile threshold. This demonstrates both that the database does include non

- damaging impacts, and additionally that a large po rtion of reported impacts include some damage. The above searches include only records that indicate both an al titude and a distance from an airport. M any entries have one or both of those fields blank, and a manual review of the data revealed th at some of those contained bird strikes for such things as pipeline patrols, helicopters ferrying personnel to oil rigs , or law enforcement activities over a city. Even though many of these incidents may be within a few miles of an airport, an additional search was run to include them as if they were all far away from an airport. Searching for records that indicate an altitude at or below 400 ft, AND that have a phase of flight of “En Route” when no distance is available , to the 3 mile results ab ove gives a total of 37 reports of damage to aircraft, 6 with injuries , and no fatalities

. For a 5 mile threshold, this expanded search gives a total of 34 reports of damage to aircraft, 6 with injuries and no fatalities. Finally, the database was searc hed to locate all fatalities associated with small

- or medium

- size birds in any location. This very broad search returned three reports. However, two of those reports were cases in which witnesses reported birds near the aircraft, but the NTSB was not ab le to confirm that there were in fact bird strikes 6

. The above results are summarized in Table 1

.

6 NSTB numbers: FTW94FA158, NYC98FA073, and CEN09MA1171408989.EX0

- 1520 6 Table 1 Summary of database query results

Threshold # Events with Damage # Events with Injuries # Events with Fatalit i es # Events w/o Damage 400	ft/5	miles 2 0 0 1 400	ft/3	miles 5 0 0 10 400 ft / 5	miles	or enroute 34 6 0 400	ft/3	miles	or enroute 37 6 0 All	reports 13906 230 All	small/medium	birds in	any	location 3

Additionally, the NTSB Aviation Acc ident Database was searched for fatal bird strikes prior to 1990 . Only three fatal accidents were found that could be potentially small or medium sized birds, in addition to those mentioned above . In these three the bird size was not listed, so it was not possible to determine if any of them were a good surrogate for micro UAV impact. All three occurred prior to 1990, so would not have been included in the FAA Wildlife Database 7

. There are some limitations in this analysis. The analysis assumes that U AVs and birds will operate in the same way, and will be distributed in the NAS the same way. Birds tend not to fly at high altitudes, and thus the database would be expected to show more strikes at low altitude. Additionally, it assumes that any impact s everity is primarily governed by velocity and mass. In fact, the specific structure and density of the objects involved will play a part in the details of any collision. This analysis is also based on the assumption that UAVs will not be intentionally op erated near manned aircraft , such as those conducting law enforcement and news related activities. Despite these limitations , until better data is available bird effects may serve as an approximation of the effects of UAVs on the NAS. Birds and micro UAV s can both operate over a very wide speed range, so a general

- impact speed cannot be assumed for either one.

. UA Vs will probably fly much less frequently than birds do so simply comparing populations an d extrapolating numbers may not lead to reliable conclusions

.

7 NTSB numbers: MIA67A0043, LAX80FA005, and ATL82FLJ031408989.EX0

- 1520 7 

## Conclusions

It is estimated that there are 10 billion birds in the United States 8 . While these birds do not fly at all times, they do spend a large amount of their time in the air. The extr eme rarity of any collisions between birds and aircraft away from airports and at low altitude , despite the population of 10 billion birds, suggests that unintentional impact between UAVs and manned aircraft away from airports and low altitude will always remain extremely unlikely. Analysis of the full 24.5 years of available FAA data using the proposed UAV regulations of 400 ft. and 5 miles from airports (including “en route ” operations of unreported distance from airport ) , with small

- and medium

- siz e birds as a surrogate for UAVs, shows that there were 3 4 cases of damage to aircraft in collisions with small and medium size birds . This search found only 6 collisions resulting in injuries and none resulting in fatalities within these parameters

. Base d on the FAA Wildlife Strike database there is no indication that allowing UAVs of three pounds or less to operate at least 5 miles from airports and at or below 400 feet will pose a significant increase in risk to manned aircraft.

8 See, e.g ., http://www.nytimes.com/2011/01/18/science/18birds.html?_r=0 and http://www.motherjones.com/kevin

- drum/2011/03/how

- many - birds . For a collection of sources concerning th is estimate, see http://birdstuff.blogspot.com/2002/07/how

- many - birds

- are - there.html1408989.EX0

- 1520 8 

## Limitations

The study presented in this report is intended for use by UAS America Fund, LLC and its counsel Brendan Schulman to assist with a proposal for rulemaking related to operations of micro UAS s, and is not intended to address all issues with respect to operation of micr o UASs

. A pplication of this report requires recognition and understanding of the limitations of both the scope and methodology of the study. Any use of the conclusions in this report is at the sole risk of the reader. The scope of the study was the analy sis of the FAA Wildlife Strike Database using birds as surrogates to UAVs to assess some of the risk posed by micro UASs

. The risk assessment methodology forming the basis of the results presented in this report is based on mathematical and statistical m odeling of physical systems and processes as well as data from third parties. Given the nature of these evaluations, significant uncertainties are associated with the various hazard and loss computations. These uncertainties are inherent in the methodolo gy and subsequently in the generated hazard and loss results. These results are not facts or predictions of the loss that may occur as a result of future events or any specific event; as such, the actual losses relevant to this study may be materially dif ferent from those presented in this study. Furthermore, the assumptions adopted in determining these loss estimates do not constitute the exclusive set of reasonable assumptions, and use of a different set of assumptions or methodology could produce mater ially different results. If you have any questions or require additional information, please do not hesitate to contact me at (212) 895

- 8105 or adershowitz@exponent.com

.05/14 

### Adam Dershowitz, Ph.D., P.E., CFEI Managing Engineer

Professional Profile

Dr. Adam Dershowitz is a Mana ging Engineer in Exponent’s Th ermal Sciences practice. Dr. Dershowitz specializes in aeronautical and as tronautical engineering. He has expertise in aircraft and spacecraft systems and instrumentati on. Dr. Dershowitz studies the interactions of complex systems, including human in the loop syst ems; airplane and heli copter icing; manned and unmanned space vehicles; cockpit displays; c ontrol of vehicles; decision making; safety critical software; and software failures. He mo dels and analyzes vehicles, systems, and their accidents, and analyzes and presents high dimensionality and complex data. Prior to joining Exponent, Dr. Dershowitz work ed at Johnson Space Center for United Space Alliance. There, he worked in NASA’s Mission Control Center on the motion control system of the International Space Station, designed and re searched advanced technology solutions for Mission Control, and served as a member of the orbital debris analysis team for the Shuttle Columbia accident investigati on. Dr. Dershowitz has significant teaching experience, both in the classroom and as a certif ied flight instructor.

Academic Credentials a nd Professional Honors Ph.D., Aeronautics and Astronautics, Ma ssachusetts Institu te of Technology, 1998 M.S., Aeronautics and Astronautics, Ma ssachusetts Institute of Technology, 1991 B.S., Aeronautics and Astronautics, Ma ssachusetts Institute of Technology, 1989 NASA Certificate of Recognition from Inventio ns and Contributions Board, 2005; Nominated NASA Software of the year, 2003; NASA Spaceflight Awareness Award, 2002; Recipient Best Paper Award at AIAA Guidance, Navigation and Controls Conference, 2002; USA Superior Achievement Recognition Award for Technica l Achievement, 2001; USA Employee of the month for Technical Achievement, August 2001; NASA Astronaut Sele ction Finalist, 2000; Nominated to be one of M.I.T. Aero/Astro XVI sixteen “whose innovatio n and vision for the future will help to create a future of opport unity,” NASA Certificate of Recognition and cash award “For the creative development of a t echnical innovation which has been proposed for publication as a NASA Technical Brief, “Augus t 1996; Distinguished Contributor, B.F. Goodrich Collegiate Inventors Program, April 19 92; Hunsaker Teaching Fellowship at M.I.T., awarded 1991

Licenses and Certifications Registered Professional Mechanical Engi neer: California, #M33404; Connecticut, #PEN.0029945; Florida, #70277; New York, #093647; Pennsylvania, #PE81587; Aeronautical Engineer: Massachusetts, #50794; Certified Fire and Explos ion Investigator (CFEI), #19090-Adam Dershowitz, Ph.D., P.E., CFEI Page 2 05/14 10709; Certified Flight Instruct or in single and multiengine airplanes and instruments; Commercial Airplane, Glider, Instrument, aerobatic , and multiengine rated pilot; University of Southern California Aviation Safety and Security Certificate; USC System Safety Certificate (Courses include: Aircraft Accide nt Investigation; Human Factor s in Aviation Safety; Software Safety; System Safety; Advanced System Sa fety; Human Error Analysis); Northwestern Accident Reconstruction Course; HAZWOPER Cert ified; NAUI Open Water SCUBA certified; First aid, CPR, and AED trained; 2 nd degree black belt in Aikido; Certified Forklift Operator

Patents Patent 5,313,202: Method of and apparatus for detection of ice accre tion January 1993 (with R.J. Hansman). Patent 5,039,439: Optically indicating su rface de-icing fluids, March 1989 (with R.J. Hansman).

Publications

Dershowitz A. ISPATOM: A generic real-time data proces sing tool without programming. NASA Software Tech Briefs, September 2007. Kim J, Crassidis J, Vadali S, Dershowitz A. International Space station leak localization using attitude response data. Journa l of Guidance, Control, and Dynamics 2006; September–October. Chamitoff G, James G, Barker D, Dershowitz A. Martian resource locations: Identification and optimization. Acta Astronautica 2005; 56:756–769. Chamitoff G, James G, Barker D, Dershowitz A. Mars mission optimization based on collocation of resources. 6 th International on Mars, Pasadena, CA, July 20–25, 2003. Dershowitz A. ISPATOM: A case study in new-generation generics for operational environments. Space Ops 2002/World Sp ace Congress 2002, Houston, TX, October 9–12, 2002. Chamitoff G, Dershowitz A. Bird's eye view—A 3-D situational awareness tool for the Space Station. Space Ops 2002/World Space C ongress 2002, Houston, TX, October 9–12, 2002. Kim J, Crassidis J, Vadali S, Dershowitz A. ISS leak localization usi ng attitude response. Proceedings, AIAA Guidance, Navigation and Control Conference, Montreal, Canada; August 2001. Chamitoff GE, Dershowitz A. Bryson AL. Co mmand level maneuver optimization for the International Space Station. Proceedings, 23 rd Annual AAS Guidance and Control Conference, Breckenridge, CO, February 2, 2000.Adam Dershowitz, Ph.D., P.E., CFEI Page 3 05/14 Dershowitz A. The effect of options on pilot de cision making in the presence of risk. Ph.D. thesis, Department of Aeronauts and Astr onautics and MIT, Cambridge, MA, October 1997. Deshowitz A, Hansman RJ. An exploration of options in value based aeronautical decision making. Proceedings, 9 th International Symposium on Aviation Psychology, Columbus, OH, April 30–May 1, 1997. Dershowitz A, Lind AT, Chandra DC, Bussolari SR. The effect of compression induced distortion of graphical weathe r on pilot decision making. 8 th International Symposium on Aviation Psychology, Columbus, OH, 1995. Hansman RJ, Dershowitz A. Temperature measur ements reveal accretion of ice on airfoils. NASA Tech Briefs, July 1995. Lind AT, Dershowitz A, Chandra DC, Bussolari SR. A human factors approach to the development and evaluation of the graphi cal weather service. Proceedings, 14 th Annual Digital Avionics Systems Conference, Cambridge, MA, 1995. Simpson R, Hansman RJ, Dershowitz A, Yama guchi K, Kazmierczak M, Wanke C. An Investigation of air transportation technology at the Mass achusetts Institu te of Technology, 1990–1991. Proceedings, NASA Joint University Pr ogram for Air Transportation Research, 1990–1991, NASA CP-3131, June 1991. Dershowitz A, Hansman RJ. Experimental inves tigation of passive infr ared ice detection of helicopter applications. Presented at the 29 th Aerospace Sciences Meeting, paper AIAA-91- 0667, Reno, NV, January 7–10, 1991. Dershowitz A, Hansman RJ. Passive infrared ice detection for helicop ter applications. 46 th Annual Forum of the American Helicopter Society, May 1990.

Presentations Dershowitz A, Weaver B. Engineering case stud ies of aircraft incide nts, lessons learned. Chicago Bar Association Annual Mee ting on Aviation Law, October 2007. Dershowitz A. Failure analysis with case studie s. Society for the Advancement of Materials and Process, ASM Failure Analysis Round Ta ble, Cal State Northridge, April 26, 2006. Dershowitz A, Reza A, Schroeder S. What happe ned? How an engineering laboratory can help you figure it out!” 2006 Winter Meeting of the California Conference of Arson Investigators, San Luis Obispo, CA January 30–February 1, 2006.Adam Dershowitz, Ph.D., P.E., CFEI Page 4 05/14 Professional Affiliations

 American Institute for Aeronautics and Astronautics (senior member)

 AIAA Systems Engineering Technical Committee (member)

 Human Factors and Ergonomics Society—HFES (member)

 Sigma Xi (member)ATTACHMENT D

MICRO UAS – ECONOMIC IMPACT IMPLICATIONSUAS America Fund Micro Unmanned Aircraft – Ec onomic Impact Implications

Page 1 Micro UA - Economic Impact Implications Overregulation of industries and markets, particular ly growing emerging market s, induces consequential effects for individual stakeholders and on the economy and country as a whole. Micro UA applications are in key industries pushing for th e growth and adoption of transfor mational UAS technologies capable of generating direct and immediat e benefits to domestic businesse s, including imme diate opportunities in the following industries: aerial photography, real estate, news ga thering and reporting, small-scale farming inspections and monitoring, in frastructure inspections, search and rescue, firefighting response, training and certification. With th e focus of many micro UA applica tions being to either increase efficiencies through cost savings or reducing risk to people and propert y, commercial interests fall in direct alignment with the FAA’s position on public safe ty and risk aversion, alleviating the need for burdening regulation and associated costs. The new business opportunities and economic development enabled by micro UA technologies will only be realized in an accommodating commercial envi ronment that encourages adoption by limiting the placement of overburdening regulation. Liberating a micro UA class of operations will favorably accelerate benefits by fast-tracking pathways to oper ationally-compliant and lo w-risk applications under minimal regulation, while upholding and emphasizing F AA’s primary mission of ensuring public safety. The current void of regulations for UAS opera tions (notwithstanding individual “Section 333” exemptions) significantly influences the decisions of UAS operators in such a way that the market size and economic impact of the busine ss activity falling under the proposed micro UA regulation is difficult to quantify. However, with the industries mentione d above the market impact, both with and without regulation, can be estimated as a fraction of the overall industry. Market growth from new UAS operations (illustrative) NAICS Codes Sample Micro UA Industry Descriptions 2013 GDP ($MM) 2% 5% 10% Overregulation 115000 Support activities for agriculture and forestry $20,902 $418 $1,045 $2,090 $0 21311A Other support activities for mining $59,384 $1,188 $2,969 $5,938 $0 611A00 Junior colleges, colleges, universities, and professional schools $205,018 $4,100 $10,251 $20,502 $0

524200 Insurance agencies, brokerages, and related activities $216,172 $4,323 $10,809 $21,617 $0

512100 Motion picture and video industries $130,288 $2,606 $6,514 $13,029 $0

TOTAL

UAS IMPACT $12,635 $31,588 $63,176 $0

AUVSI, the unmanned industry trade body, has produced an oft-cited re port on the economic impact of the commercial UAs industry. This report is based primarily on precisi on agriculture applications. IfUAS America Fund Micro Unmanned Aircraft – Ec onomic Impact Implications

Page 2 other industry applications (ins pection, aerial photography, etc.) ev en closely approach similar magnitudes of opportunity, there would be signif icant economic and employment impact lost to overregulation at the smallest and safest segment of the industry.

Year Total Economic Impact (US$ billion) Total Employment Impact 2015 $2.28 23,413 2016 $4.55 46,826 2017 $6.83 70,240 2018 $7.17 73,752 2019 $7.53 77,439 2020 $7.90 81,311 2021 $8.30 85,377 2022 $8.72 89,645 2023 $9.15 94,128 2024 $9.61 98,834 2025 $10.09 103,776 Total $82.12 844,741

Regulatory Flexibility Analysis By statute, Federal agencies must perform a review to determine whether a proposed or final rule would have a significant economic impact on a substantial number of small entities. The FAA should assess a Disproportionality Analysis (whether small entities will be disadva ntaged relative to large entities due to disproportionate impacts) and an Affordability Analysis (the degree to which small entities can afford the reduction in revenue resulting from the final rule is predicated on the ava ilability of financial resources. The entirety of nascent business contemplating comm ercial micro UA operation, all of which would be affected by any proposed UAS Rule, are currently well below existing “small business” standards as determined by the Small Business Administration (see below). NAICS Codes NAICS Industry Description Size Standards ($MM) 541922 Commercial Photography $7.5 115116 Farm Management Services $7.5 541350 Building Inspection Services $7.5 531210 Offices of Real Estate Agents and Brokers $7.5 531312 Nonresidential Property Managers $7.5 524210 Insurance Agencies and Brokerages $7.5 541360 Geophysical Surveying and Mapping Services $15.0 611512 Flight Training $27.5 213112 Support Activities for Oil and Gas Operations $38.5UAS America Fund Micro Unmanned Aircraft – Ec onomic Impact Implications

Page 3 Regulatory Flexibility Analys is - Costs of Regulation There are currently approximately 225,000 manned airc raft registered with the FAA, requiring many millions of dollars in public sector financial reso urces to support regulatory administration. The FAA currently estimates as many as 7,500 small commerci al UAS may be in use by 2018 (three years from expected - but unlikely to hold - deadline for the sma ll UAS final rule), with th is number expected to grow dramatically over the next decade.

Cost Cost Incurred by Public

Sector Cost Incurred by Private Sector Sample Cost Areas Certification Costs X X Pilot cert ification (approx.. $10,000), aircraft certification FAA DARs/DERs, Medical exams Compliance Costs X Maintena nce program, pilot currency requirements, Government Administration Costs X Aircraft registry maintenance, harmonization, Advisory circulars Regulatory Enforcement X FAA inspectors or other (police), warning letters, tracking Litigation X X Legal fees, judicial docket bandwidth Fines and Penalties X

Title II of the Unfunded Mandates Reform Act of 1995 (Public Law 104-4) requires each Federal agency to prepare a written statement assessing the e ffects of any Federal mandate in a proposed or final agency rule that may result in an expenditure of $100 million or more (adjusted annually for inflation) in any one year by State, local, and trib al governments, in the aggregate, or by the private sector; such a mandate is deemed to be a “significant regulatory action.” Rulemaking requirements that treat UAS as aircraft and operators as manned ai rcraft pilots will significantly increase the costs of compliance for both public and private sector, whic h could easily approach this benc hmark due to undetermined costs for enforcing expansive regulations By segmenting the smallest and safest portion of the commercial UAS market to focus primarily on safe operating environment parameters and operator education (as used by the hi storically safe model aircraft today), these costs could be dramatic ally avoided to allow public sector resources to focus on larger and more complex unmanned aircraft and use operating applications.UAS America Fund Micro Unmanned Aircraft – Ec onomic Impact Implications

Page 4 Regulatory Flexibility Analysis - In ternational Trade Impact Assessment The Trade Agreements Act of 1979 (Public Law 96-39) prohibits Federal agencies from establishing any standards or engaging in related ac tivities that create unnecessary obsta cles to the foreign commerce of the United States. Legitimate domestic objectives, such as safety, are not considered unnecessary obstacles. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards. Due to lagging regulatory movement domestically, th e foreign commerce of the Unites States will be irreparably harmed with a sweeping FAA standards program that is both late relative to other countries and overly burdensome for an entire portion of the commercial UAS industry. Each new jobs and dollar of economic activity will develop either in the Un ited States or internatio nally. Indeed, many industry leaders and have been publically vocal regarding their needs to m ove research and development and operations out of domestic markets due to burdens ome regulations in this country. In addition to established commercial entities, it is likely that a new generation of entrepre neurs – composed from a highly skilled workforce – will opt to establish headquarters outside of the borders of the United States. Each of these decisions harms th e United States economic viability. Further, per the statute, the FAA should consid er the current regulatory developments occurring globally. Other countries have establ ished basic operating parameters, wh ich should be considered as at least potential standards. Australia, Canada, a nd, most recently, New Zealand have all established guidelines to enable commercial UAS operations. E ach of these frameworks that could potentially contribute FAA rulemaking and should be explored.