Today, the Federal Aviation Administration (“FAA”) announced the finalization of its long-awaited Final Rule governing routine commercial operation of unmanned aircraft systems weighing 55 lbs. or less.  The new 14 C.F.R. Part 107 will become effective 60 days from the date of its publication in the Federal Register, which is likely to happen this week or next.

Below is an explanation of how the new Part 107 will affect entities that have already received a Section 333 exemption, followed by a summary of the new operational requirements and restrictions:
 
Section 333 Exemption Holders Get Best of Both Worlds: “Grandfathered” Compliance Status and the Option to Take Advantage of the New Rules
 
In the Final Rule, the FAA was careful to protect Section 333 exempt entities from the burden of complying with an additional layer of regulations.  Instead, Section 333 exemption holders will be “grandfathered” into compliance, as explained by the FAA below:
 
“The FAA clarifies that current section 333 exemptions that apply to small UAS are excluded from part 107. The FAA has already considered each of these individual operations when it considered their section 333 exemption requests and concluded that these operations do not pose a safety or national security risk.
 
The FAA recognizes, however, that there may be certain instances where part 107 is less restrictive than a section 333 exemption. Therefore, under this rule, a section 333 exemption holder may choose to operate in accordance with part 107 instead of operating under the section 333 exemption. This approach will provide section 333 exemption holders time to obtain a remote pilot certificate and transition to part 107. Operations that would not otherwise fall under part 107 may not take advantage of this option. For example, an operation with a section 333 exemption that does not fall under part 107, such as an operation of a UAS weighing more than 55 pounds, would not have the option of operating in accordance with part 107 rather than with its section 333 exemption.
 
Additionally, when section 333 exemptions come up for renewal, the FAA will consider whether renewal is necessary for those exemptions whose operations are within the operational scope of part 107, which also includes those operations that qualify for a waiver under part 107. The purpose of part 107 is to continue the FAA’s process of integrating UAS into the NAS. If a section 333 exemption is within the operational scope of part 107, there may be no need for the agency to renew an exemption under section 333. Because the FAA’s renewal considerations will be tied to the outstanding section 333 exemptions’ expiration dates, a 3-year transition period is not necessary. This will not affect those section 333 exemptions that are outside of the operational scope of part 107 or where a part 107 waiver would not be considered.”  
(Final Rule, Pages 83-84.)
 
Thus, for Section 333 exemption holders, the result is the best of both worlds.  On the one hand, Section 333 exempt entities are not required to modify their current commercial drone operations to comply with the new regulations.  On the other hand, if a Section 333 exempt entity identifies an opportunity to perform certain operations under less stringent restrictions promulgated in the new Part 107, it may “choose to operate in accordance with part 107 instead of operating under the section 333 exemption.”
 
Here is the FAA’s Summary of the new operational limitations, Pilot in Command and certification responsibilities, and aircraft requirements:
 
 


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On March 17, 2016, the Commerce, Science and Transportation Committee of the United States Senate approved amendments to the most recent funding legislation for the Federal Aviation Administration (“FAA”), the FAA Reauthorization Act of 2016, that, among other things, appear to preempt to preempt local and state efforts to regulate the operation of unmanned aircraft systems (“UAS” or “drones”).  

Federal preemption is the displacement of state and local laws which seek to govern some aspect of a responsibility that Congress views as assigned by the Constitution exclusively to the federal government.  Preemption by statute is not uncommon in legislation dealing with transportation, and its relationship to interstate commerce.  For example, the Airline Deregulation Act of 1978, 49 U.S.C. § 41713, specifically “preempts” local attempts to control “prices, routes and service” of commercial air carriers by local operators or jurisdictions.  Similarly, the Airport Noise and Capacity Act of 1990, 49 U.S.C. § 47521, et seq. (“ANCA”) preempts local efforts to establish airport noise or access restrictions.  The Senate’s current amendments, however, appear, at the same time, broader in scope, and more constrained by exceptions than previous legislative efforts.  They also hit closer to home for the average American concerned about the impact on daily life of the proliferation of UAS for all uses, including, but not limited to, the delivery of packages.  
 


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