[Senate Report 117-267]
[From the U.S. Government Publishing Office]


                                                     Calendar No. 666
117th Congress      }                           {         Report
                                 SENATE
 2d Session         }                           {         117-267
_______________________________________________________________________

                                     


                  AMERICAN SECURITY DRONE ACT OF 2021

                               __________

                              R E P O R T

                                 OF THE

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              TO ACCOMPANY

                                 S. 73

               TO BAN THE FEDERAL PROCUREMENT OF CERTAIN
               DRONES AND OTHER UNMANNED AIRCRAFT SYSTEMS
                         AND FOR OTHER PURPOSES
                         

             [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


               December 19, 2022.--Ordered to be printed
               
               
               		       __________
               		       
               		       
               	    U.S. GOVERNMENT PUBLISHING OFFICE	       
               
39-010			    WASHINGTON : 2023                      
               
               

        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   GARY C. PETERS, Michigan, Chairman
THOMAS R. CARPER, Delaware           ROB PORTMAN, Ohio
MAGGIE HASSAN, New Hampshire         RON JOHNSON, Wisconsin
KYRSTEN SINEMA, Arizona              RAND PAUL, Kentucky
JACKY ROSEN, Nevada                  JAMES LANKFORD, Oklahoma
ALEX PADILLA, California             MITT ROMNEY, Utah
JON OSSOFF, Georgia                  RICK SCOTT, Florida
                                     JOSH HAWLEY, Missouri

                   David M. Weinberg, Staff Director
                    Zachary I. Schram, Chief Counsel
         Christopher J. Mulkins, Director of Homeland Security
            Benjamin J. Schubert, Professional Staff Member
                Pamela Thiessen, Minority Staff Director
            Sam J. Mulopulos, Minority Deputy Staff Director
              William H.W. McKenna, Minority Chief Counsel
                     Laura W. Kilbride, Chief Clerk



                                                     Calendar No. 666
117th Congress      }                           {         Report
                                 SENATE
 2d Session         }                           {         117-267

======================================================================



 
                  AMERICAN SECURITY DRONE ACT OF 2021

                                _______
                                

               December 19, 2022.--Ordered to be printed

                                _______
                                

 Mr. Peters, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                          [To accompany S. 73]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 73) to ban the 
Federal procurement of certain drones and other unmanned 
aircraft systems, and for other purposes, having considered the 
same, reports favorably without amendment and recommends that 
the bill do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and Need for the Legislation..........................2
III. Legislative History..............................................3
 IV. Section-by-Section Analysis of the Bill, as Reported.............3
  V. Evaluation of Regulatory Impact..................................6
 VI. Changes in Existing Law Made by the Bill, as Reported............7

                         I. PURPOSE AND SUMMARY

    S. 73, the American Security Drone Act of 2021, prohibits 
federal agencies from procuring and operating unmanned aircraft 
systems (UAS) and associated elements that are manufactured or 
assembled by ``covered foreign entities'' that pose a national 
security risk. The prohibition will begin two years after the 
enactment of this bill. S. 73 also prohibits entities that 
receive federal contracts, grants, and cooperative agreements 
from operating or purchasing covered UAS. The bill contains 
exemptions for the Departments of Homeland Security (DHS), 
Justice (DOJ), and Defense (DOD), and other specific agencies 
or entities for the purposes of training, testing, or analyzing 
UAS, counter-UAS intelligence gathering, electronic warfare, 
and information warfare operations.
    Additionally, S. 73 requires the Director of the Office of 
Management and Budget (OMB) to establish a government-wide 
policy for the procurement of UAS to address the risks 
associated with processing, transmitting, and storing sensitive 
information collected from UAS. The bill also requires OMB to 
contract with a federally funded research center to conduct a 
study of the current and future UAS global and domestic 
markets, technological advancements in the industry, and an 
assessment of the economic impact of banning the use of 
foreign-made UAS from the federal government. The prohibition 
on the federal government's procurement of UAS by covered 
foreign entities terminates five years after the bill's 
enactment.\1\
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    \1\On March 11, 2020, the Committee approved S. 2502, the American 
Security Drone Act of 2020, with an amendment in the nature of a 
substitute. That bill is substantially similar to S. 73. Accordingly, 
this committee report is, in many respects, similar to the committee 
report for S. 2502. See S. Rept. 116-268.
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              II. BACKGROUND AND NEED FOR THE LEGISLATION

    The market for UAS, popularly called ``drones,'' has grown 
substantially in the last decade.\2\ American businesses, 
governments, and citizens use UAS for a variety of purposes: 
law enforcement, recreation, assessing property value and 
damage for insurance purposes, and surveilling and fertilizing 
crops.\3\
---------------------------------------------------------------------------
    \2\Drone market outlook in 2022: industry growth trends, market 
stats, and forecast, Business Insider (Apr. 15, 2022) (https://
www.insiderintelligence.com/insights/drone-industry-analysis-market-
trends-growth-forecasts/).
    \3\Id.
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    Federal agencies use UAS for tasks like land-use research, 
data collection, monitoring the border, and military 
operations.\4\ DHS, for example, uses UAS for missions along 
U.S. borders and over territorial waters.\5\ Information 
security is imperative when data is collected, stored, and 
transmitted by UAS for these sensitive missions. Reliance on 
UAS, however, complicates the ability of the federal government 
to protect the security of this data, in part because, as of 
March 2020, more than 70 percent of UAS in the United States 
were manufactured and assembled by foreign-owned entities.\6\
---------------------------------------------------------------------------
    \4\Cybersecurity and Infrastructure Security Agency, Unmanned 
Aircraft Systems (UAS)--Critical Infrastructure (https://www.cisa.gov/
unmanned-aircraft-systems) (accessed Aug. 21, 2022).
    \5\Congressional Research Service, Unmanned Aircraft Operations in 
Domestic Airspace: U.S. Policy Perspectives and the Regulatory 
Landscape (R44352) (Jan. 27, 2016).
    \6\The Best Drone Manufacturers in 2021, Droneii (Nov. 1, 2021) 
(https://droneii.com/the-best-drone-manufacturers-in-2021).
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    Federal agencies have already begun to limit the 
procurement of foreign-made UAS to protect national security. 
In 2017, the U.S. Army issued guidance discontinuing the use of 
UAS sold by DJI, a major foreign manufacturer of UAS, due to 
security concerns.\7\ In May 2018, DOD banned all purchases of 
commercial, off-the-shelf UAS while the Department researched 
and developed a strategy to deal with the potential 
cybersecurity risks of using such equipment.\8\ Congress later 
included a provision in the National Defense Authorization Act 
for Fiscal Year 2020 prohibiting DOD from using Chinese-made 
UAS.\9\ In May 2019, DHS' Cybersecurity and Infrastructure 
Security Agency (CISA) released a bulletin warning private 
industry about the ``potential risk[s] to . . . 
organization[al] information'' when acquiring and operating 
Chinese-made UAS and of risks posed by ``certain Chinese-made 
UAS connected devices capable of collecting and transferring 
potentially revealing data about their operations and the 
individuals and entities operating them, as China imposes 
unusually stringent obligations on its citizens to support 
national intelligence activities.''\10\ In January 2021, the 
General Services Administration (GSA) largely restricted 
federal agencies from procuring UAS in response to the 
cybersecurity threat posed by foreign-made UAS.\11\
---------------------------------------------------------------------------
    \7\U.S. Army calls for units to discontinue use of DJI equipment, 
sUAS News (Aug. 4, 2017) (https://www.suasnews.com/2017/08/us-army-
calls-units-discontinue-use-dji-equipment/).
    \8\`Quads for Squads' grounded over cyber concerns, Marine Corps 
Times (June 15, 2018) (https://www.marinecorpstimes.com/news/your-
marine-corps/2018/06/15/quads-for-squads-grounded-over-cyber-concerns/
).
    \9\National Defense Authorization Act for Fiscal Year 2020, Pub. L. 
No. 116-92, Sec. 848.
    \10\DHS warns of `strong concerns' that Chinese-made drones are 
stealing data, CNN (May 20, 2019) (https://www.cnn.com/2019/05/20/
politics/dhs-chinese-drone-warning/index.html).
    \11\US Government to Stop Buying Chinese-made Drones, Voa News 
(Feb. 16, 2021) (https://www.voanews.com/a/east-asia-pacific_voa-news-
china_us-government-stop-buying-chinese-made-drones/6202125.html).
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    S. 73 further responds to this threat by prohibiting 
federal agencies from procuring UAS manufactured or assembled 
by designated foreign entities. This will prevent nation-state 
adversaries and other hostile actors from utilizing these 
emerging technologies to obtain sensitive national security 
information. The prohibition on foreign-made UAS will also 
allow American UAS manufacturers time to grow and evolve to 
changing market needs. Increased domestic UAS manufacturing 
will provide the U.S. with increased safety, security, and 
economic benefits as the market will rely on a secure domestic 
supply chain that addresses the needs of UAS users nationwide. 
Exemptions on procurement prohibitions are included in the bill 
for security and mission-critical reasons, including DHS and 
DOJ exemptions for research and testing of existing UAS to 
develop countermeasures against malicious UAS. Additionally, 
the bill directs OMB to establish a government-wide policy for 
technology and data management standards to ensure that all UAS 
procured meet a minimum threshold of security regardless of 
their country of origin.

                        III. LEGISLATIVE HISTORY

    Senator Rick Scott (R-FL) introduced S. 73 on January 27, 
2021, with Senators Rubio (R-FL), Cotton (R-AR), Blackburn (R-
TN), Blumenthal (D-CT), Murphy (D-CT), and Hawley (R-MO). The 
bill was referred to the Senate Committee on Homeland Security 
and Governmental Affairs. The Committee considered S. 73 at a 
business meeting on May 12, 2021. The Committee ordered the 
bill reported favorably without amendment by voice vote. 
Senators present for the vote were: Peters, Hassan, Sinema, 
Rosen, Padilla, Ossoff, Portman, Johnson, Paul, Lankford, 
Romney, Scott, and Hawley. Senator Paul was recorded for the 
record as voting ``No.''

        IV. SECTION-BY-SECTION ANALYSIS OF THE BILL, AS REPORTED

Section 1. Short title

    This section provides that the bill may be cited as the 
``American Security Drone Act of 2021.''

Section 2. Definitions

    This section defines covered foreign entity and covered 
unmanned aircraft system.

Section 3. Prohibition on procurement of covered unmanned aircraft 
        systems from covered foreign entities

    Subsection (a) establishes that the head of an executive 
agency may not procure any covered unmanned aircraft system 
that is manufactured or assembled by a covered foreign entity.
    Subsection (b) exempts the Secretary of Homeland Security, 
the Secretary of Defense, and the Attorney General from the 
procurement prohibition in subsection (3)(a) for the purpose of 
researching or testing UAS systems (including for electronic 
warfare, information warfare, development of UAS or counter-UAS 
technology, counterterrorism or counterintelligence, and 
federal criminal or national security investigations) or if 
procurement of foreign UAS is in the national interest of the 
United States.
    Subsection (c) exempts the Federal Aviation Administration 
Center of Excellence for Unmanned Aircraft Systems from the 
procurement prohibition in subsection (3)(a) for the purpose of 
research and analysis for the Alliance for System Safety of UAS 
through Research Excellence Center of Excellence for Unmanned 
Aircraft Systems.
    Subsection (d) exempts the National Transportation Safety 
Board (NTSB) from the procurement prohibition in subsection 
(3)(a) for the purpose of conducting safety investigations.
    Subsection (e) exempts the National Oceanic and Atmospheric 
Administration (NOAA) from the procurement prohibition in 
subsection (3)(a) for the purpose of marine or atmospheric 
science or management.
    Subsection (f) authorizes the head of an executive agency 
to waive the procurement prohibition in subsection (3)(a) on a 
case-by-case basis with notification to Congress and the 
approval of either the Secretary of Homeland Security or 
Secretary of Defense.

Section 4. Prohibition on operation of covered unmanned aircraft 
        systems from covered foreign entities

    Subsection (a) prohibits any federal department or agency 
from operating a covered unmanned aircraft system manufactured 
or assembled by a covered foreign entity. This section also 
applies to contracted services. The prohibition takes effect 
two years after enactment.
    Subsection (b) exempts the Secretary of Homeland Security, 
the Secretary of Defense, and the Attorney General from the 
operation prohibition in subsection (4)(a) for the purpose of 
researching or testing UAS systems (including for electronic 
warfare, information warfare, development of UAS or counter-UAS 
technology, counterterrorism or counterintelligence, and 
federal criminal or national security investigations) or if 
operation of foreign UAS is in the national interest of the 
United States.
    Subsection (c) exempts the Federal Aviation Administration 
Center of Excellence for Unmanned Aircraft Systems from the 
operation prohibition in subsection (4)(a) for the purpose of 
research and analysis for the Alliance for System Safety of UAS 
through Research Excellence Center of Excellence for Unmanned 
Aircraft Systems.
    Subsection (d) exempts the NTSB from the operation 
prohibition in subsection (4)(a) for the purpose of conducting 
safety investigations.
    Subsection (e) exempts NOAA from the operation prohibition 
in subsection (4)(a) for the purpose of marine or atmospheric 
science or management.
    Subsection (f) authorizes the head of an executive agency 
to waive the operation prohibition in subsection (4)(a) on a 
case-by-case basis with notification to Congress and the 
approval of the either the Secretary of Homeland Security or 
Secretary of Defense.
    Subsection (g) requires the Secretary of Homeland Security 
to prescribe regulations or guidance to implement this section 
not later than 180 days after enactment.

Section 5. Prohibition on use of federal funds for purchases and 
        operation of covered unmanned aircraft systems from covered 
        foreign entities

    Subsection (a) bars the use of federal funds awarded 
through contracts, grants, or cooperative agreements to 
purchase or operate covered unmanned aircraft systems 
manufactured by covered foreign entities. This prohibition 
takes effect two years after enactment.
    Subsection (b) exempts funds from contracts, grants, or 
cooperative agreements awarded prior to the date of enactment. 
It also exempts the use of funds if the Secretary of Homeland 
Security, the Secretary of Defense, and the Attorney General 
determine that the use of funds for operation or procurement is 
for the purpose of researching or testing UAS systems 
(including for electronic warfare, information warfare, 
development of UAS or counter-UAS technology, counterterrorism 
or counterintelligence, and federal criminal or national 
security investigations) or if such operation or procurement is 
in the national interest of the United States.
    Subsection (c) authorizes the head of an executive agency 
to waive the prohibition under subsection (5)(a) on a case-by-
case basis with the approval of the Secretary of Homeland 
Security or the Secretary of Defense, and upon notification of 
said waiver to Congress.
    Subsection (d) requires the Federal Acquisition Regulatory 
Council to prescribe regulations or guidance to implement this 
section not later than 180 days after the date of enactment.

Section 6. Prohibition on use of government-issued purchase cards to 
        purchase covered unmanned aircraft systems from covered foreign 
        entities

    This section prohibits the use of government-issued 
purchase cards to procure any covered unmanned aircraft system 
from a covered foreign entity.

Section 7. Management of existing inventories of covered unmanned 
        aircraft systems from covered foreign entities

    Subsection (a) requires all executive agencies to inventory 
existing covered unmanned aircraft systems manufactured or 
assembled by a covered foreign entity upon enactment.
    Subsection (b) authorizes tracking under subsection (7)(a) 
to be conducted at a classified level.
    Subsection (c) authorizes DOD and DHS to exclude those UAS 
deemed expendable from the full inventory process under 
subsection (7)(a).

Section 8. Comptroller General report

    This section requires the Comptroller General of the United 
States to submit to Congress a report on the amount of 
commercial off-the-shelf UAS and covered unmanned aircraft 
systems procured by federal departments and agencies from 
foreign covered entities not later than 275 days after the date 
of enactment.

Section 9. Government-wide policy for procurement of unmanned aircraft 
        systems

    Subsection (a) requires the Director of OMB to establish a 
government-wide policy for the procurement of unmanned aircraft 
systems for non-DOD and non-intelligence operations and those 
unmanned aircraft systems procured through grants and 
cooperative agreements entered into with non-federal entities 
not later than 180 days after the date of enactment.
    Subsection (b) requires the policy developed under 
subsection (9)(a) to include certain specifications regarding 
the risks associated with processing, storing, and transmitting 
federal information in UAS.
    Subsection (c) requires the policy developed under 
subsection (9)(a) to reflect an appropriate, risk-based 
approach to UAS information security.
    Subsection (d) requires federal revision of acquisition 
regulations not later than 180 days after the date on which the 
policy under subsection (9)(a) is issued.
    Subsection (e) instructs the Director of OMB to incorporate 
an exemption to the policy under subsection (9)(a) for: 
training or analysis for electronic warfare or information 
warfare; researching UAS or counter-UAS technology, or by 
department or agency determination subject to several 
conditions.

Section 10. Study

    Subsection (a) instructs the Director of OMB enter into a 
contract with a federal funded research and development center 
to conduct a study of global and domestic UAS markets and 
manufacturing capacity and capabilities not later than 3 years 
after the date of enactment.
    Subsection (b) requires the study under subsection (10)(a) 
to be submitted to Director of OMB upon completion.
    Subsection (c) requires the Director of OMB to submit the 
study under subsection (10)(a) to Congress not later than 30 
days after receipt.

Section 11. Sunset

    This section holds that Sections 3, 4, and 5 shall cease to 
have effect 5 years after enactment.

                   V. EVALUATION OF REGULATORY IMPACT

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill and determined 
that the bill will have no regulatory impact within the meaning 
of the rules. The Committee agrees with the Congressional 
Budget Office's statement that the bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would impose no costs 
on state, local, or tribal governments.

       VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    This legislation would make no change in existing law, 
within the meaning of clauses (a) and (b) of subparagraph 12 of 
rule XXVI of the Standing Rules of the Senate, because this 
legislation would not repeal or amend any provision of current 
law.

                                  [all]