because local law enforcement provides security services at the
sporting events. The sports organizations also recommended adding
private security officials who work with local law enforcement to
enforce a temporary flight restriction or section 2209 designation to
the list of individuals authorized to request remote pilot certificates
and identification. Federal, State, and local law enforcement officers
hold the appropriate authority to verify the identity of a remote
pilot. The Agency declines to speculate on the division of authority
within Federal, State, and local law enforcement organizations.
    A few commenters opposed the FAA's proposal to require UAS
operators to present their pilot certification and identification to
officials outside the FAA on request. These commenters supported the
requirement to present their credentials to an FAA official who
understands the regulations, but noted officials outside the FAA are
not trained or supervised by the FAA, and were concerned about their
ability to properly handle situations involving small UAS operations as
a result. Another commenter suggested the small UAS operator should be
required to present the documents if an incident occurs. Other
individual commenters did not oppose the proposed provision, but
recommended that the FAA work on educating law enforcement officials
about who may operate UAS, and where, how and when they may operate.
NASAO asked for clarification regarding Federal, State, or local
officials requesting proof of an operator's license and requested the
Agency provide a clearer definition of the intent for enforcement.
    The Electronic Frontier Foundation (EFF) and the News Media
Coalition commented that remote pilots in command should only be
required to present their credentials when officials have reasonable
suspicion that the remote pilot in command is engaging in criminal
activity or violating FAA regulations. EFF asserted the proposed rule
conflicts with existing Fourth Amendment law and to bring the proposal
in line with the FAA's rationale, EFF recommended the Agency amend
Sec.  107.7 to include the reasonable suspicion standard. The News
Media Coalition indicated it does not oppose providing law enforcement
with their certification papers under narrow and well-defined
circumstances. However, the Coalition expressed concern that blanket
authorization for local law enforcement to demand immediate
presentation of papers would interfere with journalists' First
Amendment rights to lawfully gather the news without unwarranted
government interference. The Coalition also recommended that the FAA
provide law enforcement with training on the regulations to avoid
government overreach.
    To maintain the safety and security of the airspace, it is vital to
know who is operating in the NAS.\88\ The FAA implements these
regulatory inspection requirements as a measure to ensure this safety
and security. The amended regulation neither abrogates the protections
of the Fourth Amendment nor the responsibility to comply with it. The
ability to identify remote pilots provides critical information to the
Administrator, the NTSB, and law enforcement officials charged with
ensuring public safety. Moreover, the amended regulation aligns the
list of authorized individuals in Sec.  107.7 with not only Sec.
61.3(l), but other longstanding FAA regulations with similar
requirements.\89\ The FAA has continuously conducted outreach efforts
with Federal, State, and local law enforcement on small UAS operations.
Additionally, the FAA has the Law Enforcement Assistance Program
(LEAP), which provides, as appropriate, aviation-related support and
education to law enforcement agencies.
---------------------------------------------------------------------------

    \88\ See Section III., Background A. Related FAA and DOT Actions
4. Secure Operations of Small Unmanned Aircraft Systems.
    \89\ 14 CFR 65.49, 65.89, 65.95, 65.111.
---------------------------------------------------------------------------

B. 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. 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. 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 NPRM proposed rephrasing the text of Sec.  107.1(b)(3),
accordingly. The Agency did not receive any comments on this change and
adopts it, as proposed.

C. 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 Agency proposed to amend the phrase
``loss of control of the aircraft'' to say ``loss of control of the
small unmanned aircraft,'' for clarity.\90\ The Agency did not receive
any comments on this change and adopts it, as proposed.
---------------------------------------------------------------------------

    \90\ 84 FR 3856, 3893.
---------------------------------------------------------------------------

D. Operation of Multiple Small UAS

    The proposed rule included an amendment to 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 the 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
proposed change to this section will 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.
    Two commenters addressed the proposed change to Sec.  107.35. ALPA
supported the proposed change, saying it clarifies the difference
between flight operations by a company and the remote pilot in command.
ALPA also strongly supported the restriction that each small UAS remote
pilot only be in control of one small unmanned aircraft at any given
time. The Small UAV Coalition said it does not object to this
provision; however, it noted that the prohibition is subject to a
waiver under Sec.  107.205. The Agency adopts the amendatory language,
as proposed.

XII. 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 UAS, which includes small UAS subject to this rule. In
the NPRM, the Secretary proposed to determine, using a risk-based
approach, that small UAS operations under this rule would operate
safely in the NAS; the individual findings that section 44807 requires
are as follows.

A. Hazards to Users of the NAS or the Public

    Section 44807(b)(1) requires the Secretary to determine which types
of small UAS operations do not create a hazard to users of the NAS or
the public. In the NPRM, the Secretary proposed to find that small UAS
operations subject to this rule would not create a hazard to users of
the NAS or the public. The FAA invited comments on this proposed
finding.
    Several commenters expressed general concerns about introducing
small UAS into the NAS. Other commenters were concerned about potential
risks that small UAS would pose to the manned aircraft operating at the
same low level altitude. HAI, American Airlines, A4A, NAAA all stated
they supported the expansion of small UAS operations, but requested the
FAA specifically consider the potential risk of small UAS operations to
manned aircraft, particularly those operating in low-altitude airspace.
American Airlines referred the FAA to its comments submitted to the
docket for the Safe and Secure Operations of Small Unmanned Aircraft
Systems ANPRM for a discussion on its safety and security concerns.
AMOA and AAMS, commenting jointly, also expressed concern that the
proposed rule does not fully acknowledge the collision risk posed by an
increase in UAS operations to low-altitude manned aircraft and ``relies
too heavily and without adequate foundation on the skills of the UAS
remote pilot to avoid conflict.'' NAAA noted UAS present a hazard to
low-flying pilots similar to that presented by birds, which is
significant because, according to NAAA, aircraft-wildlife strikes are
the second leading cause of aviation related fatalities.
    Drone Safe Communities stated the NPRM fails to address ``the risks
posed by unauthorized UAS operations by negligent or malicious users.''
As such, the commenter asserted the FAA should focus on including
unauthorized users in its analysis and in developing counter UAS
technologies to enforce UAS regulations and integrate UAS into the NAS.
The commenter criticized the FAA for providing guidance that tells
facility owners to call local law enforcements during such sightings
rather than dealing with these disruptions as an agency, especially
because local enforcement agencies may not have the resources to deal
with such risks.
    In contrast to commenters who felt the FAA did not adequately
consider the risks associated with introducing small UAS operations to
the NAS, Precision Hawk stated the FAA was ``singularly focused'' on
such risks, while failing to consider all the benefits small UAS
operations would bring related to worker safety. This commenter noted
that small UAS offer multiple opportunities to enhance employee and
public safety and save lives by obviating the need for manned aircraft
flight in particularly hazardous mission situations.
    Through this rule, the Secretary addresses commenters' safety
concerns and suggestions for considering increased opportunities that
small UAS operations present. The requirements of part 107 mitigate the
risks to manned aircraft by requiring the remote pilot to maintain
visual line of sight of the small unmanned aircraft and to give way to
manned aircraft at all times. In addition, this rule includes
requirements that mitigate the risks associated with an increase in
small UAS operations. For example, the anti-collision lighting required
for nighttime operations, as discussed in detail in Section IX,
increases operators' awareness of a small UAS operating within the same
airspace. Moreover, this rule publishes concurrently with the final
rule for Remote Identification of Unmanned Aircraft Systems, which
addresses the security considerations raised. The FAA has developed
relationships of mutual interest with law enforcement to address the
safety and security concerns prompted by the proliferation of small UAS
operations. To facilitate the safe integration of small UAS, the Agency
must develop regulatory pathways for operation. This rule is an
important step in enabling safe operations by balancing the risk of
those operations with operational and design requirements that mitigate
it. As previously discussed in Section IV.A.1., the safety record of
175 waiver holders, as of September 2020, to conduct operations over
people have reported no injuries to persons on the ground and no damage
to property on the ground exceeding $500.00. Considering the safety
record of these waivers for operations over people, the available
safety data supports the determination that operations over people can
occur safely in accordance with this rule.

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. The Secretary proposed to find, pursuant to 49
U.S.C. 44807(b)(2), that airworthiness certification is unnecessary for
small UAS subject to this proposed rule and that a certificate under 49
U.S.C. 44703 should remain a requirement.
    AMOA and AAMS, commenting jointly, stated the lack of discussion in
the NPRM section pertaining to Section 44807 Statutory Findings made it
difficult to determine what the significance of this proposed
requirement will be. They sought clarification on what this requirement
would mean for part 107 pilots, inquiring whether remote pilots would
need medical certificates or be listed in the national pilot database.
    The findings of the Secretary are based on compliance with the
requirements outlined in this rule. The requirements and limitations of
part 107, as amended by this rule, indicate small UAS operations can
occur safely without the small UAS having an airworthiness certificate.
For example, under the existing requirements of part 107, a remote
pilot must conduct a pre-flight inspection in accordance with Sec.
107.49. The remote pilot would, if operating over people, ensure that
the aircraft meets the eligibility requirements to operate over people,
as discussed in the preamble of this rule. 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 and
flashing anti-collision light. This rule does not require pilots
conducting operations under part 107 to hold a medical certificate.
Remote pilots who hold a part 107 certificate, however, will remain
included in the national pilot database; such inclusion is a necessary
means of oversight. Moreover, the Secretary finds small UAS operations
can occur safely under part 107 as long as the remote pilot holds a
remote pilot certificate, pursuant to Sec.  107.12.

XIII. Other Considerations

A. Liability

    Several commenters suggested the FAA should require UAS operators
hold valid liability insurance or require that operators be liable for
property damage or personal injury arising out of an accident involving
UAS, especially for operations of small UAS at night. Some commenters
stated the FAA should set the minimum coverage standards. Another
commenter addressed product liability, stating manufacturers should not
be liable for the misuse of their products.
    In response to commenters' suggestions that there be an insurance
requirement for operations over people or at night, the FAA notes that
it lacks jurisdiction to mandate the purchase of liability insurance.
Similarly, OST also lacks authority to impose liability insurance
requirements on small UAS operations covered by this rule because those
operations do not rise to the level of air transportation.\91\ However,
the Department emphasizes that remote pilots who offer these types of
services are responsible for the operation, and could be held liable
for any injury or damage that could result. Prudent remote pilots
should evaluate their existing insurance policies to determine whether
they have appropriate coverage for these operations.
---------------------------------------------------------------------------

    \91\ As discussed in the part 107 final rule, air carriers
(which are not included in this rule) are subject to liability
insurance requirements. 81 FR 42064 at 42074-75. See 49 U.S.C. 41112
(noting that the Secretary may issue a certificate to a citizen of
the United States to provide air transportation as an air carrier
only if the citizen complies with the Secretary's orders and
regulations governing the filing of an insurance policy or self-
insurance plan).
---------------------------------------------------------------------------

    Finally, this rule did not propose operators obtain insurance
coverage for operations subject to this rule. The Agency considers
comments concerning insurance and liability as outside the scope of the
rule.

B. Privacy

    Commenters cited privacy issues as reasons for opposing the
proposed rule. The FAA acknowledges that privacy issues could be a
concern with operations over people; however, the proposed performance-
based rule focuses on the risk of injury involved with operations over
people and does not address privacy issues. EPIC believed that the
unrestricted use of small unmanned aircraft over protests could have a
chilling effect on free speech. They also stated people over whom a
small unmanned aircraft flies should receive advance warning, both at
public events and in closed or restricted-access sites. Similarly, the
News Media Coalition wrote that restrictions on operations over people
raise First Amendment concerns, such as when police departments set a
perimeter around an accident or incident site that prevents a fly-over.
An individual commenter recommended that the FAA conduct an information
campaign to reduce the concerns the public might have related to
privacy.
    Although the Agency is not authorized to impose regulations based
on privacy concerns, the FAA has collaborated with the public,
stakeholders, and other agencies with authority and subject matter
expertise in privacy law and policy. As stated in the 2016 final rule,
the FAA's mission is to provide the safest, most efficient aerospace
system in the world, and does not include regulating privacy or free
speech.\92\ Privacy issues are outside the focus and scope of the rule.
The FAA emphasizes, however, that this rule does not relieve the
operator from complying with other laws or regulations that are
applicable to the purposes for which the operator is using the small
UAS.
---------------------------------------------------------------------------

    \92\ 81 FR 42064 at 42190-42192.
---------------------------------------------------------------------------

C. Noise From Unmanned Aircraft

    Several commenters state that noise was potentially an issue with
operations over people. The comments were mostly general, citing
concerns about nighttime operations disturbing sleep, noise that might
be created in recreational areas that people visit to get away from
noise, and that small UAS should generally be banned in residential
areas. A few suggestions were more specific, such as limiting small UAS
operations to an unspecified straight-line distance from structures and
people to alleviate noise and privacy concerns, prohibiting operations
within 30 feet of people, allowing operations over roadways to lessen
impacts on noise-sensitive locations like schools and hospitals, and
education of remote pilots as to local noise ordinances for nighttime
operation. A few commenters conclude that compared to current ambient
noise levels of cars, large aircraft, and ``heavy lift UAS,'' small UAS
operations would not contribute noticeably to noise. One commenter
states that the FAA said the Agency did not have authority over noise;
that statement is an incorrect reading of the proposed rule.
    The FAA primarily manages aircraft source noise as a matter of
aircraft certification rather than operational restrictions. The FAA is
aware that limited data are available quantifying the acoustics of most
unmanned aircraft and almost none relating to the effect on people when
unmanned aircraft of any size are operated in close proximity. When the
FAA promulgated part 107, it determined that it would not impose any
noise requirements (in the form of testing individual aircraft) because
of the limited size of small unmanned aircraft and the scope of
operations that were allowed under that part. In the years since the
adoption of part 107, however, the number of UAS operating has
increased, the FAA has granted operational waivers, and the Agency is
now expanding part 107 operations outside of the initial operational
box. The expansion of the number of unmanned aircraft and their
operations has outpaced FAA certification actions to measure and
analyze noise from these aircraft, and the FAA has recently added UAS
to its noise reporting portal workflow in response to increasing public
awareness and concern for UAS operations near them. The FAA continues
to seek and collect available noise data on more unmanned aircraft
models, however, the efforts have faced challenges due to the rapid
expansion of operations under part 107 with unmanned aircraft that are
not required to be certificated under part 36.
    When an aircraft is presented for type certification under part 21,
the FAA undertakes noise certification in accordance with part 36
standards. To date, the Agency has treated unmanned aircraft as either
small airplanes or rotorcraft depending on their means of flight.
Manufacturers who seek type certification for unmanned aircraft--either
because they exceed the 55 pound weight limit of part 107 or seek to
operate outside part 107 limits (such as under part 91 or part 135)--
are tested and their noise levels measured, but the few already
certificated have resulted in only incremental increases in the FAA's
noise database on these aircraft. In addition, as larger unmanned
aircraft are added to the fleet, there is increased potential for noise
impacts. Accordingly, the FAA has begun to apply more relevant test
procedures and noise limits for new unmanned aircraft models presented
for type certification under part 21.\93\
---------------------------------------------------------------------------

    \93\ These standards are being applied to individual
certification projects as they are presented and found appropriate,
with the complementary intent of informing future standards of
general applicability for UAS noise in part 36.
---------------------------------------------------------------------------

    The forecasted proliferation of unmanned aircraft that weigh less
than 55 pounds has led the FAA to assess its future ability to analyze
and understand the noise impacts of unmanned aircraft. As the operating
environment expands to include more operations over people that are not
directly participating in the operation, the FAA will need to address

eventual test procedures and the criteria for determining which of
these aircraft would require noise testing. Current part 36
certification test procedures and noise standards were not developed
for aircraft that are designed to take off, land, or operate (including
hover) close to people not directly participating in the operation.
    The FAA has broad authority to address the noise of all
aircraft.\94\ This authority applies whether the aircraft are presented
for traditional type certification under part 21 or, as small unmanned
aircraft may, seek some other operational authority such as special
airworthiness certification. Consequently, the FAA has begun to
consider proposing test requirements and noise limits for unmanned
aircraft that are not type certificated under part 21. The FAA is aware
that expanding noise requirements beyond the category of traditional
type certification applicants may have broad impacts on aircraft models
newly subject to noise certification requirements. The FAA is also
aware that a new regulatory framework might be necessary to identify
the aircraft that would be included in noise certification, the limits
of the noise they would be allowed to generate, and what entities would
be responsible for testing and compliance, such as the manufacturer or
the end user. Because this is a complex topic and will need to focus on
issues of testing and certification that have yet to be proposed, the
FAA has chosen not to promulgate any certification requirements as part
of this rulemaking, but is considering future rulemaking actions that
will present the available data and noise concerns for full public
input.
---------------------------------------------------------------------------

    \94\ See 49 U.S.C. 44715(a) and (b).
---------------------------------------------------------------------------

D. Other Comments

    Several comments were not explicitly relevant to the requirements
of the proposed rule. For example, several commenters requested the FAA
modify the requirements for small UAS operations under part 107, to
address operations at or over National Parks and to reduce the number
of ``no-fly zones.'' Other commenters suggested amending the
requirements applicable to operating beyond visual line-of-sight,
altitude restrictions, and speed limits under part 107. Some commenters
suggested imposing equipage and design requirements, including
transponders and ``lock down mechanisms.'' A few commenters believed
certificated pilots should have more freedom to fly where they want.
Another commenter opined small UAS should be able to fly ``whenever and
wherever,'' except near airports and other sensitive places. One
commenter wrote that everyone should have some type of certificate
indicating ``they know the rules of the airspace,'' and it should be
easy for these small UAS pilots to fly close to airports.
    This rule expands operations over people and at night, as proposed,
with the addition of allowing operations over moving vehicles. The
Agency did not propose to amend other restrictions codified in part
107, such as the requirement that the small unmanned aircraft remain
within visual line of sight and restrictions regarding airspace in
which the operation occurs. Likewise, the proposed rule did not
consider requiring equipage such as transponders or mechanisms to stop
a small unmanned aircraft from operating. While the Agency may consider
amending existing limitations or requirements in future rulemakings,
these matters are outside the scope of the NPRM for this rule.
    One commenter stated the Agency should not finalize the proposed
rule until manufacturers design a jet engine that would not result in
loss of engine performance if it ingests a small unmanned aircraft.
This comment is beyond the scope of the proposed rule, as this rule did
not propose to develop engine certification standards for manned
aircraft.
    A commenter wrote that commercial pilots and ``licensed pilots''
must not be granted operating privileges different from those allowed
any individual or hobbyist operator. This rule only addresses
operations conducted under part 107, which does not differentiate
between the types of operations conducted. As a result, this comment is
outside the scope of the NPRM for this rule.
    Although this rule does not apply to operations that flyers conduct
under 49 U.S.C. 44809 (``Exception for Limited Recreational Operations
of Unmanned Aircraft''), the FAA received comments concerning
recreational operations. Several commenters, indicating they are
recreational operators or hobbyists, stated the proposed regulations
are unreasonable, do nothing to improve safety, would stifle innovation
of technology and sales of UAS, and would destroy the recreational UAS
market. First Person View Freedom Coalition (FPVFC) recommended the FAA
waive certain requirements in this rule for recreational pilots and
their small UAS. Others recommended FAA establish a different set of
rules for recreational operators than commercial operators. Part 107
does not specify purposes of operation to which the part applies. All
persons operating under part 107 must meet all requirements of part 107
for the operation. To the extent that FPVFC suggests the rule should
not apply to recreational operations, this comment is out of scope
because any person operating a small UAS for recreational purposes may
operate under the Limited Exception for Recreational Aircraft, as long
as the operation fulfills all criteria of 49 U.S.C. 44809(a).

E. Regulatory Analysis--Benefits and Costs

    Several commenters provided comments on the general and specific
benefits and costs of the proposed rule. Commenting generally on the
benefits of the commercial UAS industry, AUVSI stated, ``investment in
the commercial UAS industry is growing significantly and is projected
to increase rapidly in the coming years, contributing to the U.S.
economy and creating tens of thousands of jobs.'' AUVSI also quoted a
Department of the Interior (DOI) observation that, ``[a]cross nearly
19,000 drone flights flown to date, [DOI] has observed a rule of thumb
that a drone can complete a given task in 1/7th the time and at 1/10th
the cost of traditional means of accomplishing the same task.''
    The FAA thanks AUVSI for providing statistics pertaining to the
Department of the Interior UAS program. The FAA continues to work
toward the integration of unmanned aircraft in the NAS and enabling
economic opportunity for manufacturers of unmanned aircraft, part 107
operators, and providers of UAS-related services.
    Deseret UAS pointed to a Morgan Stanley report which estimates that
the market for Urban Air Mobility (UAM) could be at $1.5 trillion by
2040. The commenter also pointed to a Goldman Sachs report which
estimates that the global UAM is expected to surpass $100 billion in
the next 5 years. The commenter stated that operations over people and
at night are necessary for UAM.
    The FAA recognizes the market potential for UAM, and is in the
process of type certification for six urban air mobility aircraft.\95\
While these aircraft would operate over people and at night, it would
not be under part 107 regulations. As currently written, part 107
regulates the operation and certification of unmanned aircraft
weighting less than 55 pounds (including payload), thus UAM aircraft

would not operate in accordance with part 107.
---------------------------------------------------------------------------

    \95\ https://www.aviationtoday.com/2020/01/14/six-urban-air-mobility-aircraft-well-along-type-certification-faas-merkle-says/.
---------------------------------------------------------------------------

    CDA stated that the NPRM failed to properly weigh risk against
benefits and that the public benefits of expanding commercial UAS
operations has had, and will continue to have, a significant economic
impact on the United States. CDA reported that with UAS activity rising
from $40 million in 2012 to a projected annual impact of $31--$46
billion in 2026, the benefits are substantial.
    The FAA continues rulemaking efforts to provide relief from part
107 regulations by allowing operations that pose minimal risk.
Accordingly, this rulemaking enables small UAS operations at night,
over people, and over moving vehicles, therefore encouraging economic
activity to occur that would otherwise only take place through a more
costly and time-consuming waiver process.
    The Consumer Technology Association (CTA) states it is imperative
for the FAA to strike the appropriate risk-based balance between
innovation and safety. CTA asserted that the cost-benefit analysis
contained in the NPRM does not adequately account for many benefits
associated with small UAS operations over people, including lives that
could be saved by less restrictive rules governing small UAS operations
over people. CTA asserted that it ``is undisputed that sUAS
operations--whether search and rescue, medical supply delivery, or
other--will save a substantial number of lives and pose a risk of
injury to the public.'' CTA said these factors must be balanced when
evaluating whether to restrict small UAS operations over people and, to
date, such an analysis has not been undertaken. CTA encouraged the FAA
to revisit the cost-benefit analysis to account for such benefits
properly. CTA also noted that the FAA is required to consider ``all
costs and benefits of available regulatory alternatives'' (under
Executive Order 12866) and to support its analysis by ``the best
available science'' and to ``identify and use the best, most
innovative, and least burdensome tools for achieving regulatory ends''
(under Executive Order 13563). CTA asserted that, although the NPRM
lessens regulatory burdens, the FAA did not meet these required
standards, because less restrictive alternatives exist and because the
safety ``analysis'' includes ``presumptions not supported by scientific
data.''
    In its comments, DJI similarly pointed to lives saved by UAS. Based
on news reports, DJI estimated that small UAS have saved at least 227
people ``from life-threatening peril'' in situations involving floods,
fires, and missing persons. DJI also stated that it has learned from
its customers that UAS make dangerous jobs--such as tower inspections,
roof inspections, and firefighting--substantially safer. DJI wrote that
regulations with a near-zero tolerance for minor risk will stifle
innovation, impede beneficial operations, and be a net loss to public
safety. CDA and an individual commenter similarly said that the risk-
benefit calculus should account for the risks associated with the
activities that commercial small UAS operations would replace--i.e.,
the FAA should compare the safety benefit of using a small UAS rather
than risking a human life.
    In response to these commenters, in the part 107 final rule
published in June 2016, the FAA qualitatively discussed the safety
benefits and cost savings resulting from the substitution of small
unmanned aircraft for manned activities, such as climbing towers or
inspecting infrastructure, and for activities traditionally performed
by manned aircraft. Thus, many of the safety benefits identified by
commenters were enabled on publication of the part 107 final rule.
Nevertheless, this final rule will aid rescue personnel to perform
operations with more efficiency and expediency since they will no
longer be required to avoid operations over people and over moving
vehicles, so long as the operations are conducted with eligible small
unmanned aircraft.
    Also, the FAA agrees that enabling small UAS operations at night
will result in lives saved. This final rule eliminates the burden of
first obtaining a waiver before operating a small UAS at night,
potentially enabling rescue operations that would otherwise not occur.
DJI reports that 15 out of 65 rescues over a one-year period occurred
at night using drones with thermal imaging capability.
    The AMOA and AAMS, commenting jointly, noted that the FAA's cost-
benefit discussion did not address the increased risk of proliferating
numbers of small unmanned aircraft to low-altitude manned aircraft,
such as rotorcraft. The commenter asked if FAA has concluded that there
is no increased risk of harm to manned aircraft, crews, and passengers
should the NPRM be finalized.
    The FAA agrees that this final rule will result in an increase in
the number of small unmanned aircraft operating in the airspace,
particularly at night. However, this risk is mitigated by existing
regulations finalized in the 2016 rule. Regulations contained in part
107 stipulate that: (1) Small unmanned aircraft must yield the right of
way to all other users of the NAS and requires that the small unmanned
aircraft always be the one to initiate an avoidance maneuver to avoid
collision with any other user of the NAS, and (2) the operation of a
small unmanned aircraft cannot be so close to another aircraft as to
create a collision hazard.
    Some commenters wrote that section 44809 of the FAA Reauthorization
Act of 2018 requires FAA to develop a test for recreational operations
that can be administered online and that this should be extended to
part 107 remote pilot certification, thereby reducing the cost
associated with the initial knowledge test.
    The FAA notes that an application for a certificate must be in a
form and manner prescribed by the Administrator under 49 U.S.C. 44702.
A person who seeks to obtain a remote pilot certificate, with a small
UAS rating that does not hold a part 61 certificate (other than a
student pilot certificate) must take the part 107 aeronautical
knowledge test at an approved knowledge testing center. Because of the
need for testing security and applicant identification, part 107
initial knowledge testing for certification cannot be administered
through an online testing platform. The requirement for a knowledge
test applicant to verify their identity in person at a test center will
remain, as will the requirement for a test proctor. Both of these
requirements are consistent with part 107 and other regulatory
frameworks for knowledge testing. The FAA Reauthorization Bill of 2018
requirement for the FAA to have an online test for limited recreational
operators does not statutorily extend to part 107 remote pilot
certification. The FAA clarifies that part 107 does not mandate formal
training to obtain a remote pilot certificate, and any cost that a part
107 applicant incurs is at their discretion. The FAA contracts its
testing delivery through a third party vendor that allows the FAA to
enter into a contract that provides a zero cost model to the U.S.
government and to the taxpayers. The testing vendor has many locations
throughout the United States that are close to large and small
population centers, therefore the requirement to take a knowledge test
at a testing location is not an undue burden on applicants.
    An individual commenter pointed out that the FAA notes the safety
risk of the proposed rule to the public in the benefits section of the
regulatory analysis, and then invites comments to speculate on the
associated costs. Absent those comments, the commenter

asserted, ``the FAA assumes its safety precautions will be
sufficient.'' The commenter also pointed out that the FAA said it may
revise its regulatory impact analysis based on the data and comments it
receives on the safety risks of the proposed rule. The commenter
believed that the cost-benefit analysis could change ``tremendously''
if this negative externality were included. Another commenter
acknowledged that there is a public need for the intended regulation,
to encourage innovation and growth, but argued that it must be balanced
against safety concerns. The commenter believed FAA has not addressed
safety concerns in-depth. Specifically, the commenter said FAA has not
established guidelines on how it will take account of life into its
regulatory analysis. With respect to operations over people, the
commenter said the FAA cannot focus on kinetic energy alone as an
indicator of overall risk because it will not reflect real-world risks
and disincentivize advancements in UAS technology that would otherwise
increase safety. The commenter argued that FAA needs to factor in
operational and technical mitigations in addition to kinetic energy.
Another commenter encouraged the FAA to find a balance between safety
and the cost of qualification for rules requiring qualification of
manufactured UAS. The commenter asserted that inflated certification/
qualification costs will serve as a barrier to entry that will stunt
innovation.
    The FAA acknowledges the commenters' concerns. However, the
performance based requirements contained in this rule for the
manufacture of small UAS would mitigate the risk of injury to
individuals. Specifically, the four categories established by this rule
mitigate the risks associated with operations over people. The lowest
risk category, Category 1, sets a weight limit of 0.55 pounds for the
small unmanned aircraft and everything otherwise attached and prohibits
exposed rotating parts that could cause lacerations. Categories 2 and 3
similarly prohibit the small unmanned aircraft from having any exposed
rotating parts that could cause lacerations, in addition to injury
severity limits and prohibition on safety defects. Finally, in response
to commenters' concerns that the FAA did not sufficiently consider
reliability or probability, this final rule includes Category 4, which
would allow small UAS with an airworthiness certificate to operate over
people. While the FAA requested public comment for data concluding that
the injury severity limits should be changed, no such comments with
supporting data were provided. The FAA acknowledges commenter concerns
that inflated qualification/certification costs will serve as a barrier
to entry that will stunt innovation. However, the FAA is confident that
innovative manufacturers are capable of recovering the costs associated
with designing aircraft that will mitigate risk of injury to persons on
the ground.
    One commenter asked whether the analysis for the remote pilot
operating instructions included instructions in multiple languages. The
commenter suggested that, to address operational safety fully, manuals
could provide instructions in multiple languages, which may change the
FAA's page estimates for the remote pilot operating instructions. The
commenter noted that requiring instructions in multiple languages would
impose additional costs on manufacturers but would also provide
benefits to operations and perhaps increase safety of the public.
    The FAA values the commenters concerns that manufacturers would
need to provide remote pilot operating instructions in multiple
languages. The FAA is not requiring the applicant to provide remote
pilot operating instructions in a particular format, nor is it
prescribing the method for making the instructions available. For
example, an applicant could choose to provide the remote pilot
operating instructions as part of the packaging of a small UAS, make
them available electronically, or provide them in some other way.
Applicants with products currently on the market are free to choose
whether to incorporate the instructions into existing materials, or
create a new set of instructions that are specific to operations over
people.
    ASSURE commented on the cost of test methods related to operations
over people. The commenter estimated that it would cost manufacturers
between $30,000 and $35,000 to execute Transport Canada's
Anthropomorphic Test Devices (ATD) tests and report results for certain
multirotor and fixed-wing platforms ``up to the practical limitations
of launchers that may or may not be able to reach vehicle terminal
velocities especially for vehicles weighing more than 5lb and fixed-
wing platforms.'' ASSURE stated that, while Transport Canada's approach
is a ``solid first attempt at approaching a consistent and standardized
use of automotive test techniques and injury metrics,'' the approach
requires refinement that could potentially reduce costs and align with
the ASSURE Task A14 injury metrics. ASSURE also wrote that the NPRM's
performance-based metrics ``may cost similar amounts of funding before
standardized injury metrics are established for energy based test
methods.'' ASSURE stated that energy-based test methods have been used
for some of the Pathfinder Programs; however, the test methods have
little correlation to skull fracture, head injury or neck injury that
is required to assess injury severity due to the wide variety of
vehicle and individual impact orientations that could potentially
result for small unmanned aircraft impacts.
    The FAA thanks ASSURE for their comments and notes that ASSURE
estimates the cost for a manufacturer to conduct its own means of
compliance testing to be $55,000.\96\ This cost includes approximately
$35,000 for an ATD Hybrid III head and neck, $16,800 for a National
Instruments data acquisition system, $1,400 for MiniTech extrusions and
hardware, and approximately $950 for additional materials and supplies.
While the FAA-provided test method that was also used during the
Pathfinder Programs did not directly correlate to a particular type of
injury risk, the method meets the requirements of a means of compliance
for the injury severity limits. A commenter noted that the FAA provides
a comprehensive regulatory evaluation to help determine the benefits,
costs, and cost savings, but said the Agency could do more to
facilitate a plan to evaluate the proposed rule once it is issued.
Specifically, the commenter recommended that FAA conduct two
evaluations of the NPRM to see if the rule generates cost savings as
predicted in the economic analysis and maintains overall safety. The
first evaluation would focus on implementation (to ensure the resources
and requirements of the rule are being implemented) and the second
evaluation would focus on the impact of the rule to determine whether
it achieved its intended outcomes. The commenter also stated that
safety standards and injury measures should be identified, collected,
and assessed to measure outcomes accurately, and that the rule should
be periodically reviewed as technology continues to change.
---------------------------------------------------------------------------

    \96\ http://www.assureuas.org/projects/deliverables/a14/ASSURE_A14_Final_Report_UAS_Ground_Collision_Severity_Evaluation_2017-2019.pdf. Testing method is described in Appendix C of Annex A: pp
204-208.
---------------------------------------------------------------------------

    The FAA values the commenter's suggestion to evaluate this rule
after publication. In response, the FAA notes that post reviews of
rulemakings and regulations are conducted in response to Congressional
and presidential requirements, or directives. The Section

610 review (required by the Regulatory Flexibility Act) \97\ is one
such review that occurs every ten years. The purpose of this review is
to reexamine whether (1) the expected outcomes of the regulation have
been achieved; (2) the Agency should retain, amend, or rescind the
regulation; and/or (3) the actual benefits and costs of the implemented
regulation correspond with estimates prepared at the time the
regulation was issued. Reviews could occur more frequently as a result
of petitions from parties affected, or in light of changes to specific
technologies, industries or underlying standards.
---------------------------------------------------------------------------

    \97\ Public Law 96-354, 94 Stat. 1164, 1169 (Sept. 16, 1980)
codified at 5 U.S.C. 610. These reviews are referred to as Section
610 reviews.
---------------------------------------------------------------------------

    DJI asserted generally that regulations that increase the cost of
equipment or operational approvals will disproportionately impact small
business.
    The FAA acknowledges DJIs comment that regulations can
disproportionately impact costs to small businesses. According to the
Small Business Administration (SBA), smaller firms bear a regulatory
cost 36 percent greater than the cost of regulatory compliance carried
by larger firms.\98\ These cost burdens include compliance, reporting,
and recordkeeping.\99\ According to part 107 waiver analysis conducted
by AUVSI, from the time the part 107 rule was finalized in June 2016
through March 2020, the FAA granted 4,144 waivers.\100\ A vast majority
of the waivers were for Sec.  107.29, daylight operations (3,813
waivers granted), followed by Sec.  107.39 operations over people (125
waivers granted). These two categories account for 95 percent of the
waivers granted to date, and demonstrates the desire among entities to
be able to conduct these types of operations. The AUVSI analysis
indicates that a majority of the waivers granted were for entities with
fewer than 10 employees that generate a revenue of under $1 million
annually. While this final rule creates additional costs to operators,
it also creates costs savings. These cost savings and the enabling
activities allowed by this rule are anticipated to outweigh costs
imposed on smaller and larger entities alike.
---------------------------------------------------------------------------

    \98\ Nicole V. Crain and W. Mark Crain, ``The Impact of
Regulatory Costs on Small Firms,'' U.S. Small Business
Administration, September 2010. Page. iv. https://www.sba.gov/sites/default/files/The%20Impact%20of%20Regulatory%20Costs%20on%20Small%20Firms%20(Full).
pdf. Accessed January 22, 2020.
    \99\ U.S. Chamber of Commerce Foundation. The Regulatory Impact
on Small Business: Complex. Cumbersome. Costly. Final Report. March
2017. https://www.uschamberfoundation.org/smallbizregs/assets/files/Small_Business_Regulation_Study.pdf. Accessed January 22, 2020.
    \100\ https://www.auvsi.org/sites/default/files/PDFs/Waiver%20Update%20Mar%202020_v3_PDF%20%281%29.pdf, https://public.tableau.com/shared/RBFRZM9PP?:display_count=y&:origin=viz_share_link&:showVizHome=no#1.
Accessed April 10, 2020.
---------------------------------------------------------------------------

    Approximately 23 commenters, including the National Agricultural
Aviation Association and the Golden Gate Bridge Highway and
Transportation District, said either that they approve of an insurance
requirement for small UAS operators or that operators should be liable
in the case of an accident. Approximately 16 of the 23 commenters said
that insurance should be required. Seven of these commenters specified
that insurance should be required for small UAS operations over people
or at night. One of those commenters said that the FAA should set the
minimum coverage standards. Two commenters believed FAA should require
$1 million in insurance. One commenter said that manufacturers should
not be liable for the misuse of their products.

XIV. Effective and Compliance Dates

A. Implementation Timeline for Night Operations and Recurrent Training
Requirements

    Operations over people are permitted on the effective date of this
rule, as long as the small UAS meets all eligibility requirements for
the appropriate category. For example, an unmanned aircraft weighing
less than 0.55 pounds, including everything attached, and with no
exposed rotating parts that would cause a laceration may operate on the
effective date. Section V discusses the requirements for Category 1
small unmanned aircraft. Similarly, as discussed in Section VII, small
UAS with an airworthiness certificate issued under part 21 would be
able to operate under part 107 on the effective date of the rule,
provided the operating limitations for the small UAS do not prohibit
operations over people.
    Given that Categories 2 and 3 require a multi-step process to meet
the eligibility requirements, the FAA does not anticipate that many, if
any, small UAS will be able to operate immediately on the effective
date. Means of compliance applicants may submit the means of compliance
to the FAA either by email or through the U.S. mail. Applicants may
submit their declaration of compliance through an online portal on the
FAA website. On receipt, the FAA would review the submitted declaration
of compliance for acceptance and notify the applicants of their
acceptance status. Incomplete declarations of compliance will not be
accepted. Section VI discusses the requirements for Categories 2 and 3.
With regard to the operations over people waivers issued prior to the
effective date of this rule, the FAA will review these on a case-by-
case basis and determine next steps as appropriate.
    On the effective date of this rule, persons are permitted to
conduct operations at night, provided they successfully complete the
updated initial aeronautical knowledge test, initial training, and
recurrent training, as applicable, which addresses the requirements of
operating at night and that the small unmanned aircraft has lighted
anti-collision lighting visible for at least 3 statute miles that has a
flash rate sufficient to avoid a collision. Section IX.B. of this
preamble provides a discussion of this requirement. The updated
knowledge area on night operations for initial and recurrent training
will be available on March 1, 2021, and will be accessible through the
FAA website. The initial aeronautical knowledge test will have the
updated knowledge area on night operations and will be available on
March 1, 2021 at the knowledge testing centers. However, remote pilots
without a waiver from Sec.  107.29 will need to wait until March 16,
2021 before operating at night.
    Sixty days after the effective date of the rule, no person may
operate a small UAS at night in accordance with a certificate of waiver
issued prior to the effective date of the rule. Existing waivers from
Sec.  107.29 granted prior to the effective date will terminate 60 days
after the effective date of the rule. Similarly, on the effective date
of this rule, pilots will be subject to the recurrent training
requirement finalized in this rule, rather than the recurrent knowledge
test. Remote pilots conducting operations in accordance with a current
night waiver will need to complete the updated night operations
knowledge area either by retaking the initial aeronautical knowledge
test or completing the recurrent online training within 60 days from
the effective date of this rule. The other amendments described in
Section XI will also take effect on the effective date of this rule.
The FAA did not receive any comments specific to the effective and
compliance dates of this final rule, with the exception of comments
that discussed coordination with the Remote Identification final rule,
as discussed in the following section.

B. Compliance With Remote Identification

    The NPRM noted the FAA planned to finalize its policy concerning
remote identification of UAS before finalizing

the proposed changes in this rulemaking that pertain to operations over
people and operations at night. Concurrent with publication of this
final rule, this edition of the Federal Register also includes the
Remote ID final rule.
    Several commenters, including A4A, Vigilent, and NAAA, suggested
implementing the requirements of the Remote ID rule before finalizing
this rule. APPA, EEI, and NRECA, commenting together, agreed the FAA
should expedite the release of a Remote ID rulemaking. However, APPA,
EEI, and NRECA were concerned the utility industry would not benefit
from the ``advances'' of small UAS operations over people due to the
delays associated with the Remote ID rulemaking. A commenter believed
this rule should be delayed until the FAA has implemented remote
identification requirements and increased the number of operations over
people waivers with the goal of gathering more data.
    The NFL, MLB, NASCAR, and NCAA commented that the FAA should deploy
a comprehensive ``Remote ID framework'' as soon as possible. The sports
organizations strongly encouraged the ``agency's efforts to implement a
Remote ID requirement for all drones that present any risk of use at a
sporting event.'' API believed that without the capability of remote
identification and tracking, the FAA and law enforcement will face
serious challenges in locating offenders. EPIC argued that the open-air
assembly prohibition should apply to all categories, and not just
Category 3. It specifically stated that a ``modified version'' of this
prohibition should apply to all operations over people.
    In response to these comments, and others, this final rule
prohibits sustained flight over open-air assemblies for Categories 1,
2, and 4, unless the operation is conducted using a standard remote
identification unmanned aircraft or a remote identification broadcast
module in compliance with Sec.  89.110 or Sec.  89.115(a) (remote
identification operational and broadcast requirements for standard
remote identification unmanned aircraft or unmanned aircraft with
remote identification broadcast modules). The FAA may waive this
requirement as appropriate. However, conditions of any waiver issued
may require the operator to notify local law enforcement prior to the
operation. All small unmanned aircraft operations are subject to remote
identification requirements upon the applicable remote identification
compliance date, as specified in the Remote Identification for Unmanned
Aircraft final rule. Airzus, Inc. believed that, until remote
identification or other operational awareness efforts are codified, the
FAA should consider the success of the LAANC system as a ``model for
how self-reporting technologies can aid in furthering economic growth
in the industry, while still emphasizing safety and flight awareness.''
A commenter recommended a public portal for reporting intended
operations involving flights over people or at night without the need
for special permission. Several commenters suggested requiring remote
pilots to file a flight plan prior to operating over people: Flytcam
suggested pilots should submit the locations and times of their
operations into the DroneZone.\101\ Concerned the elimination of
waivers would erode the FAA's ability to identify operators of small
UAS, a commenter recommended requiring an ``electronic license plate--
basically a simple signal that broadcasts identifying information.''
---------------------------------------------------------------------------

    \101\ https://faadronezone.faa.gov/.
---------------------------------------------------------------------------

    DJI and AUVSI both commented that there should be no more delay,
stating the Agency should issue Remote ID and this rulemaking
simultaneously to keep pace with the integration of small UAS into the
NAS. DJI, along with several individuals, wanted the rules allowing
Category 1 operations to finalize as soon as possible, noting they
should be excluded from Remote ID requirements as they would likely
impose negligible risk.
    As discussed previously, the FAA is publishing the Remote ID final
rule simultaneously with this final rule, with the added open-air
assembly prohibition as described in this section.

XV. Regulatory Notices and Analyses

    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 on a
reasoned determination that the benefits of the intended regulation
justify its costs. In addition, DOT rulemaking procedures in subpart B
of 49 CFR part 5 instruct DOT agencies to issue a regulation on a
reasoned determination that benefits exceed costs. Second, the
Regulatory Flexibility Act of 1980 (Pub. L. 96-354) requires agencies
to analyze the economic impact of regulatory changes on small entities.
Third, the Trade Agreements Act (Pub. L. 96-39) prohibits agencies from
setting standards that create unnecessary obstacles to the foreign
commerce of the United States. In developing U.S. standards, this Trade
Act 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 (Pub. L. 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 $100
million or more annually (adjusted for inflation with base year of
1995). The FAA has provided a more detailed Regulatory Impact Analysis
of this final rule in the docket of this rulemaking. This portion of
the preamble summarizes the FAA's analysis of the economic impacts of
this rule.
    In conducting these analyses, FAA has determined that this rule:
(1) Has benefits that justify its costs, (2) is an economically
``significant regulatory action'' as defined in section 3(f) of
Executive Order 12866, (3) is not ``significant'' as defined in DOT's
Regulatory Policies and Procedures; (4) will have a significant
economic impact on a substantial number of small entities; (5) will not
create unnecessary obstacles to the foreign commerce of the United
States; and (6) will not impose an unfunded mandate on state, local, or
tribal governments, or on the private sector by exceeding the threshold
identified previously. These analyses are summarized in this section.

A. Regulatory Evaluation

1. Assumptions and Data
    The analysis of benefits and costs for the regulatory evaluation is
based on the following assumptions.
     The analysis is conducted in 2020 constant dollars. Year 1
of the period of analysis, which would correlate with the effective
date of the final rule, is used as the base year.
     The FAA uses a 10-year period of analysis to capture the
recurring effects of the rule.
     The FAA uses a three percent and seven percent discount
rate for the costs and benefits as prescribed by OMB in Circular A-
4.\102\
---------------------------------------------------------------------------

    \102\ OMB Circular A-4 (Sept. 17, 2003), https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf.
---------------------------------------------------------------------------

     The costs and cost savings of this rule are based on the
fleet forecast for small UAS published in the Federal Aviation
Administration's FAA Aerospace Forecast 2020-2040.\103\ Additionally,
fleet forecasts for Category

1 small UAS and Category 4 small UAS are derived to more accurately
reflect costs and cost savings for the final rule.
---------------------------------------------------------------------------

    \103\ FAA Aerospace Forecast Fiscal Years 2020-2040 at 52,
available at http://www.faa.gov/data_research/aviation/aerospace_forecasts/media/FY2020-40_FAA_Aerospace_Forecast.pdf.
---------------------------------------------------------------------------

     Under the final rule, a means of compliance must be
accepted by the FAA before it could be used by applicants to build UAS
for operations over people and moving vehicles. Means of compliance are
developed by persons or organizations to describe methods by which a
UAS could be designed and produced to meet the performance requirements
of this rule. The FAA anticipates that other entities, such as UAS
manufacturers, could also submit a means of compliance to the FAA for
acceptance and will incur additional costs. Further details on the
costs to develop means of compliance are provided in the Regulatory
Impact Analysis of this final rule in the docket of this rulemaking.
     The FAA estimates 31 existing models may satisfy the
performance-based requirements of the rule for Categories 2 and 3 small
UAS operations over people with little or no modification.\104\
Applicants of these models would be subject to the cost of submitting a
declaration of compliance to the FAA. The FAA estimates that applicants
would likely submit declarations of compliance for eight additional
models in each of the subsequent years of the analysis.
---------------------------------------------------------------------------

    \104\ The proposed rule assumed a cutoff weight of 4.4 lbs based
on the Micro UAS Aviation Rulemaking Committee (ARC) final report.
Since publication of the ARC final report, the FAA has granted 109
waivers for operations of small UAS over people (as of 3/2/2020).
These waivers give insight as to the type of vehicles conducting
operations over people and show that a majority of the waivers
granted have been for UA weighing 11.68 pounds or less. The part 107
aircraft registry was analyzed for the number of models in this
weight range. Based on this analysis, 31 of the models registered
(for those models in the registry that could be identified by
model), weighed 11.68 pounds or less. A copy of the ARC's final
report is available in the public docket for this rulemaking.
---------------------------------------------------------------------------

     The FAA assigns the United States Department of
Transportation guidance on the hourly value of time and hourly value of
travel time savings equal to $27.89 for the analysis period.\105\
---------------------------------------------------------------------------

    \105\ 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 (Sept. 27, 2016).
---------------------------------------------------------------------------

     The FAA notes the analysis of this rule reflects industry
conditions that predate the public health emergency concerning the
coronavirus disease 2019 (COVID-19). While there is currently a lack of
data to forecast the timing of recovery relative to implementation of
the rule, the analysis provides information on the types of impacts
that may be experienced in the future as the economy returns to
baseline levels. The FAA also notes the expanded operations enabled by
this rule will benefit the economy and provide regulatory relief for
remote pilots.
2. Summary of Benefits
    This rule will further integrate small UAS into the NAS by enabling
operations over people and nighttime operations. These operations will
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
unmanned aircraft within a safe distance from people, but are not able
to operate over people who are not participating in the operation.
Without this rule, the only entities allowed to operate small unmanned
aircraft 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 an airworthiness certificate from the FAA that does not
prohibit operations over people who also operate with a COA. This rule
will allow individuals 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 with a small UAS that complies with the provisions. The FAA
quantifies cost savings from this rule in the following section along
with a summary of important unquantified savings.
3. Summary of Costs and Savings
    The costs of this rule include the FAA converting the
administration of recurrent tests to administration of training;
manufacturers conducting testing, analysis, or inspection to comply
with the requirements relevant to manufacturing a small UAS for
operations over people; and, remote pilots studying additional subject
matter related to activities enabled by the final rule. The cost
savings of this rule includes relief provided through online training
for remote pilots, and relief from time expended by the FAA for
processing waivers.
    The FAA bases the analysis of this rule on a fleet forecast for
small unmanned aircraft that includes base, low, and high scenarios.
Accordingly, this analysis provides a range of net impacts from low to
high based on these forecast scenarios. The FAA considers the base
scenario as the primary estimate of net impacts of this rule. For the
primary estimate, over a 10-year period of analysis this rule will
result in present value net cost savings (savings less costs) of
$688.27 million at a three percent discount rate, with annualized net
cost savings of $80.69 million. At a seven percent discount rate, this
rule will result in present value net cost savings of $551.31 million,
with annualized net cost savings of $78.49 million. The following table
summarizes the quantified costs and cost savings of this rule for the
three forecast scenarios.

                          Table 2--Costs and Savings of Final Rule by Forecast Scenario
                                                  [$Millions] *
----------------------------------------------------------------------------------------------------------------
                                                10-Year present    Annualized    10-Year present    Annualized
               Forecast scenario                   value (3%)         (3%)          value (7%)         (7%)
----------------------------------------------------------------------------------------------------------------
Base Scenario--Primary Estimate:
    Costs.....................................           146.44           17.17           119.98           17.08
    Cost Savings..............................         (834.71)         (97.85)         (671.28)         (95.58)
                                               -----------------------------------------------------------------
        Net Cost Savings......................         (688.27)         (80.69)         (551.31)         (78.49)
----------------------------------------------------------------------------------------------------------------
Low Scenario:
    Costs.....................................           102.96           12.07            85.32           12.15
    Cost Savings..............................         (616.60)         (72.28)         (501.51)         (71.40)
                                               -----------------------------------------------------------------

        Net Cost Savings......................         (513.64)         (60.21)         (416.19)         (59.26)
----------------------------------------------------------------------------------------------------------------
High Scenario:
    Costs.....................................           207.17           24.29           169.27           24.10
    Cost Savings..............................       (1,158.84)        (135.85)         (927.41)        (132.04)
                                               -----------------------------------------------------------------
        Net Cost Savings......................         (951.67)        (111.56)         (758.14)        (107.94)
----------------------------------------------------------------------------------------------------------------
* Table notes: Columns may not sum to total due to rounding. Savings are shown in parenthesis to distinguish
  from costs.

    The following tables summarize quantified costs and cost savings by
provision category for the three forecast scenarios.

                 Table 3.a--Costs and Savings of Final Rule by Provision Category ($Millions) *
                                        [Base scenario--Primary estimate]
----------------------------------------------------------------------------------------------------------------
                                                10-Year present  Annualized (at  10-Year present  Annualized (at
                   Category                      value (at 3%)         3%)        value (at 7%)         7%)
----------------------------------------------------------------------------------------------------------------
Costs:
    Standards Development Costs for MOC.......             3.18            0.37             2.88            0.41
    Applicant Costs for Testing and DOC.......             4.39            0.51             3.76            0.54
    Remote Pilot Costs--Additional Content for           138.57           16.24           113.06           16.10
     Tests....................................
    FAA Costs.................................             0.31            0.04             0.28            0.04
                                               -----------------------------------------------------------------
        Total Costs...........................           146.44           17.17           119.98           17.08
----------------------------------------------------------------------------------------------------------------
Cost Savings:
    Remote Pilot Savings--Training in lieu of          (593.73)         (69.60)         (479.17)         (68.22)
     Testing..................................
    Part 107 Operators--Reduced Waiver                 (209.58)         (24.57)         (167.10)         (23.79)
     Requests.................................
    FAA--Reduced Waiver Processing............          (31.40)          (3.68)          (25.01)          (3.56)
                                               -----------------------------------------------------------------
        Total Cost Savings....................         (834.71)         (97.85)         (671.28)         (95.58)
        Net Cost Savings......................         (688.27)         (80.69)         (551.31)         (78.49)
----------------------------------------------------------------------------------------------------------------
* Table notes: For this and the following tables, columns may not sum to total due to rounding. Savings are
  shown in parenthesis to distinguish from costs.

                  Table 3.b--Costs and Savings of Final Rule by Provision Category ($Millions)
                                                 [Low scenario]
----------------------------------------------------------------------------------------------------------------
                                                10-Year present  Annualized (at  10-Year present  Annualized (at
                   Category                      value (at 3%)         3%)        value (at 7%)         7%)
----------------------------------------------------------------------------------------------------------------
Costs:
    Standards Development Costs for MOC.......             3.18            0.37             2.88            0.41
    Applicant Costs for Testing and DOC.......             4.39            0.51             3.76            0.54
    Remote Pilot Costs--Additional Content for            95.09           11.15            78.40           11.16
     Tests....................................
    FAA Costs.................................             0.31            0.04             0.28            0.04
                                               -----------------------------------------------------------------
        Total Costs...........................           102.96           12.07            85.32           12.15
----------------------------------------------------------------------------------------------------------------
Cost Savings:
    Remote Pilot Savings--Training in lieu of          (443.11)         (51.95)         (362.47)         (51.61)
     Testing..................................
    Part 107 Operators--Reduced Waiver                 (151.01)         (17.70)         (121.04)         (17.23)
     Requests.................................
    FAA--Reduced Waiver Processing............          (22.48)          (2.63)          (18.00)          (2.56)
                                               -----------------------------------------------------------------
        Total Cost Savings....................         (616.60)         (72.28)         (501.51)         (71.40)
        Net Cost Savings......................         (513.64)         (60.21)         (416.19)         (59.26)
----------------------------------------------------------------------------------------------------------------

                  Table 3.c--Costs and Savings of Final Rule by Provision Category ($Millions)
                                                 [High scenario]
----------------------------------------------------------------------------------------------------------------
                                                10-Year present  Annualized (at  10-Year present  Annualized (at
                   Category                      value (at 3%)         3%)        value (at 7%)         7%)
----------------------------------------------------------------------------------------------------------------
Costs:
    Standards Development Costs for MOC.......             3.18            0.37             2.88            0.41
    Applicant Costs for Testing and DOC.......             4.39            0.51             3.76            0.54
    Remote Pilot Costs--Additional Content for           199.30           23.36           162.35           23.12
     Tests....................................
    FAA Costs.................................             0.31            0.04             0.28            0.04
                                               -----------------------------------------------------------------
        Total Costs...........................           207.17           24.29           169.27           24.10
----------------------------------------------------------------------------------------------------------------
Cost Savings:
    Remote Pilot Savings--Training in lieu of          (822.92)         (96.47)         (659.49)         (93.90)
     Testing..................................
    Part 107 Operators--Reduced Waiver                 (291.98)         (34.23)         (232.90)         (33.16)
     Requests.................................
    FAA--Reduced Waiver Processing............          (43.95)          (5.15)          (35.02)          (4.99)
                                               -----------------------------------------------------------------
        Total Cost Savings....................       (1,158.84)        (135.85)         (927.41)        (132.04)
        Net Cost Savings......................         (951.67)        (111.56)         (758.14)        (107.94)
----------------------------------------------------------------------------------------------------------------

    The FAA also expects this rule will provide industry with important
unquantified savings and efficiencies from reduced operational costs.
The FAA did not identify data to quantify these operational cost
savings due to the wide variety of small UAS applications and
operations enabled by this rule. In addition, the rule provides
flexibility and scalability through performance-based requirements that
will support future industry innovation. The following table summarizes
unquantified savings from the final rule.

                      Table 4--Unquantified Savings
------------------------------------------------------------------------
           Savings                              Summary
------------------------------------------------------------------------
Clearing people from areas of  Reduced burden and costs for certain
 operations.                    operators that will no longer need to
                                clear people from an area of operation
                                to avoid flight over people.
Circuitous routes............  Reduced operational costs for certain
                                operators that will no longer need to
                                perform circuitous routing to avoid
                                flight over people.
Fly over moving vehicles.....  Operational flexibility and reduced costs
                                for certain operators that will no
                                longer need to avoid operations over
                                moving vehicles.
Special conditions in waivers  In addition to the administrative cost
                                savings from operating without waivers
                                (i.e., reduced costs of submitting and
                                processing waiver requests), certain
                                operators may receive reduced operating
                                costs from avoided special conditions
                                often included in waivers that will not
                                be required under this rule.
------------------------------------------------------------------------

    Operations of small UAS over people may result in an increased risk
to safety. Although the FAA expects the probability of injuries that
may occur from operations of small UAS over people is low, when that
low probability is multiplied by an increased number of operations,
some additional risk of injury exists. This final rule's performance-
based requirements establish four categories of small UAS operations
defined primarily by level of risk of injury posed. Compliance with the
eligibility and operational requirements that apply to these categories
mitigates 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.
    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, Section 604 of the Act
requires agencies to prepare a Final Regulatory Flexibility Analysis
describing the impact of final rules on small entities.
    The FAA has determined this final rule will have a significant
economic impact on a substantial number of small entities. Therefore,
under the requirements in Section 604 of the RFA, the Final Regulatory
Flexibility Analysis must address:
    (1) A statement of the need for, and objectives of, the rule;
    (2) A statement of the significant issues raised by the public
comments in response to the initial regulatory flexibility analysis, a
statement of the assessment of the Agency of such issues, and a
statement of any changes made in the proposed rule as a result of such
comments;
    (3) The response of the Agency to any comments filed by the Chief
Counsel for Advocacy of the Small Business Administration in response
to the proposed rule, and a detailed statement of any change made to
the proposed rule

in the final rule as a result of the comments;
    (4) A description of and an estimate of the number of small
entities to which the rule will apply or an explanation of why no such
estimate is available;
    (5) A description of the projected reporting, recordkeeping and
other compliance requirements of the rule, including an estimate of the
classes of small entities which will be subject to the requirement and
the type of professional skills necessary for preparation of the report
or record; and,
    (6) A description of the steps the Agency has taken to minimize the
significant economic impact on small entities consistent with the
stated objectives of applicable statutes, including a statement of the
factual, policy, and legal reasons for selecting the alternative
adopted in the final rule and why each one of the other significant
alternatives to the rule considered by the Agency which affect the
impact on small entities was rejected.
    Based on these requirements, the FAA has prepared the following
Final Regulatory Flexibility Analysis.
    (1) A statement of the need for, and objectives of, the rule.
    The FAA publishes this rule 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.'' \106\
---------------------------------------------------------------------------

    \106\ 49 U.S.C. 44807(c).
---------------------------------------------------------------------------

    The FAA also publishes this rule 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.
    This rule is an important step in further integrating small UAS
operations into the NAS. The FAA's overall objective in this rule is to
ensure safety while encouraging new uses of small UAS in the NAS. This
rulemaking finalizes 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 February 14, 2020, the FAA has received 9,698
requests for waiver to permit operation at night, 3,555 requests to
permit operating over people, and 1,623 requests to permit operating
over people at night.\107\ For operations over people, the FAA's
performance-based requirements establish four categories of small UAS
operations defined primarily by level of risk of injury posed.
Additional eligibility requirements and operating limitations beyond
those already in part 107 apply to certain categories of small UAS to
mitigate the risks associated with each category.
---------------------------------------------------------------------------

    \107\ As of April 6, 2020, part 107 Non-Airspace Waivers totaled
36,130. Of these, 15,777 have been disapproved and 4,155 have been
approved. Of the remaining waivers, 15,067 are in process, with
another 1,131 withdrawn.
---------------------------------------------------------------------------

    This rule also removes the requirement for completing a recurrent
aeronautical knowledge test at a knowledge testing center and replaces
it with a requirement for online training. As a result, the remote
pilot in command who does not also hold a certificate issued under part
61 would be relieved of costs associated with recurrent knowledge
testing every 24 calendar months. This rule also requires a remote
pilot applicant to either pass a knowledge test or complete online
training containing knowledge areas on night operations, before
undertaking these types of operations.\108\
---------------------------------------------------------------------------

    \108\ Testing or training is contingent upon whether the remote
pilot applicant is a part 61 or non-part 61 remote pilot. Non-part
61 remote pilot applicants are required to pass an initial knowledge
test to be able to conduct night operations; part-61 remote pilot
applicants have the flexibility to successfully complete either the
knowledge test or online training to be able to conduct operations
at night. For those individuals that have already received a remote
pilot airman's certificate, online knowledge training is required
before conducting night operations.
---------------------------------------------------------------------------

    (2) A statement of the significant issues raised by the public
comments in response to the initial regulatory flexibility analysis, a
statement of the assessment of the Agency of such issues, and a
statement of any changes made in the proposed rule as a result of such
comments.
    While there were no public comments specific to the initial
regulatory flexibility analysis, one commenter asserted regulations
that increase the cost of equipment or operational approvals will
disproportionately impact small business. The FAA acknowledges that
regulations disproportionately impact costs to small businesses, and
cites an SBA sponsored study stating small firms bear a regulatory cost
36 percent greater than the cost of regulatory compliance carried by
larger firms.\109\ These cost burdens include compliance, reporting,
and recordkeeping.\110\ In this particular rule, it follows that
smaller applicants for a declaration of compliance will be
disproportionately affected versus their larger counterparts in terms
of costs associated with means of compliance testing. For the final
rule, these costs are estimated to average between $11,000 to $26,000.
---------------------------------------------------------------------------

    \109\ Nicole V. Crain and W. Mark Crain, ``The Impact of
Regulatory Costs on Small Firms,'' U.S. Small Business
Administration, September 2010. Page. iv. https://www.sba.gov/sites/default/files/The%20Impact%20of%20Regulatory%20Costs%20on%20Small%20Firms%20(Full).
pdf. Accessed January 22, 2020.
    \110\ U.S. Chamber of Commerce Foundation. The Regulatory Impact
on Small Business: Complex. Cumbersome. Costly. Final Report. March
2017. https://www.uschamberfoundation.org/smallbizregs/assets/files/Small_Business_Regulation_Study.pdf. Accessed January 22, 2020.
---------------------------------------------------------------------------

    Other entities affected by the final rule are entities/operators of
small UAS. AUVSI conducted an analysis on part 107 waivers issued by
entity size. This analysis shows that over 87 percent of the waivers
issued were issued to entities with fewer than 10 employees.\111\
Assuming that the share of small entities granted waivers is similar to
the distributional share of all entities operating under part 107, this
final rule will have a positive impact on small entities by allowing
night operations, operations over people, and operations over moving
vehicles without waiver.
---------------------------------------------------------------------------

    \111\ For those waivers that AUVSI was able to find information
on entity size, 1,365 were issued to entities with less than ten
employees; 107 were issued to entities with 10 to 99 employees; 67
were issued to entities with 100 to 999 employees; 20 were issued to
entities with 1,000 to 9,999 employees, and 3 waivers were issued to
entities with 100,000 or more employees.
---------------------------------------------------------------------------

    (3) The response of the Agency to any comments filed by the Chief
Counsel for Advocacy of the Small Business Administration in response
to the proposed rule, and a detailed statement of any change made to
the proposed rule in the final rule as a result of the comments.
    The Chief Counsel for Advocacy of the Small Business did not submit
comments to the proposed rule.

    (4) A description of and an estimate of the number of small
entities to which the rule will apply or an explanation of why no such
estimate is available.
    This final rule impacts applicants seeking acceptance of a
declaration of compliance from the FAA for small UAS eligible to
conduct operations over people. The FAA analyzed the part 107 unmanned
aircraft registry for aircraft weighing less than or equal to 11.68
pounds, which aligns with the weight of small unmanned aircraft that
have been granted waivers for operating over people.\112\ The registry
indicates that small unmanned aircraft in this weight class are
comprised of 31 different models which are built by eleven different
manufacturers that are located in three different countries.\113\ Using
the AUVSI business size standard, one manufacturer is identified as
small (fewer than 50 employees); two manufacturers are identified as
medium (50-499 employees); and five manufacturers are identified as
large (more than 499 employees). Entity size was not known for three of
the manufacturers.\114\ The table below shows key statistics for the
eleven manufacturers by country of origin.
---------------------------------------------------------------------------

    \112\ https://www.faa.gov/uas/commercial_operators/part_107_waivers/waivers_issued/. As of 3/2/2020, 109 waivers have
been granted for operations over people. A majority of these waivers
were for unmanned aircraft weighing 11.68 pounds or less.
    \113\ Source: AUVSI Air Platform Database (accessed April 2020).
    \114\ The Small Business Administration has not defined the
number of employees that would indicate that a manufacturer of small
UAS is a small entity. The NAICS code for Unmanned Aircraft
Manufacturing is 336411, which falls under the broad category of
``Aircraft Manufacturing.'' SBA defines entities with NAICS 336411
as small if it employs 1,500 employees or less. Based on the SBA
definition all entities are small ones.

                                 Table 5--Select Statistics for Part 107 Unmanned Aircraft Weighing 11.68 Pounds or Less
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    Number of      Number of                                            Number of UA in    Share of UA
         Manufacturer country of origin           manufacturers      models                 Entity size *                 FAA registry   <=11.68 lbs (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
China..........................................                4           18  2 large, 1 medium, 1 unknown...........          226,785             86.6
France.........................................                1            3  unknown................................            4,649              1.8
United States..................................                6           10  3 large, 1 medium, 1 small, 1 unknown..           30,572             11.7
                                                --------------------------------------------------------------------------------------------------------
    Total......................................               11           31  5 large, 2 medium, 1 small, 3 unknown..          262,006            100.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Source: AUVSI Air Platform Data. AUVSI defines entity size as follows: Large entities have more than 500 employees; medium entities have between 50
  and 499 employees; small entities have less than 50 employees.
Note: This information is based on records in the unmanned aircraft registry as of October 2019 that weigh 11.68 pounds or less. The remaining records
  did not contain readily identifiable make/model information and are excluded from the analysis.

    The final rule enables entities to conduct operations over people
and at night using eligible small UAS. Part 107 waiver analysis by
AUVSI shows that between June 2016 and March 2020, a total of 4,144
waivers have been granted by the FAA.\115\ A vast majority of the
waivers granted are for Sec.  107.29, daylight operations (3,813
waivers granted), followed by Sec.  107.39 operations over people (125
waivers granted). These two waiver categories account for 95 percent of
the waivers granted to date, and demonstrates the desire among entities
to be able to conduct these types of operations. The AUVSI analysis
shows a majority of the waivers granted have been for entities with
fewer than 10 employees that generate a revenue of under $1 million
annually.
---------------------------------------------------------------------------

    \115\ https://www.auvsi.org/sites/default/files/PDFs/Waiver%20Update%20Mar%202020_v3_PDF%20%281%29.pdf, https://public.tableau.com/shared/RBFRZM9PP?:display_count=y&:origin=viz_share_link&:showVizHome=no#1.
Accessed April 10, 2020. June 2016 marks the date for the
publication of the final part 107 rule.
---------------------------------------------------------------------------

    The final rule impacts the entire population of part 107 remote
pilots, many of whom work for small entities or own their own business,
by requiring all part 107 remote pilots to be tested or knowledge
checked on additional subject matter. The rule also relieves a subset
of the remote pilot population (i.e., non-part 61 remote pilots) from
the recurrent knowledge testing requirement. Instead of taking
recurrent knowledge testing, this affected group will take recurrency
training every 24 calendar months to maintain the privileges of the
remote pilot airmen certificate. This is expected to create a cost
savings for approximately 90% of the current remote pilot population.
    (5) A description of the projected reporting, recordkeeping and
other compliance requirements of the rule, including an estimate of the
classes of small entities which will be subject to the requirement and
the type of professional skills necessary for preparation of the report
or record.
    In order for the FAA to accept a declaration of compliance, this
rule requires the applicant to declare that a small UAS meets
applicable performance-based safety requirements by using a means of
compliance by test, analysis, or inspection, or any combination of
these options accepted by the FAA. An applicant 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 the transfer of kinetic
energy on impact. The applicant would certify the results from this
means of compliance testing on its declaration of compliance to the
FAA. The FAA estimates approximately eleven entities could be affected
by compliance requirements in year 1 of the rule. Using the AUVSI
business size standard for UAS manufacturers, one manufacturer is
identified as small (fewer than 50 employees); two manufacturers are
identified as medium (50-499 employees); and five manufacturers are
identified as large (more than 499 employees). Entity size could not be
determined for three of the manufacturers. The rule also requires
applicants of small UAS eligible for Category 2 or Category 3
operations to make available to the Administrator an FAA-accepted
declaration of compliance and any other document, record, or report
that the final rule requires, on request. The rule provides 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 applicants 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 applicants because they

would already have computer systems, with sufficient memory available,
to store and produce the documents this rule requires.
    For Categories 2 and 3, this rule requires an applicant to label a
small unmanned aircraft with each category for which the small UAS is
eligible to operate. The applicant must ensure that the label is in
English, legible, prominent, and affixed onto the small unmanned
aircraft by some permanent means. In addition, remote pilots are
required to ensure their small unmanned aircraft are properly labeled
before conducting any operations over people. The FAA believes the cost
of adding the labeling information for the category for which the small
UAS is eligible to operate would be minimal, given that small unmanned
aircraft typically come with a label containing information such as the
name of the manufacturer, serial number, and model name or number. If
the label has worn out due to use or age, the remote pilot could
satisfy the rule by using a permanent marker, or etching the category
into the body of the small unmanned aircraft.
    The rule requires a small UAS applicant 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 rule 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 an applicant could be an individual
that modifies a small UAS and then sells it. According to the rule,
this individual would also be required to have a notification and
support process in place. The FAA envisions this process would be
scaled to production, so the individual who sells a single aircraft
could establish a much smaller scale process. For example, the
applicant 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.
    The rule requires owners or operators of small UAS issued an
airworthiness certificate under part 21 operating under part 107 to
retain records of all maintenance performed on their aircraft and
records documenting the status of life-limited parts, compliance with
airworthiness directives, and inspection status of the aircraft. The
records must be kept for the time specified in Sec.  107.140 and must
be available to the FAA and NTSB on request. This requirement only
affects operations conducted under Category 4, and would result in
minimal costs.
    (6) A description of the steps the Agency has taken to minimize the
significant economic impact on small entities consistent with the
stated objectives of applicable statutes, including a statement of the
factual, policy, and legal reasons for selecting the alternative
adopted in the final rule and why each one of the other significant
alternatives to the rule considered by the Agency which affect the
impact on small entities was rejected.
    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 either rejecting those alternatives, or adopting them for
the final rule, 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 unmanned aircraft over people.
The FAA has determined that it is unnecessary to require additional
knowledge testing or training for operations over people beyond the
initial testing and initial or recurrent training requirements of part
107. Questions and training specific to operations over people may be
added to the testing and training in the existing areas of knowledge in
Sec. Sec.  107.73 and 107.74 without the need for an additional
knowledge area. As stated previously, the FAA declines to require
practical training for part 107 remote pilots. Additionally, the FAA
does not find it necessary to tailor the subject areas to specific
small UAS, because existing systems vary widely. Furthermore, the
remote pilot is already required to comply with all applicable
regulations, including the preflight familiarization and inspection
requirements, to ensure that their small UAS is in proper working
condition prior to operation.
    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 ft-lbs 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. However, comments
to the proposed rule stated that demonstrable reliability of the small
UAS should be an alternative path for operations over people. The FAA
agrees. Therefore, this final rule includes a fourth category to allow
small UAS that have been issued an airworthiness certificate under part
21 to operate over people under part 107, so long as the operating
limitations of that airworthiness certification do not prohibit
operations over people.
    The FAA considered incorporating the standards of Sec. Sec.
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. Prescriptive 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.
In response to comments to the proposed rule, the FAA always intended
that the anti-collision lights for both civil twilight and night
operations

should flash, rather than be static. Costs for anti-collision lights
that flash at a sufficient rate to avoid a collision were included in
the 2016 final rule.

C. International Trade Impact Assessment

    The Trade Agreements 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 finalizes in this rule. In addition, this final rule
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 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 million in lieu of $100
million.
    This rule does not contain a mandate that would result in
expenditure by State, local, or Tribal governments or impose costs on
the private sector of more than $155 million annually.\116\ As a
result, the requirements of Title II of the Unfunded Mandates Reform
Act of 1995 do not apply.
---------------------------------------------------------------------------

    \116\ 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
that 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 adds a new information collection, which includes the
estimated burdens for the declaration of compliance, means of
compliance, the development of remote pilot operating instructions, and
recordkeeping to reflect compliance with applicable maintenance
requirements. This rule eliminates information collection requirements
from the 2016 final rule as a result of changes to the recurrent
knowledge testing requirements. As previously discussed, this rule may
also reduce the number of waiver applications that the FAA receives.
    A detailed discussion of each of these information-collection
requirements is included in this section. As required by the Paperwork
Reduction Act of 1995, the FAA has submitted these information
collection amendments to OMB for its review.\117\
---------------------------------------------------------------------------

    \117\ The recordkeeping requirements prescribed by Sec.
107.140(c)(2) through (5) will be submitted to OMB for review upon
publication of this final rule.
---------------------------------------------------------------------------

1. Declaration of Compliance and Means of Compliance
    Summary: The information collection addresses the 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 3 operations. It also addresses
applicants' compliance with the record retention requirements
associated with submitting justification to establish compliance.
    The declaration of compliance must include the following
information:
     The applicant's name, physical address, and email address.
     The small UAS make and model name, and series, if
applicable and serial number or range of serial numbers.
     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.
     A certification that the applicant has demonstrated that
the small unmanned aircraft satisfies the applicable requirements
through an accepted means of compliance and will permit the
Administrator to inspect its facilities, technical data, and any
manufactured small UAS.
    The means of compliance demonstrates through test, analysis, or
inspection that the small UAS is eligible for operations pursuant to
Category 2 or 3 or both. The applicant submitting the means of
compliance must include the following information:
     The name of the person or entity submitting the means of
compliance, the name of the main point of contact for communications
with the FAA, the physical address, email address, and other contact
information.
     A detailed description of the means of compliance.
     An explanation of how the means of compliance establishes
achievement of the requirements identified in either Sec.
107.120(a)(1) and (2) for Category 2 small unmanned aircraft or Sec.
107.130(a)(1) and (2) for Category 3 small unmanned aircraft so that
any small unmanned aircraft system designed, produced, or modified in
accordance with such means of compliance meets those requirements.
     Any substantiating material the person wishes the FAA to
consider as part of the request.
     A means of compliance submitted for acceptance by the FAA
must include testing and validation procedures for persons responsible
for the production or modification of the Category 2 or Category 3
small unmanned aircraft system to demonstrate how the small unmanned
aircraft system meets the requirements of either Sec.  107.120(a)(1)
and (2) for Category 2 small unmanned aircraft or Sec.  107.130(a)(1)
and (2) for Category 3 small unmanned aircraft.
    Use: The FAA will use 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
or 3 or both operations.

    Estimated Annual Burden: The table below shows the annual
information collection burden in hours.

              Table 6--Annual Burden Estimate for Declaration of Compliance and Means of Compliance
                                                   [In hours]
----------------------------------------------------------------------------------------------------------------
                      Year                            Initial          Pages      Hours per page   Hourly burden
----------------------------------------------------------------------------------------------------------------
1...............................................           32.55              50               1           1,628
2...............................................            8.40              50               1             420
3...............................................            8.40              50               1             420
                                                 ---------------------------------------------------------------
    Total.......................................  ..............  ..............  ..............           2,468
----------------------------------------------------------------------------------------------------------------

    The cost for the information collection on an hourly basis is a
fully-burdened wage of $96.92, for an annual cost of $157,737 in year 1
and $40,706 in each of years 2 and 3 for the small UAS manufacturers to
submit their declarations. Over the 3-year analysis period, the total
cost is approximately $239,150 in 2020 dollars.
2. Remote Pilot Operating Instructions
    Summary: 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, all of
the following:
     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.
     Instructions for how to verify and change the mode or
configuration of the small UAS, if they are variable.
    Use: To operate a small unmanned aircraft safely over people,
remote pilots would be responsible for knowing what category of
operations their small UAS are eligible to conduct, and what technical
and operational limitations apply to the operations. Accordingly, this
rule requires manufacturers to provide remote pilot operating
instructions with product-specific information.
    Estimated Annual Burden: The table below shows the annual
information collection burden in hours.

                  Table 7--Three-Year Burden Estimates for Remote Pilot Operating Instructions
                                                   [In hours]
----------------------------------------------------------------------------------------------------------------
                                                     Operating
                      Year                         instructions        Pages      Hours per page   Hourly burden
----------------------------------------------------------------------------------------------------------------
1...............................................              31               6              25           4,650
2...............................................               8               6              25           1,200
3...............................................               8               6              25           1,200
                                                 ---------------------------------------------------------------
    Total.......................................  ..............  ..............  ..............           7,050
----------------------------------------------------------------------------------------------------------------

    The cost per hour for the information collection is a wage of
$96.92, for an annual cost of $450,678 in year 1 and $116,304 in each
of years 2 and 3 for small UAS manufacturers to develop and maintain
remote pilot operating instructions. Over the 3-year analysis period,
the total cost is approximately $683,286 in 2020 dollars.
3. Labeling of Unmanned Aircraft
    Summary: Because a small UAS could be qualified to conduct more
than one category of operations over people, this rule requires
manufacturers to label small unmanned aircraft with each category of
operations the small UAS is eligible to conduct. For example, a small
UAS that is eligible to conduct both Category 2 and Category 3
operations would be labeled with both categories, 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: There are two purposes for the label. For the remote pilot,
the purpose of the label is to list the categories of operations over
people the small UAS is eligible to conduct, as indicated on the
manufacturer's declaration of compliance. The other purpose of the
label is for the FAA and law enforcement agencies to determine whether
an operation is consistent with the requirements of the regulation. The
labeling requirement will help remote pilots know what category of
operations their small unmanned aircraft is eligible to conduct, and
what technical and operational limitations apply to the operations. The
labeling requirement will also assist the FAA in its oversight role
because labeling provides an efficient means for an inspector to
evaluate whether an operation is consistent with the category or
categories of operation the small unmanned aircraft may conduct.
Because Category 3 operations entail unique operating limitations, the
label on small unmanned aircraft eligible to conduct Category 3
operations will indicate to remote pilots that they must

adhere to the applicable operating limitations.\118\
---------------------------------------------------------------------------

    \118\ The labeling requirement 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 aeronautical knowledge testing and recurrent training
implemented after the effective date of this final rule would
include operations over people as a subject area on both the test
and training.
---------------------------------------------------------------------------

    Estimated Annual Burden: The table below shows the annual
information collection burden in hours.

                       Table 8--Three-Year Burden Estimates for Labeling Unmanned Aircraft
                                                   [In hours]
----------------------------------------------------------------------------------------------------------------
                                                                     Number of       Hours per
                              Year                                   platforms       redesign      Hourly burden
----------------------------------------------------------------------------------------------------------------
1...............................................................              31               2              62
2...............................................................               8               2              16
3...............................................................               8               2              16
                                                                 -----------------------------------------------
    Total.......................................................  ..............  ..............              94
----------------------------------------------------------------------------------------------------------------

    The FAA assumes that manufacturers will redesign labels already
affixed to the unmanned aircraft, and that the label redesign and
redesign approval will take a maximum of two hours at an hourly wage of
$96.92, for an annual cost of $6,009 in year 1 and $1,551 in each of
years 2 and 3. Over the 3-year analysis period, the total cost is
approximately $9,110 in 2020 dollars.
4. Maintenance Records
    Summary: Owners of small UAS issued an airworthiness certificate
under part 21 must retain records of all maintenance performed on their
aircraft and records documenting the status of life-limited parts,
compliance with airworthiness directives, and inspection status of the
aircraft. The records must be kept for the time specified in Sec.
107.140, and they must be available to the FAA and law enforcement
personnel upon request.
    Use: These records will be used to validate that the aircraft has
been maintained in a manner that assures that it remains in a condition
eligible to be operated over people in accordance with Category 4.
    Estimated Annual Burden: The table below shows the annual
information collection burden in hours.

               Table 9--Three-Year Burden Estimates for Recordkeeping Associated With Maintenance
----------------------------------------------------------------------------------------------------------------
                                                              Number of    Affected small    Hourly burden (0.5
                           Year                              respondents         UAS           per small UAS)
----------------------------------------------------------------------------------------------------------------
1........................................................               1             100                     50
2........................................................               2             200                    100
3........................................................               3             300                    150
                                                          ------------------------------------------------------
    Total................................................  ..............  ..............                    300
----------------------------------------------------------------------------------------------------------------
Rows and Columns may not sum to total due to rounding.

    The FAA expects remote pilots will engage in maintenance record
upkeep and documentation. The fully-burdened hourly wage for a remote
pilot is estimated to be $47.66.\119\ Multiplying the total combined
hourly burden of 300 hours by the fully burdened hourly wage of $47.66
yields a total cost of approximately $14,298 in 2020 dollars for the
three year period.
---------------------------------------------------------------------------

    \119\ SeAverage is based on information found at https://www.thedroneu.com/blog/part-107-faq-drone-license/. Accessed 6/17/
2020.
---------------------------------------------------------------------------

    The FAA will publish separate notice in the Federal Register
seeking comment regarding this new information collection.

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 ICAO
Standards and Recommended Practices to the maximum extent practicable.
The FAA has reviewed the corresponding ICAO Standards and Recommended