The legislation, passed on a vote of 36 to 0, would not ban the use of unmanned aircraft outright, according to local news reports.
Local departments will also be required to maintain a log of drone usage and submit those logs and associated maintenance reports to the state attorney general annually.
“Information or records of a verbal or video communication derived from the use of an unmanned aerial vehicle shall be strictly safeguarded and shall not be made available or disclosed to the public or any third party,” according to the drone bill.
Any data deemed irrelevant to a criminal investigation must be discarded after 14 days, under the state senate proposal, reports state.
Despite Friday's vote, the drone bill still must make it through the state legislature's lower chamber and be signed into law by New Jersey Gov. Chris Christie (R).
If passed, New Jersey will join Florida, Idaho, Montana, Texas and Virginia as states with legislation restricting or banning outright the use of unmanned drones, according to data compiled by the American Civil Liberties Union.
The drone debate, and their possible use against American citizens. reached a tipping point on Capitol Hill earlier this year.
Sen. Rand Paul (R-Ky.) launched a 13-hour filibuster in March against the nomination of CIA Director John Brennan, protesting the Obama administration's justification for the use of armed drones in counterterrorism operations.
The justification, according to Paul, could open the door to armed drone strikes against U.S. citizens suspected of terrorism on American soil.
Paul ultimately ended his filibuster of Brennan's bid, but only after Attorney General Eric Holder issued a letter to the Kentucky Republican that the United States has no legal authority to take out an American citizen suspected to terrorism on U.S. shores.
But weeks after Holder issued his letter, the Department of Justice admitted to Congress that four America terrorist suspects had been killed in U.S.-led drone strikes in Yemen and elsewhere since 2009.
One of the four Americans identified — Anwar al-Awlaki, an American-born Muslim cleric — was believed to be the spiritual leader for al Qaeda's Yemen cell, known as al Qaeda in the Arabian Peninsula.
Holder identified the three other Americans as al-Awlaki’s son, Abdulrahman al-Awlaki; Samir Khan; and Jude Kenan Mohammed.
Those three individuals were not specifically targeted by the U.S. but were nonetheless killed in counterterrorism operations, Holder said in May.