FEMA’s latest counter-drone funding round gives states and territories an opportunity to strengthen airspace security. But an overdue federal legal advisory leaves applicants navigating uncertainty over which technologies trigger federal restrictions, and how the data those systems collect must be handled. The result: 56 state agencies will spend $250 million while making their own calls about which detection data they are required to hand to federal partners and which is subject to strict handling and retention requirements under federal law.
The Bottom Line Up Front
On October 16, 2026, the Federal Emergency Management Agency (FEMA) released the second $250 million Notice of Funding Opportunity (NOFO) for its Counter-Unmanned Aircraft Systems (C-UAS) Grant Program. Unlike the FY 2026 program, the FY 2027 funding round is open to every state and territory.
The new grant also brings changes to mutual aid commitments, technology priorities and data sharing. Those changes make an unresolved question increasingly consequential: Which counter-drone detection technologies fall under 6 U.S.C. § 124n, the federal statute that authorizes certain counter-drone activities that would otherwise face restrictions under federal law? As expanded by the SAFER SKIES Act, that authority extends to qualifying state, local, Tribal and territorial law enforcement and correctional agencies (SLTT agencies), subject to specific requirements. But determining which detection technologies require that authority, and therefore trigger its strict data-handling requirements, remains a challenge for agencies buying and operating these systems.
What the FY 2027 C-UAS Grant Program Funds
The FY 2026 grant focused on protecting the FIFA World Cup 2026, America 250 and related events. It was released before passage of the SAFER SKIES Act, which granted SLTT agencies relief under § 124n to conduct certain C-UAS detection and mitigation activities. To use detection and mitigation technology procured through that grant, participating SLTT personnel were deputized by the Department of Justice (DOJ) through the FBI.
The FY 2027 program operates under the new authorities established by the SAFER SKIES Act and its implementing regulations in 6 C.F.R. Part 124. Its stated purpose is to “support the development of nationwide detection and response capabilities overall and in support of the 2028 Olympic and Paralympic Games, including the nationwide torch relay.”
All 56 State Administrative Agencies (SAAs) are eligible for noncompetitive statutory minimum allocations. Each state, Puerto Rico and the District of Columbia receives a statutory floor of $3,325,000. Each of the four other territories receives $760,000. Permissible costs fall into five categories:
- Planning
- Organization
- Equipment
- Training
- Exercises
Mitigation equipment must be mobile, fall within an Authorized Technologies List category and appear on the Authorized Systems List where that list is populated. Unlike the FY 2026 NOFO, the FY 2027 version requires every awardee to include a mutual aid commitment, and DHS “strongly recommending radar systems.” The application window is short: 31 days, ending November 16, 2026.
Counter-Drone Data Sharing Raises Compliance Questions
Another significant change concerns detection data. Grant-funded detection systems must be configured to participate in a data-sharing effort, “As allowed by applicable jurisdictional records retention policies, data sharing restrictions, and information law, and consistent with the data retention, minimization, and dissemination requirements of 6 C.F.R. Part 124.”
The data sharing requirement puts a longstanding legal ambiguity at the center of grant planning. The SAFER SKIES Act expanded C-UAS authority, but it did not resolve precisely which detection technologies implicate § 124n. That question matters because once § 124n applies, the statute and 6 C.F.R. Part 124 strictly limits how agencies collect, use, retain and share drone communications. Generally, collection must be necessary for authorized operations, protect constitutional rights and minimize unrelated information; it cannot be used for general surveillance. Incidental data must be promptly deleted, and drone control communications generally cannot be retained beyond 180 days without a legal exception or shared for unrelated investigations.
SLTT agencies also must maintain legally reviewed procedures and protected six-year audit records, verify any third party’s authority to intercept and strip communications content before sharing sensor data with vendors. None of those limits reach anonymized pattern data or data from sensors that do not implicate § 124n. The resulting uncertainty affects more than equipment selection. It shapes how agencies collect, store, retain and share the information those systems produce.
Why RF Detection Technology Needs a Closer Legal Review
C-UAS detection systems generate, collect and process substantial volumes of sensor-derived data to detect, track, classify and identify potential drone threats. Radio frequency (RF) sensors illustrate why the legal distinctions matter. From a legal perspective, these systems can generally be grouped into three categories based on how they collect, process and use electronic communications between a drone and its controller:
- Signal location: Using directional antennas, signal-strength measurements and triangulation techniques to determine the bearing and location of active drone and controller signals.
- Non-content information: Intercepting, recording, decoding or capturing dialing, routing, addressing or signaling information, commonly called DRAS.
- Communications content: Intercepting, decrypting or otherwise accessing the content of communications between a drone and its controller.
The first category is generally understood not to require the statutory relief contemplated under § 124n. The second and third involve capabilities identified in the 2020 DOJ, DHS, FAA and FCC Interagency Legal Advisory as potentially implicating federal privacy laws.
Determining where a particular sensor falls requires a technical assessment, not simply a review of its marketing materials. Labels such as “passive” or “detection-only” do not establish whether a system implicates federal law. Agencies need to understand what information a sensor acquires, how it processes that information and whether its operation involves acquiring DRAS information or intercepting communications content.
The Missing Federal Guidance on C-UAS Technology
Several federal documents have attempted to clarify which RF capabilities require § 124n relief, but they have not supplied a consistent, sufficiently detailed framework.
For example, the FY 2026 NOFO included an extensive discussion of the legal implications of different sensor types. The SAFER SKIES Act Interim Final Rule and supplemental guidance offered explanations that appeared to conflict with that discussion. The Authorized Technologies List identifies RF technology as the only currently approved detection technology implicated by § 124n. The FY 2027 NOFO now provides guidance that more closely follows the language DOJ and DHS used in the Interim Final Rule.
Taken together, these documents still leave agencies without the specificity needed to determine reliably how they should collect, retain and share data from their C-UAS systems. An updated interagency legal advisory should clearly answer those questions. Its revision is already overdue.
On June 6, 2025, the president signed Executive Order 14305, Restoring American Airspace Sovereignty. The order directed the attorney general, the secretary of transportation, the secretary of homeland security and the FCC chairman to revise the August 2020 advisory “to reflect relevant developments in Federal law and regulations addressing drones.” The deadline was July 6, 2025, 30 days later.
Revising a four-agency legal document grounded in complex engineering was an ambitious assignment for that timeframe. But more than 15 months after the deadline, the missing update has practical consequences: Agencies are preparing to spend another $250 million without clear guidance on how to handle the extensive datasets their new systems will collect. DOJ should lead the effort to complete and release the updated advisory before the next round of federal funds is spent.
How Grant Applicants Can Build a Layered Counter-Drone Strategy
States are unlikely to leave their allocations unused while waiting for updated guidance. With applicants advised to submit proposals totaling 50% above their allotted funding, demand is likely to exceed available resources. The practical challenge is to build useful capabilities while preserving flexibility as the legal framework develops.
Prioritize Complementary Detection Sensors
DHS’s recommendation to include radar provides a starting point. The scoring rubric awards additional points for radar, electro-optical/infrared (EO/IR) sensors, Remote ID receivers and, “Passive RF (non-content) with direction-finding (DF) that inspects physical waveforms only (no content/payload reading) and names at least one DF method (TDOA, FDOA, POA, or AOA).”
The NOFO does not spell out those acronyms. TDOA, FDOA, POA and AOA commonly refer to time difference of arrival, frequency difference of arrival, power of arrival and angle of arrival.
Radar, EO/IR and Remote ID receivers provide detection capabilities outside the strict data-handling requirements of § 124n. A layered approach can combine those sensors with RF technologies subject to the statute’s requirements, rather than making the entire detection architecture dependent on one sensor type or one interpretation of the law. That flexibility matters as guidance evolves and some requirements may shift or ease.
Get Sensor Data-Handling Details in Writing
Applicants also need to examine the NOFO’s federal data-access condition. Grant-funded systems, and the agreements supporting them, must permit DHS, DOJ, DOE and DOW access to detection data. In practice, that may involve shared cloud access to a vendor’s platform. Before selecting a system, agencies should ask vendors:
- How is the data feed from each sensor type retained?
- How long is that data kept?
- Where is it stored?
- How will federal partners access it?
Those answers should be documented in writing. Understanding the platform’s overall capabilities is not enough; applicants need visibility into how it handles data from each sensor.
Connect Procurement to Statewide Critical Infrastructure Needs
The FY 2027 NOFO requires all mitigation equipment to be mobile. It also signals acceptance, and potentially encouragement, of comprehensive statewide C-UAS strategies that address the needs of multiple critical infrastructure partners.
Jennifer Daskal, a Venable partner and former White House deputy homeland security advisor, urged states to use the funding to increase protections for critical infrastructure. “States should seize this opportunity to work proactively with critical infrastructure owners and operators, identify potential vulnerabilities, and close identified gaps, using this new round of funding to put in place key protections that will make their communities safer.”
A complete statewide strategy may not be achievable within a 31-day application window. SAAs can nevertheless engage critical infrastructure partners and describe those broader planning efforts in their proposals.
Use Independent C-UAS Testing to Inform Purchases
Before committing to a vendor, applicants should also review resources such as recent C-UAS testing from DHS’s National Urban Security Technology Laboratory (NUSTL). NUSTL’s independent testing and performance metrics can help agencies evaluate technology and make more informed procurement decisions within limited budgets.
Legal Clarity Before Counter-Drone Deployment
The FY 2027 NOFO spans dozens of pages and points applicants to the SAFER SKIES Act, 6 C.F.R. Part 124, the Authorized Technologies List and the Authorized Systems List. What remains missing is an updated interagency advisory that clearly explains which sensor capabilities fall under § 124n and which do not.
Fifty-six SAAs face a November 16 application deadline without that guidance. Procurement, deployment and data-sharing decisions will follow. DOJ can help close the gap by completing the revision ordered more than 15 months ago. Until then, the funding offers a significant opportunity to strengthen counter-drone capabilities, but leaves recipients carrying legal uncertainty alongside their new operational responsibilities.