Category 2 and 3 operations, Sec. Sec.  107.115(a) and 107.120(a)(1)
would require a remote pilot in command to use a small UAS that is
qualified and labeled to conduct those operations.
    To confirm a small UAS is eligible to conduct Category 2 or 3
operations, a remote pilot must ensure an FAA-accepted Declaration of
Compliance exists for his or her small UAS. A situation may occur in
which a small UAS previously eligible for operations over people in
either Category 2 or Category 3 would either no longer be compliant
with the standards with which compliance was declared or would be
ineligible for such operations due to rescission of the Declaration of
Compliance that previously applied to it. The remote pilot would have
to verify the flight eligibility status of his or her small UAS.
(a) Distances From People
    The FAA declines to propose that the remote pilot maintain a
specific minimum distance from people during small UAS operations
because the existing requirements of part 107, combined with the new
proposed subpart D, provide a sufficient manner of mitigating risks.
Part 107 already requires the remote pilot to ensure the small UAS
operation does not pose an undue hazard to other aircraft, people, or
property in the event of a loss of control of the aircraft for any
reason.\87\ In addition, a prescriptive minimum distance from people is
not appropriate; for some operations, such a distance may be too
burdensome, and for others, it might be too conservative. The FAA
acknowledges, however, that the ARC recommended a ``small UAS must be
operated at a minimum distance of 20 feet above people's heads, or 10
feet laterally away from people'' for Category 2 and 3 operations.\88\
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    \87\ See Sec. Sec.  107.19(c), 107.23(a), 107.31(a)(4) and
107.49(a)(3).
    \88\ ARC Report at 11.
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    Section 107.19(c) requires the remote pilot in command to ensure
the operation will not pose any undue hazard to other people, other
aircraft, or other property in the event of a loss of control of the
small UAS. The FAA believes Sec.  107.19(c), as a performance-based
requirement, allows a remote pilot in command to determine what
specific stand-off distance (if any) is appropriate to the specific
small unmanned aircraft and operation that he or she is conducting. To
determine this stand-off distance, the preamble of the 2016 final rule
stated that a remote pilot should consider the small unmanned
aircraft's course, speed, and trajectory to determine whether the small
unmanned aircraft would go over or impact a person who is not directly
involved in the flight operation (uninvolved person).\89\ To comply
with Sec. Sec.  107.19(c), 107.23(a), 107.31(a)(4), and 107.49(a)(3),
therefore, a remote pilot conducting operations over people would
likely consider several factors when making the determination of a
stand-off distance from uninvolved people, all of which the remote
pilot must tailor to the intended operation.
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    \89\ 81 FR 42064, 42129. In addition, Sec.  107.23(a) prohibits
operating a small UAS ``in a careless or reckless manner so as to
endanger the life or property of another.'' Section 107.31(a)(4)
requires that the remote pilot in command maintain an ability to see
the aircraft and make a determination that the unmanned aircraft
does not endanger others. Section 107.49(a)(3) requires the remote
pilot in command to conduct a preflight assessment of the risk to
persons and property, factoring in their locations.
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    The FAA has not received information to demonstrate that a
prescriptive stand-off distance would provide a safety benefit beyond
complying with part 107's current requirements; therefore, the FAA
maintains the position it articulated in the 2016 final rule. Due to
the large variety of operations and types of small UAS that exist, and
consistent with the mitigations in part 107, the importance of
providing flexibility to the remote pilot outweighs any benefit of
having a prescriptive standard.
    The remote pilot is best suited to determine what distance would be
safe and thereby ensure operation of the small UAS would pose no undue
hazard to other aircraft, people, or property in the event of a loss of
control of the aircraft for any reason. For example, a remote pilot
might factor in the traffic along nearby roads, current and forecasted
weather conditions, the likelihood of people gathering or transiting
under or near the flight path, and property located in or near the
flight path. The remote pilot would use this information, in addition
to his or her knowledge of the performance of the small UAS under
normal operating conditions and probable failure modes such as lost
link, fly-away, and power failure, to identify a suitable horizontal
and vertical distance from people and property to ensure the small UAS
operation would not create an undue hazard. These distances may include
an area around people and property.
    The FAA requests comment on the following question: Does a
prescriptive standard exist for a minimum vertical or horizontal
distance that would apply equally across a large variety of

operations and aircraft and that would provide a safety benefit that
outweighs the importance of allowing the remote pilot the flexibility
to assess each unique situation? The FAA further requests data to
support any comments identifying a prescriptive standard.
(b) Prohibition on Operations Over a Moving Vehicle
    Part 107 currently prohibits the operation of a small UAS over a
moving vehicle in the absence of a waiver. The FAA established this
prohibition because the moving vehicle operating environment is
dynamic, as the remote pilot in command cannot control it directly. In
addition, the potential forces that would result when a small unmanned
aircraft impacts a moving vehicle on a road pose unacceptable risks due
to head-on closure speeds. For example, the impact kinetic energy of a
small unmanned aircraft on a person who is moving at 40 miles per hour
on a motorcycle would be much greater than on a person who is
stationary. Impact with a small unmanned aircraft may also distract the
driver of a moving vehicle and result in an accident.
    The FAA is considering, however, allowing the operation of small
UAS over moving vehicles in absence of a waiver. The agency seeks
public comment on whether it should take this action, in this or a
future rulemaking. The most useful comments on this issue will include
data on whether operations over moving vehicles would either increase
or decrease safety risks, including distracted driving or other hazards
to traffic. The FAA encourages commenters to include information, with
supporting data, on how to mitigate any risks they identify.
(c) Restricted Areas of Operation
    Due to the increased risk of injury associated with the higher
impact kinetic energy threshold, the FAA proposes restricting the areas
where Category 3 operations may occur. This rule would permit small UAS
eligible for operations in Category 3 to fly over people only when the
operator conducts the operation over a closed- or restricted-access
site and when people with access to the site have been notified that a
small unmanned aircraft may fly over them. In the alternative, if the
operation was over people not within a closed- or restricted-access
site, the small UAS operating in Category 3 must not sustain flight
over one or more people during its operation. For example, small UAS
conducting operations pursuant to Category 3 would be limited to
transient flights over people unless the operation occurs in a closed-
or restricted-access site in which the people within the site have
received notice. Moreover, unlike Categories 1 and 2, all Category 3
operations would be prohibited from occurring over open-air assemblies
of people.
    For Categories 1 and 2, the FAA proposes to permit operations at
any location, in accordance with the other requirements of this
proposed rule, part 107, and any other applicable laws and regulations.
The absence of any restrictions on the location of Category 1 or 2
operations is due to the fact that these categories present a low risk
of injuring people. A small UAS qualified to conduct Category 1 or 2
operations could operate over open air assemblies and in public spaces
with no applicable restrictions.
    In its report, the ARC recommended the FAA prohibit flight over
crowds or dense concentrations of people for ARC Category 3 operations.
The ARC also stated:

    Category 3 UAS may only operate over people if: (1) the
operation is conducted over a closed- or restricted-access work site
with the permission of the site's owner or operator; or (2)
overflight of people is limited to those who are transient or
incidental to the operation, i.e., the overflight of people is
incidental to the operation and is not sustained.\90\
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    \90\ ARC Report at 4.

    Compared to Categories 1 and 2, Category 3 operations under this
proposed rule present a higher likelihood of causing a casualty by
blunt trauma. In this regard, Category 3 operations could utilize
heavier, faster, or higher-operated small UAS. Permitting Category 3
operations would allow for continued and uninterrupted operation at a
site, minimize disruption of normal site operations, and limit
situations that could compromise the site's operational safety.
Examples of closed- or restricted-access sites over which Category 3
---------------------------------------------------------------------------
operations could be conducted include, but are not limited to:

     Agricultural fields in which workers are conducting
agricultural operations;
     Bridge inspections that include workers who may be
conducting inspection or construction activities;
     Filming operations that include movie set location
employees, such as caterers, set designers, and actors; and
     A wedding in which access is available only to guests
and a small UAS is conducting aerial photography or filming
operations.

    Based on the increased risk associated with Category 3 operations,
the FAA proposes to prohibit operating over open-air assemblies of
people, as well as the other restrictions described above. The FAA
proposes allowing Category 3 operations at closed- or restricted-access
sites because the general public would be unable to access the site. In
this regard, a closed- or restricted-access site would permit access to
those involved in the activity that occurs on the site, but not to the
general public. Those people who are permitted access to the closed- or
restricted-access site could be advised of precautions or other
recommended actions to ensure safety during a small UAS operation.
    The FAA would expect a remote pilot to ascertain whether a site is
closed- or restricted-access prior to conducting Category 3 operations
under this provision. A remote pilot could accomplish this by
identifying sites that restrict access to the general public through,
for example, public notices and signage, flagging and barricading,
erecting temporary fencing, or providing escorts, as appropriate.
Remote pilots would be responsible for monitoring activity during the
small UAS operation to ensure access to the site remains closed or
restricted. Remote pilots must control vehicle and pedestrian access
routes onto the site to prevent inadvertent or unauthorized entry of
persons onto the closed- or restricted-access site.
    In addition, this rule proposes to require that a remote pilot
verify that people with access to the closed- or restricted-access site
were provided notice that a small UAS may operate over them within the
site. The FAA anticipates this notice will enhance the situational
awareness of the people over whom the operations will occur. For the
purposes of this proposal, actual notice could include a written notice
posted at the entry point to the restricted area. When a person
receives a letter or contract stating small UAS operations may occur
over him or her, this would serve as sufficient actual notice, no
matter the amount of time that passes between receipt of the
information and the small UAS operation. By this proposed rule, the FAA
encourages operators to provide verbal notice in addition to the
written notice in cases in which a verbal notification is necessary to
ensure the information is received and understood. The remote pilot
would not have to be the person who provides the notice, but he or she
must ascertain people below the small unmanned aircraft have received
notice before conducting a Category 3 operation over a closed- or
restricted-access site.
    Alternatively, Category 3 operations could take place outside a
closed- or restricted-access site as long as the small unmanned
aircraft does not maintain

sustained flight over a person who is not directly involved in the
operation. This requirement would prohibit holding above, or
maintaining sustained flight above, any part of any person during a
Category 3 operation that occurs outside a closed- or restricted-access
site. This would include hovering above any person's head, flying back
and forth over a person, or circling above an uninvolved person in such
a way that the small unmanned aircraft remains above some part of that
person. The intent of this proposed requirement is ensuring only
momentary exposure to any one person occurs for Category 3
operations.\91\ Overall, restricting Category 3 operations from
maintaining sustained flight over people enhances safety by reducing
the likelihood of injury by limiting protracted duration of a flight
over a person or persons.
---------------------------------------------------------------------------

    \91\ The FAA considers ``exposure,'' to mean the amount of time
during which the small unmanned aircraft would be in a position over
or a near a person in which, if it were to experience a failure, it
would likely impact the person. For example, in the event a person
is lying down, this rule would not permit a small unmanned aircraft
to maintain sustained flight over any part of that person.
---------------------------------------------------------------------------

    The ARC suggested permitting flights to occur only over uninvolved
people who may loiter beneath the aircraft. The FAA declines to adopt
such a suggestion because doing so would place a heavy burden on the
remote pilot to anticipate constantly a person's actions during an
operation, which could affect the remote pilot's ability to operate the
small UAS safely, as the obligation may present a distraction.
    In some circumstances, it may not be possible for a small unmanned
aircraft to take off and land inside a closed- or restricted-access
site. The proposed requirements for Category 3 operations would allow
for takeoffs and landings to occur outside the site and transition to
the site to conduct the desired operation provided the aircraft does
not maintain sustained flight over uninvolved persons when outside the
site.
13. Provisions Applicable to Existing Small UAS
    The FAA recognizes a significant number of small UAS have already
been sold and are operating in the NAS under part 107. Some remote
pilots and manufacturers of small UAS may wish to use existing small
UAS to conduct operations over people. The FAA does not seek to
preclude existing small UAS from conducting these operations, and
recognizes the economic benefits of not requiring current owners of
small UAS to procure new aircraft solely for the purpose of operations
over people when existing aircraft may fulfill the proposed safety
level of this rule.
    Accordingly, manufacturers of existing small UAS may follow the
procedures in this proposed rule to establish the eligibility of their
small UAS to operate over people. Once a manufacturer has demonstrated
through an FAA-accepted Means of Compliance that the existing small UAS
meets the safety levels in this proposed rule, it would submit a
Declaration of Compliance establishing compliance with the proposed
requirements in Sec. Sec.  107.115(b)(5) and 107.120(b)(5). A
manufacturer would identify those small UAS to which the declaration
applied by listing the aircraft serial numbers on the Declaration of
Compliance submitted to the FAA. Once submitted, the FAA would handle a
Declaration of Compliance for an existing small UAS in the same manner
it proposes to handle a Declaration of Compliance submitted for a newly
manufactured small UAS. A manufacturer would also be responsible for
developing remote pilot operating instructions for the existing
aircraft, and making those instructions available to remote pilots or
owners of the small UAS.
    The FAA emphasizes this proposal would require a manufacturer make
the remote pilot operating instructions available; the FAA does not
propose requiring a manufacturer to locate owners or remote pilots
operating these small UAS and provide the instructions personally to
them. Rather, if a remote pilot owns an existing aircraft that a
manufacturer has identified on a Declaration of Compliance as eligible
for Category 2 or 3 operations, and the remote pilot intends to conduct
operations over people using that aircraft, the remote pilot would be
able to access the remote pilot operating instructions if the
manufacturer posted them online.
    Finally, the FAA proposes the remote pilot be permitted to label an
existing small unmanned aircraft, not previously labeled, in accordance
with the labeling requirements of this rule. The FAA recognizes that
requiring a manufacturer to contact all remote pilots of a particular
make and model of small UAS and provide labels to those persons would
be unreasonable. However, the option for a remote pilot to label the
aircraft would not preclude a manufacturer from making a label
available, either as a website download or for cost, which a remote
pilot could then affix to the aircraft. A remote pilot could choose to
label his or her existing aircraft in any manner that meets the
requirements of the regulations.

C. Waivers

    In the 2016 final rule, the FAA noted its process to integrate UAS
is ongoing. As such, the FAA decided to proceed with an incremental
approach, which included waiver authority in the regulatory text of
part 107 to permit new technologies and unique operational
circumstances that part 107 may currently restrict. The FAA does not
propose any changes to the existing waiver process in part 107. The FAA
proposes, however, to amend 14 CFR 107.205 to allow waivers for
specific types of operations over people this proposal would otherwise
limit, as well as to allow waivers for the anti-collision light
requirement that applies to operations at night and during civil
twilight.
1. Prohibition on Operations Over a Moving Vehicle
    This proposal would allow small UAS operations over people in
moving vehicles through the part 107 waiver process. Although this rule
does not address mitigations concerning the types of risks associated
with operating a small UAS over a person located in a moving vehicle,
the FAA would allow these operations if a waiver applicant is able to
demonstrate that these operations can be conducted safely pursuant to
the terms of the certificate of waiver. As stated above, the FAA does
not propose altering the prohibition on operating over a moving vehicle
in this NPRM, but seeks comments on this topic.
2. Operations Over People
    While this proposal would enable certain routine operations over
people, other operations would remain prohibited. For example,
operations using small UAS that exceed the Category 2 or 3 thresholds
for kinetic energy transfer would remain prohibited. Under current
regulations, an operator that wishes to conduct prohibited operation
over people may request a waiver under Sec.  107.205(g). The FAA does
not propose to change that provision. Operators seeking to operate over
people, but beyond the limits of this rule's requirements, would be
able to request a waiver under Sec.  107.205(g).
    Some operators of small UAS may seek a waiver of more than simply
the operational restrictions applicable to Category 3. For operations
over people that would occur, for example, in an aircraft that does not
achieve the safety level the FAA proposes in this rule, the FAA may
consider an application for waiver of the proposed prohibition of Sec.
107.39. The FAA anticipates such

applications would consider the rationale the FAA has provided in this
proposed rule, in an effort to understand the FAA's views on the
acceptable level of risk, as well as the agency's expectations with
regard to safety of operations over people. As such, the FAA would
continue to scrutinize applications for waiver of Sec.  107.39 in light
of the agency's risk-based decision-making process, and determine
whether any waiver application fulfills the waiver application
requirements. In this regard, the FAA expects any person who seeks a
waiver of Sec.  107.39 would present a unique risk assessment of the
intended area of operation that proves the operation would either
present a de minimis risk or that the operator's proposed limitations
or provisions would mitigate the risk sufficiently.\92\
---------------------------------------------------------------------------

    \92\ For example, one waiver for operations over people included
a small unmanned aircraft that only weighed 18.5 grams, while
another waiver relies primarily on containment of the operational
environment and conclusions regarding reliability of the small
unmanned aircraft, which weighs 8 kg. or 17.7 lbs. See Waiver No.
107W-2016-00993A (May 3, 2017) and Waiver No. 107W-2017-03788 (Sept.
25, 2017). In both cases, the FAA first assessed the risks, then
provided mitigation measures sufficient to address the level of risk
that the operation presented.
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D. Remote Pilot in Command Requirements

    Since promulgating part 107, the FAA determined that certain
amendments to part 107 would enhance clarity as well as consistency
with other FAA regulations. As a result, this rule includes a proposal
to add to Sec.  107.7 the requirement for remote pilots to present
their remote pilot in command certificate with small UAS rating, as
well as a form of identification, to authorized individuals upon
request. Lastly, this rule proposes permitting remote pilots to
maintain currency of their remote pilot in command certificates by
participating in recurrent training, rather than knowledge testing.
1. Presentation of Remote Pilot in Command Certificate
    Section 107.7 (``Inspection, testing, and demonstration of
compliance'') requires a remote pilot in command, owner, or person
manipulating the controls of a small UAS to present to the
Administrator, upon request, the remote pilot certificate with small
UAS rating and any other document, record, or report the regulations of
this chapter require. This proposed rule will align the text of Sec.
107.7 with 14 CFR 61.3(l), which requires pilots to present airman
certificates upon request.
    The FAA proposes amending Sec.  107.7 to require remote pilots to
present their remote pilot in command certificates to the
Administrator, authorized representatives of the National
Transportation Safety Board (NTSB) or Transportation Security
Administration (TSA), or any Federal, State, or local law enforcement
officer, upon request from any such officials. As noted above, Sec.
61.3(l) includes a parallel requirement for airman certificates,
medical certificates, and other similar documents, along with photo
identification. When the FAA promulgated 14 CFR 61.3(l), the agency
cited security concerns regarding the identification of pilots as the
primary impetus for the requirement. 67 FR 65858 (Oct. 28, 2002). The
same rationale applies to remote pilots. Law enforcement officials, the
Administrator, and the NTSB and TSA must be capable of correctly
identifying remote pilots in command in the event that an operation
raises security concerns or issues concerning safety in the NAS. Such a
provision will enhance the ability of other government agencies and
officials to conduct timely investigations in the interest of ensuring
safety and security pursuant to their authority.
    The FAA proposes requiring presentation of both the remote pilot in
command certificate and one of the types of identification the remote
pilot could use to establish his or her identity at a knowledge testing
center. Section 107.67(b) states a person's application for a knowledge
test must include proof of the applicant's identity that contains the
person's photograph, signature, date of birth, and permanent mailing
address. This proposed requirement would apply equally to remote pilots
who hold a certificate under 14 CFR part 61 and obtained their remote
pilot certificate by fulfilling the requirements of Sec.  107.61(d)(2).
2. Changes to Knowledge Testing Framework
    Following the implementation of part 107, the FAA re-evaluated its
testing requirements for remote pilots. This proposed rule would amend
the knowledge testing framework by requiring remote pilots to complete
recurrent training, rather than pass knowledge tests, to maintain a
current remote pilot in command certificate with small UAS rating.
(a) Recurrent Knowledge Testing and Training
    The FAA maintains the current initial testing requirement to
evaluate a remote pilot's knowledge for operating in the NAS is
critical, given the absence of a requirement for a practical test or
proficiency course in obtaining a remote pilot certificate. The FAA
proposes requiring recurrent training every 24 months, in lieu of
recurrent knowledge testing, however, so remote pilots maintain ongoing
familiarity with small UAS operations and the provisions of part 107.
Moreover, recurrent training, which a remote pilot can complete online,
presents a less costly option and will achieve a level of assurance of
knowledge that is comparable to the assurance a recurrent test
provides. In this regard, the FAA's current use of online training
enables the FAA to tailor the training to address the pilot's areas of
knowledge in which improvement is necessary. The FAA intends to employ
this type of mechanism to remote pilot training, in order to customize
the training.
    The recurrent training the FAA contemplates in this proposal may
take different formats. The primary way the FAA anticipates remote
pilots may fulfill the recurrent training requirement would be to
complete questions throughout the training, the completion of which the
FAA will consider satisfactory once the applicant achieves a score of
100 percent. The FAA may also allow small UAS training to occur within
a proficiency program or other approved program. The FAA would either
offer, or review and approve, all such training that could fulfill the
requirement of the proposed version of Sec.  107.65(b) and (c).
    The FAA anticipates the proposed change from recurrent knowledge
testing to completion of recurrent training will continue to serve as
an important risk mitigation measure. As UAS operations in the NAS
continue to evolve, training provides the opportunity to re-emphasize
the requirements of part 107 and incorporate any changes the FAA has
made to part 107 as a part of subsequent rulemakings, such as this one.
A training course provides the FAA with a way to ensure remote pilots
are aware of the key requirements that affect them, address new or
changed requirements in part 107 as a result of subsequent rulemakings,
and highlight the tools and resources available to remote pilots. Such
training would ensure remote pilots maintain awareness of
recommendations for decision-making so they can continue to operate
safely within the boundaries part 107 has established.
    Because pilots could complete online training to fulfill the
recurrent training requirement, this rule would not require travel to
any kind of knowledge testing center every 24 calendar months. Upon
completion of the training course, the

pilot would be able to print a completion certificate, which the pilot
would use to demonstrate aeronautical knowledge recency in accordance
with the proposed revisions to Sec.  107.65.
    The FAA uses the term ``training'' rather than ``training course''
in the proposed regulatory text in the relevant sections that address
training requirements, which would provide the opportunity for the FAA
to consider completion of special pilot proficiency programs, such as
an FAA-provided WINGS course \93\ specific to small UAS operations, to
suffice for fulfillment of the training requirements. Such a program
would offer tools and resources to strengthen decision-making skills
and thereby enable the remote pilot to continue to ensure he or she
operates safely in accordance with part 107. Overall, the FAA expects a
recurrent online training course, pilot proficiency program, or similar
option would keep remote pilots informed about enhancements to the
small UAS industry while reducing costs associated with travel to
knowledge testing centers.
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    \93\ WINGS is a voluntary pilot education and proficiency
program the FAA offers. The program addresses accident causal
factors associated with common pilot errors, lack of proficiency,
and faulty knowledge, and is available online. WINGS provides the
opportunity and the structure for pilots to continue pilots'
aviation education.
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(b) Aeronautical Knowledge Areas
    The FAA re-evaluated the knowledge topics that are required for
initial knowledge tests and those required for training currently
identified in Sec. Sec.  107.73 and 107.74, respectively. In
particular, the FAA reviewed the associated knowledge testing standards
identified in the Remote Pilot--Small Unmanned Aircraft System Airman
Certification Standards (sUAS ACS) document \94\ and the resource
guidance identified in the Remote Pilot sUAS ACS. As explained above,
knowledge regarding operations at night is one of the measures the FAA
seeks to employ to ensure the safety of operations at night. As such,
the FAA proposes adding a knowledge area that would cover night
operations for the initial knowledge test and the training. This area
would include questions on night physiology and night illusions.
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    \94\ The FAA's sUAS ACS is available at https://www.faa.gov/training_testing/testing/acs/media/uas_acs.pdf.
_____________________________________-

    The FAA also plans to update its guidance, training, and testing
material, including the associated knowledge testing standards
identified in the sUAS ACS document and the resources listed in that
ACS, to ensure the information is available for those remote pilots who
seek to operate a small UAS at night. In addition, the FAA would
provide educational items to the small UAS community through various
means of communication such as FAASafety.gov, FAA.gov/UAS, and industry
organizations.
    The existing subject areas on the recurrent knowledge test for
remote pilots include fewer topic areas than subject areas on the
initial knowledge test. This proposed rule would amend this by
requiring inclusion of the same list of subject areas on both the
initial test and the recurrent training for pilots who hold a remote
pilot certificate under Sec.  107.65(b). As for pilots who already hold
a pilot certificate under 14 CFR part 61 as described in Sec.
107.65(c), this proposed rule would likewise require the initial
training and the recurrent training cover identical subject areas. The
FAA has carefully evaluated the topics applicable in each category and
concludes that consistency in pilots' adequate knowledge in all topic
areas listed is important for ensuring safety of small UAS operations
in the NAS. Topics such as weather, small unmanned aircraft loading,
determining the performance of the small UAS, the effects of drugs and
alcohol, and radio communication procedures are all sufficiently
important to warrant a place in recurrent small UAS training.
    In addition, pilots who hold a part 61 certificate and therefore
need to complete only an abbreviated listing of topic areas should be
required to complete training on weather, small unmanned aircraft
loading, and determining the performance of the small UAS. Although the
2016 final rule stated that the validation of skills necessary for a
pilot who holds a part 61 certificate to complete flight review for
manned aircraft obviated the need to address these topics in recurrent
training for unmanned aircraft, the FAA has now revisited its analysis
and concluded such a distinction is not well-founded.\95\ For example,
although a pilot who holds a part 61 certificate will understand the
effects of weather on a manned aircraft, such effects could be very
different for operations of small UAS. Likewise, determining the
performance of a manned aircraft is distinct from the manner in which a
pilot should determine the performance of a small UAS; in this regard,
the preflight check requirements of Sec.  107.49 are distinct from
those codified in part 91 and in other, similar regulations specific to
manned aircraft.
---------------------------------------------------------------------------

    \95\ See 81 FR 42064, 42162.
---------------------------------------------------------------------------

    The fact that remote pilots operating under part 107 are not
subject to flight reviews or any practical test criteria from the FAA
also forms a basis for the FAA's rationale in making the recurrent
training area topics match the initial topic areas. The FAA has no
means of knowing remote pilots' weaknesses or areas in which they lack
experience or recollection. As a result, the FAA's presumption that
each pilot may lack recollection with regard to every subject area is
reasonable. For the foregoing reasons, the FAA now proposes to abandon
the distinctions in the topic areas of initial knowledge tests (or
training courses) and recurrent training.
    Those remote pilots who hold a remote pilot certificate with a
small UAS rating who completed initial knowledge testing or training
prior to this rule becoming final would not have been tested or
initially trained on operations at night. Although all remote pilots
who choose to exercise the privileges of their remote pilot in command
certificate could receive training through an online recurrent training
course that would cover the subject matter, a period of time would
exist for some remote pilots in which operations over people would be
permitted and those remote pilots would not have completed recurrent
training that includes instruction on night operations. As with all
airman certificate holders, the FAA expects such remote pilots would
adhere to the regulations under which they operate even when those
regulations change. As a result, remote pilots who operate at night
without having first completed the updated training this rule proposes
would be operating in violation of Sec.  107.29. The FAA would update
its guidance, training, and testing material to ensure information is
available for those remote pilots who seek to exercise this new
privilege, and would alert the small UAS community accordingly, through
various means of communication.
    In addition, the regulatory text the FAA proposes with regard to
eligibility and recency requirements for a remote pilot certificate
includes the phrase ``in a manner acceptable to the Administrator.''
The FAA's addition of this phrase would serve to ensure remote pilots
who already hold a remote pilot in command certificate under part 107
and are not yet required to complete their recurrent training would not
need to re-take a knowledge test or complete training immediately,
simply because the subject area listings of Sec. Sec.  107.73 and
107.74 have changed. Instead, remote pilots who wish to operate a small
UAS at night must take the updated knowledge test or training before
operating at night.

V. Other Amendments

    For purposes of consistency throughout part 107, as well as
clarity, this rule also includes proposals to make certain, specific
amendments to various provisions of part 107. These amendments are
minor and concise.

A. UAS Exemption-Holders

    The existing text of Sec.  107.1 excludes from the applicability of
part 107 remote pilots who hold an exemption for a UAS operation
pursuant to section 333 of Public Law 112-95. The text identifies the
remote pilot as the person who is excluded from the applicability of
part 107. The FAA has concluded this identification is imprecise, as
the text should identify the excluded party as the exemption-holder,
rather than the remote pilot. In addition, on October 5, 2018, the
President signed the FAA Reauthorization Act of 2018.\96\ The statute
codified within title 49 of the United States Code the authority
previously provided in section 333 of Public Law 112-95. As a result,
the citation within Sec.  107.1(b)(3) should reflect 49 U.S.C. 44807 as
the exemption authority. The FAA proposes re-phrasing the text of Sec.
107.1(b)(3), accordingly.
---------------------------------------------------------------------------

    \96\ Public Law 115-254.
---------------------------------------------------------------------------

B. Remote Pilot in Command

    Section 107.19 outlines the responsibilities of the remote pilot in
command under part 107. Following the promulgation of part 107, the FAA
identified the need for a minor edit to paragraph (c) of Sec.  107.19,
which currently requires each remote pilot in command to ``ensure the
small unmanned aircraft will pose no undue hazard to other people,
other aircraft, or other property in the event of a loss of control of
the aircraft for any reason.'' The FAA amends the phrase ``loss of
control of the aircraft'' to say ``loss of control of the small
unmanned aircraft,'' for clarity. The FAA's intention in promulgating
Sec.  107.19(c) was to ensure the remote pilot in command remains
responsible for the safe operation of a small unmanned aircraft when a
loss of control of that small unmanned aircraft occurs. The remote
pilot in command is not responsible for ensuring the safety of another
person's aircraft in the event of loss of control; as a result, this
proposed rule amends the text of Sec.  107.19(c), accordingly.

C. Operation of Multiple Small UAS

    The FAA proposes amending the existing text of Sec.  107.35, which
prohibits contemporaneous operation of more than one small unmanned
aircraft. Following the promulgation of part 107, the FAA realized its
use of the term ``operate'' in Sec.  107.35 could result in the
perception that a single company or operator was prohibited from
employing more than one remote pilot in command and conducting more
than one small UAS operation at the same time. The FAA's proposed
change to this section would allow companies to run two or more
simultaneous small UAS operations, provided each aircraft is under the
control of its own remote pilot in command.

VI. Privacy

    In the 2016 final rule, the FAA acknowledged various organizations'
and commenters' concerns regarding the use of small UAS to collect
information about individuals. In that rule, the FAA noted that privacy
concerns were beyond the scope of the FAA's mission to ensure safety
and efficiency of aviation operations in the NAS, but discussed various
methods by which the FAA intended to continue addressing privacy
concerns through engagement and collaboration with the public,
stakeholders, and other agencies with authority and subject matter
expertise in privacy law and policy.
    Proposed regulations to address privacy concerns are beyond the
scope of the FAA's mission. Nonetheless, the FAA has consistently
recognized the importance of stakeholder engagement regarding privacy
implications associated with UAS integration and incorporated privacy
considerations into the UAS Test Site Program and the UAS Integration
Pilot Program, under its contracting authority.
    The FAA acknowledges unique characteristics and capabilities of UAS
may pose uncertainties with regard to individual privacy. However,
these concerns are generally related to technology and equipment, which
may be installed on an unmanned (or manned) aircraft, but are unrelated
to the safe operation of the aircraft. News helicopters, aerial
surveys, film/television production, law enforcement, and other such
manned aircraft have long placed cameras and other sensors on them, for
a variety of purposes.
    Although the FAA regulates the safe and efficient operation of
aircraft within the NAS, the FAA has never extended its administrative
reach to regulate the use of cameras and other sensors extraneous to
the airworthiness or safe operation of the aircraft in order to protect
individual privacy. Substantial, ongoing debate among policymakers,
industry, advocacy groups and members of the public has occurred
regarding: The extent to which UAS operations pose novel privacy
issues, whether those issues are addressed by existing legal
frameworks, and the means by which privacy risks should be further
mitigated. In recognizing the importance of addressing privacy concerns
in the proper forum, the FAA has partnered with other agencies with the
mandate and expertise to identify, develop, and implement appropriate
mitigation strategies to address such concerns. The FAA's discussions
with stakeholders have informed the FAA as it furthers plans for UAS
integration. As the FAA stated in a July 20, 2018 press release,\97\
Congress exclusively authorized the FAA to regulate aviation safety,
the efficiency of navigable airspace, and air traffic control, among
other things. The FAA further stated, ``[l]aws traditionally related to
state and local police power--including land use, zoning, privacy, and
law enforcement operations--generally are not subject to federal
regulation.'' As a result, cities and municipalities, while not
permitted to have their own rules or regulations governing the
operation of aircraft, may generally determine the location of aircraft
landing sites. The FAA expects the Department of Transportation's UAS
Integration Pilot Program \98\ to provide the FAA with insight on how
best to involve local jurisdictions in the integration of UAS into the
airspace while considering local interests in conjunction with aviation
safety.
---------------------------------------------------------------------------

    \97\ Federal Aviation Administration, Press Release--FAA
Statement--Federal vs. Local Drone Authority, available at https://www.faa.gov/news/press_releases/news_story.cfm?newsId=22938.
    \98\ 82 FR 51903 (Nov. 8, 2017); Presidential Memorandum for the
Secretary of Transportation (Oct. 25, 2017), available at https://www.whitehouse.gov/the-press-office/2017/10/25/presidential-memorandum-secretary-transportation.
---------------------------------------------------------------------------

    With regard to the information manufacturers and operators may
submit in accordance with this proposed rule's requirements, the FAA
conducted a privacy impact assessment (PIA) under section 522(a)(5) of
division H of the FY 2005 Omnibus Appropriations Act, Public Law 108-
447, 118 Stat. 3268 (Dec. 8, 2004) and section 208 of the E-Government
Act of 2002, Public Law 107-347, 116 Stat. 2889 (Dec. 17, 2002). As
part of the PIA, the FAA analyzed the effect the proposed rule might
have on collecting, storing, and disseminating personally identifiable
information (PII) of manufacturers and UAS operators. The FAA also
examined and evaluated protections and alternative information-handling
processes in developing the proposed rule to mitigate potential privacy
risks. A copy of the draft PIA is

posted in the docket for this rulemaking.\99\
---------------------------------------------------------------------------

    \99\ Upon finalization, PIAs are posted on the Department of
Transportation's Privacy Program page, available at https://www.transportation.gov/individuals/privacy/privacy-impact-assessments#Federal%20Aviation%20Administration%20(FAA).
---------------------------------------------------------------------------

VII. Section 44807 Statutory Findings

    To determine whether certain UAS may operate safely in the NAS
pursuant to 49 U.S.C. 44807, the Secretary must find that the operation
of the UAS would not create a hazard to users of the NAS or the public.
The Secretary must also determine whether a certificate under 49 U.S.C.
44703 (``Airman certificates'') or section 44704 (``Type certificates,
production certificates, and airworthiness certificates, and design and
production organization certificates''), or a certificate of waiver or
certificate of authorization, is required for the operation of small
UAS subject to this proposed rule. Using a risk-based approach, the
Secretary proposes to determine that small UAS operations under this
proposed rule would operate safely in the NAS; the individual findings
section 44807 requires are as follows.

A. Hazard to Users of the NAS or the Public

    Section 44807(b)(1) requires the Secretary to determine which types
of small UAS operations, as a result of their size, weight, speed,
operational capability, proximity to airports and populated areas,
operation over people, and operation within or beyond visual line of
sight, or operation during the day or night do not create a hazard to
users of the NAS or the public. In the 2016 final rule, the Secretary's
finding of acceptable risk was based on the following mitigations:
Requiring operations to be conducted within visual line of sight;
limiting maximum gross weight of the small unmanned aircraft to be 55
pounds; limiting the operating altitude to below 400 feet above ground
level (AGL); requiring remote pilots to hold valid, current
certificates; defining the area of operation; and prohibiting
operations over any person who is not directly participating in the
operation. This proposed rule would allow operations over uninvolved
people; however, these aircraft would still be required to comply with
the other restrictions codified in part 107. The additional hazard
posed by operating directly over people would be mitigated through
manufacturer requirements and operational restrictions, including
limited areas of operation for Category 3 aircraft. This rule would
also allow for operations at night. The proposed risk mitigation
measures of an illuminated anti-collision light and increased airman
knowledge would provide sufficient risk mitigation for such operations.
    Accordingly, the Secretary proposes to find that small UAS
operations subject to this proposed rule would not create a hazard to
users of the NAS or the public. The FAA invites comments on this
proposed finding.

B. Certificate Requirements

    Additionally, 49 U.S.C. 44807(b)(2) requires the Secretary to
determine whether small UAS operations subject to this proposed rule
pose a safety risk sufficient to require airworthiness certification or
airman certification.
    Due to the provisions in this proposed rule, in addition to the
existing provisions in part 107, the risks associated with small UAS
operations over people are significantly distinct from the risks that
other types of aircraft operations present. Under part 107, a remote
pilot must make a determination of whether the small UAS is in a
condition for safe operation prior to and during flight operations.
This proposed rule would also require a remote pilot to ensure that his
or her unmanned aircraft weighs 0.55 pounds or less or has an FAA-
accepted Declaration of Compliance prior to operating over people.
Similarly, operations at night may only occur after the remote pilot
has taken the updated knowledge test or training that includes content
on night operations and when the small unmanned aircraft maintains an
illuminated anti-collision light. These proposed requirements serve to
mitigate the risks the proposed operations would present.
    Small UAS operations that occur in accordance with this proposal
and the requirements of part 107 would pose significantly less risk
than the level of risk that heavier aircraft present. Moreover, small
UAS operating under part 107 must remain in a condition for safe
operation. Therefore, the Secretary proposes to find, pursuant to 49
U.S.C. 44807(b)(2), that airworthiness certification would be
unnecessary for small UAS subject to this proposed rule.
    Part 107 currently requires a remote pilot in command certificate
prior to conducting operations under part 107. The FAA has carefully
tailored the knowledge and training requirements of part 107, subpart
C, to ensure remote pilots in command are adequately aware of the
restrictions and requirements of part 107. This framework is a key
component of the Secretary's determination. As a result, the Secretary
proposes to find, in this proposed rule, that a certificate under 49
U.S.C. 44703 is required. The FAA invites comments on these findings.

VIII. Regulatory Notices and Analyses

A. Regulatory Evaluation

    Changes to Federal regulations must undergo several economic
analyses. First, Executive Order 12866 and Executive Order 13563 direct
that each Federal agency shall propose or adopt a regulation only upon
a reasoned determination that the benefits of the intended regulation
justify its costs. Second, the Regulatory Flexibility Act of 1980
(Public Law 96-354) requires agencies to analyze the economic impact of
regulatory changes on small entities. Third, the Trade Agreement Act of
1979 (Public Law 96-39) prohibits agencies from setting standards that
create unnecessary obstacles to the foreign commerce of the United
States. In developing U.S. standards, the Trade Agreement Act of 1979
requires agencies to consider international standards and, where
appropriate, that they be the basis of U.S. standards. Fourth, the
Unfunded Mandates Reform Act of 1995 (Public Law 104-4) requires
agencies to prepare a written assessment of the costs, benefits, and
other effects of proposed or final rules that include a Federal mandate
likely to result in the expenditure by State, local, or Tribal
governments, in the aggregate, or by the private sector, of $155
million or more annually (adjusted for inflation with base year of
1995). This portion of the preamble summarizes the FAA's analysis of
the economic impacts of this proposed rule. We suggest readers seeking
greater detail read the full regulatory evaluation, a copy of which is
available in the docket for this rulemaking.
    In conducting these analyses, FAA has determined that this proposed
rule: (1) Has benefits that exceed costs; (2) is not an economically
``significant regulatory action'' as defined in section 3(f) of
Executive Order 12866; (3) is ``significant'' as defined in DOT's
Regulatory Policies and Procedures; (4) would have a significant
positive economic impact on a substantial number of small entities; (5)
would not create unnecessary obstacles to the foreign commerce of the
United States; and (6) would not create a Federal mandate likely to
result in the expenditure of more than $155 million annually under the
Unfunded Mandates Reform Act of 1995 (Public Law 104-4). These analyses
are summarized below.

1. Assumptions and Data
    The benefit and cost analysis for the regulatory evaluation is
based on the following assumptions:

     The analysis is conducted in constant dollars with 2016
as the base year.
     Because the commercial small UAS industry may evolve
differently from current expectations, the FAA determines that a
five-year period of analysis is appropriate.
     We use a three percent and seven percent discount rate
for the costs and benefits as prescribed by OMB in Circular A-
4.\100\
---------------------------------------------------------------------------

    \100\ https://www.whitehouse.gov/omb/circulars_a004_a_4.
Accessed August 3, 2017.
---------------------------------------------------------------------------

     The small UAS vehicle forecasts used in this analysis
are based on the Federal Aviation Administration's FAA Aerospace
Forecast 2017-2037.\101\
---------------------------------------------------------------------------

    \101\ FAA Aerospace Forecast Fiscal Years 2017-2037 at 30-33,
available at http://www.faa.gov/data_research/aviation/aerospace_forecasts/media/FY2017-37_FAA_Aerospace_Forecast.pdf.
---------------------------------------------------------------------------

     Small unmanned aircraft that weigh 0.55 lbs. or less
(Category 1) are not part of this analysis as costs are zero to
minimal.
     The FAA estimates that 15 existing models may satisfy
the performance-based requirements of the rule for Category 2 and
Category 3 operations with little or no modification. These
operations would be subject to the cost of obtaining a Declaration
of Compliance. The FAA also assumes manufacturers would likely
introduce a comparable number of compliant models in each of the
subsequent years of the analysis.
     The FAA estimates that the remote pilot operating
manual is 6 pages in length and requires 150 hours to develop at an
hourly rate of $72.91.
     The FAA assumes that five percent of submitted
Declarations of Compliance (DoC) documents would be rescinded,
rewritten, and resubmitted for acceptance. It is assumed that DoCs
resubmitted to the FAA would be accepted.
     The FAA assigns the United States Department of
Transportation guidance on the hourly value of time and hourly value
of travel time savings as to equal $25.40 for the analysis
period.\102\

    \102\ Time savings is estimated to be median hourly wage plus
benefits as described in the U.S. Department of Transportation
Revised Departmental Guidance on Valuation of Travel Time in
Economic Analysis dated September 27, 2016.
---------------------------------------------------------------------------

2. Benefits Summary
    This proposed rulemaking would further integrate small UAS into the
NAS by enabling operations over people and nighttime operations. These
would benefit the economy and encourage innovation and growth across a
variety of sectors, such as construction, education, infrastructure
inspection, insurance, marketing, and event, film and sports
photography.
    Today, remote pilots who comply with part 107 can fly a small UAS
within a safe distance from people, but are not able to operate over
people who are not participating in the operation. Without this
proposed rule, the only entities allowed to operate small UAS over
people in the NAS are public entities holding an active certificate of
waiver or authorization (COA), entities with an FAA-issued exemption,
entities that hold a waiver to the prohibition on operations over
people provision of part 107, or small UAS that have received
airworthiness certification from the FAA who also operate with a COA.
When this proposed rule is finalized, individuals would be able to
conduct operations of a small UAS over people in the NAS and at night
under part 107, so long as the activity is conducted by a small UAS
that complies with the proposed provisions.
3. Costs and Savings Summary
    A manufacturer would incur costs for demonstrating compliance with
the safety requirements of this proposed rule and providing a
Declaration of Compliance to the FAA. For both Category 2 and Category
3 operations, this proposed rule would also require the manufacturer to
label the aircraft for the appropriate category of operation and to
provide remote pilot operating instructions for the small UAS upon
sale, transfer, or use by someone other than the manufacturer.
Additionally, a small UAS manufacturer would be responsible for the
development of a website or other notification process for the purpose
of notifying the public of the continued eligibility of small UAS for
operations over people under this proposed rule. The costs to the FAA
from this proposed rule include notice to a manufacturer that a
Declaration of Compliance has been accepted (or rescinded); the
development of a website for the FAA to notify the public of small UAS
that have a Declaration of Compliance rescinded; and altering knowledge
test questions into a training format. FAA costs are minimal.
    Over the five-year period of analysis, the total present value cost
of the proposed rule is about $14 million with annualized costs of $3
million (using a seven percent discount rate).
    This proposed rulemaking would have quantified cost savings. Part
107 currently requires an applicant for a remote pilot certificate with
a small UAS rating to go to a knowledge testing center and take the
initial knowledge test to be eligible for the remote pilot in command
certificate. To maintain the privileges of that certificate, remote
pilots currently must pass a recurrent knowledge test at a knowledge
testing center every 24 calendar months thereafter. This proposed rule
would remove the requirement for completing a recurrent aeronautical
knowledge test at a knowledge testing center and replace the
requirement with completing online training.
    As a result, the remote pilot in command who does not also hold a
current certificate under part 61 would be relieved of costs associated
with recurrent knowledge testing every 24 months. The cost savings
include the elimination of the knowledge test fee; the elimination of
the mileage expense for travel to and from the knowledge testing
center; and the elimination of the opportunity cost of time studying
for the knowledge test and travelling to the knowledge testing center.
In total, these costs savings average $460 every 24 calendar months per
affected remote pilot.
    The full regulatory evaluation for this proposed rule presents a
range of cost savings based on three varying fleet forecasts.
Subsequently, over the five-year period of analysis, this proposed
change would provide a total present value cost savings between $38
million and $135 million with annualized cost savings between $9
million and $33 million (using a seven percent discount rate).
    The net present value cost savings (less costs) of the proposed
rule ranges from $24 million to $121 million at a seven percent
discount rate with net annualized costs savings between $6 million and
$29 million. The following table presents quantified costs to
manufacturers and the FAA and savings to remote pilots.

              Table 6--Costs and Savings of Proposed Rule ($ Millions) 5-Year Period of Analysis *
----------------------------------------------------------------------------------------------------------------
                                                       7% PV       7% Annualized       3% PV       3% Annualized
----------------------------------------------------------------------------------------------------------------
Low case:
    Costs (Manufacturers and FAA)...............             $14              $3             $15              $3
    Cost Savings (Remote Pilots)................            (38)             (9)            (44)            (10)
                                                 ---------------------------------------------------------------
        Net Cost Savings........................            (24)             (6)            (29)             (6)
----------------------------------------------------------------------------------------------------------------
Base case:
    Costs (Manufacturers and FAA)...............              14               3              15               3
    Cost Savings (Remote Pilots)................            (49)            (12)            (57)            (12)
                                                 ---------------------------------------------------------------
        Net Cost Savings........................            (35)             (9)            (42)             (9)
----------------------------------------------------------------------------------------------------------------
High case:
    Costs (Manufacturers and FAA)...............              14               3              15               3
    Cost Savings (Remote Pilots)................           (135)            (33)           (158)            (34)
                                                 ---------------------------------------------------------------
        Net Costs Savings.......................           (121)            (29)           (143)            (31)
----------------------------------------------------------------------------------------------------------------
* Columns may not sum to total due to rounding. Savings are shown in parenthesis to distinguish from costs.

4. Benefit Cost Summary
    This rulemaking responds to Congressional direction that instructs
the Secretary of Transportation to determine whether ``certain unmanned
aircraft systems may operate safely in the national airspace
system.\103\ This proposed rule has been initiated at the request of
the Administrator and the Secretary of Transportation after
consultation with the Office of Management and Budget, and the Office
of Science and Technology Policy in the Executive Office of the
President. This high-level interest reflects a strong desire from
industry for operating small UAS over people and is another step toward
an eventual full integration of unmanned aircraft systems operating in
the NAS. This rule would expand the opportunities for part 107 remote
pilots and supports innovation in the emerging UAS industry.
---------------------------------------------------------------------------

    \103\ See Public Law 115-254 347 (2018), codified at 49 U.S.C.
44807.
---------------------------------------------------------------------------

    The operation of small UAS over people may increase safety risk.
Although the FAA believes the probability of injury from operating
small UAS over people is small, when that small probability is
multiplied by an increased number of operations, the risk of the
occurrence of injury increases. The proposed performance-based
standards would establish three categories of small UAS operations
defined primarily by level of risk of injury posed. Additional
manufacturer and operational requirements would also apply to certain
categories of small UAS to mitigate the risks of operating over people.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) (RFA)
establishes ``as a principle of regulatory issuance that agencies shall
endeavor, consistent with the objectives of the rule and of applicable
statutes, to fit regulatory and informational requirements to the scale
of the businesses, organizations, and governmental jurisdictions
subject to regulation. To achieve this principle, agencies are required
to solicit and consider flexible regulatory proposals and to explain
the rationale for their actions to assure that such proposals are given
serious consideration.'' The RFA covers a wide range of small entities,
including small businesses, not-for-profit organizations, and small
governmental jurisdictions.
    Agencies must perform a review to determine whether a rule will
have a significant economic impact on a substantial number of small
entities. If the agency determines that it will, the agency must
prepare a regulatory flexibility analysis as described in the RFA.
    The FAA believes this proposed rule would have a significant impact
on a substantial number of small entities. Therefore, under Section
603(b) of the RFA, the initial analysis must address:

     Description of reasons the agency is considering the
action.
     Statement of the legal basis and objectives for the
proposed rule.
     Description of the record-keeping and other compliance
requirements of the proposed rule.
     All Federal rules that may duplicate, overlap, or
conflict with the proposed rule.
     Description and an estimated number of small entities
to which the proposed rule will apply.
     Description of Significant Regulatory Alternatives for
Small Entities.
1. Description of Reasons the Agency Is Considering the Action
    This rulemaking proposes performance-based requirements to allow
small UAS to operate over people or at night under part 107 without
obtaining a waiver or exemption. Currently under part 107, a remote
pilot must obtain a waiver or exemption explicitly allowing operations
over people or at night. As of July 10, 2017, the FAA has received
2,155 requests for waiver to permit operation at night, 477 requests to
permit operating over people, and 228 requests to permit operating over
people at night.\104\
---------------------------------------------------------------------------

    \104\ As of September 2017, part 107 Non-Airspace Waivers
totaled 5,835. Of these 5,835 waivers, 3,915 have been disapproved
and 1,060 have been approved. Of the remaining waivers, 543 are in
process, with another 317 withdrawn.
---------------------------------------------------------------------------

    The proposed requirements would allow small UAS to operate over
people and during the hours of night while minimizing the risk these
operations may pose to the general public. For operations over people,
the FAA's proposed performance-based standards would establish three
categories of small UAS operations defined primarily by level of risk
of injury posed. Additional manufacturer requirements and operational
restrictions beyond those already in part 107 would apply to certain
categories of small UAS to mitigate the risks associated with each
category.
    This rulemaking also proposes to remove the requirement for
completing a recurrent aeronautical knowledge test at a knowledge
testing center and replaces the requirement with completing training
that requires passing an online knowledge check by achieving a 100%
score. As a result, the remote pilot in command who does not

also hold a certificate under part 61 would be relieved of costs
associated with recurrent knowledge testing every 24 months.
2. Statement of the Legal Basis and Objectives for the Proposed Rule
    The FAA promulgates this rulemaking pursuant to the authority set
forth in 49 U.S.C. 44807. Section 44807 directs the Secretary of
Transportation to determine whether ``certain unmanned aircraft systems
may operate safely in the national airspace system.'' If the Secretary
determines that certain unmanned aircraft systems may operate safely in
the NAS, then the Secretary must ``establish requirements for the safe
operation of such aircraft systems in the national airspace system,
including operation related to research, development, and testing of
proprietary systems.'' \105\
---------------------------------------------------------------------------

    \105\ 49 U.S.C. 44807(c).
---------------------------------------------------------------------------

    This rulemaking is also promulgated pursuant to 49 U.S.C.
40103(b)(1) and (2), which charge the FAA with issuing regulations: (1)
To ensure the safety of aircraft and the efficient use of airspace; and
(2) to govern the flight of aircraft for purposes of navigating,
protecting and identifying aircraft, and protecting individuals and
property on the ground. In addition, 49 U.S.C. 44701(a)(5) charges the
FAA with prescribing regulations that the FAA finds necessary for
safety in air commerce and national security. Lastly, 49 U.S.C.
46105(c) allows the Administrator to issue immediate orders to address
an emergency related to safety in air commerce.
    The FAA intends this rule will be an important step in further
integrating small UAS operations into the NAS. This rule would permit
operations of small UAS over people and operations at night without
first obtaining a waiver. This proposed rule would also amend the
knowledge testing requirements in part 107 to provide for recurrent
training to substitute for in-person knowledge testing. With this
proposed rule, the FAA expects the small UAS industry to continue
finding new and creative ways for utilizing small UAS, and thereby grow
the industry through innovation. The FAA's overall objective in this
proposed rule is to ensure safety while encouraging new uses of small
UAS in the NAS.
3. Description of the Record-Keeping and Other Compliance
Requirements of the Proposed Rule
    The proposed rule would require the manufacturer to declare that a
small UAS meets applicable performance-based requirements by using a
means of compliance by test, analysis, or inspection, or any
combination of these options. A manufacturer could perform any
necessary tests contained in the means of compliance in-house or they
could rent a testing facility with the necessary equipment to show
compliance with the injury limitation based on transfer of kinetic
energy upon impact. The manufacturer would certify the results from
this means of compliance testing on its Declaration of Compliance to
the FAA.
    The proposed rule would require manufacturers of small UAS who use
a means of compliance the FAA has accepted for Category 2 or Category 3
operations, to make available to the Administrator the Declaration of
Compliance and any other document, record, or report that the proposal
requires, upon the FAA's request. The proposed rule would provide
record retention requirements for manufacturers who submit either a
Declaration of Compliance or a means of compliance to the FAA. With
today's minimal cost of producing electronic documents and mass storage
hardware devices, the FAA expects manufacturers would keep all relevant
documents, records, or reports required in an electronic format and
properly back up their storage systems. Therefore, this requirement
would add minimal to no costs to the manufacturers because
manufacturers would already have computer systems, with sufficient
memory available, to store and produce the documents this proposal
requires.
    The proposed rule would require a manufacturer to label a small
unmanned aircraft qualified for Category 2 or Category 3 operations
with each category for which the small UAS is qualified to operate such
that the label is in English, legible, prominent, and affixed onto the
small unmanned aircraft by some permanent means. In addition, the FAA
proposes requiring remote pilots to ensure their small unmanned
aircraft are properly labeled before conducting any operations over
people. The FAA believes the cost of adding the additional labeling
information for the category for which the small UAS is qualified to
operate would be minimal given that UAS typically come with a label
containing information such as the name of the manufacturer, serial
number, and model name or number. In addition, if the label has worn
out due to use or age, the remote pilot could satisfy the proposal by
using a permanent marker, or etching the category into the body of the
small unmanned aircraft.
    The proposed rule would require a small UAS manufacturer to
establish and maintain a product support and notification process to
notify the public and the FAA of any safety issues that would render
the aircraft ineligible for operations over people. The FAA believes
manufacturers of small UAS would have such a system already developed
and in place to handle their warranties and to inform users of their
small UAS about new developments and new products they are bringing to
the marketplace. This proposal does not require the owner of a small
UAS to send in a warranty card or provide the manufacturer any personal
contact information. Therefore, the FAA believes the cost of this
requirement would be minimal. The FAA notes a manufacturer could be an
individual that modifies a small UAS and then sells it. According to
the proposal, this individual would also be required to have a
notification and support process in place. The FAA envisions this
process would be scaled to the production, so the individual who sells
a single aircraft could establish a much smaller scale process. For
example, the manufacturer could simply email the owner of the small UAS
and advise them of any safety issues. The FAA also believes for a
small-scale manufacturer or a modifier, the requirement to maintain a
product support and notification process would also result in minimal
costs.
4. All Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rule
    The FAA is unaware that the proposed rule will overlap, duplicate
or conflict with existing Federal rules.
5. Description and an Estimated Number of Small Entities to Which the
Proposed Rule Will Apply
    This proposed rule would apply to two separate communities of small
entities: Manufacturers of small UAS and entities that operate small
UAS. The FAA has not quantified the number of manufacturers that would
be subject to the proposed rule because the FAA cannot reasonably
predict how the market will develop for individual commercial uses of
small UAS. However, one database that the FAA has access to identifies
2,126 manufacturers of UAS worldwide.\106\ Out of these 2,126
manufacturers, over 72 percent are foreign entities. Additionally,
Association of Unmanned Vehicle Systems International (AUVSI)

examined the top 15 platforms used by section 333 exemption holders,
and determined that only 3 of the 15 platforms are manufactured by U.S.
entities, with over half (8 platforms) manufactured by DJI Industries,
a company based in China. It is not known how many of these
manufacturers currently build, or will build in the future, small UAS
that may fit within the bounds of this rulemaking. The FAA requests
comments on the number of U.S. owned and operated small manufacturers
of small UAS that would be affected by this proposed rule.
---------------------------------------------------------------------------

    \106\ AUVSI Air Platform Database (accessed August 2018).
---------------------------------------------------------------------------

    To be eligible for operations over people, a manufacturer must
submit a Declaration of Compliance that would generally include the
test report that is generated by following an acceptable means of
compliance. Based on information from industry, the FAA estimated the
one-time cost for developing the means of compliance to be
$200,000.\107\ The FAA considers this cost as an upper bound; as
methods become standardized, the cost will be reduced. To provide
flexibility to small entities, this rule proposes several performance-
based requirements that would accommodate varying means of compliance.
In this manner, the FAA would build flexibility into the regulations,
which would adapt to the fast pace of small UAS innovation and
development. The FAA requests information and data on the cost of
developing varying means of compliance for small manufacturers.
---------------------------------------------------------------------------

    \107\ The FAA received aggregated cost data that included the
full rental of a research facility that has a drop tower, the set-up
of the facility, testing equipment costs, the cost of small UAS to
be tested, and the cost of time experts spend on testing and
analysis among other information. The FAA did not receive itemized
cost data to perform a sensitivity analysis of the costs for varying
means of compliance.
---------------------------------------------------------------------------

    The FAA determines many of the small UAS operations over people or
at night will be conducted by small business entities. Based on
analysis conducted by AUVSI, over 85 percent of waivers granted have
been to small businesses.\108\ Therefore, the FAA determines this
proposed rule would have a positive significant economic impact on a
substantial number of small entities.
---------------------------------------------------------------------------

    \108\ (AUVSI) Association of Unmanned Vehicle Systems
International. As of July 31, 2017, 1,074 waivers had been issued of
which 85 percent were granted to small entities (entities with less
than 10 employees).
---------------------------------------------------------------------------

6. Description of Significant Regulatory Alternatives Considered for
Small Entities
    The FAA considered both more and less costly alternatives as part
of its NPRM because the RFA requires the agency to consider significant
regulatory alternatives that meet the agency's statutory objectives and
minimize the costs to small entities. The FAA rejected the costlier
alternatives due to policy considerations and the undue burden imposed
on small UAS operators. The less costly alternatives and the FAA's
reasons for rejecting those alternatives are discussed below. In
addition, the FAA discusses performance-based means of compliance that
may provide additional flexibility and minimize costs to small
entities.

     The FAA considered hands-on remote pilot flight
training as part of the requirements for operating a small UAS over
people or at night. However, at this time, the FAA does not have
enough knowledge or experience with the operation of small UAS on a
large scale to assess whether training beyond part 107 requirements
is warranted.
     The FAA considered allowing Category 3 operations on a
closed- or restricted-access site without requiring notice that the
operation was taking place. The FAA rejected this alternative due to
the increased severity of an injury resulting from a small unmanned
aircraft impacting a person with up to 25 foot-pounds of kinetic
energy.
     The FAA considered proposing a Category 4 to include
operations in which a small UAS may operate over people, including
flights over crowds or dense concentrations of people, if: (1) The
manufacturer of the small UAS certifies the aircraft satisfies the
same impact energy threshold as small UAS eligible to conduct
Category 3 operations; (2) the small UAS complies with industry
consensus standards; and (3) the operation is conducted in
compliance with a documented risk mitigation plan. The FAA rejected
this alternative due to the increased severity of an injury
resulting from a small unmanned aircraft impacting a person with up
to 25 foot-pounds of kinetic energy.
     The FAA considered incorporating the standards of 14
CFR 23.1401 or 27.1401 (``Anti-collision light system'') for night
operations under part 107. Part 107 does not contain aircraft
certification rules or standards, and the FAA concludes the reduced
risk small UAS operations pose does not warrant application of such
standards. In addition, the diverse range of aircraft that may
operate under part 107 render prescriptive lighting requirements for
all types of operations at night impractical. Prescribing lighting
requirements would be overly burdensome for both the FAA and
manufacturers of small UAS, because they would be forced to make
tradeoffs that affect both the weight of the aircraft and the
aircraft's power source and supply.
     The FAA considered the status quo. In other words,
requiring those entities that want to perform operations over people
or operations at night to go through the process of obtaining a
waiver. The FAA rejected this alternative due to the undue burden it
would impose on small UAS operators without an expectation of an
increased level of safety.

    As previously discussed in this section, the FAA considered and
incorporated performance-based requirements that would accommodate
varying means of compliance and potentially provide flexibility to
small manufacturers. However, the FAA did not identify itemized cost
data to perform a sensitivity analysis of the costs for varying means
of compliance for small manufacturers. Instead, the FAA estimates the
cost of developing a means of compliance assuming it would involve the
full costs of testing in a research facility. The FAA requests
information and data on types of means of compliance that would be
flexible and scalable and minimize costs to small manufacturers.

C. International Trade Impact Assessment

    The Trade Agreement Act of 1979 (Pub. L. 96-39), as amended by the
Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal
agencies from establishing standards or engaging in related activities
that create unnecessary obstacles to the foreign commerce of the United
States. Pursuant to these Acts, the establishment of standards is not
considered an unnecessary obstacle to the foreign commerce of the
United States, so long as the standard has a legitimate domestic
objective, such as the protection of safety, and does not operate in a
manner that excludes imports that meet this objective. The statute also
requires consideration of international standards and, where
appropriate, that they be the basis for U.S. standards. The FAA has
considered the ongoing work of international organizations and other
countries. No international standards currently exist for the types of
operations the FAA proposes in this rule. In addition, the FAA's
proposed requirements would not create any obstacle to foreign
commerce. The FAA will maintain its awareness of other countries' and
international organizations' work in developing potential standards
relevant to small UAS operations.

D. Unfunded Mandates Assessment

    Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4) requires each Federal agency to prepare a written statement
assessing the effects of any Federal mandate in a proposed or final
agency rule that may result in an expenditure of $100 million or more
(in 1995 dollars) in any one year by State, local, and tribal
governments, in the aggregate, or by the private sector; such a mandate
is deemed to be a ``significant regulatory action.'' The FAA currently

uses an inflation-adjusted value of $155.0 million in lieu of $100
million. The assessment may be included in conjunction with other
assessments, as it is here.
    Although this proposed rule is a significant regulatory action, it
does not contain a mandate that would impose costs on the private
sector of more than $155 million annually.\109\ As a result, the
requirements of Title II of the Act do not apply.
---------------------------------------------------------------------------

    \109\ The Unfunded Mandates Reform Act of 1995 defines ``Federal
private sector mandate'' as ``any provision in legislation, statute,
or regulation that . . . would impose an enforceable duty upon the
private sector . . . or would reduce or eliminate the amount of
authorization of appropriations for Federal financial assistance
that will be provided to the private sector for the purposes of
ensuring compliance with such duty.'' Public Law 104-4 section 658
(1995).
---------------------------------------------------------------------------

E. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires
the FAA consider the impact of paperwork and other information
collection burdens imposed on the public. According to the 1995
amendments to the Paperwork Reduction Act (as implemented by 5 CFR
1320.8(b)(2)(vi)), an agency may not collect or sponsor the collection
of information, nor may it impose an information collection
requirement, unless it displays a currently valid Office of Management
and Budget (OMB) control number.
    This rule proposes to add a new information collection for the
Operation of Small Unmanned Aircraft over People. This information
collection includes the estimated burdens for the Declaration of
Compliance, Means of Compliance, and the development of remote pilot
operating instructions.
    This proposed rule also eliminates information collection
requirements from the 2016 final rule as a result of changes to the
recurrent knowledge testing requirement. In addition, it may reduce the
number of waiver applications the FAA receives because under this
proposed rule, most operations at night and some operations over people
would be permissible in the absence of a waiver.
    Below is a discussion of each of these information-collection
requirements in detail. As required by the Paperwork Reduction Act of
1995 (44 U.S.C. 3507(d)), the FAA has submitted these proposed
information collection amendments to OMB for its review.
    Summary for Declaration of Compliance and Means of Compliance: The
information collection addresses a manufacturer's submission of the
Declaration of Compliance and the Means of Compliance to the FAA for
the purpose of demonstrating that the small UAS fulfills the applicable
standards for Category 2 and Category 3 operations. It also addresses
manufacturers' compliance with the record retention requirements
associated with submitting justification to establish compliance.
    The Declaration of Compliance includes the following information:

     Manufacturer's name, physical address, and email
address;
     the small unmanned aircraft system make, model name,
and serial number;
     whether the Declaration of Compliance is an initial
declaration or an amended declaration, and if amended, the reason
for resubmittal;
     A process for notifying customers of conditions that
could render the small UAS ineligible for operations over people;
and
     certification that the manufacturer has demonstrated
that the small unmanned aircraft satisfies the kinetic energy and
exposed rotating parts standards through an accepted Means of
Compliance.

    The Means of Compliance demonstrates through test, analysis, or
inspection that the small UAS is eligible for operations pursuant to
Category 2 and/or Category 3. The Means of Compliance includes the
following information: Detailed description of the means of compliance,
and justification (including any substantiating material) showing the
means of compliance establishes achievement of or equivalency to the
safety level identified.
    Use: The FAA uses the Declaration of Compliance and Means of
Compliance to either accept or not accept that the manufacturer has
demonstrated compliance with the requirements applicable to Category 2
and/or Category 3 operations.

              Table 7--Annual Burden Estimate for Declaration of Compliance and Means of Compliance
                                                   [In hours]
----------------------------------------------------------------------------------------------------------------
              Year                    Initial       Resubmitted        Pages      Hours per page   Hourly burden
----------------------------------------------------------------------------------------------------------------
1...............................              15            0.75              50               1           787.5
2...............................              15            0.75              50               1           787.5
3...............................              15            0.75              50               1           787.5
                                 -------------------------------------------------------------------------------
    Total.......................  ..............  ..............  ..............  ..............         2,362.5
----------------------------------------------------------------------------------------------------------------

    The cost for the information collection on an hourly basis is a
wage of $72.91, for an annual cost of $57,417 for the small UAS
manufacturers to submit their declarations. Over the 3-year analysis
period, the total cost is approximately $172,250 in 2016 dollars.
    Summary for Remote Pilot Operating Instructions: The information
collection addresses the manufacturer's recordkeeping associated with
the development and maintenance of remote pilot operating instructions
for small UAS operating over people. The remote pilot operating
instructions must address, at a minimum:

     A system description that includes the required small
UAS components, any system limitations, and the declared category or
categories of operation;
     Modifications that will not change the ability of the
small UAS to meet the requirements for the category or categories of
operation the small UAS is eligible to conduct, and
     Instructions for how to verify and change the mode or
configuration of the small UAS, if they are variable.

    Use: In order to operate a small UAS safely over people, the remote
pilot would be responsible for knowing what category of operations his
or her small UAS is eligible to conduct, and what technical and
operational limitations apply to the operations. Accordingly, the FAA
proposes to require manufacturers to provide remote pilot operating
instructions with product-specific information.

                    Table 8--3-Year Burden Estimates for Remote Pilot Operating Instructions
                                                     [Hours]
----------------------------------------------------------------------------------------------------------------
                                                     Operating
                      Year                         instructions        Pages      Hours per page   Hourly burden
----------------------------------------------------------------------------------------------------------------
1...............................................              15               6              25             150
2...............................................              15               6              25             150
3...............................................              15               6              25             150
                                                 ---------------------------------------------------------------
    Total.......................................  ..............  ..............  ..............             450
----------------------------------------------------------------------------------------------------------------

    The cost per hour for the information collection is a wage of
$72.91, for an annual cost of $10,937 for small UAS manufacturers to
develop and maintain remote pilot operating instructions. Over the 3-
year analysis period, the total cost is approximately $32,810 in 2016
dollars.
    Summary for Labeling of Unmanned Aircraft: Given that a small UAS
could be qualified to conduct more than one category of operations, the
FAA proposes requiring a manufacturer label the small UAS with each
category of operations the small UAS is qualified to conduct. For
example, a small UAS qualified to conduct Category 2 operations may
also be qualified to conduct Category 3 operations. The manufacturer
would label such a small UAS with each category, as follows: ``Cat. 2,
3'' or ``Category 2, 3''. The label could be painted onto, etched into,
or affixed to the aircraft by some other permanent means.
    Use: The proposed labeling requirement would assist the remote
pilot to know what category of operations his or her small UAS is
eligible to conduct, and what technical and operational limitations
apply to the operations. The proposed labeling requirement would also
assist the FAA in its oversight role because it provides an efficient
means for an inspector to evaluate whether an operation is consistent
with the category or categories of operation the small UAS may conduct.
Because Category 3 operations would entail unique operating
limitations, the label on small unmanned aircraft eligible to conduct
Category 3 operations would indicate to the remote pilot that he or she
must adhere to the applicable operating limitations.\110\
---------------------------------------------------------------------------

    \110\ The labeling requirement this rule proposes is not the
sole means by which a remote pilot in command will be aware of the
operating limitations applicable to Category 3 operations. Remote
pilots in command must maintain awareness of updated regulations, as
required by proposed Sec. Sec.  107.73(a) and 107.74(a) in this
rule. As a result, initial knowledge testing and recurrent training
implemented after the effective date of this proposed rule would
include operations over people as a subject area on both the test
and training.

                         Table 9--3-Year Burden Estimates for Labeling Unmanned Aircraft
                                                     [Hours]
----------------------------------------------------------------------------------------------------------------
                                                                     Number of       Hours per
                              Year                                   platforms       redesign      Hourly burden
----------------------------------------------------------------------------------------------------------------
1...............................................................              15               2              30
2...............................................................              15               2              30
3...............................................................              15               2              30
                                                                 -----------------------------------------------
    Total.......................................................  ..............  ..............              90
----------------------------------------------------------------------------------------------------------------

    The FAA assumes that a manufacturer would redesign a label already
affixed to the aircraft, and that the label redesign and redesign
approval would take a maximum of two hours at an hourly wage of $72.91,
for an annual cost of $2,187. Over the 3-year analysis period, the
total cost is approximately $6,562 in 2016 dollars.
    Summary for Replacing Recurrent Knowledge Testing Requirement with
Recurrent Training. The FAA is proposing to revise existing information
collection 2120-0021, Certification: Pilots and Flight Instructors, to
reflect a reduction in the information collection burden as a result of
replacing recurrent in-person knowledge testing with recurrent online
training.
    Following the implementation of part 107, the FAA re-evaluated its
testing requirements for remote pilots. The FAA maintains the current
initial testing requirement to evaluate a remote pilot's knowledge for
operating in the NAS is critical, given the absence of a requirement
for a practical test or proficiency course in obtaining a remote pilot
certificate. The FAA, however, has concluded that requiring recurrent
training in lieu of recurrent knowledge testing will achieve the
necessary assurance the FAA seeks with regard to remote pilots' ongoing
familiarity with small UAS operations and the provisions of part 107.
Recurrent training, which a remote pilot can complete online, presents
a less costly option and will achieve a level of assurance of knowledge
that is comparable to the assurance a recurrent test provides.
    The FAA maintains that completion of training every two years is
important in ensuring the remote pilots' familiarity with small UAS
operations under part 107. As a result, this proposed rule would
replace the recurrent knowledge testing requirement with a requirement
to complete an online recurrent training, which the FAA may tailor to
address any knowledge areas in which the remote pilot needs
improvement. Thus, each remote pilot eligible to take recurrent
knowledge training as a result of this proposed rulemaking would no
longer be required to take a knowledge test.
    Use: A training course affords the FAA the ability to ensure remote
pilots are aware of the key requirements that affect them, address new
or changed requirements in part 107 as a result of subsequent
rulemakings, and highlight the tools and resources available to remote
pilots. Such training would

ensure remote pilots stay current and aid in their decision-making so
they can continue to operate safely within the boundaries part 107 has
established. The table below shows the hourly savings in terms of the
annual information collection burden.

                                      Table 10--3-Year Burden Estimate--Savings From Eliminating Recurrent Testing
                                                                         [Hours]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Applicant
                      Year                         Pages per       time       Low case     Low case    Base case    Base case    High case    High case
                                                  application    (hours)       pages        hours        pages        hours        pages        hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................................           70            3      915,692       39,244    1,039,015       44,529    2,264,918       97,068
2...............................................           70            3    1,673,944       71,740    1,899,440       81,405    4,140,494      177,450
3...............................................           70            3    2,164,218       92,752    2,868,812      122,949    8,362,221      358,381
                                                 -------------------------------------------------------------------------------------------------------
    Total.......................................           70            3    4,753,854      203,737    5,807,267      248,883   14,767,633      632,899
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rows and Columns may not sum to total due to rounding. Recurrent testing is not required until 2018.

                       Table 11--3-Year Burden Estimates for Relief From Recurrent Testing
                                                   [$Millions]
----------------------------------------------------------------------------------------------------------------
                                                                         Savings ($Millions)--by scenario
                      Year                         Hourly value  -----------------------------------------------
                                                      of time           Low            Base            High
----------------------------------------------------------------------------------------------------------------
1...............................................          $25.40            $1.0            $1.1            $2.5
2...............................................           25.40             1.8             2.1             4.5
3...............................................           25.40             2.4             3.1             9.1
                                                 ---------------------------------------------------------------
    Total.......................................  ..............             5.2             6.3            16.1
----------------------------------------------------------------------------------------------------------------
Rows and Columns may not sum to total due to rounding.

    Individuals and organizations may send comments on the information
collection requirement to the address listed in the ADDRESSES section
at the beginning of this preamble by April 15, 2019. Comments also
should be submitted to the Office of Management and Budget, Office of
Information and Regulatory Affairs, Attention: Desk Officer for FAA,
New Executive Office Building, Room 10202, 725 17th Street NW,
Washington, DC 20053.

F. International Compatibility and Cooperation

    In keeping with U.S. obligations under the Convention on
International Civil Aviation, it is FAA policy to conform to
International Civil Aviation Organization (ICAO) Standards and
Recommended Practices to the maximum extent practicable. The FAA has
reviewed the corresponding ICAO Standards and Recommended Practices and
has identified no differences with these regulations.

G. Environmental Analysis

    FAA Order 1050.1F identifies FAA actions that are categorically
excluded from preparation of an environmental assessment or
environmental impact statement under the National Environmental Policy
Act in the absence of extraordinary circumstances. The FAA has
determined this notice of proposed rulemaking action qualifies for the
categorical exclusion identified in paragraph 5-6.6 of FAA Order
1050.1F and involves no extraordinary circumstances.

IX. Executive Order Determinations

A. Executive Order 13132, Federalism

    The FAA has analyzed this proposed rule under the principles and
criteria of Executive Order 13132, Federalism.\111\ The agency has
determined this action would not have a substantial direct effect on
the States, or the relationship between the Federal Government and the
States, or on the distribution of power and responsibilities among the
various levels of government and therefore would not have federalism
implications.
---------------------------------------------------------------------------

    \111\ 64 FR 43255 (Aug. 4, 1999).
---------------------------------------------------------------------------

B. Executive Order 13211, Regulations That Significantly Affect Energy
Supply, Distribution, or Use

    The FAA analyzed this proposed rule under Executive Order 13211,
Actions Concerning Regulations that Significantly Affect Energy Supply,
Distribution, or Use.\112\ The agency has determined this rule would
not be a ``significant energy action'' under the executive order and
would not be likely to have a significant adverse effect on the supply,
distribution, or use of energy.
---------------------------------------------------------------------------

    \112\ 66 FR 28355 (May 18, 2001).
---------------------------------------------------------------------------

C. Executive Order 13609, Promoting International Regulatory
Cooperation

    Executive Order 13609, Promoting International Regulatory
Cooperation,\113\ promotes international regulatory cooperation to meet
shared challenges involving health, safety, labor, security,
environmental, and other issues and to reduce, eliminate, or prevent
unnecessary differences in regulatory requirements. The FAA has
analyzed this proposed rule under the policies and agency
responsibilities of Executive Order 13609, and has determined this
proposal would have no effect on international regulatory cooperation.
---------------------------------------------------------------------------

    \113\ 77 FR 26413 (May 1, 2012).
---------------------------------------------------------------------------

D. Executive Order 13771, Reducing Regulation and Controlling
Regulatory Costs

    This proposed rule is expected to be an Executive Order 13771
deregulatory action. Details on the estimated cost savings of this
proposed rule can be found in the rule's economic analysis.

X. Tribal Outreach

    Consistent with Executive Order 13175, Consultation and
Coordination with Indian Tribal Governments,\114\ and FAA Order
1210.20, American Indian

and Alaska Native Tribal Consultation Policy and Procedures,\115\ the
FAA ensures that federally recognized Tribes (Tribes) are given the
opportunity to provide meaningful and timely input regarding proposed
Federal actions that have the potential to affect uniquely or
significantly their respective Tribes. At this point, the FAA has not
identified any unique or significant effects, environmental or
otherwise, on tribes resulting from this proposed rule. As the FAA
contemplated in the 2016 final rule, the FAA has conducted outreach to
tribes and responded to those tribes seeking information about small
UAS operations conducted within their territory.
---------------------------------------------------------------------------

    \114\ 65 FR 67249 (Nov. 6, 2000).
    \115\ FAA Order No. 1210.20 (Jan. 28, 2004), available at http://www.faa.gov/documentLibrary/media/1210.pdf.
---------------------------------------------------------------------------

    The FAA continues to evaluate how it might address such concerns
within the broader UAS integration effort.\116\ In particular, the FAA
is currently engaged in steps to fulfill the President's recent
direction to the Secretary to establish a pilot program under which
State, local, and tribal governments can submit proposals to the
Secretary to test and evaluate the integration of civil and public UAS
operations into the low-altitude NAS.\117\ The pilot program involves
cultivating relationships with State, local, and tribal jurisdictions
to promote the safe operation of UAS and enable the development of UAS
technologies and their use in agriculture, commerce, emergency
management, human transportation, and other sectors.
---------------------------------------------------------------------------

    \116\ 81 FR 42064, 42189.
    \117\ 82 FR 51903 (Nov. 8, 2017); Presidential Memorandum for
the Secretary of Transportation (Oct. 25, 2017), available at
https://www.whitehouse.gov/the-press-office/2017/10/25/presidential-memorandum-secretary-transportation.
---------------------------------------------------------------------------

    The FAA has also conducted outreach to tribes to ensure they are
familiar with the provisions of part 107 and how they might apply in
Indian country, and that they are aware of FAA's plans for additional
rulemakings to integrate UAS into the NAS. As part of that outreach,
the FAA has:

     Provided material on the 2016 final rule to
participants at the mid-year conference of the National Congress of
American Indians (Spokane, Washington, June 27-30, 2016);
     Presented at a workshop at the National Tribal
Transportation Conference (Anaheim, California, October 4, 2016);
     Responded to inquiries from the Shoshone-Bannock Tribes
and Muscogee (Creek) Nation regarding use of UAS (September and
October 2016);
     Presented information on UAS at a meeting of the Tribal
Transportation Self-Governance Program Negotiated Rulemaking Meeting
(Shawnee, Oklahoma, October 18, 2016); and
     Provided information to The Choctaw Nation of Oklahoma,
which is participating in the UAS Integration Pilot Program.\118\
Through this program, the FAA will work with The Choctaw Nation to
ensure safe UAS operations for the purposes of agriculture, public
safety, and infrastructure inspections. Such operations may include
operations over people and operations at night.
---------------------------------------------------------------------------

    \118\ Federal Aviation Administration, UAS Integration Pilot
Program (May 7, 2018), available at https://www.faa.gov/uas/programs_partnerships/uas_integration_pilot_program/. See also

    The FAA will continue to respond to tribes that express interest in
or concerns about UAS operations, and will engage in government-to-
government consultation with tribes as appropriate, in accordance with
Executive Orders and FAA guidance.

XI. Additional Information

A. Comments Invited

    The FAA invites interested persons to participate in this
rulemaking by submitting written comments, data, or views. The agency
also invites comments relating to the economic, environmental, energy,
or federalism impacts that might result from adopting the proposals in
this document. The most helpful comments reference a specific portion
of the proposal, explain the reason for any recommended change, and
include supporting data. To ensure the docket does not contain
duplicate comments, commenters should send only one copy of written
comments, or if comments are filed electronically, commenters should
submit only one time.
    The FAA will file in the docket all comments it receives, as well
as a report summarizing each substantive public contact with FAA
personnel concerning this proposed rulemaking. Before acting on this
proposal, the FAA will consider all comments it receives on or before
the closing date for comments. The agency may change this proposal in
light of the comments it receives.

B. Proprietary or Confidential Business Information

    Commenters should not file proprietary or confidential business
information in the docket. Such information must be sent or delivered
directly to the person identified in the FOR FURTHER INFORMATION
CONTACT section of this document, and marked as proprietary or
confidential. If submitting information on a disk or CD ROM, mark the
outside of the disk or CD ROM, and identify electronically within the
disk or CD ROM the specific information that is proprietary or
confidential.
    Under 14 CFR 11.35(b), if the FAA is aware of proprietary
information filed with a comment, the agency does not place it in the
docket. It is held in a separate file to which the public does not have
access, and the FAA places a note in the docket that it has received
it. If the FAA receives a request to examine or copy this information,
it treats it as any other request under the Freedom of Information Act
(5 U.S.C. 552). The FAA processes such a request under Department of
Transportation procedures found in 49 CFR part 7.

C. Availability of Rulemaking Documents

    An electronic copy of rulemaking documents may be obtained from the
internet by--
    1. Searching the Federal eRulemaking Portal (http://www.regulations.gov);
    2. Visiting the FAA's Regulations and Policies web page at http://www.faa.gov/regulations_policies; or
    3. Accessing the Government Publishing Office's web page at https://www.govinfo.gov/.
    Copies may also be obtained by sending a request to the Federal
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence
Avenue SW, Washington, DC 20591, or by calling<PHONE_NUMBER>.
Commenters must identify the docket or notice number of this
rulemaking.
    All documents the FAA considered in developing this proposed rule,
including economic analyses and technical reports, may be accessed from
the internet through the Federal eRulemaking Portal referenced above.

D. Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act of 1996
(SBREFA) requires FAA to comply with small entity requests for
information or advice about compliance with statutes and regulations
within its jurisdiction. A small entity with questions regarding this
document may contact its local FAA official, or the person listed under
the FOR FURTHER INFORMATION CONTACT heading at the beginning of the
preamble. To find out more about SBREFA online, visit http://www.faa.gov/regulations_policies/rulemaking/sbre_act/.

List of Subjects in 14 CFR Part 107

    Aircraft, Airmen, Aviation safety, Reporting and recordkeeping
requirements, Security measures, Signs and symbols, Small unmanned
aircraft, Unmanned aircraft.

The Proposed Amendment

    In consideration of the foregoing, the Federal Aviation
Administration

proposes to amend chapter I of title 14, Code of Federal Regulations as
follows:

PART 107--SMALL UNMANNED AIRCRAFT SYSTEMS

0
1. The authority citation for part 107 is revised to read as follows:

    Authority:  49 U.S.C. 106(f), 40101 note, 40103(b), 44701(a)(5),
46105(c), 46110, 44807.

0
2. Amend Sec.  107.1 by revising paragraphs (a) and (b)(3) to read as
follows:

Sec.  107.1  Applicability.

    (a) Except as provided in paragraph (b) of this section, this part
applies to the registration, airman certification, and operation of
civil small unmanned aircraft systems within the United States. This
part also applies to the qualification of civil small unmanned aircraft
systems to operate over human beings in the United States.
    (b) * * *
    (3) Any operation that the holder of an exemption under section 333
of Public Law 112-95 or 49 U.S.C. 44807 elects to conduct pursuant to
the exemption, unless otherwise specified in the exemption.
0
3. Amend Sec.  107.3 by adding the definitions of ``Casualty'' and
``Declaration of Compliance'' in alphabetical order to read as follows:

Sec.  107.3  Definitions.

* * * * *
    Casualty means an Abbreviated Injury Scale level 3 or greater
injury.
* * * * *
    Declaration of Compliance means a record submitted to the FAA that
certifies the small unmanned aircraft system conforms to the Category 2
or Category 3 requirements under subpart D of this part.
* * * * *
0
4. Amend Sec.  107.5 by revising paragraphs (b)(2) and (3) and adding
paragraph (b)(4) to read as follows:

Sec.  107.5  Falsification, reproduction or alteration.

* * * * *
    (b) * * *
    (2) Denial of a Declaration of Compliance;
    (3) Suspension or revocation of any certificate, waiver, or
Declaration of Compliance issued or accepted by the Administrator under
this part and held by that person; or
    (4) A civil penalty.
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5. Amend Sec.  107.7 by revising paragraph (a) and adding paragraphs
(c) and (d) to read as follows:

Sec.  107.7  Inspection, testing, and demonstration of compliance.

    (a)(1) A remote pilot in command, owner, or person manipulating the
flight controls of a small unmanned aircraft system must present his or
her remote pilot certificate with a small UAS rating and identification
that contains the information listed at Sec.  107.67(b) for inspection
upon a request from:
    (i) The Administrator;
    (ii) An authorized representative of the National Transportation
Safety Board;
    (iii) Any Federal, State, or local law enforcement officer; or
    (iv) An authorized representative of the Transportation Security
Administration.
    (2) A remote pilot in command, owner, or person manipulating the
flight controls of a small unmanned aircraft system must, upon request,
make available to the Administrator any document, record, or report
required to be kept under the regulations of this chapter.
* * * * *
    (c) Any person holding an FAA-accepted Declaration of Compliance
under subpart D of this part must, upon request, make available to the
Administrator:
    (1) The Declaration of Compliance required under subpart D of this
part; and
    (2) Any other document, record, or report required to be kept under
the regulations of this chapter.
    (d) Any person holding an FAA-accepted Declaration of Compliance
under subpart D of this part must, upon request, allow the
Administrator to inspect its facilities, technical data, and any
manufactured small UAS and witness any tests necessary to determine
compliance with that subpart.
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6. Amend Sec.  107.19 by revising paragraph (c) to read as follows:

Sec.  107.19  Remote pilot in command.

* * * * *
    (c) The remote pilot in command must ensure that the small unmanned
aircraft will pose no undue hazard to other people, other aircraft, or
other property in the event of a loss of control of the small unmanned
aircraft for any reason.
* * * * *
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7. Amend Sec.  107.29 by revising paragraph (a) to read as follows:

Sec.  107.29  Operation at night.

    (a) No person may operate a small unmanned aircraft system at night
unless:
    (1) The remote pilot in command of the small unmanned aircraft has
completed an initial knowledge test or training, as applicable, under
Sec.  107.73 or Sec.  107.74, after [the effective date of a subsequent
final rule]; and
    (2) The small unmanned aircraft has lighted anti-collision lighting
visible for at least 3 statute miles. The remote pilot in command may
reduce the intensity of, but may not extinguish, the anti-collision
lighting if he or she determines that, because of operating conditions,
it would be in the interest of safety to do so.
* * * * *
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8. Revise Sec.  107.35 to read as follows:

Sec.  107.35  Operation of multiple small unmanned aircraft.

    A person may not manipulate flight controls or act as a remote
pilot in command or visual observer in the operation of more than one
unmanned aircraft at the same time.
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9. Revise Sec.  107.39 to read as follows:

Sec.  107.39  Operation over human beings.

    No person may operate a small unmanned aircraft over a human being
unless:
    (a) That human being is directly participating in the operation of
the small unmanned aircraft;
    (b) That human being is located under a covered structure or inside
a stationary vehicle that can provide reasonable protection from a
falling small unmanned aircraft; or
    (c) The operation meets the requirements of at least one of the
operational categories specified in subpart D of this part.
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10. Amend Sec.  107.49 by revising paragraphs (d) and (e) and adding
paragraph (f) to read as follows:

Sec.  107.49  Preflight familiarization, inspection, and actions for
aircraft operation.

* * * * *
    (d) If the small unmanned aircraft is powered, ensure that there is
enough available power for the small unmanned aircraft system to
operate for the intended operational time;
    (e) Ensure that any object attached or carried by the small
unmanned aircraft is secure and does not adversely affect the flight
characteristics or controllability of the aircraft; and
    (f) If the operation will be conducted over human beings under
subpart D of this part, ensure that the aircraft meets the requirements
of Sec.  107.110, Sec.  107.115(a), or Sec.  107.120(a), as applicable.
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11. Amend Sec.  107.61 by revising paragraph (d) to read as follows:

Sec.  107.61  Eligibility.

* * * * *

    (d) Demonstrate aeronautical knowledge by satisfying one of the
following conditions, in a manner acceptable to the Administrator:
    (1) Pass an initial aeronautical knowledge test covering the areas
of knowledge specified in Sec.  107.73; or
    (2) If a person holds a pilot certificate (other than a student
pilot certificate) issued under part 61 of this chapter and meets the
flight review requirements specified in Sec.  61.56, complete training
covering the areas of knowledge specified in Sec.  107.74.
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12. Revise Sec.  107.65 to read as follows:

Sec.  107.65  Aeronautical knowledge recency.

    A person may not exercise the privileges of a remote pilot in
command with small UAS rating unless that person has accomplished the
following in a manner acceptable to the Administrator within the
previous 24 calendar months:
    (a) Passed an initial aeronautical knowledge test covering the
areas of knowledge specified in Sec.  107.73;
    (b) Completed recurrent training covering the areas of knowledge
specified in Sec.  107.73; or
    (c) If a person holds a pilot certificate (other than a student
pilot certificate) issued under part 61 of this chapter and meets the
flight review requirements specified in Sec.  61.56, completed training
covering the areas of knowledge specified in Sec.  107.74.
    (d) A person who has passed a recurrent aeronautical knowledge test
in a manner acceptable to the Administrator or who has satisfied the
training requirement of paragraph (c) of this section prior to [the
effective date of a subsequent final rule] within the previous 24
calendar months is considered to be in compliance with the requirement
of paragraph (b) or (c) of this section, as applicable.
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13. Revise Sec.  107.73 to read as follows:

Sec.  107.73  Knowledge and training.

    An initial aeronautical knowledge test and recurrent training
covers the following areas of knowledge:
    (a) Applicable regulations relating to small unmanned aircraft
system rating privileges, limitations, and flight operation;
    (b) Airspace classification, operating requirements, and flight
restrictions affecting small unmanned aircraft operation;
    (c) Aviation weather sources and effects of weather on small
unmanned aircraft performance;
    (d) Small unmanned aircraft loading;
    (e) Emergency procedures;
    (f) Crew resource management;
    (g) Radio communication procedures;
    (h) Determining the performance of the small unmanned aircraft;
    (i) Physiological effects of drugs and alcohol;
    (j) Aeronautical decision-making and judgment;
    (k) Airport operations;
    (l) Maintenance and preflight inspection procedures; and
    (m) Operation at night.
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14. Revise Sec.  107.74 to read as follows:

Sec.  107.74  Small unmanned aircraft system training.

    Training for pilots who hold a pilot certificate (other than a
student pilot certificate) issued under part 61 of this chapter and
meet the flight review requirements specified in Sec.  61.56 covers the
following areas of knowledge:
    (a) Applicable regulations relating to small unmanned aircraft
system rating privileges, limitations, and flight operation;
    (b) Effects of weather on small unmanned aircraft performance;
    (c) Small unmanned aircraft loading;
    (d) Emergency procedures;
    (e) Crew resource management;
    (f) Determining the performance of the small unmanned aircraft;
    (g) Maintenance and preflight inspection procedures; and
    (h) Operation at night.

Subpart D--[Redesignated as Subpart E]

0
15. Redesignate subpart D as subpart E.
0
16. Add new subpart D to read as follows:

Subpart D--Operations Over Human Beings

Sec.
107.100 Applicability.
107.105 Prohibition on operations over moving vehicles.
107.108 Limitations on operations over human beings.
107.110 Category 1 operations.
107.115 Category 2 operations.
107.120 Category 3 operations.
107.125 Means of compliance.
107.130 Variable mode and variable configuration of small unmanned
aircraft systems.
107.135 Declaration of Compliance.
107.140 Previously manufactured small unmanned aircraft systems.
107.145 Record retention.
107.150 Relabeling by remote pilot in command for Category 2 and 3
operations.

Sec.  107.100  Applicability.

    This subpart prescribes the eligibility standards and operating
requirements for small unmanned aircraft systems that may conduct
operations over human beings, in addition to those permitted by Sec.
107.39(a) and (b).

Sec.  107.105  Prohibition on operations over moving vehicles.

    No person may operate a small unmanned aircraft over a human being
located in a moving vehicle.

Sec.  107.108  Limitations on operations over human beings.

    Except as provided in Sec.  107.39(a) and (b), a remote pilot in
command may conduct operations over human beings only as Category 1, 2,
or 3 operations authorized by Sec. Sec.  107.110, 107.115, and 107.120.

Sec.  107.110  Category 1 operations.

    To conduct Category 1 operations, a remote pilot in command must
use a small unmanned aircraft that weighs 0.55 pounds or less on
takeoff and throughout the duration of each operation under this
category, including everything that is on board or otherwise attached
to the aircraft.

Sec.  107.115  Category 2 operations.

    (a) Remote pilot in command requirements. To conduct Category 2
operations, a remote pilot in command must use a small unmanned
aircraft system that is qualified and labeled for Category 2 operations
pursuant to paragraph (b) of this section.
    (b) Eligibility. To be qualified to conduct Category 2 operations,
the small unmanned aircraft system must:
    (1) Be designed, produced, or modified such that it:
    (i) Will not cause injury to a human being that is equivalent to or
greater than the severity of injury caused by a transfer of 11 foot-
pounds of kinetic energy upon impact from a rigid object;
    (ii) Does not contain any exposed rotating parts that could
lacerate human skin upon impact with a human being; and
    (iii) Does not contain any safety defects identified by the
Administrator.
    (2) Display a label indicating eligibility to conduct Category 2
operations. The label must be in English and be legible, prominent, and
permanently affixed to the small unmanned aircraft.
    (3) Have current remote pilot operating instructions that apply to
the operation of the small unmanned aircraft system. The person who
designed, produced, or modified the small unmanned aircraft system must
make available the instructions upon sale, transfer, or use of the
aircraft by someone other than the person who designed, produced, or
modified the small unmanned aircraft system. Such

instructions must address, at a minimum:
    (i) A system description that includes the required small unmanned
aircraft system components, any system limitations, and the declared
category or categories of operation;
    (ii) Modifications that will not change the ability of the small
unmanned aircraft system to meet the requirements for the category or
categories of operation the small unmanned aircraft system is eligible
to conduct; and
    (iii) Instructions for how to verify and change the mode or
configuration of the small unmanned aircraft system, if they are
variable.
    (4) Be subject to a product support and notification process.
Anyone who designs, produces, or modifies a small unmanned aircraft
system under this paragraph (b) must maintain product support and
notification procedures to notify the public and the FAA of:
    (i) Any defect or condition that causes the small unmanned aircraft
system to no longer meet the requirements of this subpart; and
    (ii) Any identified safety defect that causes the small unmanned
aircraft system to exceed a low probability of casualty.
    (5) Operate only after the person who designed, produced, or
modified the small unmanned aircraft system has received notification
that the FAA has accepted the Declaration of Compliance for that small
unmanned aircraft system in accordance with Sec.  107.135.

Sec.  107.120  Category 3 operations.

    (a) Remote pilot in command requirements. To conduct Category 3
operations, a remote pilot in command:
    (1) Must use a small unmanned aircraft system that is qualified and