BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2724


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          GOVERNOR'S VETO


          AB  
          2724 (Gatto)


          As Enrolled  September 9, 2016


          2/3 vote


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          |ASSEMBLY:  |54-17 |(June 2, 2016) |SENATE: |25-13 |(August 24,      |
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          |ASSEMBLY:  |47-24 |(August 30,    |        |      |                 |
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          Original Committee Reference:  P. & C.P.


          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 that prevents operation within any area  
          prohibited by local, state, or federal law, and requires UAS  
          owners to have adequate liability insurance on January 1, 2020.   








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          The Senate amendments: 


          1)Specify that the safety and registration disclosures required  
            by the bill must include a link to the Federal Aviation  
            Administration (FAA) Web site containing the FAA safety  
            regulations or best practices applicable to UAS, instead of a  
            physical copy.
          2)Specify that UAS with geofencing features are prohibited from  
            flying within any area prohibited by local, state, or federal  
            law, instead of within five miles of an airport. 


          3)Require the Department of Insurance, in consultation with the  
            Department of Transportation (Caltrans), to set the amount of  
            liability protection that is considered adequate under this  
            bill. 


          4)Limit the January 1, 2020, operative date of this bill to  
            apply only to the provision requiring adequate protection  
            against liability. 


          5)Make other technical and nonsubstantive changes to the bill.


          EXISTING LAW:  


          1)Vests the FAA with the authority to regulate airspace use,  
            management and efficiency, air traffic control, safety,  
            navigational facilities, and aircraft noise.  (49 United  
            States Code (U.S.C.) Sections 40103, 44502, and 44701-44735)  










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           2)Requires, under the FAA Modernization and Reform Act of 2012,  
            the FAA to safely integrate UAS operation into the national  
            airspace system by September 30, 2015, and to develop and  
            implement certification requirements for the operation of UAS  
            in the national airspace system.  (Public Law Number 112-095)  


           3)Requires, under FAA rules, as of February 19, 2016, federal  
            registration of a UAS before first flight outdoors, for any  
            UAS weighing more than 0.55 pounds (250 grams) and less than  
            55 pounds (approximately 25 kilos), including payloads such as  
            on-board cameras, and requires UAS owners to be at least 13  
            years old to register and to provide name, home address, and  
            email address.  Upon registration, UAS owners receive a  
            Certificate of Aircraft Registration/Proof of Ownership along  
            with a unique identification number, which must be marked or  
            affixed to the UAS.  (14 Code of Federal Regulations (CFR)  
            Parts 1, 45, 47, 48, 91, and 375)  


           FISCAL EFFECT:  According to the Senate Appropriations Committee  
          analysis of a prior version of this bill, unknown Caltrans  
          costs, potentially in the range of $150,000 over several fiscal  
          years, to the extent Caltrans adopts regulations to establish  
          liability insurance requirements.  (State Highway Account or  
          Aeronautics Account) 


          COMMENTS:  This bill requires drones equipped with GPS (global  
          positioning system) to also be equipped with geofencing  
          technology that would prevent their operation in prohibited  
          areas.  It would also require, beginning January 1, 2020, that  
          drone operators have adequate protection against liability, with  
          the Department of Insurance being tasked with defining what  
          level of liability insurance would be "adequate". 


          Given the increase in the number of UAS and reports of crashes  
          and near misses, technology known as "geofencing" is being  








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          developed to prevent drones from flying into unauthorized areas.  
           Geofencing utilizes GPS and other technologies to impose  
          geographical limits on drone movement.  With geofencing  
          technology installed, a drone will, by default, not fly into  
          geofenced areas; it will simply stop and hover at the boundary.   
          Geofencing technology has the potential to prevent drones from  
          flying into areas such as airport runways, government  
          properties, and in the vicinity of natural disasters. 


          GOVERNOR'S VETO MESSAGE:


          I am returning Assembly Bill 2724 without my signature.


          This bill mandates that drone hobbyists be covered by adequate  
          liability insurance when operating drones and requires drone  
          manufacturers to install "geo-fencing" software on drones that  
          are equipped with global positioning satellite technology.


          This bill creates significant regulatory confusion by creating a  
          patchwork of federal, state, and local restrictions on airspace.  
           Moreover, the Federal Aviation Administration will likely  
          assert federal preemption on the bill's "geo-fencing"  
          requirements.  I believe it's more prudent to explore a more  
          comprehensive approach that takes into account federal  
          regulations on this subject.  Piecemeal is not the way to go.




          Analysis Prepared by:                                             
                          Jennie Bretschneider / P. & C.P. / (916)  
                          319-2200                                         
          FN: 0005126










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