Virginia is close to instituting a two-year ban on the use of drones, even as state officials lobby the federal government to become one of six new sites nationally where the controversial technology would be tested.

Virginia is part of a multistate coalition -- with New Jersey and possibly Maryland -- applying to the Federal Aviation Administration to become a test site for unmanned aircraft systems, or drones, The Washington Examiner has learned. It's among 28 competitors vying for one of six slots.

But industry insiders are concerned that Virginia could lose out on the opportunity -- and the economic benefits that come with it -- if Gov. Bob McDonnell signs a two-year moratorium on the use of drones by the state's law enforcement agencies. The General Assembly approved the moratorium last month with overwhelming bipartisan support.

"Virginia is speaking out of both sides of its mouth," said John Langford, CEO of Aurora Flight Sciences, a Manassas defense contractor that builds unmanned aircraft. "This is an intense competition, and at the same time they're passing legislation that you can't use these. That is sending mixed messages in a confusing way."

Drones were once used exclusive by the military, and President Obama's ongoing use of them to target suspected terrorists overseas is still generating considerable criticism at home and abroad. But the unmanned aircraft are now available to police departments and others that could use them for domestic surveillance, and that has some officials worried.

Supporters say the drones would provide a powerful tool for first responders. Opponents warn that domestic spying is a Big Brother-like threat to privacy.

That divide prompted the Virginia General Assembly to vote to ban the domestic use of drones for two years. Del. Ben Cline, R-Amherst, sponsor of the ban, calls it "an opportunity to take a breath and put some rules and procedures for the use of this technology by law enforcement."

McDonnell hasn't said whether he'll sign the ban, but he said recently on WTOP that "we should not be afraid of using technology" domestically.

While he weighs signing the ban, his administration is working with Virginia Tech on an application to become a drone test site, a spokesman confirmed. Maryland may join the coalition as well.

The federal government wouldn't give the state money if it wins the bid, but state officials are hoping the drone site would attract companies, and their high-paying, high-tech jobs. The FAA hopes to make a decision by year's end and will use the sites to develop rules for drone use in U.S. airspace.

Because the moratorium would only restrict law enforcement use of drones, not research, it shouldn't undercut the state's bid, said Craig Quigley, executive director of the Hampton Roads Military and Federal Facilities Alliance.

But others point to the FAA application guidelines that say its preference is a state without laws "limiting aircraft operations within the proposed test site area." That could be interpreted to include Virginia's moratorium, said Michael Toscano, president of the Association for Unmanned Vehicle Systems International.

Toscano said he has personally asked McDonnell not to sign the ban.

"There are ways to meet concerns of the public," Toscano said, "and not prevent the state from creating jobs and technology that can save lives."