Using A Drone For Business? Here’s What You Need To Know Under FAA’s New Drone Regulations

by Tara Kalar – Associate Legal Counsel – MnDOT Office of Chief Counsel
and Jonathan Estes – Aviation Policy Analyst – MnDOT Office of Aeronautics
Published in Midwest Flyer – Oct/Nov 2016

If you are an aerial applicator, aerial photographer, or just someone who bought a drone, you might be wondering how to incorporate a drone into your business model now that the Federal Aviation Administration (FAA) has made its first attempt at regulating drones. As of August 29, 2016, commercial drone operations are regulated under Part 107 of the Federal Aviation Regulations (FARs), freeing many operators from the Section 333 exemption process that, for most commercial operators, took months to complete.

Part 107 is ushering in a new era of innovation. The FAA was mandated by Congress in the FAA Modernization and Reform Act of 2012 to safely integrate drones into the National Airspace System (NAS). The FAA’s focus in rolling out Part 107 is safety. Department of Transportation Secretary Anthony Foxx reiterated the role of Part 107 as, “part of an effort to strike the right balance between safety and innovation as we undergo one of the most dramatic periods in the history of transportation.”

The commercial drone industry has the potential to generate over $82 billion in the U.S. economy and by 2025 could be supporting as many as 100,000 new jobs. The FAA is estimating that as many as 600,000 new commercial drone businesses will crop up within the first year of the Part 107 effective date.

• If you are considering using a drone for commercial purposes, Part 107 requires an operator to take an aeronautical knowledge test in order to become a Remote Pilot. To qualify for the test, you must be:
• At least 16 years old.
• Able to read, speak, write and understand English.
• A U.S. Citizen.
• In physical and mental condition to operate a small UAS.
• Able to pass a TSA background check.

However, starting a commercial drone business is not as easy as passing the Remote Pilot test. There are many additional considerations that factor into the decision to use a drone in your business:

STATE REQUIREMENTS: After passing the test, you are required to register your drone with the FAA and the state, if applicable. In Minnesota, aircraft registration is required by state law and is generally a $100 annual registration tax. You may also require a commercial operations license under Minnesota State law if you are operating for a profit. Aircraft insurance is required in Minnesota, as well.

SAFETY: First, consider how you would like to use the drone. If the problem you are attempting to solve requires flying the drone at night, over crowds of people, or beyond your visual line of sight, it may be difficult to operate under Part 107 and your operation may require a waiver. A prudent operator would outline a safety plan prior to undertaking the operation.

LOCATION: The FAA continues to restrict the areas that can be flown under Part 107. You are required to give notice to any airports and air traffic control, including hospital heliports and seaplane bases, located within a five-mile radius of your operation. In Minnesota, there are over 135 listed airports, leaving very small pockets where notification is not required. The FAA has produced an app called “B4UFLY” that helps users visualize their location in relation to airports and identify any flight restrictions. Airport operators can object to the operation if the activity would endanger the safety of the airspace. However, an airport operator objection would not restrict the operation, but it could be held against the drone operator if something were to happen.

There are two other notable restrictions that could put a wrench in your commercial drone plans. The FAA restricts flights within three (3) miles of stadiums that hold more than 30,000 people. The restriction takes effect one hour before the scheduled sporting event and concludes one hour after the event. Also, the National Park Service prohibits drones from launching, landing or operating within its bounds.

RISK: Minnesota State law provides for strict liability over any operation that causes injury or damage to persons or property. That means that an aggrieved party would only need to prove that you were operating the aircraft to prove that you were at fault in a civil case, regardless of intent. State law may also prohibit your actions if you attempt to do something that is otherwise illegal, like spying on your neighbor, trespassing, nuisance, or operating carelessly.

Part 107 requires an operator to self-report accidents within 10 days that cause more than $500 of property damage or result in serious bodily injury. In addition, the FAA has hefty fines associated with non-compliance, in some cases as high as $250,000 and/or three years in prison. Given the risk associated with operating commercial drones, it may be wise to assess the risk and test the waters before diving in.

Minnesota is unique in that state law requires proof of insurance on aircraft. This requirement cannot be satisfied by homeowner’s insurance and drones are not generally covered in a standard aircraft policy. Some risk can be managed by having a good insurance policy and knowing what is covered. Regardless of where you come out when you assess all the factors of a commercial drone business, all commercial operations under Part 107 follow the same operating rules:

• Operate in Class G airspace.
• Must keep drone in Visual Line of Sight.
• Must fly during the day.
• Must fly at or below 100 mph.
• Must fly at or below 400 feet.
• Must yield right of way to manned aircraft.
• Must NOT fly over people.
• Must NOT fly from a moving vehicle.

Waivers from these operating rules are available, however, flights that deviate from the standard are not exempt from liability if something goes wrong with the operation. There are countless benefits to using drones in business and their use will continue to grow. The new FAA rules will help spur that growth by providing a much simpler process for flying commercial drones legally and safely. This is an exciting time in which thousands of drones will take to the skies. If you are contemplating using a drone for your business, remember to get any registrations and licenses necessary, follow the Part 107 rules, and above all have fun flying!

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This entry was posted in Columns, Columns, MN Aeronautics Bulletin, Oct/Nov 2016 and tagged , , , , , , , . Bookmark the permalink.

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