I'm pretty new to droning, but have managed to take some excellent videos, particularly on my friends ranch.  Long story short, my kids' school PTO noticed and asked me to use it to get footage of one of their events.  There's no money involved, just me getting to use my toy, and them getting cool shots for their facebook page.  I'm concerned about liability and if it's even legal to be "hired out" even though it's free.  The PTO has liability insurance for events and the runners (it's a "color run") sign a release, I'm just looking into whether or not I'm included in that as an amateur "pilot" helping out with the event.  

Any insights?  Am I over thinking it?  Under thinking it?

Here in Canada, if you're using it for any kind of commercial use (even for no money) you need insurance and a license.

TJ10 Posted at 2016-4-26 18:52
Here in Canada, if you're using it for any kind of commercial use (even for no money) you need insur ...

That's my concern.  I think it'd be fine, it's all friendly and they know me personally.  I'm just worried about that "worst case" scenario.

mattschaefer Posted at 2016-4-26 20:55
That's my concern.  I think it'd be fine, it's all friendly and they know me personally.  I'm just ...

If you know them all and they have insurance, I'd go for it. Just think safety first. Don't fly over anybody and put them at risk. That's the only concern you really have. If it falls on their building/property, I'm sure it won't be the end of the world as they know you. I'd keep a good distance from any people though at all times, so that if it does fall, it won't hit anyone

TJ10 Posted at 2016-4-26 19:09
If you know them all and they have insurance, I'd go for it. Just think safety first. Don't fly ov ...

Good call.  I won't know every participant (it's a fundraiser), and I'll be on public grounds.  I almost think staying separate as a "spectator" might be better than being officially involved.

mattschaefer Posted at 2016-4-26 21:21
Good call.  I won't know every participant (it's a fundraiser), and I'll be on public grounds.  I  ...

I'd try and stay out of sight in that case so you don't draw attention to yourself. All it takes is one grumpy mom to stir the pot. Hide behind a tree or something lol

TJ10 Posted at 2016-4-26 19:29
I'd try and stay out of sight in that case so you don't draw attention to yourself. All it takes i ...

IT's a 5k run, I can stay inconspicuous.  Ha!

The worst place to get legal advice is on a user forum. If you want legal advice perhaps you should consult a legal professional. The advice that you are likely to get here is worth about as much as you paid for it.

"... I'm just looking into whether or not I'm included in that as an amateur "pilot" helping out with the event..."

***************

It really isn't a gray area.  In all honesty, with the scenario that you cite, you would indeed be acting in a commercial capacity *even* if you are not accepting payment therefore.  The FAA requires anyone acting in a commercial capacity while operating a UAS to possess a pilot certificate, a *commercial* registration number (an "N..." number) for the UAS and a Section 333 exemption for the aircraft as well.

Will the Earth stop spinning if you are not caught or if nothing eventful happens?  No.  But should something happen as a consequence, indirectly or directly, of your operating the UAS, then both you and the entity for whom you are supplying services would be both culpable and potentially exposed (in the sense of liability).  In that case, your homeowner's insurance and/or your AMA insurance, certainly, would be useless and both organizations would disavow any fiduciary responsibility.  But in reality, a star will not go supernova somewhere because of it...

... unless something happens ;) .

http://abcnews.go.com/Internatio ... d/story?id=38253589

http://www.latimes.com/local/lan ... 20150916-story.html

http://ktla.com/2015/09/15/toddl ... on-pasadena-street/

Well I see this as 'hobby proposes' and in this case authorization or licence is not required according to your FAA.  For gain or reward would be commercial use.  As a fairly new guy to the use of these aerial platforms, I would suggest getting a good few flights in to practice and do a good survey of the route to pick out the best and safest areas to work from.  Ensure you don't attract a crowd around you when operating and certainly don't have anyone near with mobile phones - maybe have an assistant to help keep people away.  They must tell anyone who comes close not to distract or interfer with the operator.  
As for the news clips in the previous posting they are always exaggerated, two are of the same incident and it looks like some idiot flying over people and in a busy street situation, possibly with buildings around, cross draft and mobile phones etc.  The first clip looks like it could be a very small machine (going by the reflection of a person inside) of the FPV type or toytown model according to the size of whole.
I would do my homework and enjoy the day.  When I go to events I always follow the above, stay well back from people,  get up there, do the job and get down.

mattschaefer Posted at 2016-4-26 14:55
That's my concern.  I think it'd be fine, it's all friendly and they know me personally.  I'm just ...

Aloha matt,

     You note that you are a member of the community putting on the community event.  If you are acting in the capacity of a community member similar to providing a pot luck dinner contribution, then you are not providing a commercial service any more than providing a pot luck serving requires that you have a restaurant license and a department of health clearance.  This is a community service contribution and not commercial.  I do it all the time over here and even had the managing director of Honolulu (like a vice-mayor) view my video in lieu of a site visit for a road collapse repair project the community was taking on.  Community service is not commercial service, but if you are not a member of the community, you could have a problem with donating video.  I hope this puts you at ease.

Aloha and Drone On!

CaptRuss Posted at 2016-4-27 00:46
"... I'm just looking into whether or not I'm included in that as an amateur "pilot" helping out wit ...

I think CaptRuss hit is on the head.

I am a firm believer in CYA. There are plenty of things you can "get away with" and this is probably one of them. If something goes wrong, however, you are out of luck.

This is a commercial project. You are shooting for an organization for a commercial purpose. Not-for-profit doesn't matter. It is technically a commercial project. No gray area at all. Many people are mistakenly under the impression that a not-for-profit corporation is somehow not considered a buisness under the law.

If you are flying commercial without the FAA exception, you are not "legal" and any organization insurance will not cover your actions. Same for homeowner's. You and the organization can fight them in court - good luck with that. You will be on your own.

In all likelihood, everything will be fine and you will have no problems. You have to decide how much you are afraid of the one in one million chance of something going very wrong.

jrm11 Posted at 2016-4-27 14:54
I think CaptRuss hit is on the head.

I am a firm believer in CYA. There are plenty of things you c ...

Aloha jrm11,

     Sorry, but you and CaptRuss are not looking at the legal issues involved.  You are only looking at matt's question as some sort of FAA doctrine.  Well, that doctrine does not exist.  First off, the FAA regulations do not define commercial flight services, they only say what is required of commercial flight services.  There is a big difference.  

     The PTO has liability insurance, so liability is covered for the event and since the PTO asked matt to use his camera to photograph the community event, his actions are covered by their liability insurance just as if he was asked to bring food for a pot luck or some other event related item.  The FAA has no interest in your actions supporting the community other than that you fly safely and follow the current airspace regulations.  The FAA is only interested in commercial issues as defined elsewhere, not community issues.

     So many drone operators are freaking out about suddenly having to follow regulations they are getting the heebie-jeebies.  Just chill.  The current regulations are way more strict than the proposed rulemaking, but both only say what you have to do to operate commercially and otherwise manage the airspace equitably.  One of the cases recently prosecuted in the current regulatory regime was a non-exempt operator flying commercially.  But the commercial definition used to win the case came from outside the FAA regulations - and the guy was obviously operating a business and he was pushing it.

     Attached is a copy of the proposed rulemaking.  Read it and you will feel a lot better about the future of flying.

Aloha and Drone On!

Cetaman Posted at 2016-4-28 07:11
Aloha jrm11,

     Sorry, but you and CaptRuss are not looking at the legal issues involved.  You  ...

"... Sorry, but you and CaptRuss are not looking at the legal issues involved..."

******************************

That is incorrect.  The [FAA's] definition of commercial operation is demonstrated precisely through settled *case law*.

The FAA has consistently defined commercial operation in terms of whether the operator receives direct or indirect payment for the operation. It is *not necessary* that the operation be conducted for profit or even that there be any intent or ability to make a profit. The compensation is not just limited to monetary payments but includes *anything* of value.

This broad definition of compensation has been affirmed and adopted by both the NTSB and the federal courts. Administrator v. Roundtree, 2 NTSB 1712 (1975); Administrator v. Mims, NTSB Order No. EA-3284, review denied 988 F.2d 1380; Consolidated Flower Shipments, Inc., Bay Area, 16 C.A.B. 804 (1953), aff'd. 213 F.2d 814 (2nd Cir. 1954).

In short, the question becomes "Are you doing it for yourself or *for* someone else for some other purpose that is not your own [hobby & recreational use]?"  In other words, are you doing it for hire... even if payment is a simple "Hey, thanks a lot, bud!"?

But as I have stated within other threads in this forum- hey, go for it... do as you wish.  If the one-in-a-million stroke of bad luck befalls you and/or your UAS, best of luck in court and with your dealings with your insurance companies ;) .

________________________________

"... The PTO has liability insurance, so liability is covered for the event and since the PTO asked matt to use his camera to photograph the community event, his actions are covered by their liability insurance just as if he was asked to bring food for a pot luck or some other event related item..."

*****************************

That would all be true if the PTO secured the services of a *qualified* operator.  Matt may indeed be the UAS equivalent of Sean Tucker and he may be able to pilot the vehicle through a keyhole from a distance of a mile away while blindfolded (another violation lol), but he is not legally qualified per FAA mandates [for several reasons (pilot certificate, commercial UAS registration, Section 333 exemption)].  You do not need to be specially qualified & certificated to bring hot-dogs and marshmallows to the event.  The PTO's insurance companies will make Usain Bolt seem like a tortoise as they dash away from any claims the PTO may need to file ;) .

Using the quad to inspect your next-door brother-in-law's chimney for him to see if its base needs to be re-flashed with new copper is one thing.  Aerial video-recording a community/public event for contribution to that event, certainly on public property (but even if not as well), is something entirely different.

At the end of the day, it is not about whether the operator will be sent to solitary confinement at the Supermax Prison in Colorado for 20 years.  They won't.  It is not even about whether the operator will be fined $25,000.  They probably won't either (they might be fined some smaller amount though).  It is about whether or not all participants, which often include  insurance companies seeking *any* justification for refusing to settle liability claims involving parties claiming damages, have the legal basis to successfully defend their position.  Your argument is that the operator's attorney does and the insurance company's team of attorneys does not.  Well, that may or may not always be so.  I wouldn't want to bet my house on it though ;) .

But... do what you think is right ;) .

CaptRuss Posted at 2016-4-28 02:34
"... Sorry, but you and CaptRuss are not looking at the legal issues involved..."

*************** ...

Aloha CaptRuss,

     Your responses are missing the point.  This is not about the FAA regulations of which you are well versed, but about legal issues.  The regulations state that a non-commercial operator is one who uses their drone for "personal use".  Personal use is the legal issue and it is almost always missed except by those who are intrigued by legal issues.  

     As a non-commercial operator, can I fly a drone and record video for my company (an LLC) as long as I do not use the video as part of a commercial transaction with any customer?  I only use it to document my company's resources and procedures.  For example, I use it as an aid to inspections of some sort.  My business decisions are partially based on that drone video inspection.

     The answer is yes.  If you think no, then you do not understand the legal issues involved.  In fact, my friend is the designated drone operator for a leading edge engineering company here in Hawai'i and he is not certified as a commercial operator (Section 333 exemption).  One of the principals in the company is an attorney.

     The legal issues revolve around, "What is a person?"  Under the law, my LLC (Limited Liability Corporation) is a person, as is any commercial vessel on the ocean.  My company has a drone for personal use.  Interesting huh?

     Now, we have matt's situation.  He is a member of the PTO and the PTO has liability insurance.  From that information we can assume that the PTO is probably incorporated [as a 501c (3)?] because otherwise they could not get the insurance.  As a member of the PTO corporate body, matt is using the drone for personal use.  The insurance company can only evaluate matt's competence to fly the drone under current FAA regulations and they say that it is fine for him to fly for personal use, no need for certification.  The PTO has also evaluated and decided on matt's competence by viewing his previous videos and asking him to do the proposed video.  Therefore, the CEO and Directors of the PTO are comfortable with matt as a drone operator and with mention of the liability insurance, he is covered as a member of the PTO body.  The insurance coverage is more to make matt comfortable than the PTO comfortable (since they already seem to be).

     The result is really quite simple once you understand the legal issues.  So many on this forum tie themselves up with confusion and listen to and repeat things that do not apply.  There are certain things that the FAA has jurisdiction over and we need to understand what those regulations are.  The rest are basic legal issues.  In fact the proposed rulemaking, attached earlier, mentions that the micro drone commercial operators will self-certify by signing off on a statement that they understand the applicable rules.  So, we really need to understand them.  The nice thing about the proposed rulemaking is that commercial certification for micro drone operators (P3s) should only cost and estimated $214.  And that is in the attachment in my earlier post.

Aloha and Drone On!

mattschaefer Posted at 2016-4-26 16:45
IT's a 5k run, I can stay inconspicuous.  Ha!

Aloha matt,

     Please review the legal information below responding to CaptRuss that clears you to fly for your PTO.  It will always be your decision, but the current legal state of affairs is outlined below.

Aloha and Drone On!

Cetaman Posted at 2016-4-28 19:08
Aloha CaptRuss,

     Your responses are missing the point.  This is not about the FAA regulations ...

"... my friend is the designated drone operator for a leading edge engineering company here in Hawai'i and he is not certified as a commercial operator (Section 333 exemption)..."

****************************************

Firstly, thank you for an interesting, civil and spirited discussion!

With regard to your point quoted above, the person with their hands on the sticks need not be the entity in possession of the Section 333 exemption for their aircraft. I have never argued otherwise.  They merely need to possess a pilot certificate of some sort ("Sport Pilot" will suffice) themselves.  However. the entity *utilizing the services* of the certificated pilot for commercial purposes (if it is not the pilot himself, and if it is not the pilot acting on his/her own behalf), though, indeed needs to be in possession of the exemption.  That has *always* been my point.  I have never argued otherwise; you need to read my points a bit more carefully & deliberately.  My guess is that Matt, acting as the entire orchestra here, possesses neither the necessary exemption nor pilot certificate, although I may be wrong.  If so, I apologize.  However, my points, which you continue to miss, have consistently and simply been the following... and they have never other:

a) If Matt partakes in this commercial enterprise (see below), and he is the fellow with his fingers on the sticks, then he must be a certificated pilot,

b) If Matt partakes in this commercial enterprise, the UAS which he utilizes must bear a commercial registration number affixed thereto, not simply his personal registration number.  If he has the latter, then that means that two FAA registration numbers would have to be affixed to his aircraft if he also utilizes it for hobby & recreational purposes,

c) If Matt partakes in this commercial enterprise, then either he, his company (perhaps an LLC like your own) or the PTO securing his services must possess the Section 333 exemption.

_____________________________________


"... As a non-commercial operator, can I fly a drone and record video for my company (an LLC) as long as I do not use the video as part of a commercial transaction with any customer?..."

*****************************************

Rather than answer that myself (I, too, have an LLC, and all my ducks are in the process of lining up in a row ;) ), the following extract from the FAA's own Interpretation of the Special Rule for Model Aircraft directly addresses your question as well as those characteristics that define commercial operation:

[4910-13]
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 91
[Docket No. FAA-2014-0396]
Interpretation of the Special Rule for Model Aircraft:

"Not Hobby or Recreation (i.e.: Commercial Operation):

... A person photographing a property **or event** and selling the photos to someone else.

... Determining whether crops need to be watered that are grown as part of commercial farming operation..."

As mentioned in my previous post, "selling" need *not* involve the acceptance of monetary compensation; a simple "Thank you" from that someone else would qualify as payment.  It is the "someone *else*" that is the big deal.

*If* your friend's engineering company possesses the Section 333 exemption, your designated pilot friend employee may record video *for the company* as long as he is a certificated pilot; I never implied that he would not be able to, and I never stated nor implied that compensation therefor was mandatory.  Because it is for a company and not for his own hobby & recreational use, the operation is commercial in nature and, as such, he must be a certificated pilot.  Can your designated pilot friend do so if his engineering company does *not* possess the exemption?  Absolutely, unequivocally no.  Conversely, would *you*, as an uncertificated operator of a UAS, be able legally operate the aircraft while & if *representing your LLC* to record video *for the company*?  Again, absolutely and unequivocally no, because you would be doing it for commercial purposes as cited above (similar to "Determining whether crops need to be watered...").  In that instance, even though your company possesses the necessary exemption, its UAS operator (you!) does not possess the necessary pilot certification.  Can you fly the UAS around to record video for your own personal records? Sure, but you may not do so on behalf of the company or your LLC.  If you are indicating that you, your friend, and your friend's engineering company have indeed all done otherwise, then you are all lucky indeed and are tempting Fate ;).  You state that one of the principals in the engineering company for whom your friend operates the UAS is an attorney; however, I suspect that he is not an aviation attorney.  The above quote, extracted directly from the FAA's own statement speaks to that field of expertise.  There seem to be several folks in this story whom, attorneys or not, are acting on their own behalf in [aviation] fields which are not necessarily their specialty.

Again, my points remain, they are simple, and they are not refuted by any of your terrific points:

* The enterprise is deemed commercial in nature because it is not for "hobby or recreational" purposes (see FAA extracts, above),

* No one either in, representing, or acting on behalf of, the commercial enterprise in which Matt is considering participating possesses the necessary FAA Section 333 exemption for the aircraft,

* The UAS does not possess the necessary commercial registration,

* Matt, if he is the operator of the UAS for the commercial enterprise, does not possess the required pilot certification.

My points have cited specific *existing* references, case law, FAA stipulations and regulatory extracts to support my points.  Your arguments, although eloquently and passionately presented, have not.

In the final analysis, as I am certain that we have both pretty much exhausted the reserves on this one lol, thanks for a great discussion!

*********

Matt:  Even though Cetaman has already unofficially [ ;) ] cleared you for takeoff for this venture, I strongly suggest that you ponder, not just Ceta's impassioned interpretations, but more importantly, the cited references and that you, perhaps, consult someone vastly more qualified than either of us to offer you more expert advice.  In any event, I know that you will decide wisely!

CaptRuss Posted at 2016-4-28 15:24
"... my friend is the designated drone operator for a leading edge engineering company here in Haw ...

Aloha CaptRuss,

     Indeed, this is a spirited discussion.  I enjoy spirited discussions even if I should lose the argument because it is all part of the learning process.  Anyway, the current FAA regulations are not able to override the other regulations and laws of the US and the legal corpus of the US is amazing that way.  That is why it is taking so long to get the new UAV proposed rulemaking completed.  The new rules also have to be fair and equitable in sharing the airspace.

     No one in my friend's company has a 333 Exemption, yet he is completely legal when he flies for the company.  This is also true if matt should fly for the PTO "event" because the corporations they are a part of, and the two would be flying for, are considered persons under the law.  It would be the same as if he shot a drone video of his son or daughter surfing.

Let me ask you directly;

Am I allowed, under the FAA regulations, to fly my camera drone for my own personal benefit and not the benefit of others - as personal use?  This is despite the fact that others may enjoy my personal videos when they are accessed on YouTube.

This is supposed to be a direct question requiring a short answer, but since we are having fun here you can play with that a little.

     Regarding your Special Rule for Model Aircraft, the first part "selling photos" is obvious.  but when I read the second one about commercial farming the first time a few months ago, it struck me as vague and that they have to be talking about a operator going between farms evaluating their crop hydration.  That to would then be obvious.  Your notations about a hand-shake being payment also make perfect sense, especially as contra and bartering are frowned upon because of a lack of transparency and accountability for the government.  So, we really have no issue with each other's points except regarding the one question above.

     Now think about this, if matt is a member of a corporate body, he is inclusive in that body - the PTO.  There is no other entity of the membership, there is only one corporate body.  The CEO, President and Board and the members are all part of the same body.  As noted, matt is also a part of that body and that body is a person under the law or at least that is how the US Supreme Court sees it.  Ask any attorney, they will confirm that legal fact.  It is a legal fact that goes way back to common law.

     Now matt can shoot videos and post them to his facebook page because he is using his camera drone for personal use.  However, matt is also a member of the corporate body of the PTO, a person under the law.  Matt turns over the recorded video to the PTO IT member (another part of the person of the PTO and whether he shakes hands or not is irrelevant but let us just say he does) and that IT member posts the video just like matt does on his fb page but this time it goes on the PTO fb page.  Then that handshake is no different than if you pat yourself on the back for a job well done or shake your own hands like a winner does congratulating himself.  That handshake is not a payment under the law because matt and the IT member are both part of the same person under the law and the video was made for personal use and posted on fb for personal use.  And if a person outside of the PTO looks at the PTO fb page, it is not any different than if they looked at matt's fb page.

     There is nothing unusual about this scenario - except that it is hard to wrap your mind around the concepts.  This is done all the time and has been done for centuries.  It is very old and has stood the test of time.  The current FAA rules and regulations have no issue with this scenario and if you read the new proposed rulemaking for UAVs you will see that the proposed rulemaking also has no issue with this scenario.  If nothing else, it is very interesting.

Aloha and Drone On!

CaptRuss Posted at 2016-4-28 15:24
"... my friend is the designated drone operator for a leading edge engineering company here in Haw ...

Aloha CaptRuss,

     Oh, sorry, I was not done enjoying the discussion.  BTW, my hobby and recreation is making community service drone videos without charge for the benefit of our community (since we are incorporated) and we are all in this together.
     Sadly, the ones who are reading what we write generally do not need to read about our splitting hairs - they are going to fly safe and generally within the regulations.  Matt will make the right decision with the information he has, tempered by what he has read in this thread (probably the others because we write too much).  It is those baboozes out there who do not give a rip that the regulations really address, like that guy who got busted for running a commercial operation illegally.  I sure was glad to hear that the British Airways plane may not have hit a drone though.  Probably a matter of time.

Aloha and Drone On!

Hi mattschaefer, why not decline the invertation from the PTO and use your drone to film YOUR child and his/her friends for your own personal use.
Then once the event has passed safely give whatever footage / pictures that you deem appropriate to the PTO.

HTH

George

CaptRuss Posted at 2016-4-28 15:24
"... my friend is the designated drone operator for a leading edge engineering company here in Haw ...

Aloha CaptRuss,

     Just an update.  I checked some more on the FAA web site and found an interpretive document on Model Aircraft Special Rule.  It looks like we have to split this one.  The table from the interpretation shows matt's problem is a non-issue.  #2 Left Column as per the personal use definition posted earlier allows non-business corporations to claim personal use.  But, my friends work situation is much more tenuous because of a 2008 opinion on business use by the FAA, so I may have to give you that one.  Now I got to tell my friend the news.

     However, because it is an opinion, it has not been tested in court, so it could still be ruled invalid and the historic definitions apply.  But, I should give you that one because this would not have come to a head without you.  Still working on it!

Aloha and Drone On!

Cetaman Posted at 2016-4-29 22:34
Aloha CaptRuss,

     Just an update.  I checked some more on the FAA web site and found an interp ...

"... I checked some more on the FAA web site and found an interpretive document on Model Aircraft Special Rule..."

***************************

Yes, I made mention of that document quite some time ago.  In fact, if you read a bit more deliberately, it is precisely the extract that I quoted above in my Post #17 and that I identified by name (I am glad that you were finally able to find it and read the extract from it that I had posted the other day in my above post):

"...[4910-13]
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 91
[Docket No. FAA-2014-0396]
Interpretation of the Special Rule for Model Aircraft:

Not Hobby or Recreation (i.e.: Commercial Operation):

... A person photographing a property **or event** and selling the photos to someone else.

... Determining whether crops need to be watered that are grown as part of commercial farming operation..."

Because the purpose of Matt's operation of the UAS would not be for his own personal "hobby or recreational" use, it would be commercial in nature.  It's as simple as that.  *Any* commercial operation of a UAS presently requires pilot certification.  Period.  I stated that over and over ad infinitum.  That's why I previously posted the extract that you only just now discovered.  No "splitting" anything.  You are beginning to discover that there are attorneys, and then there are aviation attorneys.  That is why I posted examples of case law that I am particularly acquainted with ;) .  Nonetheless, thanks again for a great discussion; I am finished here.  Blue skies & safe flying to both you and Matt.

CaptRuss Posted at 2016-4-29 20:08
"... I checked some more on the FAA web site and found an interpretive document on Model Aircraft  ...

Aloha CaptRuss,

     See, that is where you get it wrong.  That is the section that says matt is able to use his drone for the community - as in the PTO - for the personal use of the PTO which is a person under the law.  

     If you read the whole document, they address business use and offer an opinion - not law - not court tested - an opinion that can be overturned in court; and state that business use without compensation is still business use.  

"Although they are not commercial operations conducted for compensation or hire, such operations do not qualify as a hobby or recreation flight because of the nexus between the operator’s business and the operation of the aircraft. See, e.g., Legal Interpretation to BSTC Corporation, from Rebecca B. MacPherson, Assistant Chief Counsel for Regulations (June 22, 2009)" (Emphasis Added)

     That is the part I concede to you in theory and just for fun.  My friend may have an issue now because further investigation and decision-making needs to be done by his employer.  Do you take the FAA to court or do you wait until the proposed rulemaking allows my friend to operate the company drone for only $214 for a commercial certificate and self-certification.  Kind of a no-brainer but it will take a year or so for the proposed rulemaking to become enacted.
***********************

     Specifically, "Because the purpose of Matt's operation of the UAS would not be for his own personal "hobby or recreational" use, it would be commercial in nature."

     No one is saying that matt's effort is for his own personal use - it is obviously for the personal use of the PTO.  You need to get your people straight.  (Honest, this is not easy.)  With the above quote, you are determining that what matt wants to do is commercial without any backing from the FAA.  You seem to be making a very difficult legal decision for the FAA and dismissing an entire history of US law that states that corporate use can be personal use and that a non-profit organization like the PTO is not a business and is protected under the law in that respect.  Are you an attorney?  Are you employed by the FAA so you can make such decisions?  On the other hand, I do not have to be employed by anybody to point out facts of law in any venue.  (So, I am not practicing law without a license.)

     In fact of law, matt is a member of a not-for-profit association - the PTO - that is a person under the law.  A non-profit organization is not recognized as a business under the law.  A non profit organization is not a commercial venture, it is non-commercial - non-business.

     You are making a determination that has no basis in fact of law or FAA regulation.  At best, the quotes you use are only interpretations of regulations regarding UAS by the FAA, none of which has been tested in court to see if it is real under the law.  It is hearsay at best and legally should be treated as such.  (However, it is a necessary form of communication with the public to help the public understand Federal regulations.  So confusing.)

     But still, I understand your dedication to this issue and the need to keep it tidy.  But it is not tidy!  And with the volume of air traffic in the National Air Space doubling in just a couple years because of the exponential increase of drones, it will become even less tidy in the future and then issues will finally get to court.

     We need to face reality and understand the issues that will concern us in the future.  The new regulations will have to favor a much broader position on personal use; way more than the present regulations, because the FAA will have to update their opinions from 2009 when personal drones were almost unknown.  Everyone will have camera drones, almost like selfie-sticks.  Personal use will become a hot-button issue in the drone world and we need to understand the law behind it as well as the FAA regulations greeting it.

Aloha and Drone On!

Cetaman Posted at 2016-4-30 05:26
Aloha CaptRuss,

     See, that is where you get it wrong.  That is the section that says matt is a ...

" See, that is where you get it wrong.  That is the section that says matt is able to use his drone for the community - as in the PTO - for the personal use of the PTO which is a person under the law. "

This is the fundamental flaw in your reasoning. An organization such as a PTO is NOT considered a "person" under the law. It is a commercial entity. Except from certain possible tax benefits, it is essentially the same as any other corporation (or LLC, etc. depending on how it was formed).

I am a board member on a few 501 organizations (c3, c4 and c6) and have helped form some of those. We have D&O insurance to protect the directors. We have liability insurance. We have by-laws. We are registered with the government as a commercial entity, even though we a "not for profit."  One of the main reasons to form such an organization is to have commercial liability insurance and limit your personal liability.

Anything done on behalf such an organization is considered  "commercial" under the law. I have worked with enough accountants and lawyers and IRS rulings to be certain on this point.

I agree that the odds of getting caught are low and being prosecuted by the FAA is lower.

However, I have also worked with insurance companies. They do NOT like unnecessary risk, nor do they like activities that fall outside of an organization's scope. A PTO is expected to have a bake sale. It is not expected to conduct UAV operations.

FAA aside, I wouldn't be surprised if an astute underwriter eventually saw the video and questioned the insurance policy - even if nothing goes wrong.

Before you claim "far-fetched" example, I had almost the exact thing happen. I was on the board of a local horseman's organization. Among other activities, they run horse events. One day I received a call from our insurance company. They were browsing our website and saw photos of a horse event. The event included a horse activity which is common, but one they weren't aware of. They threatened to cancel the policy. (It turns out the event in question was run by a different organization that had their own insurance, but that's beside the point).

Cetaman Posted at 2016-4-28 19:08
Aloha CaptRuss,

     Your responses are missing the point.  This is not about the FAA regulations ...

Just to add...

"The legal issues revolve around, "What is a person?"  Under the law, my LLC (Limited Liability Corporation) is a person, as is any commercial vessel on the ocean.  My company has a drone for personal use.  Interesting huh?"

Very interesting. This further proves the point I was making.

Your LLC cannot own something for "personal use." By definition, it is for _company_ use (i.e. commercial use).

When you purchased that drone with company funds, it counted as an "expense." That expense was deducted from your revenue to determine the LLC's tax liability. If the drone was for your personal use and not for corporate use (i.e. commercial) that was a  misuse of company funds.

If it is a legitimate corporate expense, it is commercial. Simple.

If not, why not buy your wife a birthday present with company funds? It would be great if we could make all these "personal" expenditures on the company dime and use it to reduce taxes. That's just not the way it works.

If it is for personal use, the IRS will ding you for it.
If it is for company use, it is commercial and the FAA wants their paperwork.

I can see how your attorney would tell you the LLC is a "person" - in a sense it is because it is a separate legal entity. However, a corporation is a commercial entity.. .it is not a person. Very different rules apply. They are NOT the same thing.

This is an interesting and informative discussion however I tend to Interpret what I've read in favor of Cetamans view.

Capt Russ seems to have contradicted himself in that his main qualifier for a flight being commercial is compensation, and he says " The compensation is not just limited to monetary payments but includes *anything* of value."  

He then goes on to say that in this scenario a simple thanks qualifies as commercial use assuming that a verbal thanks is  "something of value": "In short, the question becomes "Are you doing it for yourself or *for* someone else for some other purpose that is not your own [hobby & recreational use]?"  In other words, are you doing it for hire... even if payment is a simple "Hey, thanks a lot, bud!"?"

I think the personal use table that has been cited pretty clearly shows that the spirit of the regulation hinges around an item of monetary value being exchanged as the words "selling" "fee" and "money" are used in all the commercial examples.  While you and I may place a value on a kind "thanks" intrinsically,   I do not believe that in the spirit of the regulation a simple thanks would take shooting a community event from a personal, to a commercial endeavor.

Just my 2 pennies

Holy cow!  This really blew up.  I sincerely appreciate all the feedback.  It appears that I'm either completely in the clear or completely illegal if I do this.  

My plan is to do it, hope for the best, and rely on the very libertarian attitude of where I live.

mattschaefer Posted at 2016-5-7 17:34
Holy cow!  This really blew up.  I sincerely appreciate all the feedback.  It appears that I'm eithe ...

Aloha matt,

     Sorry, bad time to take a month off.  So how did the shoot go?

Aloha and Drone On!

jrm11 Posted at 2016-5-6 03:29
Just to add...

"The legal issues revolve around, "What is a person?"  Under the law, my LLC (Limit ...

Aloha jrm,

     Sorry, bad time to take a month off.

     The issue here is "personhood".  Yes, a person can engage in "commercial use" and a person can engage in "personal use".  They have different definitions.  You are claiming that an LLC can purchase a ring for your personal use.  This is not true.  You are not the person of the LLC, you are an entity of the LLC.  Therefore, you would be in violation of the IRS code.  The problem is you have not encountered this discussion before and are not prepared for the nuances of the arguments.  Ask your attorney friends.

     Here is how it works.  You are a person.  You can go out and buy tools - for personal use.  When you try to sell the product you have made with your tool, you are now engaging in commerce and it is no longer personal use of the tool.  But, if you use the tools to better your own quality of life - even if that quality of life overflows to a certain degree into the workspace of your job (kind of like a car or a special suit for presentations) - your use of that tool is still personal use.  

     Now, you are a corporation - a person under the law as noted.  Your corporation can go out and buy tools - for personal use.  When your corporation tries to sell the product you have made with your corporate tool, your corporation is now engaging in commerce and it is no longer personal use of the tool.  But, if your corporation uses the tools to better the corporation's quality of life - even if that quality of life overflows to a certain degree into the corporate workspace (kind of like a form of observation or a special communication tool for in-house presentations) - your corporation's use of that tool is still personal use.

     It is really quite simple once you understand the concept of person under the law.  The FAA attorneys are very familiar with the concept and have to evaluate enforcement based on the necessity of the person under the law concept.  The FAA does not have tons of money to waste on court challenges they know they will lose based on time honored legal decisions.  The FAA is very selective in enforcement and only takes on slam-dunk cases.

Aloha and Drone On!

ryan209 Posted at 2016-5-6 04:10
This is an interesting and informative discussion however I tend to Interpret what I've read in favo ...

Aloha ryan,

     Sorry, bad time to take a month off.  Check out the response I made to jrm.  It explains the issue a little better.

Aloha and Drone On!

Cetaman Posted at 2016-6-2 18:58
Aloha jrm,

     Sorry, bad time to take a month off.

I haven't been around in a while either.

"The issue here is "personhood".  Yes, a person can engage in "commercial use" and a person can engage in "personal use".  They have different definitions.  You are claiming that an LLC can purchase a ring for your personal use.  This is not true.  You are not the person of the LLC, you are an entity of the LLC.  Therefore, you would be in violation of the IRS code.  The problem is you have not encountered this discussion before and are not prepared for the nuances of the arguments.  Ask your attorney friends."

Not really an "argument" and I do deal with this issue on a regular basis. You seem to have misunderstood what I wrote. I stated it would be an IRS violation.

"But, if your corporation uses the tools to better the corporation's quality of life - even if that quality of life overflows to a certain degree into the corporate workspace (kind of like a form of observation or a special communication tool for in-house presentations) - your corporation's use of that tool is still personal use."

There is no such thing as "personal use" for a corporate entity. Corporate expenses are deductible. That "communication tool for in-house presentations" was purchased as a "business" expense. There is nothing in the law or tax code relating to a "corporation's quality of life." It is either a legitimate business expense (and deductible) or it is not.

Where "personal" comes in is when actual people are involved. If the purchase is not a legitimate business expense and benefits the individual (i.e. personal), then the value of that item is supposed to be attributed to the person as income.

Example:
A) Trip to St. Thomas for training conference. Business expense. Nothing "personal."
B) Trip to St. Thomas for week on the beach. The company can still pay for and deduct this as a business expense, but the total cost should be attributed to the recipient as taxable income. It is treated as "compensation' and thus a business expense to the corporation.

A corporation is a commercial entity by definition. There is no "personal" from a legal/tax perspective. To turn a phrase, you may want to ask some of your "business owner" or accountant "friends." to clear up the "nuances" for you.

It's been so long that I forgot the original point which brought this all off topic. It seems that the original question revolved around drone video for a PTO. All other things aside, I would still maintain that the PTO is a commercial entity and thus any work done on their behalf qualifies as "commercial" (whether done for "profit" or to enhance the PTO's "quality of life" - whatever that may be. )  CaptRuss was right on point, and made the smart move to move on a while ago.

Is is doubtful that the FAA will come after you for this minor transgression. Technically, it would still be a commercial flight and require the necessary clearances. Everyone is certainly free to ignore, break or bend these rules as they see fit.

Whether the FAA attempts to enforce a rule or if that rule can stand up in court is an entirely different issue.

Best of luck.

Aloha, and arrivederci roma.

jrm11 Posted at 2016-6-21 06:57
I haven't been around in a while either.

"The issue here is "personhood".  Yes, a person can enga ...

Aloha jrm,

     This discussion may be moot now that the sUAS rules have come out, but it still leaves the Phantom class without rules.  (I am starting a new thread on that shortly.)  Anyway;
***
"There is no such thing as "personal use" for a corporate entity. Corporate expenses are deductible. That "communication tool for in-house presentations" was purchased as a "business" expense. There is nothing in the law or tax code relating to a "corporation's quality of life." It is either a legitimate business expense (and deductible) or it is not."

The reason there is no such thing as '"personal use" for a corporate entity' is because the case has not been made in court.  It is a legitimate legal approach.  In this case, the business part of your "business expense" will not apply is the application in court is that the business is a person.  This is a legal gap bridge.  This is how new legal interpretation is created in court.  If the legislators do not like it then the legislators have to edit their law.
***
"Where "personal" comes in is when actual people are involved. If the purchase is not a legitimate business expense and benefits the individual (i.e. personal), then the value of that item is supposed to be attributed to the person as income."

You are stuck in business law.  This is not business law.  It is personhood law.  There is a very big difference.
***

"A corporation is a commercial entity by definition."

Wrong!  A corporation is a person under the law.  Look it up!
***

     Like I said, this is now probably moot for most operators since the sUAS rules came out and now there is a framework for Inspire pilots to fly commercially without having to get a pilot's license.  But, Phantoms are in limbo and will have to file for a 107 Exemption to fly commercially - but they will also not be required to have a pilot's license.

Aloha and Drone On!

Wow.  A comma here,  a semicolon there.  Everything changes.  I recall reading once,  the law is like a rubber line,  fixed at either end but able to be moved a considerable amount in between those points.
In any event,  it all may no longer matter,  as the new rules as applies to commercial use are out.  And,  as I read them,  as long as the drone does not fly over people or property that is not part of the proceedings,  and as long as everyone involved is informed that the drone will be flying,  then there is no problem.

Cetaman Posted at 2016-6-21 17:45
Aloha jrm,

     This discussion may be moot now that the sUAS rules have come out, but it still l ...

"You are stuck in business law.  This is not business law.  It is personhood law.  There is a very big difference."



There is no such thing a "personhood law." (Although it is a term used when dealing with the issue of abortion). Business law is a real concept and accepted term. Different rules and laws apply to commercial entitles. I'm really not sure where you are going with this. When dealing with a corporation (not for profit or otherwise) business/corporate law applies.

Wrong!  A corporation is a person under the law.  Look it up!

Are you suggesting there is no difference between an individual and a corporation under the law?

A corporation cannot vote.
An individual cannot deduct travel or meal expenses on their personal income tax return.
A corporation files a corporate tax return and pays corporate tax on profits.
An individual files personal tax return and pays income tax on all income.
You can "kill" (aka dissolve) a business and cannot be charged with murder. You can also then distribute its assets without a will or probate process.

There are laws and rules that apply to businesses which do not apply to individuals - and vis a versa. It is absurd to suggest otherwise.

More to the point, if an individual performs an action on their own, it is a "personal" action. If a person performs an action on behalf of a corporation (because corporations are not individuals and require people to take actions on their behalf) it is considered "commercial." Anything a business entity does is, by definition, a commercial action.

Originally you stated there was "personal use" for a corporation. Now you agree that the concept does not exist, but you have a legal theory to change that through court rulings. Good luck trying to redefine legal principles which are settled law. Your entire position seems based on some home grown theory with no factual basis.

If you ever decide to start your own business, I hope you get some qualified lawyers and accountants to help. Your misconceptions on these matters will get you in big trouble with state and federal tax agencies.

I sincerely wish you the best of luck and hope you never go broke or get jailed testing your theories in an IRS audit. Peace to you, my friend.

jrm11 Posted at 2016-6-23 07:08
"You are stuck in business law.  This is not business law.  It is personhood law.  There is a very  ...

Aloha jrm,

     Do you study law and legal issues?  The question is not are you an attorney, just do you study legal issues?  Unfortunately, I do study law and legal issues, but I have no desire to be an attorney, although I have prevailed over City and very wealthy private attorneys in Circuit Court.  It really depends on what you are looking for in the limits of your life.

     I appreciate that you are concerned about the limits of business law and a lot of that is limited to the IRS statutes, which are quite daunting.  But this discussion is not in the limits of your arena, business law and the IRS statutes.  This is all about "what is a person", Personhood Law.  And you have no idea.  But read the papers, cruise the Internet, maybe even do a few searches about law and person, personhood, etc.  You will be surprised.  It is a whole new legal world out there and so much can be done due to the loopholes opened by personhood.  Law is relative and is always evolving.  Think about it.

     Maybe we should resume this discussion after August.  I have already slipped up a couple times because I cannot keep up with the concerns of Forum members about the new FAA Part 107 regulations.  And remember, I am only trying to help.  I love the seriously cool technology we have at our disposal and I do not want us to be misguided by mistaken interpretations of the new rules.  We are in a good place right now and need to keep this hover spot.

Aloha and Drone On!

It's such a headache I would simply talk to a lawyer, it would be better if the school can pay for the consultation fee.

jrm11 Posted at 2016-6-23 07:08
"You are stuck in business law.  This is not business law.  It is personhood law.  There is a very  ...

Aloha jrm,

     In another discussion, I suddenly remembered that one of the issues that was not covered in this discussion is personal rights as applied to personal use in corporations.  When you deal with the IRS and business law, I bet you never think about personal rights, probably because everything has been decided already.  But, new things happen every day and life evolves.  This is why we now have Part 107.

     BTW, I never said that the concept of personal use for a corporation does not exist.  It probably has been written down and written about many times.  It just may not have been adjudicated in court.  Again, there is a big difference.  There are many examples of personal use that are in practice but not adjudicated, you just have to look for them.  Law evolves - or else we would have no use for judges!

     If you actually study law, you learn that there is a lot of decision making before cases are ever brought to court (mostly about the cost of a case).  Issues are studied to the extreme so that a case can be presented.  Rights for personal use is one of those issues.  You have to think about law and how it works, not regurgitate past legal experiences.  Regurgitation of past legal experiences is quite stagnant.  No evolution.  No progress.  No basis for past legal experiences since the process was supposed to stop before the last case was adjudicated (because there were no more judges?).  

Aloha and Drone On!

Cetaman, you my friend destroyed the argument these others are trying to make.  I have noticed on these forums, actual pilots tend to put themselves above others. Thanks Cetaman for your level headed opinions, and Drone On my friend as you say.