Udall said that the private sector industry for domestic drones would be good for U.S. jobs and the economy but that federal privacy protections have not kept pace with the new technology developments.
Udall said his bill would protect Americans from private drone operators using surveillance on them without consent and ensure the constitutional right to privacy.
The Federal Aviation Administration has estimated that there could be 30,000 unmanned aerial vehicles in U.S. airspace within the next decade.
The Senate Judicial Committee held a hearing on the issue last week, where members heard state law enforcement officers talk about the potential benefits of domestic drone use.
Earlier this month, Sen. Rand Paul (R-Ky.) filibustered the Senate for 13 hours, demanding the Obama administration explicitly say it could not launch a military drone attack on U.S. citizens on American soil.