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                                                         Calendar No. 547
                                                        

116th Congress  }                                             {   Report
                                  SENATE                          
2d Session     }                                             {  116-268
_______________________________________________________________________

                                     

                                                       


                  AMERICAN SECURITY DRONE ACT OF 2020

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                S. 2502

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




               September 15, 2020.--Ordered to be printed
               
               
                            ______

              U.S. GOVERNMENT PUBLISHING OFFICE 
 99-007                WASHINGTON : 2020                
 
               
               
               
        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin, Chairman
ROB PORTMAN, Ohio                    GARY C. PETERS, Michigan
RAND PAUL, Kentucky                  THOMAS R. CARPER, Delaware
JAMES LANKFORD, Oklahoma             MAGGIE HASSAN, New Hampshire
MITT ROMNEY, Utah                    KAMALA D. HARRIS, California
RICK SCOTT, Florida                  KYRSTEN SINEMA, Arizona
MICHAEL B. ENZI, Wyoming             JACKY ROSEN, Nevada
JOSH HAWLEY, Missouri

                Gabrielle D'Adamo Singer, Staff Director
                   Joseph C. Folio III, Chief Counsel
           Brian P. Kennedy, Senior Professional Staff Member
                 Caroline K. Bender, Research Assistant
               David M. Weinberg, Minority Staff Director
               Zachary I. Schram, Minority Chief Counsel
                    Roy S. Awabdeh, Minority Counsel
                     Laura W. Kilbride, Chief Clerk
                     
                     



                                                        Calendar No. 547
                                                       
                                                       
116th Congress   }                                           {   Report
                                 SENATE
 2d Session      }                                           {  116-268

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



 
                  AMERICAN SECURITY DRONE ACT OF 2020

                                _______
                                

               September 15, 2020.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 2502]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 2502) to ban the 
Federal procurement of certain drones and other unmanned 
aircraft systems, and for other purposes, having considered the 
same, reports favorably thereon with an amendment in the nature 
of a substitute and recommends that the bill, as amended, 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......................................4
  V. Evaluation of Regulatory Impact..................................6
 VI. Congressional Budget Office Cost Estimate........................6
VII. Changes in Existing Law Made by the Bill, as Reported............7

                         I. PURPOSE AND SUMMARY

    S. 2502, the American Security Drone Act of 2020, prohibits 
the Federal Government from procuring unmanned aircraft systems 
(UAS) manufactured or assembled by covered foreign entities 
beginning two years from the enactment of this bill. The bill 
includes exemptions for the Departments of Homeland Secretary 
(DHS), Defense (DOD) and Justice (DOJ) for the purposes of 
research, evaluation, training, testing, and analysis of 
counterterrorism activities and counter-UAS technology, among 
other things. With some exceptions, all executive branch 
agencies are required to account for and inventory any existing 
UAS manufactured or assembled by covered foreign entities.
    In addition, the bill requires the Office of Management and 
Budget (OMB) to develop a government-wide procurement policy of 
UAS to address the risks associated with processing, 
transmitting, and storing sensitive information collected from 
a UAS. The bill also requires an industry study to cover the 
current and future UAS domestic and global marketplace, 
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.

              II. BACKGROUND AND THE NEED FOR LEGISLATION

    The emergence of new technologies and capabilities presents 
both an opportunity and challenge to the security of the United 
States. For instance, our nation deploys UAS for everything 
from the surveillance and fertilization of crops, delivering 
packages and prescriptions, recreational uses, to national 
security purposes. However, the reliance on UAS for a wide 
range of national security applications has called into 
question the ability of the Federal Government to protect the 
integrity of data and information collected by these systems, 
as an estimated 60 percent of UAS operating in the United 
States are manufactured and assembled by foreign-owned 
entities.\1\
---------------------------------------------------------------------------
    \1\Skylogic Research Report Unveils Drone Industry Market Share 
Figures, Drone Analyst (Sept. 18, 2017), https://droneanalyst.com/
press-release/skylogic-research-report-unveils-drone-industry-market-
share-figures.
---------------------------------------------------------------------------
    Specific uses across the Federal Government of UAS include, 
but are not limited to, wildfire tracking by the Department of 
Interior (DOI)\2\, researching land use by the Department of 
Agriculture\3\, and data collection by the Department of 
Transportation.\4\ DHS uses UAS for law enforcement 
investigations, surveillance of drug routes along the coast, 
and other sensitive missions.\5\ Because the Federal Government 
uses UAS for a variety of mission sets, including sensitive 
missions, information security is imperative when data is 
collected, stored, and transmitted. The procurement of UAS 
manufactured by certain foreign-owned entities calls into 
question the Federal Government's ability to employ adequate 
information security safeguards.
---------------------------------------------------------------------------
    \2\ Press Release, U.S. Dep't of the Interior, Interior Announces 
2017 Drone Mission Report (Feb. 21, 2018), https://www.doi.gov/
pressreleases/interior-announces-2017-drone-mission-report.
    \3\ USDA may use drones to monitor vast Western rangeland, Farm 
Progress (Apr. 17, 2020), https://www.farmprogress.com/government/usda-
may-use-drones-monitor-vast-western-rangeland.
    \4\ U.S. Dep't of Transportation, Unmanned Aerial Systems (Oct. 3, 
2019), https://www.fhwa.dot.gov/uas/.
    \5\ U.S. Dep't of Homeland Security, Unmanned Aerial Systems (last 
visited Apr. 26, 2020), https://www.dhs.gov/science-and-technology/
unmanned-aerial-systems.
---------------------------------------------------------------------------
    DHS' Cybersecurity and Infrastructure Security Agency 
(CISA) released a bulletin in May 2019, warning private 
industry about the ``potential risk to an organization's 
information'' when acquiring and operating Chinese-made UAS.\6\ 
The bulletin goes on to explain, ``Those concerns apply . . . 
to 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.''\7\
---------------------------------------------------------------------------
    \6\ David Shortell, 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.
    \7\ Id.
---------------------------------------------------------------------------
    In 2017, the U.S. Army issued guidance discontinuing the 
use of DJI drones due to security concerns.\8\ The DOD went a 
step further in May 2018, and banned all purchases of 
commercial-off-the-shelf UAS while they researched and 
developed a strategy to deal with the potential cybersecurity 
risks.\9\ Ultimately, Congress included a provision in the 
National Defense Authorization Act for Fiscal Year 2020 
prohibiting DOD from using Chinese-made UAS.\10\
---------------------------------------------------------------------------
    \8\ Gary Mortimer, US 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/.
    \9\ Shawn Snow, `Quads for Squads' grounded over cyber concerns, 
Marine Corps Times (Jun 15, 2018), https://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, available at https://www.congress.gov/bill/
116th-congress/senate-bill/1790/text.
---------------------------------------------------------------------------
    There are conflicting views within the Federal Government 
on the extent of the threat posed by the utilization of 
foreign-made UAS, how best to minimize potential negative 
effects of these technologies, and the ability of the American 
market to fill demand. For instance, after deploying the 
technology, DOI recognized DJI's privacy policy and data 
management systems did not meet the necessary requirements to 
be utilized in their small UAS fleet.\11\ Therefore, DOI 
contracted with an American-based company that met all 
technology requirements at an affordable cost to the 
taxpayer.\12\ Unfortunately, the American company halted its 
UAS manufacturing due to foreign competition, leaving DOI 
without a cost-effective alternative.\13\ In response, DOI 
coordinated with DJI to produce a ``government edition'' that 
would meet DOI's data management requirements.\14\ In order to 
confirm the suitability of the government edition, DOI's Office 
of Aviation Services, along with industry and Federal partners, 
tested the data management and risk mitigation 
requirements.\15\ DOI found that DJI's new technology met the 
required security criteria allowing DOI to manage the flow of 
data information sharing by the aircraft, the software, and all 
relevant applications.\16\ Similarly, CISA partnered with Idaho 
National Laboratory to test data flow and management from 
foreign-made UAS.\17\ The study called for more testing of the 
technology, but confirmed that DJI's government-edition UAS 
provided the necessary data management and information security 
tools to meet the Federal agency's requirements.\18\ 
Ultimately, the DOI grounded its non-emergency drone program to 
review cybersecurity concerns.\19\
---------------------------------------------------------------------------
    \11\ U.S. Dep't of the Interior, Flight Test and Technical 
Evaluation Report: DJI Unmanned Aircraft System (UAS) Mission 
Functionality and Data Management Assurance Assessment (July 2, 2019), 
available at https://www.doi.gov/sites/doi.gov/files/uploads/
oas_flight_test_and_
technical_evaluation_report_-
_dji_uas_data_managment_assurance_evaluation_-_7-2-19_v2.0.pdf.
    \12\ Id.
    \13\ Id.
    \14\ Id.
    \15\ Id.
    \16\ Id.
    \17\ U.S. Dep't of Homeland Sec. Cybersecurity & Infrastructure 
Sec. Agency, Aviation Cyber Initiative Unmanned Aircraft System 
Information Security Risks Limited Scope Test & Evaluation, Idaho 
National Laboratory (Oct. 2019).
    \18\ Id.
    \19\ Press Release, U.S. Dep't of the Interior, Secretary Bernhardt 
Signs Order Grounding Interior's Drone Fleet for Non-Emergency 
Operations (Jan. 29, 2020), https://www.doi.gov/pressreleases/
secretary-bernhardt-signs-order-grounding-interiors-drone-fleet-non-
emergency.
---------------------------------------------------------------------------
    S. 2502 prohibits Federal agencies from procuring UAS from 
designated foreign-made countries and entities. The primary 
purpose is to prevent nation-state adversaries and other bad 
actors from exploiting these emerging technologies to obtain 
sensitive national security information. The prohibition on 
foreign-made UAS will provide Federal agencies and American 
drone manufacturers time to adjust to these new regulations and 
allow the domestic market to evolve. Exemptions are included in 
the bill for security and mission-critical reasons. One such 
exemption is for DHS and DOJ to research and test existing UAS 
to ensure these agencies are capable of countering any and all 
malicious UAS. Furthermore, the bill creates a government-wide 
policy for technology and data management standards to ensure 
that all UAS procured meets a minimum threshold of security 
regardless of the country of origin. Lastly, the prohibition on 
the procurement of covered UAS sunsets five years after the 
enactment of the bill.

                        III. LEGISLATIVE HISTORY

    Senator Rick Scott (R-FL) introduced S. 2502, the American 
Security Drone Act of 2019, on September 18, 2019, with 
Senators Cotton (R-AR), Hawley (R-MO), Rubio (R-FL), Murphy (D-
CT), and Blumenthal (D-CT). The bill was referred to the 
Committee on Homeland Security and Governmental Affairs. 
Senator Marsha Blackburn (R-TN) later joined as a cosponsor.
    The Committee considered S. 2502 at a business meeting on 
March 11, 2020. During the business meeting, a substitute 
amendment was offered by Senator Scott and accepted by 
unanimous consent. The bill, as amended, was ordered reported 
favorably by voice vote en bloc. Senators Johnson, Portman, 
Lankford, Romney, Scott, Enzi, Hawley, Peters, Carper, Hassan, 
Harris, Sinema, and Rosen were present for the votes.

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

Section 1. Short title

    This section names the bill as the ``American Security 
Drone Act of 2020''.

Sec. 2. Definitions

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

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

    This section prohibits the procurement of a covered UAS by 
the Federal Government. This section also includes exemptions 
for DHS and DOJ for the purposes of the research, evaluation, 
training, testing, or analysis of certain types of warfare, 
development of counter-UAS technology, counterintelligence 
activities, Federal investigations, and when required for the 
national interest. The section also provides the authority to 
the head of any executive agency to waive this section on a 
case-by-case basis and with the approval of the Secretaries of 
Homeland Security or Defense.

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

    This section prohibits the operation or use of a covered 
UAS by any Federal agency beginning two years after enactment 
of the bill. This section also provides the same exemptions and 
waivers as Section 3. This section also requires the Secretary 
of Homeland Security to issue guidance and produce regulations 
to implement the prohibition on the operation of covered UAS by 
covered foreign entities within 180 days of the bill's 
enactment.

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

    This section prohibits the use of Federal funds through a 
contract, grant, or cooperative agreement to procure or operate 
a covered UAS by the defined covered foreign entities beginning 
two years after this bill is enacted. This section also 
provides exemptions similar to Section 3. Additionally, this 
section requires the Federal Acquisition Regulatory Council to 
provide guidance and prescribe regulations to implement this 
section within 180 days.

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

    Upon enactment, Federal agencies are prohibited from using 
government-issued purchase cards to purchase a UAS from a 
covered foreign entity.

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

    This section requires Federal agencies to account for and 
track their inventories of UAS from a covered foreign entity 
regardless of how the agency procured the UAS. Inventory data 
related to a covered UAS may be tracked at a classified level. 
This section also includes an exception for DHS and DOD for 
covered UAS deemed expendable due to the mission risks or that 
are for one-time-use.

Sec. 8. Comptroller general report

    This section requires the Government Accountability Office 
to, within 275 days of enactment, submit a report to Congress 
on the number of UAS, commercial off-the-shelf and covered UAS 
procured by Federal agencies from covered foreign entities.

Sec. 9. Government-wide Policy for procurement of unmanned aircraft 
        systems

    This section requires OMB, along with the National 
Institute of Standards and Technology and other related Federal 
agencies, to develop a procurement policy for Federal agencies 
to procure any UAS. The policy must include provisions related 
to protections of software, firmware, and hardware; securing 
sensitively collected, stored, and transmitted information, and 
other data security requirements. This section also provides 
exemptions to when Federal agencies are allowed to procure UAS 
outside of this policy. This section is intended to coincide 
with the Federal prohibition on the procurement of UAS from 
covered foreign entities.

Sec. 10. Study

    This section requires OMB to contract with a Federally-
funded research and development center (FFRDC) to study the UAS 
industry three years after the enactment of this bill, and 
submit the results of the study to Congress within 30 days of 
receiving the study from the FFRDC. Specifically, the FFRDC 
will study the current and future UAS domestic and global 
market; the ability for domestic companies to compete in the 
global marketplace; domestic supply chains; and an assessment 
of the economic impact of this legislation.

Sec. 11. Sunset

    This section sunsets Sections 3, 4, and 5, five years after 
the enactment of this bill.

                   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

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, September 9, 2020.
Hon. Ron Johnson,
Chairman, Committee on Homeland Security and Governmental
  Affairs, U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2502, the American 
Security Drone Act of 2020.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff is Sofia Guo.
            Sincerely,
                                         Phillip L. Swagel,
                                                          Director.
    Enclosure.

    
    

    S. 2502 would prohibit most federal agencies from procuring 
or operating unmanned aircraft systems manufactured or 
assembled by a covered foreign entity, which includes, for 
example, an entity that poses a national security risk. The 
Department of Homeland Security, the Department of Defense, and 
the Attorney General would be exempt from the bill's 
prohibitions for such systems that are acquired or operated 
under certain conditions. The new prohibitions would sunset 
five years after enactment.
    The bill would require the Office of Management and Budget 
to establish a policy for procuring unmanned aircraft systems 
for operations outside of the defense and intelligence 
communities and would require any department or agency not 
otherwise subject to the Federal Acquisition Regulation to 
follow the new policy. The bill also would require executive 
agencies to account for their inventories of covered unmanned 
aircraft systems and would require various studies and reports.
    Using information from the affected agencies, CBO estimates 
that implementing S. 2502 would cost $1 million over the 2021-
2025 period for additional administrative activities and new 
reporting requirements. Such spending would be subject to the 
availability of appropriated funds.
    Enacting S. 2502 could affect direct spending by some 
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 by those 
agencies would be negligible because most of them can adjust 
amounts collected to reflect changes in operating costs.
    The CBO staff contact for this estimate is Sofia Guo. The 
estimate was reviewed by H. Samuel Papenfuss, Deputy Director 
of Budget Analysis.

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

    Because this legislation would not repeal or amend any 
provision of current law, it would not make changes in existing 
law within the meaning of clauses (a) and (b) of paragraph 12 
of rule XXVI of the Standing Rules of the Senate.