(a) Applicability. This section applies to license applicants or operators seeking an optional test-induced damage exception.

(b) Coordination of potential test-induced damage. Test-induced damage is not a mishap if all of the following are true:

(1) A license applicant or operator coordinates potential test-induced damage with the FAA before the planned activity, and with sufficient time for the FAA to evaluate the operator's proposal during the application process or as a license modification;

(2) The test-induced damage did not result in any of the following:

(i) Serious injury or fatality (as defined in 49 CFR 830.2);

(ii) Damage to property not associated with the licensed activity; or

(iii) Hazardous debris leaving the pre-defined hazard area; and

(3) The test-induced damage falls within the scope of activities coordinated with the FAA in paragraph (b)(1) of this section.

(c) Application requirements. An applicant must submit the following information—

(1) Test objectives;

(2) Test limits;

(3) Expected outcomes;

(4) Potential risks, including the applicant's best understanding of the uncertainties in environments, test limits, or system performance;

(5) Applicable procedures;

(6) Expected time and duration of the test; and

(7) Additional information as required by the FAA to ensure protection of public health and safety, safety of property, and the national security and foreign policy interests of the United States.