BILL ANALYSIS Ó AB 2724 Page 1 ASSEMBLY THIRD READING AB 2724 (Gatto) As Amended May 5, 2016 Majority vote ------------------------------------------------------------------ |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+----------------------+--------------------| |Privacy |10-0 |Chau, Wilk, Calderon, | | | | |Chang, Cooper, | | | | |Dababneh, Gatto, | | | | |Gordon, Low, Olsen | | | | | | | | | | | | ------------------------------------------------------------------ SUMMARY: Requires unmanned aircraft system (UAS) makers to provide safety and registration disclosures with the UAS at the point of sale, requires certain UAS to be outfitted with a "geofencing" feature, and requires UAS owners to have adequate liability insurance. Specifically, this bill: 1)Establishes the Drone Registration Omnibus Negligence Prevention Enactment (DRONE) Act. 2)Requires UAS sold in California to include in the product packaging the following information: AB 2724 Page 2 a) A copy of Federal Aviation Administration (FAA) UAS safety regulations; and b) A notice that the UAS must be registered with the FAA. 3)Requires a UAS equipped with global positioning satellite (GPS) mapping capabilities to be equipped with geofencing technological capabilities that prohibit the UAS from flying within five miles of an airport. 4)Requires the owner of a UAS to have adequate insurance against liability, including coverage for potential damages for personal bodily injuries and death, and for property damage, resulting from the operation of the UAS. 5)Contains a severability clause and exempts commercial UAS operators if they are operating under FAA permission. FISCAL EFFECT: None. This bill has been keyed non-fiscal by the Legislative Counsel. COMMENTS: 1)Purpose of this bill. This bill seeks to reduce the risk of accidents posed by UAS accidents by requiring UAS product packaging to include information about federal UAS regulations and registration, requiring UAS owners to obtain liability insurance in case of a UAS accident, and requiring UAS with GPS units to contain a geofencing function to keep UAS from flying within five miles of an airport. This bill is author-sponsored. 2)Proliferation of recreational UAS and new FAA registration rules. UAS are widely available to the public. Retail UAS devices outfitted with cameras now range from roughly $300 to AB 2724 Page 3 $1,500. The FAA estimates that nearly one million UAS were sold during the December 2015 holiday season. In anticipation of the influx of UAS in the skies, the FAA issued new rules in 2015 requiring any UAS weighing between half a pound and 55 pounds to be registered with the FAA by February 19, 2016. The new FAA registration rules apply only to "model aircraft," i.e., recreational UAS. The FAA's Aerospace Forecast report projects that the number of UAS in the U.S. will increase from 2.5 million in 2016 to 7 million in 2020 (4.3 million hobbyist and 2.7 million commercial). 3)About geofencing technology. Given the increase in numbers of UAS and reports of crashes and near misses, the technology is developing to prevent drones from flying into unauthorized areas. This technology, known as "geofencing," utilizes GPS and other technologies to impose geographical limits on drone movement. By default, a drone will not fly into "geofenced" areas - it will simply stop and hover at the boundary. The technology has the potential to prevent drones from flying into areas such as airport runways, government properties, and in the vicinity of natural disasters. Requiring geofencing technology for GPS-enabled UAS sold in California would likely pose additional design and licensing costs for UAS makers. However, California-specific environmental and safety standards are neither unique nor insurmountable, as the auto industry meets state-specified emissions standards in order to sell cars in this state. 4)Liability insurance requirement. This bill requires all owners of recreational UAS to procure "adequate protection against liability" to cover damages for personal injury and death and for property damage that may result from a UAS accident. In practice, UAS owners would either have to ensure that their current homeowner's insurance policies would cover a UAS accident, or obtain supplemental insurance to cover potential personal injury and damages that may be caused by operating their UAS. However, the question of how much AB 2724 Page 4 protection is "adequate" remains open. 5)Forthcoming FAA regulation of commercial UAS. In 2012, Congress passed the FAA Modernization and Reform Act of 2012 which required the FAA to establish a framework for safely integrating commercial UAS into the national airspace no later than September 30, 2015, and authorized the FAA to establish interim requirements for the commercial operation of UAS. Under the interim rules, UAS operators must meet certain standards and apply for a commercial use exemption and an FAA Certificate of Authorization (COA) in order to operate in in "navigable airspace," which is generally above 500 feet. This bill would exempt from its provisions any UAS flown pursuant to a COA issued by the FAA or future FAA regulations. 6)The federal preemption issue. Once the FAA has finished promulgating regulations governing the commercial deployment of UAS, which is expected to occur in the next two years, a future court may find that those federal regulations preempt certain state laws, or parts thereof - such as this one, if passed - but much remains uncertain. This bill contains a severability provision, so that if one section is preempted the other sections remain in force. Analysis Prepared by: Jennie Bretschneider / P. & C.P. / (916) 319-2200 FN: 0002878 AB 2724 Page 5