Bismarck — The North Dakota House Appropriations Committee on a 23-0 vote recommended a do-pass for House Bill 1038, a measure that would fund a two‑year state program to replace Chinese‑manufactured unmanned aircraft systems (UAS) in state inventories and allocate $11 million to integrate FAA radar data with the state’s VANTAS UAS network.

The bill’s sponsor, Representative Mike Natey, said the state inventory lists 353 drones owned by state agencies and higher‑education entities, of which 307 are “Chinese manufactured by the company by the name of DJI.” He told committee members the proposal combines a $15 million drone replacement, training and disposal program with an $11 million appropriation to build a secure FAA radar data enclave for VANTAS, the state’s UAS integration network.

The proposal matters because federal law and defense policy increasingly restrict use of certain foreign‑manufactured UAS. Natey cited the National Defense Authorization Act (NDAA) and federal agency guidance saying some systems pose national security risks. “Even if out of the 307, we have one of these that are bad, it’s worth doing,” Natey said during his opening remarks.

Why it matters: proponents say HB1038 aims to keep state operations — from highway patrol and emergency response to infrastructure inspections — compatible with evolving federal rules while positioning North Dakota’s VANTAS program as a national model. Test site and industry witnesses told the committee the radar data piece is a time‑sensitive pathfinder with substantial technical and personnel requirements that the state cannot meet under current VANTAS funding.

Key provisions and implementation

- Drone replacement and buyback: The bill would create a test‑site‑administered program to inventory, evaluate and replace state‑owned UAS that are not NDAA‑compliant. Representative Natey said the program would be administered by the Northern Plains UAS Test Site, which will determine replacement equipment, training, consolidation of agency fleets and disposal after forensic review.

- Funding: The bill designates $15,000,000 for the replacement, training and disposal program and $11,000,000 for a one‑year FAA radar data pathfinder to raise VANTAS to the FAA’s security and operational standards.

- FAA radar data pathfinder: Witnesses described the $11 million as funding for program management, system redesign, cybersecurity upgrades, personnel security vetting (public trust certifications), third‑party assessment, integration testing and operational flight trials required by the FAA and other federal agencies to permit unfiltered radar data sharing.

Who testified

- Frank Mattis, director of UAS Integration at Thales (VANTAS systems integrator), described the state‑industry partnership and said NDAA compliance includes supply chain components and that a phased federal ban is already affecting some procurements.

- Trevor Woods, executive director of the Northern Plains UAS Test Site, and Erin Raisler, deputy executive director, testified for the test site. Woods said the test site is prepared to administer the replacement program; Raisler detailed security, training and third‑party audit work needed to accept FAA data.

- Other supporting witnesses included Josh Reedy (CEO, Thread) and Aaron Weber (policy director, governor’s office). Reedy urged attention to software and enterprise data management as part of security.

Questions and concerns raised in committee

Committee members pressed witnesses on cost, scope and the plan’s limits. Representative Kempenick and others asked whether $15 million and $11 million are sufficient; Natey and witnesses replied the $15 million covers purchase, training and disposal but costs vary by capability. Witnesses estimated NDAA‑compliant platform costs generally run higher than popular consumer models and gave rough price ranges for compliant systems.

Members also asked about private‑market drones. Witnesses emphasized HB1038 applies only to state agency inventory and higher education; it does not regulate private citizens or local governments. Several representatives asked how the program will produce a return to the state; witnesses pointed to a royalty and commercialization model tied to VANTAS but said contractual mechanisms and revenue timing are still being developed.

Formal action and next steps

Representative Munson moved a do‑pass recommendation; Representative Steaman seconded. The committee voted 23-0 to give HB1038 a do‑pass recommendation and did not place the bill on the consent calendar. Representative Mike Natey agreed to carry the bill to the House floor.

Context and limits

The bill’s proponents framed the measure as proactive compliance with federal policy (NDAA) and as a strategic investment in the VANTAS shared‑use infrastructure that could enable expanded beyond‑visual‑line‑of‑sight operations and faster FAA approvals. Witnesses said the pathfinder is intended to be a one‑year program to validate security controls and procedures; if validated, the state could offer services or licensing to other jurisdictions. They also cautioned that replacing state drones does not affect privately owned UAS.

What remains unresolved

Committee members sought more concrete projections of long‑term return on investment and more precise per‑unit replacement cost estimates. Witnesses provided ranges and said further procurement and operational planning would be handled by the test site, subject to reporting requirements in the bill.

The committee’s recommendation sends HB1038 to the House floor with a due‑pass report and a roll‑call record of the 23‑0 approval; the sponsor will carry the bill into further action.