### State Farm Insurance Companies®

JACK WEEKES, CPCU®, CLU®, ChFC® OPERATIONS VICE PRESIDENT

October 15, 2014 U.S. Department ofTransportation Docket Management System 1200 NewJersey Ave., SE Washington, D.C. 20590 ONE STATE FARM PLAZA BLOOMINGTON, ILLINOIS 61710-0001

Re: Exemption Request Pursuant to Section 333 ofthe FMRA and Part 11 ofthe Federal Aviation Regulations, Seeking Exemption from 14 C.F.R. Part 21 Subpart H; 14 C.F.R. § 21.191(a); 14 C.F.R. §45.23(b); 14 C.F.R. § 45.27; 14 C.F.R. §§ 61.113(a) and (b); 14 C.F.R. § 91.l 19(c); 14 C.F.R. § 91.121; 14 C.F.R. § 91.151(a); 14 C.F.R. § 91.405(a); 14 C.F.R. § 91.407(a)(l); 14 C.F.R. §§ 91.409(a)(l) and (2); 14 C.F.R. §§ 91.417(a) and (b).

Dear Sir or Madam: Pursuantto Section 333 ofthe FAA Modernization and Reform Act of2012 (FMRA) and 14 C.F.R. Part 11, State Farm Mutual Automobile Insurance Company ("Petitioner" or "State Farm") hereby applies for an exemptionfrom the listed FederalAviationRegulations ("FARs") and any othernecessary to allow operation ofits small Unmanned Aircraft Systems ("UAS") for research and development ("R&D") related to use ofUAS for civil operations, so long as such operations are conducted within and under the conditions outlinedherein. State Farmrequests such authorization to conduct outdoor R&D for its use ofUAS for insurance functions, including using imagery and analytics in underwriting, re-underwriting, catastrophe response, roof inspection, and claimresolution settings. These R&D operations will help define the role of UAS technology in State Farm's business operations and will guide the company in the most appropriate implementation ofsuchtechnology. Ultimately, incorporating UAS into State Farm'sbusinessprocesses will improve worker safety and expedite response and claim resolution for policyholders. State Farm was founded in 1922 with the vision ofoperating fairly and doing the right thing for its customers. In advancing this vision andthe goal ofproviding the best service possible, State Farmhas committedto supporting innovation that improves the lives and safety ofits policyholders and the general public. This commitment in championing innovation to improve lives and safety has helped State Farm become the nation's leading insurer ofhomes and automobiles, in addition to being an industry leader in other areas ofinsurance and financial services. Currently, State Farmhas over 65,000 employees and 18,000 agents providing remarkable service intaking care ofover 27 million home policies (1 in 5 U.S. houses) and 44 million auto policies. Whetherproviding assistance after a major natural disaster or looking for 1

HOME OFFICES: BLOOMINGTON, ILLINOIS 61710·0001ways to help_people manage everyday risks, State Farm is there. By exploringthe ability to use UAS, State Farmhas the opportunity to further champion innovation in order to benefitthe wellbeing ofits policyholders and the general public. State Farm'srequest for exemption for research and development is two pronged. First, State Farm seeks an exemptionto permitthe operation ofsmall UAS for R&D at State Farm's own testing facility. This testing will be done under controlled conditions in airspace that is 1) limited, 2) predetermined, and 3) controlled as to access. This testing will give State Farm valuable information about howbestto safely and efficiently deploy UAS for insurance functions, such as evaluation ofpolicyholder claims, while also having the benefit ofoccurring in a controlled and safe environment. Second, State Farm also seeks an exemptionto permitthe operation ofits UAS to conduct R&D in "real world" situations during and immediately following an actual catastrophe such as hurricane, tornado, windstorm, flood, wild-fire, mudslide or similar event. State Farm's UAS operations in this scenario wouldbe activated in coordination withthe FAA and the official in charge ofon scene emergency response activities. As explained further below, suchtesting will occurunder conditions that limit the likelihood ofoperations overmembers ofthe general public and ensure full coordination with any manned aircraft operations. State Farm's use ofUAS during and after actual catastrophes will educate the company on howthe potential ofUAS can be unlocked to assess the extent and severity ofdamage to insured property and enable State Farm to continue to provide remarkable customer service to its policyholders. 

### I. REQUEST FOREXEMPTIONTO USE UAS FORRESEARCHAND DEVELOPMENTAT STATE FARM'S TEST SITES A. Overview ofRequest to Use UAS for R&D at Test Sites Owned or Controlledby State Farm. State Farm's first request involves the use ofUAS to conduct R&D at State Farm's ownfacilities onproperty it either owns or leases providing a minimum of 100 acres ofuninhabitedrural farmland and located a minimum offive miles from any airport. Suchproperty will be located within 50 miles ofState Farm's corporate headquarters in Bloomington, Illinois. The testing facility is not open to the public and access will be restricted to State Farm employees or consultants engaged intest ortestrelated work. UAS testing will occur in Class G airspace at altitudes of400 feet or less. The test site may at times feature uninhabited structures, whichwill enable State Farm to test howUAS will operate and capture images over various types of buildings. In support ofthis exemptionrequest, State Farm is submitting an Operations Manual and Training Syllabus, under separate cover and with a request for confidential treatment. 1 State Farm will be conducting R&D to determine howbestto incorporate UAS into the company's business processes to further enhance customer experiences. State Farm will be evaluating howto utilize UAS to capture images and to determine the nature and extent of

Petitioner submits its Operations Manual and Training Syllabus as Confidential documents under 14 C.F.R. § l l .35(b) as they contain proprietary information that Petitionerhas not and will not share with others. The documents contain operating conditions and procedures that are not available to the public and are protected from release underthe Freedom ofInformation Act, 5U.S.C. § 552. 2damage to policyholders' property. State Farm is specifically interested in studyinghowUAS can be deployed to obtain up-close images ofa policyholder's roofand how State Farm can deploy UAS resources to areas hit by catastrophes. This testing will give State Farmthe necessary information to be optimallypositioned to serve policyholders who have suffered losses. Petitionerthus requests authorizationto perform R&D operations using UAS underthe control ofa pilotpossessing at least a privatepilot certificate and a third-class medical certificate (Phase I). State Farmproposesthat it also be granted authority to conduct UAS R&D flight operations using a person(s) holding only a third-class medical certificate, acting under the direct supervision and control ofa personholding an FAAprivatepilot certificate (Phase II). State Farm's interest inutilizing the R&D environmentto determine the extent to which certain UAS operations can safely be conducted using anon-FAA certificatedpilot is logical outgrowth of State Farm's desire to conduct R&D to investigate the utility, efficiency and safety improvements from using UAS in its insurance business. The results ofsuch R&D flights would inform the comments upon the UAS pilot licensing qualifications and requirements the FAA proposes in its imminent small UAS NPRM. While Section 333 ofthe FMRA obviates the statutory requirement in 49 U.S.C. § 44704 for a civil aircraft to have an airworthiness certificate, the FMRA did not extend exemptionreliefto the 49 U.S.C. §§ 44702 and 44703 requirements that a civil aircraft be pilotedbythe holder ofan airman certificate. In requesting this Phase II authority to conduct UAS R&D flight operations using a person(s) holding only a third-class medical certificate, acting underthe direct supervision and control ofa personholding an FAAprivate pilot certificate, State Farm notes that at this time, the holder ofa third-class medical certificate, with a "Solo" endorsement is authorized to fly a full sized aircraft in the NAS. As long as studentpilots avoid operation within the class ofairspace whichthey are ineligible to enter, and do not carry passengers, they can fly within many classes ofairspace inthe NAS, including airports with control towers in Class C and D airspace. In the interest ofdeveloping empirical data onthe efficacy ofnonPrivate Pilotrated UAS operations, State Farmrespectfully requests that it also be authorizedto conduct Phase II R&D UAS flights, by persons holding only a third-class medical certificate, underthe supervision and control ofa licensed pilot. State Farm'srequest for R&D testing at its own facilities also carries with it a number of benefits. Itwould be impractical for State Farm to use the six FAA-selectedUAS test sites as the primary location for R&D atthis time. First, among other scenarios, State Farm is interested inusing UAS for roofinspections. UAS testing for roofinspectionpurposes would ideally occur by operating over a residential type ofstructure. Second, the nearest FAA approved UAS test site to State Farm'sheadquarters in Bloomington, Illinois is the Virginia Tech site--over700 miles away. State Farm can conduct its R&D more efficiently and realize cost savings by having the tests occur in close proximity to State Farm developers. Third, to use the test sites, State Farmwouldhave to obtain a special airworthiness certificate (experimental category) for the UAS. Itwould be an unreasonable burden for State Farm to obtain a special airworthiness certificate for every UAS design ortesting configuration while the company is inR&D and conducting rapid prototyping. Repeating thatprocess for each design variation would also 3necessitate great use ofFAAresources. State Farm can avoid these problems and conduct specificallytargeted, safe, and economical testing at its own facilities. B. Public Interest Benefits ofPermitting Use ofUAS for R&D at Test Sites Owned or Controlledby State Farm. Grant ofState Farm's request to operate UAS for R&D at its own facilities is decidedly in the public interest. As an initial matter, grantingthis petition advances Congress's goal of integrating civil UAS into the United States airspace safely and soon. Allowing State Farm to conduct R&D is a first necessary step toward realizing the consumerbenefits ofusing UAS for insurance-related purposes. Grant ofthe instantrequestwill enable State Farmto be ready to launch civil operations as soon as permittedby subsequentFAA action. Testing now will also improve safety later. In fact, R&D operation will help State Farm develop and test safety measures for UAS operation. State Farm will develop bestpractices for UAS operation using off-the-shelftechnologies and will contribute to advancing automated features to mitigate human error. At State Farm'stest sites, privacy will also be protected-all flights will occur over private or controlled access property. Any filming that may occur will be ofpeople who have consentedto being filmed orotherwise have agreed to be in the areawhere filming will take place. In addition, as described in more detail below, operation will not create a hazardto aviation or thepublic. Flights will be conducted under 400 feet AGL-avoiding interference withusers of the national airspace system ("NAS") -andwill be suspended immediately to yield right-of-way to any other aircraft. Atthe test site, eachUAS will be geo-fenced to ensure that it does not fly where it is not supposedto be. Operationwill also not create a hazard to the public as State Farm will only operate the UAS overunpopulated areas. The test site will be secured and only authorized personnel will bepermitted onthe grounds. Further, the UAS operationposes no credible threat to national security due to its size, speed, location ofoperation, lack ofexplosive materials orflammablejetfuels, and inability to carry a substantial external load. 

### II. REQUEST FOREXEMPTIONTO USE UAS FORRESEARCHAND DEVELOPMENTDURINGAND AFTERACTUAL CATASTROPHES A. Overview ofRequest to Use UAS for R&D During and After Catastrophes. The second component ofState Farm's exemptionrequest involves the use ofUAS during and afterreal world catastrophes. State Farm has the largest catastrophe response team inthe industry. Its catastrophe team workers are specially trained in catastrophe response and are ready to respond to catastrophic scenes 24 hours a day, seven days a week. Catastrophe locations cannotbe predicted and are unlikely to occur at approved UAS test sites. And no test site canprovidethe scale, variability, complexity and unpredictability likely to occurduring and after an actual catastrophe. State Farm requests the FAA grant an authorization for the company to conduct limited UAS operations for R&D purposes during and/or immediately following an actual catastrophe. Therequested authorization couldbe granted in addition to, and as a part of, the reliefsought herein.

4State Farm will limitthe likelihood ofhazard to the general public onthe ground by adhering to its Operations Manual(s); and complying with all conditions and limitations contained in a Grant; ofthe reliefsought, and all instructions from the FAA and the official(s)-in-charge ofon scene emergency responsive activities during and/or following an actual disaster. State Farm will coordinate with the FAA and all first responders to ensure that the use ofits UAS can occur safely and without impedingpublic safety efforts. State Farm'sUAS operations will cease immediately at the direction ofthe applicable officials. Further, State Farm's UAS operations will be conducted with notice to manned aircraft and will at all times cede the right ofway to such aircraft. State Farmproposes that the process for obtaining access to a catastrophe areawork as follows. When a catastrophe is expected to occur or has recently occurred, State Farm will contact the UAS Integration Office, AFS-80, the cognizant Flight Standards District Office, local Air Traffic· Control Facilities, and the Official-in-Charge ofon-scene emergencyresponse activities, or whomever the FAA designates in the Grant. State Farm will give the applicable authorities a copy ofits Grant and information about the location, UAS, and flight activities to be conducted. The UAS Integration Office will give State Farm permission to conductflight operations subject

. to the conditions and limitations in the Grant. State Farm will coordinate withboththe FAA and

. the officials in charge ofon-scene emergencyresponse activities prior to conducting its UAS R&D during or immediately following the actual catastrophe. State Farm will take direction from the FAA and the officials in charge ofon-scene emergency response activities as to the location, duration and real-time coordination ofits in-catastrophe UAS R&D operations. With proper controls and coordination, as described herein, State Farm believes such operations can be safely conducted to avoid any riskto first responders, other aircraft and persons and property on the ground. During operation, State Farm will fly cautiously and safely to ensure that. the UAS does not create any hazards to people orproperty. State Farmwill also coordinate with ' manned aircraft and first responders. Safety is State Farm'stop priority while gathering this valuable research information. B. Public Interest Benefits ofPermitting Use ofUAS for R&D During and After Catastrophes. Allowing State Farm to conduct real-world testing is the first step toward realizing the consumer ; benefits ofusing UAS for insurance purposes inthe aftermath ofa catastrophe. These flights ' will take place amid conditions that would be impossible to create at any test site. UAS operations at an actual disaster site will provide a wide range ofaftermath conditions to test real- · time coordinationtechniques, flight planning, and on-condition flight operations for State Farm's UAS and their operators. State Farm believes there is a substantial likelihood that such R&D operations in actual catastrophe conditions will greatly advance the company's ability to safely utilize UAS in such conditions. Testing now will result in even safer operations later. In additionto providing faster, more effective service to its customers, State Farm'sUAS operations in actual disaster conditions may also speed overall post-disasterreliefassessments in

. the event this data is shared with first responders, thereby allowing manned ground and aviation assets to do more vital tasks. Indeed, footage obtainedby State Farm could materially assist first· responders' knowledge ofthe catastrophe aftermath. In this regard, use ofUAS may free up scarce ground and manned aviation assets for the most critical needs, and it may even save lives. : 5Operation during and after catastrophes also does not create a hazard to the public, as State Farm will cooperate fully with officials managing on scene response and will operate as far as · practicable from persons on the ground. Operations will also not create hazards to manned flight, as manned flight will always maintainright ofway over all UAS operations. Additionally, this exemptionrequestprovides that the operator will request a Notice to Airman ("NOTAM") as early as practicable priorto operations to alert other users ofthe airspace about the UAS operations. State Farmwill make safety a priority for all ofits UAS operations. 

### III. THE FAA HAS LEGAL AUTHORITY TO GRANT THIS EXEMPTION REQUEST. This exemption request will help the FAA to fulfill Congress' goal inpassing Section 333 ofthe : FMRA. Section 333 directs the Secretary ofTransportationto consider whether certain UAS may operate safely inthe NAS before completion ofthe rulemaking required under Section 332 ofthe FMRA. The Secretary is required to determine which types ofUAS do not create a hazard to users ofthe NAS orthe public orpose a threat to national security in light ofthe UAS's size, weight, speed, and operational capability and whether operation will occur near airports or populated areas and within the visual line ofsight ofthe operator.2 The FMRAillustrates Congress's intent to have the FAA issue exemptions and allow civil UAS, so long as they operate withinthe necessary safety parameters. In addition, the Federal Aviation Act expressly grants the FAA the authority to issue exemptions.' This statutory authority by its terms includes exempting civil aircraft, as the term is defined under§ 40101 ofthe Act, which includes UAS, from the requirementthat all civil aircraft must ' have a current airworthiness certificate. The Administrator may grant an exemption from a requirement ofa regulation prescribed under§§ 44701(a) or (b) orin§§ 44702-44716 ofthe Act ifthe Administrator finds the exemption in the public interest.3

. 

### IV. APPLICATION INFORMATION The names and addresses ofthe applicant are: State Farm Mutual Automobile Insurance Company Todd Binion Innovation Manager State Farm Mutual Automobile Insurance Company 3 State Farm Plaza South Bloomington, IL 61791 todd.binion.hkoO@statefarm.com 309-735-8633

2 FAA Modernization and Reform Act of2012, Pub. L. No. 112-95, 126 Stat. 75-76 (codified as a Note to 49 

### u.s.c. § 40101). 3 49 U.S.C. §44701 (f). See also 49 U.S.C. §4471I(a);49 U.S.C. §44704; 14 C.F.R. § 91 .203(a)(l). 6Regulations from whichthe exemption is requested: 14 C.F.R. Part 21 SubpartH; 14 C.F.R. § 21.191(a); 14 C.F.R. § 45.23(b); 14 C.F.R. §45.27; 14 C.F.R. §§ 61.113(a) and (b); 14 C.F.R. 

### § 91.119(c); 14 C.F.R. § 91.121; 14 C.F.R. 

### § 91.151(a); 14 C.F.R. § 91.405(a); 14 C.F.R. 

### § 91.407(a)(l); 14 C.F.R. §§ 91.409(a)(l) and (2); 14 C.F.R. §§ 91.417(a) and (b). 

### V. THE AIRCRAFT State Farm specificallyproposes to conduct R&D operations withUAS including the Aerialtronics AlturaZenith ATX8 and the AltavianNovaF6500. The Altura Zenith ATX8 is a multi-rotor aircraft built with a monocoque carbon airframe. The Zenithhas a 5.6 kg take-offweight and a maximum payload of2.9 kg. The Zenith carries a 16.600 mAhbattery, which facilitates up to 45 minutes offlight-time with total payloads ofup to, 6.4 lbs. for the ATX8. It can be flown with either a radio or tablet and carries a variety of · payloads. The Zenith has a maximum cruise speed of20 mis. It features auto-takeoffand landing, auto go home and landing, GPS waypoint navigation, direction lock, and GIS mapping. Specifications include:

• Length x Width : 23.6" x 23.6"

• Height : 13.7"

- 21.6"tall

• Weight: 7.7 lbs., without payload (less than 15 lbs. with payload) TheNova F6500 Aircraft is an all-electric drone thatprovides precision 3D mapping and realtime thermal infrared and high definition video capabilities. The system deploys in nearly every environment with minimal logistics due to its waterproof, lightweight and hand-launchable design. The F6500 efficiently collects high quality dataand delivers real-time results with speed and accuracy. It is hand launched and capable offlying in all weather conditions, and landing on , land or water. Specifications include: '

• Wing Span: 108"

• Length: 67"

• Weight: 15 lbs. withoutpayload (less than 20 lbs. withpayload)

7State Farm may also use aircraft with comparable characteristics and safety features. State Farm agrees that any UAS it uses for R&D will include, atminimum: geo-fencing at a maximum ceiling of

### 400' AGL, flight programming capabilities, a flight termination link available to the operatorto prevent a "fly away," and safe abortprocedures. Ifthe UAS loses communications or its GPS signal, the UAS will returnto a pre-determined location and land orbe recovered in accordance with the Operations Manual. The UAS will have markings identifying the serial number and identification (N-number) markings as large as practicable. Further, State Farm's UAS operation will comply with all manufacturer Safety Bulletins. Any UAS to be used wiU weigh less than 55 pounds. State Farm will incorporate Airware's flight control systems across the range ofourvehicles. Airware's systems are designed to enable safe and reliable commercial UAS applications and have been built from the ground up by leading engineers from the aerospace industry utilizing industry best practices and decades ofexperience. The system has been developed using modelbased-design for the core control algorithms and robust CIC++ atthe application and OS level. The autopilot system is built on top ofa real-time embedded operating system whichhas been certified to D0-178B. Airware uses rigorous design, development, review, andtesting processes, using strict compiler checking, formal verificationmethods, MISRA compliance verification, unittesting, and integration testing with test coverage verification. In addition to aerospace quality hardware and software, safety features include geofencing for ensuring vehicles stay within pre-defined areas, a full suite ofcontingency management functions, user and flight plan management and approval functionality, amongst others. 

### VI. OPERATING PARAMETERSFORUAS USE AT STATE FARM'S TEST SITES. Petitionerproposes that the exemption requested herein apply to civil aircraft that have the characteristics and that operate withthe limitations listed herein. These limitations provide for at least an equivalent orevenhigher level ofsafety to operations under the currentregulatory structure because the proposed operations represent a safety enhancementto the already safe operations conducted with conventional aircraft. Further details about the aircraft and operating procedures are available inthe Operations Manual and Training Syllabus. The limitations and conditions to which State Farm agrees to be bound when conducting R&D at a State Farm site for commercial operations under an FAA issued exemption include: A. UAS Pilot and Observer 1. UAS operations during "Phase I" ofR&D will be conducted by, at minimum, pilots holding a privatepilot certificate and at least a current third-class medical certificate.

a. During "Phase II" ofR&D, UAS operations will be conductedby appropriately-trained persons holding third-class medical certificates underthe direct, in-person supervision ofa pilot holding both a private pilot certificate and a third-class medical certificate. 2. All UAS operations must utilize a visual observer ("VO"). 83. Thepilot-in-command ("PIC") and VO mustbe able to communicate verbally at all times. 4. The PIC will be wearing a safety vest that identifies him orher as the pilot. 5. Priorto operations, the pilot musthave accumulated and logged a minimum of200 flight cycles, ormore as required bythe FAA, and 25 hours oftotal time as a UAS rotorcraftpilot. Thepilotmust also have accumulated and loggedpriorto operations at least ten hours as a UAS pilot with a similarUAS type (single blade ormulti-rotor). Prior documented flight experience that was obtained in compliance with applicable regulations may satisfy this requirement.

a. Training, proficiency, and experience-building flights can also be conducted underthe FAA's grant ofexemptionto accomplish the required flight cycles and flight time. b. Duringtraining, proficiency, and experience-building flights, all persons not essential for flight operations are considered nonparticipants, and the pilotmust operate the UA with appropriate distance from nonparticipants in accordance with 14 C.F.R. § 91.119. 6. State Farm will rely onthe UAS vendor(s) to provide a pilot qualification program, including a training program incorporatingproper aircraft operations and safety standards.

a. Priorto any flight operations authorized bythis grant of exemption, the PIC and VO musthave successfully completedthe vendor training program and qualificationprocess and the State Farm training process, as outlined inthe Operations Manual and Training Syllabus. b. The qualification test will be developed and implemented by a qualified person designated at the sole discretion ofState Farm.

c. A record ofcompletion ofthis qualification process mustbe documented and made available to the Administratoruponrequest. 7. State Farm will require all pilots conducting UAS operations to provide proofofthe following: third-class medical certification, pilot certification where applicable, and completion ofthe associated vendor's training program. B. Operational Parameters. 1. Aircraft will notcarry pilots orpassengers, and aircraft will not carry 9

### explosive materials orflammable liquid fuels. 2. UAS must be operated within visual line ofsight ofthe pilot at all times. 3. UAS may not be flown at ground speeds exceeding 50 knots. 4. Flights will be operated at an altitude ofno more than 400 feet above ground level. 5. Each UAS operation will be completed within 60 minutes flight time or with 25% battery power remaining, whichever occurs first. At 30% battery the UAS will enter a return and land sequence; at 20% it will land immediately. 6. UAS will not be operated over any person (otherthan participating State Farm personnel) at an altitude that is hazardous to persons orproperty on the surface in the event ofa UAS failure oremergency

a. Distance from participatingpersons will be specified in the Operations Manual. b. Operations will be conducted as far as practicable from nonparticipatingpersons. 7. The UAS will abort the flight inthe event ofunpredicted obstacles or emergencies in accordance withthe Operations Manual. 8. Prior to operations, a flight demonstration, administered by an operatorapproved and qualified pilot will be successfully completed and documented. Documentationwill be made available for reviewby Administrator upon request. 9. The operator must obtain an Air Traffic Organization (ATO) issued Certificate ofWaiver or Authorization (COA) prior to conducting any operations under this grant ofexemption.

a. This COA will also require the operator to request aNotice to Airmen (NOTAM) not more than 72 hours in advance, but not less than 48 hours prior to the operation. 10. Operations will be limited to the test site(s) described herein. 11. Petitioner will display signage notifying the public ofUAS operations before beginning operations. Signs will be approximately 18" x 24" in size and will be placed in locations that will be visible from adjacent roadways at least 5minutes priorto UAS operations. 12. Before conducting operations, the radio frequency spectrum used for

10operation and control ofthe UAS will comply withthe FCC or other appropriate government oversight agency requirements. 13. The UAS pilot will establish a working relationship with a representative at the local Flight Standards District Office ("FSDO") with which to periodically review safety procedures and other operations to further enhance safety. Undernormal circumstances, the operatorwill submit a written Plan ofActivities to the local FSDO at least 48 hours priorto conducting operations. In an emergency situation, the operator will submit a written Plan ofActivities 24 hours priorto conducting operations, unless sooner operations are authorized bythe FSDO. The Plan ofActivities will include:

a. Dates and times for all flights; b. Name and phone number ofthe operator for the UAS and for the personresponsible for on-site operations;

c. Make, model, and serial orN-number ofUAS; d. Name and certificate number ofpilot(s);

e. Signature ofexemptionholder orrepresentative; f. Description offlight activity, includingmaps/diagrams ofarea over which operations are occurring and essential altitudes. 14. The documents required under 14 C.F.R. § 91.9 mustbe available to the PIC at the Ground Control Station ofthe UAS any time the aircraft is operating. These documents mustbe made available to the Administrator or any law enforcement official uponrequest. 15. The UAS mustremain clear and yield the right ofwayto all othermanned operations and activities at all times (including, butnot limitedto, ultralight vehicles, parachute activities, parasailing activities, hang gliders, etc.). 16. State Farm will ensure safety to first responder aircraft and helicopter traffic. Uponnotification from manned aircraft controllers orthrough visual identification ofmanned aircraft, State Farm will immediately suspendthe UAS flight until the airspace is cleared. 17. UAS operations may not be conducted during night, as defined in 14 C.F.R. § 1.1. All operations mustbe conducted under visual meteorological conditions (VMC). Flights under special visual flight rules (SVFR) are not authorized. 18. The UAS maynotbe operatedbythe PIC from any moving device or 11vehicle. 19. The UAS may not be operated less than 500 feet beloworless than 2,000 feet horizontally from a cloud or when visibility is less than 3 statute miles from the PIC. 20. The UAS maynot operate in Class B, C, or D airspace without approval from the FAA. The UAS may not operate within 5 nautical miles ofthe geographic center ofa non-towered airport as denoted on a current FAApublished aeronautical chart unless an agreement withthat airport's management is obtained, and the operation is conducted in accordance with a NOTAM as required bythe Operator's COA. The letter of agreement with the airport management should be made available to the Administrator uponrequest. 21. Altitude information will beprovidedto the UAS pilotvia a digitally encoded telemetric data feed, which downlinks from the aircraft to a ground-based on-screen display. The UAS may have a GPS altitude readout. Prior to each flight, a zero altitude initiationpoint will be established and confirmed for accuracy bythe PIC. 22. Any incident, accident, orflight operationthattransgresses the lateral or vertical boundaries ofthe operational area as defined bythe applicable COAmustbe reported to the FAA'sUAS Integration Office (AFS-80) within 24 hours. Accidents mustbe reported to the National Transportation Safety Board (NTSB) perinstructions contained on the NTSB Web site: www.ntsb.gov. Further flight operations may notbe conducted until the incident, accident, ortransgression is reviewed by AFS-80 and authorization to resume operations is provided. C. Operations Manual. 1. The Operatormust follow the procedures as outlined in its Operations Manual. 2. The Operations Manual mustbe maintained and made available to the Administratorupon request. D. Pre-Flight Inspections and Maintenance. 1. Priorto each flight, pilot will inspect UAS to ensure it is in conditionfor safe flight. Ifthe inspectionreveals a discrepancy, aircraft will be prohibited from operating until the necessary maintenance has been performed and the UAS is found to be in a condition for safe flight. 2. All maintenance and alterations will be properly documented inthe aircraft records.

123. Any UAS that undergoes maintenance oralterations that affectthe UAS operation or flight characteristics will undergo a functional flight test in accordance withthe Operations Manual. 4. Petitioner will institute a rigorous maintenance programto ensure airworthiness ofUAS. Operator will follow the manufacturer's UAS aircraft/component, maintenance, overhaul, replacement, inspection, and life limitrequirements.

a. When unavailable, requirements mustbe established inthe Operations Manual, including for the following: i. Actuators 

### I Servos; 11. Transmission (single rotor);

111. Powerplant (motors); 1v. Propellers;

v. Electronic speed controller; vi. Batteries;

vu. Mechanical dynamic components (single rotor); vui. Remote command and control; 1x. Ground control station (ifused); and

x. Any other components as determined bythe operator. 5. Operator will develop procedures to document and maintain a record of the UAS maintenance, preventative maintenance, alterations, status of replacement/overhaul componentparts, and the total time in service ofthe UAS. These procedures will be added to the Operations Manual. 6. Operator will develop UAS technician qualification criteria. These criteria will be added to the Operations Manual. 

### VII. AIRCRAFT AND OPERA TING PARAMETERS FORUAS USE DURINGAND AFTERCATASTROPHES. In additionto the above parameters, State Farm agrees to be bound to the following limitations and conditions when conducting R&D using UAS during and after a catastrophe. A. Procedure for Gaining Access to Catastrophe Area. 1. State Farm will contactthe UAS Integration Office, AFS-80; cognizant 13

### Flight Standards District Office; local Air Traffic Control Facility(ies); and Official-in-Charge ofon scene emergency response activities (or whomever FAA designates in conditions and limitations ofGrant) to request "activation" ofits authority to conduct R&D operations at specified disaster location. 2. State Farm will provide the applicable authorities:

a. A copy ofits Grant ofExemption. b. Dates and times for all flights;

c. Make, model, and serial orN-number ofUAS; d. Name and phone number ofthe operator for the UAS and for the personresponsible for on-site operations;

e. Name and certificate number ofpilot(s); f. Signature ofexemption holder or representative; g. Description offlight activity, including maps/diagrams ofarea over which operations are occurring and essential altitudes. B. 

### Operations will be limited to the authorized areas. C. Before and during operations, State Farm will coordinate with FAA and the on scene commander for area from which to operate the UAS. D. Operations will cease immediately at the request ofon scene officials. State Farm will vacate the area ifso requested. E. To the extent there are people on the ground, operations will be conducted as far as practicable from non-participating persons. F. The UAS must remain clear and yield the right ofway to all other manned operations and activities at all times (including, but not limited to, ultralight vehicles, parachute activities, parasailing activities, hang gliders, etc.). G. Operator will request aNOTAM as early as practicable prior to operations to alert other users ofthe airspace about the UAS operations. VIII. SPECIFIC SECTIONS OF 14 C.F.R. FROM WHICH PETITIONERS SEEKAN EXEMPTION 

### State Farin requests exemption from the following Federal Aviation Regulations ("FARS") to the extent necessary to enable the requested UAS operations for the reasons detailed below. A. 14 C.F.R. Part 21 Subpart H including 14 C.F.R. § 21.191(a) Experimental 14certificates Subpart H, entitled Airworthiness Certificates, establishes the procedural requirements for the issuance ofairworthiness certificates. Giventhe size and limited operating area associated with the aircraftto be utilized, an exemption from Part 21 Subpart H meets the requirements ofan equivalent level ofsafety under Part 11 and Section 333 ofthe Reform Act. The Federal Aviation Act4 and Section 333 ofthe FMRA both authorize the FAAto exempt aircraft from the requirement for an airworthiness certificate, upon consideration ofthe size, weight, speed, operational capability, andproximity to airports and populated areas ofthe particular UAS. In all cases, an analysis ofthese criteria demonstrates thatthe UAS operated without an airworthiness certificate, in the proposed environments and underthe conditionsproposed will be at least as safe, or safer, than a conventional aircraft (fixed wing orrotorcraft) operating with an airworthiness certificate without the restrictions and conditions proposed. The UAS to be operated hereunder is less than 20 pounds including payload, carries neither a pilot norpassenger, carries no explosive materials or flammable liquid fuels, and operates exclusively within the parameters stated in the Operations Manual. Unlike other civil aircraft, operations under this exemptionwill be tightly controlled and monitored by both the operator and under the requirements and in compliance with local public safety requirements, to provide security for the area ofoperation. The FAA will have advance notice ofall operations via notices to airmen (NOTAMS). Finally, these UAS, as a result oftheir size, weight, speed, operational capability, and operation within visual line ofsight do not create a hazard to users ofthe national airspace system orthe public orpose a threat to national security. Petitioner also seeks relieffrom the requirements of 14 C.F.R. § 21.191(a) regarding experimental certificates for the same reasons as listed above. Given the size and limited operating area ofthe UAS to be used by State Farm, an exemption from this provision meets the requirements ofan equivalent level ofsafety under Part 11 and Section 333 ofthe FMRA. B. 14 C.F.R. § 45.23(b) Display ofmarks; general; 14 C.F.R. § 45.27 Location of marks; non-fixed wing aircraft Section 45.23(b) requires markings in letters not less than 2 inches normore than 6 inches high the word "experimental," as applicable. Section 45.27 requires that each operator ofa rotorcraft must display on thatrotorcraft horizontally onboth surfaces ofthe cabin, fuselage, boom, ortail the marks required by § 45.23. Giventhe size ofthe UAS, two-inch lettering will not be feasible. The UAS will also have no entrance to the cabin, cockpit, orpilot station on which the word "experimental" canbe placed. The word "experimental" will be displayed on the aircraft, as applicable, in letters oflegible size, in a location where the pilot, observer, and others working with the UAS will see the identification. The FAA has issued exemptions to§ 45.23 inExemptionsNos. 10700, 8738, 10167, 10167A, and 11062. The FAA issued an exemption to 45.27 inExemptionNo. 8496B. C. 14 C.F.R. §§ 61.l 13(a) and (b) Private pilotprivileges and limitations

4 49 U.S.C. §44701(1). 15Sections 61.113 (a) & (b) limitprivate pilots to non-commercial operations. Because the UAS will not carry a pilot orpassengers, the proposed operations can achieve the equivalent level of safety ofcurrent operations in its Phase I R&D byrequiring the PIC operating the aircraft to have a privatepilot's license ratherthan a commercial pilot's license to operate this small UAS. Unlike a conventional aircraftthat carries the pilot andpassengers, the UAS is remotely controlled with no living thing on board. The area ofoperation is controlled andrestricted, and all flights are planned and coordinated in advance as set forth in the Operations Manual. The level ofsafetyprovided by the requirements included in the Operations Manual exceeds that provided by a single individual holding a commercial pilot's certificate operating a conventional aircraft. The risks associated with the operation ofthe UAS are so diminished from the level of risk associated with commercial operations contemplated by Part 61 when drafted, that allowing operations ofthe UAS as requested with a private pilot as the PIC exceeds the present level of safety achieved by 14 C.F.R. 

### § 61.113 (a) & (b). TheFAA issued an exemptionto this regulation in ExemptionNo. 11062. For its Phase II R&D, during which certified pilot UAS operators supervise PICs holding thirdclass medical certificates, State Farm can similarly achieve an equivalent level ofsafety. Again, the area ofoperation is controlled and restricted, and flights are pre-planned and satisfy the requirements in the Operations Manual. Because the PIC will have metthe sametraining requirements as pilot-certified Phase I PICs and be under direct in-person supervision ofa licensedpilot, Phase II R&D will be essentially as low-risk as Phase I. Accordingly, an equivalent level ofsafety will be met. D. 14 C.F.R. 

### § 91.119(c) Minimum safe altitudes over congested and other areas Section 91.119(c) establishes safe altitudes for operation ofcivil aircraft over areas otherthan congested areas. State Farm requests relieffrom this section with respect to those participating persons, vehicles, and structures directly involved with R&D. The UAS will never operate at higher than 400 AGL. Itwill be operated in a restricted area, where buildings and people will not be exposed to operations without theirpre-obtained consent. Relieffrom this provision is warranted as operations will be conducted with the safety provisions as outlined herein and in the Operations Manual. The FAA issued an exemptionto this regulation in ExemptionNo. 11062. E. 14 C.F.R. §91.121 Altimeter Settings This regulation requires eachperson operating an aircraft to maintain cruising altitude by reference to an altimeterthat is set "

...to the elevation ofthe departure airport oran appropriate altimeter setting available before departure." As the UAS may nothave a barometric altimeter, but instead a GPS altitude read out, an exemption may be needed. Anequivalent level ofsafety will be achieved bythe operator, pursuantto the Operations Manual, confirmingthe altitude of the launch site shown onthe GPS altitude indicatorbefore flight. The FAA issued an exemption to this regulation inExemptionNo. 11062. F. 14 C.F.R. §91.151(a) Fuel requirements for flight in VFRconditions Section 91.151 (a) prohibits an individual from beginning "aflight in an airplane underVFR conditions unless (considering wind and forecast weather conditions) there is enough fuel to fly

16to the first point ofintended landing, and, assuming normal cruising speed- (1) Duringthe day, to fly afterthat for at least 30 minutes; or (2) At night, to fly afterthat for at least 45 minutes." Complying with the 30 minute reserve requirement in 14 C.F.R. 

### § 91.151, would unnecessarily limit the length ofState Farm's UAS flights. Given the limitations onthe UAS'sproposed flight area and the location ofits proposed operations within a predetermined area, a longer time frame for flight in daylight conditions is reasonable. Operating the small UAS, in a tightly controlled area where onlypeople andproperty owners or official representatives who have signed waivers will be allowed does not engenderthe type ofrisks that 

### § 91.151(a) was intended to alleviate given the size and speed ofthe small UAS. Additionally, limiting UAS flight minutes would reduce the utility ofthe flights for R&D for which the exemption will be granted. State Farm believes that an equivalent level ofsafety can be achieved bylimiting flights to 60 minutes or 25% ofbatterypower whicheverhappens first. The FAA issued an exemptionto this regulation in Exemption No. 11062 and 10673. G. 14 C.F.R. 

### § 91.405(a) Maintenance required; 14 C.F.R. 

### § 91.407(a)(l) Operation after maintenance, preventive maintenance, rebuilding or alteration; 14 C.F.R. 

### §§ 91.409(a)(l) and (2) Inspections; 14 C.F.R. 

### §§ 91.417(a) and (b) Maintenance records These regulations require that an aircraft operator or owner "shall have that aircraft inspected as prescribed in subpart E ofthis part and shall betweenrequired inspections, except as provided in paragraph (c) ofthis section, have discrepancies repaired as prescribed inpart 43 ofthis chapter

...," and others shall inspect ormaintain the aircraft in compliance with Part 43. Given that these sections and Part 43 apply only to aircraft with an airworthiness certificate, these sections will not apply to the Petitioner. Maintenance will be accomplished bythe operator pursuantto the Operations Manual. An equivalent level ofsafety will be achieved because these small UAS are very limited in size and will carry a small payload and operate only inrestricted areas for limited periods oftime. Ifmechanical issues arise, the UAS canland immediately and will be operating from no higherthan 400 feet AGL. As provided in the Operations Manual, the operator will ensure that the UAS is in working orderpriorto initiating flight, performrequired maintenance, and keep a log ofany maintenance performed. Moreover, the operatoris the person most familiar with the aircraft and best suited to maintainthe aircraft in an airworthy condition to provide the equivalent level ofsafety. The FAAissued an exemptionto these regulations in ExemptionNo. 11062. H. Such otherreliefas the FAA deems appropriate to enable the requested operations. State Farm also requests exemption from such otherFARS as the FAA deems appropriate to enable the requested operations. If, during the effective dates ofany Grant ofExemption issued pursuantto this Petition, the FAA issues interim orfinal rules for small UAS, State Farm requests that it be relieved ofthe requirements ofany conditions and limitations ofsaid exemption and allowed to comply with any less burdensome applicable regulations that may have become effective.

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### IX. SUMMARYTOBEPUBLISHED INFEDERALREGISTER Petitioner: State Farm Mutual Automobile Insurance Company Sections of 14 C.FR. Affected: Part 21 Subpart H; § 21.191(a); §45.23(b); § 45.27; §§ 61.113(a) and (b); § 91.l 19(c); § 91.121; § 91.151(a); § 91.405(a); § 91.407(a)(l); §§ 91.409(a)(l) and (2); §§ 91.417(a) and (b). Description of Relief Sought: Petitioner seeks relieffrom the requirements of 14 C.F.R. Part 21 Subpart H; 14 C.F.R. 

### §21.191(a); 14 C.F.R. §45.23(b); 14 C.F.R. §45.27; 14 C.F.R. §§ 61.113(a) and (b); 14 C.F.R. 

### § 91.119(c); 14 C.F.R. 

### § 91.121; 14 C.F.R. § 91.151(a); 14 C.F.R. § 91.405(a); 14 C.F.R. § 91.407(a)(l); 14 C.F.R. §§ 91.409(a)(l) and (2); 14 C.F.R. §§ 91.417(a) and (b) to conduct small unmanned aircraft systems (UAS) research and development operations at its owntesting facility and in limited areas following catastrophes subject to operating procedures that meet or exceed those that FAA requires for similar operations. 

### X. CONCLUSION Satisfaction ofthe criteriaprovided in Section 333 ofthe FMRAregarding size, weight, speed, operating capabilities,proximityto airports and populated areas, operation within visual line of sight, and national security, provide more than adequatejustificationfor the grant ofthe requested exemption allowing operation ofPetitioner'sUAS for R&D related to the insurance industrypursuantto the Operations Manual. The requested two exemptions-one for R&D at a State Farm test site and one for real world catastrophe areaR&D--canbe granted separately or in the same Grant. Please do not hesitate to contact Petitioner's outside counsel, R. Michael Senkowski at 202-719-7249 ormsenkowski@wileyrein.com and LauraA. Foggan at 202-719- 3382 or lfoggan@wileyrein.com, with any questions aboutthis filing.

Sincerely,

Operations Vice President State Farm Mutual Automobile Insurance Company

Attachment: Confidential Operations Manual and Training Syllabus

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