In a battle between privacy and profits, many states find themselves playing both sides of the street in the intense national debate over drones.

Worried about violations of civil liberties, at least 19 states are considering limits on how the unmanned craft can be used, a response to swelling public fear that drones pose serious threats to Fourth Amendment and privacy rights.

But many of those same states don’t want to miss out on the billions of dollars in potential economic activity and development the booming drone technology may be offering. They also want a front seat for the hottest new sector in aviation technology.

To that end, about 30 states are angling to host one of the Federal Aviation Administration’s six proposed test sites, where drones will undergo rigorous evaluation to see how they handle different altitudes, climates and other varying conditions. Government and high-skilled industry jobs are tied to the test-site program, and, by extension, so is a great deal of money to be spent in each host state.

The potential payoffs are huge: A Government Accountability Office (GAO) study last September cited an industry survey that put the combined public- and private-sector spending on drones over the next decade at $89 billion, including spinoff spending for research and development estimated at $28.5 billion over the same period.

Industry leaders are urging states to use caution when walking that tightrope.

The sector’s leading trade group, the Association of Unmanned Vehicle Systems International (AUVSI), is sensitive to rising privacy concerns, but also fears states may be sabotaging their own ability to cash in on the drone revolution.

“Depending on the provisions of specific state legislation, state officials may be working at cross-purposes — working to attract [drone] jobs on the one hand while, on the other, working to kill the job-creation potential of the technology,” said AUVSI spokeswoman Melanie Hinton. “We would encourage officials in all states, and especially those seeking test sites, to work collaboratively to ensure that state legislation doesn’t undermine the job-creation potential of unmanned aircraft or a particular state’s ability to compete for a test site.”

Competing to host

The FAA formally unveiled its test-site program Feb. 14. It’s now accepting applications to host the locations, which will be part of the agency’s complex and challenging effort to safely integrate commercial drones into U.S. airspace by September 2015.

As the FAA deals with safety, it and other federal departments are struggling with how best to ensure that privacy rights aren’t violated by increasingly small, fast and undetectable drones. Jim Williams, who heads the FAA’s Unmanned Aircraft Systems Integration Office, recently compared the regulatory challenge posed by private-sector drones to that posed by the Wright brothers’ invention of the airplane.

Last week, another GAO report revealed that it is even unclear which arm of the federal government has primary responsibility for protecting those privacy rights from infringement by law enforcement, media or any other entity using a drone.

While more than a half-dozen privacy bills have been introduced in Congress, the confusion over exactly who would enforce those laws has led states to propose their own limits.

One such state is Virginia, which is not only seeking to host an FAA test site, but also is considering some of the harshest drone legislation in the country: a two-year moratorium on all state and local agency use of drones. The bill passed the state General Assembly on Thursday and is now on GOP Gov. Bob McDonnell’s desk.

State Delegate Benjamin L. Cline, Amherst County Republican, who introduced the ban in the state House, argues there’s no contradiction in what Virginia is doing. The drone legislation, he said, would not prohibit the FAA, the Department of Defense or other agencies from flying drones as part of testing procedures. It also wouldn’t hinder Virginia’s aviation and aerospace industries, he said.

“Virginia has been a leader in economic development in those areas,” Mr. Cline said. “We’re open for business. When it comes to these technologies, we want to remain a leader. We feel approval [to host an FAA test site] would be another step forward in Virginia’s continued leadership.”

The state has partnered with neighboring Maryland and will submit a joint application to the FAA. It’s not clear when the agency will announce the winners of the test-site competition.

Drone duality

Just as in Virginia, a drone duality is unfolding in Arizona. State Rep. Tom Forese, Maricopa County Republican, is sponsoring a privacy-protection bill while also lobbying for the state to be chosen by the FAA.

“On one hand, you have economic development. We’re talking about millions of dollars and thousands of jobs,” he said, according to the Arizona Daily Star. “On the other hand, you have significant threats to our privacy. I take them very seriously. We’re talking about the potential to be searched without a warrant.”

While it may seem that states are trying to have it both ways, it’s possible to both protect privacy and be part of drone expansion, said Jay Stanley, a senior policy analyst with the American Civil Liberties Union’s Speech, Privacy and Technology Project.

“We shouldn’t be selling our oldest traditions of privacy for some temporary economic gain. … That’s one of the reasons why state legislators should get ahead of the curve here and put in place some good privacy protections and open up the path for a lot of good, innovative uses for drones,” he said. “In the short term, this may look like a conflict. But in the long term, even the most greedy person who wants to do nothing but sell this technology, it’s in their interest for the privacy [questions] to be settled.”

Such a balance may be possible, but states realize that some voters may remain skeptical as drone expansion continues. They’re trusting that, by taking concrete steps to protect privacy rights while also promoting cutting-edge technology, they will eventually convince most residents of the virtues of unmanned aerial systems while putting their fears to rest.

“It is one thing to offer soaring rhetoric about the importance of both technology and/or civil liberties. But eventually both must be proven, affirmed and protected in the real world. That is exactly what we are offering to do in Florida,” said Jim Kuzma, chief operating officer of Space Florida, the state’s aerospace economic development organization.

Florida is yet another state where strict privacy laws are under consideration in the legislature — while Mr. Kuzma and others ready a pitch for an FAA test site.

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