[Senate Report 118-87]
[From the U.S. Government Publishing Office]


                                                  Calendar No. 190

118th Congress}                                           { Report
                                 SENATE
 1st Session  }                                           { 118-87

======================================================================
                  AMERICAN SECURITY DRONE ACT OF 2023

                               __________

                              R E P O R T

                                 OF THE

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              TO ACCOMPANY
                              
                                 S. 473

                     TO PROVIDE FOR DRONE SECURITY

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                August 22, 2023.--Ordered to be printed
   Filed, under authority of the order of the Senate of July 27, 2023  
   
                                 __________

                                
                    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
         Christopher J. Mulkins, Director of Homeland Security
            Benjamin J. Schubert, Professional Staff Member
           William E. Henderson III, Minority Staff Director
              Christina N. Salazar, Minority Chief Counsel
          Kendal B. Tigner, Minority Professional Staff Member
                     Laura W. Kilbride, Chief Clerk


                                                  Calendar No. 190

118th Congress}                                           { Report
                                 SENATE
 1st Session  }                                           { 118-87

======================================================================
 
                  AMERICAN SECURITY DRONE ACT OF 2023

                               _______
                                

                August 22, 2023.--Ordered to be printed

   Filed, under authority of the order of the Senate of July 27, 2023

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 473]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 473) to provide for 
drone security, having considered the same, reports favorably 
thereon 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..............................................4
 IV. Section-by-Section Analysis of the Bill, as Reported.............4
  V. Evaluation of Regulatory Impact..................................7
 VI. Congressional Budget Office Cost Estimate........................8
VII. Changes in Existing Law Made by the Bill, as Reported............9

                         I. PURPOSE AND SUMMARY

    S. 473, the American Security Drone Act of 2023, 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. 473 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), Defense (DOD), the Office of the Director of 
National Intelligence, 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. 473 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 exempts state, local, 
or territorial law enforcement and emergency service agencies 
from procurement or operation restrictions for a covered UAS 
that was purchased with non-federal funding. Further, the bill 
allows the federal government to continue entering into 
contracts, grants, and other federal funding instruments with 
state, local, or territorial law enforcement and emergency 
service agencies who will purchase or operate a covered UAS 
under a waiver process. The prohibition on the federal 
government's procurement of UAS manufactured or assembled by 
covered foreign entities terminates five years after the bill's 
enactment.\1\
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    \1\On May 12, 2021, the Committee approved S. 73, the American 
Security Drone Act of 2021. That bill is substantially similar to S. 
473. Accordingly, this committee report is, in many respects, similar 
to the committee report for S. 73. See S. Rept. 117-267.
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              II. BACKGROUND AND NEED FOR THE LEGISLATION

    The market for UAS, commonly called ``drones,'' has grown 
substantially in the last decade. American businesses, 
governments, and citizens use UAS for a variety of purposes, 
including: law enforcement, recreation, assessing property 
value and damage for insurance purposes, and surveilling and 
fertilizing crops.\2\
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    \2\Drone market outlook in 2023: industry growth trends, market 
stats, and forecast, Insider Intelligence (Jan. 7, 2023) 
(www.insiderintelligence.com/insights/drone-industry-analysis-market-
trends-growth-forecasts/).
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    Federal agencies use UAS for tasks like land-use research, 
data collection, search and rescue operations, and monitoring 
the border.\3\ DHS, for example, uses UAS along U.S. borders 
and over territorial waters for Customs and Border Protection 
surveillance missions.\4\ Information security is imperative 
when data is collected, stored, and transmitted by UAS for 
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% of 
UAS in the globally were manufactured and assembled by foreign-
owned entities with affiliations that have divergent interests 
than the United States.\5\
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    \3\5 Ways Drone Technology Is Used in Federal IT, FedTech (Mar. 28, 
2019) (fedtechmagazine.com/article/2019/03/5-ways-drone-technology-
used-federal-it-perfcon).
    \4\Congressional Research Service, Unmanned Aircraft Operations in 
Domestic Airspace: U.S. Policy Perspectives and the Regulatory 
Landscape (R44352) (Jan. 27, 2016).
    \5\The Best Drone Manufacturers in 2021, Droneii (Nov. 1, 2021) 
(www.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.\6\ 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. For example, 
cybersecurity and data sharing vulnerabilities associated with 
DJI products could allow sensitive national security 
information to be shared with nation-state adversaries and 
other hostile actors.\7\ Hostile foreign actors could also use 
drones to collect intelligence and enable espionage, steal 
sensitive technology and intellectual property, and conduct 
cyber-attacks against wireless devices or networks, which could 
have significant implications for sensitive U.S. facilities and 
critical infrastructure, the defense industrial base, 
technology firms, and others.\8\
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    \6\Interior Dept. Grounds Its Drones Over Chinese Spying Fears, New 
York Times (Jan. 29, 2020) (www.nytimes.com/2020/01/29/technology/
interior-chinese-drones.html) and U.S. Army calls for units to 
discontinue use of DJI equipment, UAS News (Aug. 4, 2017) 
(www.suasnews.com/2017/08/us-army-calls-units-discontinue-use-dji-
equipment/).
    \7\DHS warns of `strong concerns' that Chinese-made drones are 
stealing data, CNN (May 20, 2019) (www.cnn.com/2019/05/20/politics/dhs-
chinese-drone-warning/index.html).
    \8\Senate Committee on Homeland Security and Governmental Affairs, 
Testimony Submitted for the Record of Acting Assistant Secretary for 
Counterterrorism, Threat Prevention, and Law Enforcement Samantha 
Vinograd, Department of Homeland Security, Hearing on Protecting the 
Homeland from Unmanned Aircraft Systems, 117th Cong. (July 14, 2022) 
(S. Hrg. 117-XX).
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    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.\9\ Congress later included a provision in 
the National Defense Authorization Act for Fiscal Year 2020 
prohibiting DOD from using Chinese-made UAS.\10\ In May 2019, 
DHS's Cybersecurity and Infrastructure Security Agency 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.''\11\ In January 
2021, the General Services Administration largely restricted 
federal agencies from procuring UAS in response to the 
cybersecurity threat posed by foreign-made UAS.\12\
---------------------------------------------------------------------------
    \9\`Quads for Squads' grounded over cyber concerns, Marine Corps 
Times (June 15, 2018) (www.marinecorpstimes.com/news/your-marine-corps/
2018/06/15/quads-for-squads-grounded-over-cyber-concerns/).
    \10\National Defense Authorization Act for Fiscal Year 2020, Pub. 
L. No. 116-92, Sec. 848.
    \11\DHS warns of `strong concerns' that Chinese-made drones are 
stealing data, CNN (May 20, 2019) (www.cnn.com/2019/05/20/politics/dhs-
chinese-drone-warning/index.html).
    \12\U.S. Government to Stop Buying Chinese-made Drones, VoA News 
(Feb. 16, 2021) (www.voanews.com/a/east-asia-pacific_voa-news-china_us-
government-stop-buying-chinese-made-drones/6202125.html).
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    S. 473 is intended to respond to this threat by prohibiting 
federal agencies from procuring UAS manufactured or assembled 
by designated foreign entities. This would prevent nation-state 
adversaries and other hostile actors from utilizing these 
emerging technologies to obtain sensitive national security 
information. The bill would also support American UAS 
manufacturers by permitting them time to grow and evolve to 
changing market needs. Increased domestic UAS manufacturing 
would provide the United States with increased safety, 
security, and economic benefits based 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 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 
procured UAS meet a minimum threshold of security regardless of 
their country of origin.

                        III. LEGISLATIVE HISTORY

    Senator Rick Scott (R-FL) introduced S. 473, the American 
Security Drone Act of 2023, on February 16, 2023, with original 
cosponsors Senator Mark Warner (D-VA), Senator Marco Rubio (R-
FL), Senator Richard Blumenthal (D-CT), Senator Marsha 
Blackburn (R-TN), and Senator Christopher Murphy (D-CT). The 
bill was referred to the Committee on Homeland Security and 
Governmental Affairs. Senator Josh Hawley (R-MO) and Senator 
Mitt Romney (R-UT) joined as additional cosponsors on March 1, 
2023 and April 27, 2023, respectively.
    The Committee considered S. 473 at a business meeting on 
May 17, 2023. At the business meeting, the bill was ordered 
reported favorably by roll call vote of 9 yeas to 1 nay, with 
Senators Peters, Hassan, Sinema, Rosen, Padilla, Ossoff, 
Blumenthal, Lankford, and Romney voting in the affirmative, and 
Senator Paul voting in the negative. Senators Carper, Johnson, 
Scott, Hawley, and Marshall voted yea by proxy, for the record 
only.

        V. SECTION BY SECTION ANALYSIS OF THE BILL, AS REPORTED

Section 1. Short title

    This section establishes the short title of the bill as the 
``American Security Drone Act of 2023.''

Section 2. Definitions

    This section defines ``covered foreign entity,'' ``covered 
unmanned aircraft system,'' ``intelligence,'' and 
``intelligence community.''

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, the Director of National 
Intelligence, and the Attorney General from the procurement 
prohibition in subsection (3)(a) for specified activities if 
the procurement of foreign UAS is in the national interest of 
the United States or maintenance of public safety.
    Subsection (c) exempts the Secretary of Transportation from 
the procurement prohibition in subsection (3)(a) if the 
operation or procurement is deemed to support the safe, secure, 
or efficient operation of the National Airspace System (NAS).
    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 meeting NOAA's science or 
management objectives or operational mission.
    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 the Director of OMB after consultation with the 
Federal Acquisition Security Council (FASC).

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, the Director of National 
Intelligence, and the Attorney General from the operation 
prohibition in subsection (4)(a) for specified activities if 
the procurement of foreign UAS is in the national interest of 
the United States.
    Subsection (c) exempts the Secretary of Transportation from 
the operation prohibition in subsection (4)(a) if the operation 
is deemed to support the safe, secure, or efficient operation 
of the NAS or maintenance of public safety.
    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 meeting NOAA's science 
or management objectives or operational mission.
    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 Director of OMB after consultation with the 
FASC.
    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 procurement 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 the Secretary of Homeland Security, 
the Secretary of Defense, the Director of National 
Intelligence, and the Attorney General from the restriction in 
subsection (5)(a) for specified activities if the procurement 
of foreign UAS is in the national interest of the United 
States.
    Subsection (c) exempts the Secretary of Transportation from 
the restriction in subsection (5)(a) if the operation is deemed 
to support the safe, secure, or efficient operation of the NAS 
or maintenance of public safety.
    Subsection (d) exempts NOAA from the restriction in 
subsection (5)(a) for the purpose of meeting NOAA's science or 
management objectives or operational mission.
    Subsection (e) authorizes the head of an executive agency 
to waive the restriction in subsection (5)(a) on a case-by-case 
basis with notification to Congress and the approval of the 
Director of OMB after consultation with the FASC.
    Subsection (f) 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 UAS manufactured or assembled by a covered 
foreign entity within one year of enactment.
    Subsection (b) authorizes tracking under subsection (7)(a) 
to be conducted at a classified level, as determined by the 
Secretary of Homeland Security.
    Subsection (c) authorizes DOD, DHS, DOJ, Department of 
Transportation (DOT), and NOAA to exclude from the full 
inventory process those UAS that are deemed expendable due to 
mission risk, or that are one-time-use UAS.

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 UAS 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 UAS for non-DOD 
and non-intelligence operations and those UAS 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 in order to implement 
that policy.
    Subsection (e) instructs the Director of OMB, in developing 
the policy under subsection (9)(a), to incorporate policies to 
implement the exemptions contained in this bill and incorporate 
an exemption to the policy if a department or agency head 
determines that no product that complies with the information 
security requirements under subsection (9)(b) is capable of 
fulfilling mission critical performance requirements.
    Section 10. State, local, and territorial law enforcement 
and emergency service exemption
    Subsection (a) states that nothing in this bill will 
prevent a state, local, or territorial law enforcement or 
emergency service agency from procuring or operating a covered 
UAS purchased with non-federal dollars.
    Subsection (b) allows the federal government to continue 
entering into contracts, grants, and cooperative agreements or 
other federal funding instruments with state, local, or 
territorial law enforcement or emergency service agencies under 
which a covered UAS will be purchased or operated if the agency 
has received approval or waiver to purchase or operate a 
covered UAS pursuant to section 5 of the bill.

Section 11. Study

    Subsection (a) requires the Under Secretary of Defense for 
Acquisition and Sustainment to provide congressional committees 
a report on the supply chain for covered UAS, including a 
discussion of current and projected future demand for covered 
UAS, within one year of enactment.

Section 12. Exceptions

    Subsection (a) exempts appropriate federal agencies, in 
consultation with the Secretary of Homeland Security, from the 
procurement and operation restrictions under sections 3, 4, and 
5 if the procurement or operation is necessary to support the 
full range of wildfire management operations or search and 
rescue operations.
    Subsection (b) exempts elements of the intelligence 
community, in consultation with the Director of National 
Intelligence, from the procurement and operation restrictions 
under sections 3, 4, and 5 if the procurement or operation is 
necessary to support intelligence activities.
    Subsection (c) exempts tribal law enforcement or tribal 
emergency service agencies, in consultation with the Secretary 
of Homeland Security, from the procurement and operation 
restrictions under sections 3, 4, and 5 if the procurement or 
operation is necessary to support the full range of law 
enforcement operations or search and rescue operations on 
Indian lands.

Section 13. Sunset

    This section holds that Sections 3, 4, and 5 shall cease to 
have effect five 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. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE



    S. 473 would prohibit most federal agencies and contractors 
from procuring or operating unmanned aircraft systems (UAS) 
manufactured or assembled by foreign entities that pose 
national security risks. Several agencies, including the 
Departments of Defense, Homeland Security, and Justice, would 
be exempt from the bill's prohibitions under conditions 
specified in the bill. Agencies could receive a waiver, on a 
case-by-case basis, after receiving approval from the Office of 
Management and Budget (OMB) and notifying the Congress. The new 
prohibitions would sunset five years after enactment.
    S. 473 would require OMB, in coordination with several 
agencies, to establish a government-wide policy for procuring 
UAS for nondefense and intelligence-related operations. Any 
federal agency or department not otherwise subject to the 
Federal Acquisition Regulation would be required to follow the 
policy. The bill also would require all executive agencies to 
inventory their existing UAS and impose various reporting 
requirements.
    Based on the costs of similar requirements, CBO estimates 
that the affected agencies would incur an additional $1 million 
in administrative and personnel costs to comply with the bill's 
requirements. Any spending would be subject to the availability 
of appropriated funds.
    Enacting S. 473 could affect direct spending by agencies 
that are allowed to use fees, receipts from the sale of goods, 
and other collections to cover operating costs. CBO estimates 
that any net changes in direct spending would be less than 
$500,000 over the 2024-2033 period.
    The CBO staff contact for this estimate is Jeremy Crimm. 
The estimate was reviewed by H.Samuel Papenfuss, Deputy 
Director of Budget Analysis.

                                         Phillip L. Swagel,
                             Director, Congressional Budget Office.

       VII. 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.

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