Will a Moratorium on State AI Laws Advance in the US Senate?

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On Thursday, May 22, the United States House of Representatives narrowly advanced a budget bill that included the "Artificial Intelligence and Information Technology Modernization Initiative," which includes a 10-year moratorium on the enforcement of state AI laws. Tech Policy Press editor Justin Hendrix and associate editor Cristiano Lima-Strong discussed the moratorium, the contours of the debate around it, and its prospects in the Senate.

What follows is a lightly edited transcript of the discussion.

House Speaker Mike Johnson (R-LA):

The bill is passed.

WRAL News:

President Trump scored a major legislative victory on Thursday. The House passed his Big Beautiful Bill by a razor-thin margin. The final vote was 215 to 214 with one member voting present.

Justin Hendrix:

Early in the morning on Thursday, May 22nd, the Speaker of the United States House of Representatives, Mike Johnson, announced the passage of a budget bill that advances President Donald Trump's domestic agenda. Tucked in alongside the extension of tax cuts, reductions in spending on Medicaid and social services, and increases on immigration enforcement and the military is section 43201, the Artificial Intelligence and Information Technology Modernization Initiative. The measure establishes a moratorium on the enforcement of state AI legislation. It says, "No state or political subdivision thereof may enforce, during the 10-year period beginning on the date of the enactment of this act any law regulation limiting, restricting, or otherwise regulating artificial intelligence models, artificial intelligence systems, or automated decision systems entered into interstate commerce."

Supporters of the moratorium say it would stop a confusing patchwork of state AI laws that have cropped up nationwide and give Congress space to craft its own AI legislation while preserving American leadership. For instance, here's Representative Jay Obernolte, a Republican from California, during debate over proposed amendments to the measure in a House Energy and Commerce markup on May 14th.

Rep. Jay Obernolte (R-CA):

And let me explain why that moratorium is so important to safeguard the investment. Right now, there are over a thousand bills on the topic of AI regulation pending in state legislatures across the country. Imagine how difficult it would be for a federal agency that operates in all 50 states to have to navigate this labyrinth of regulation when we potentially have 50 different states going 50 different directions on the topic of AI regulation. And in fact, this is exactly the same circumstance that we are putting private industry in as they attempt to deploy AI. And the gentleman was talking about the potential hazards of AI, which I completely agree with, but Article I of the US Constitution gives the ability to regulate interstate commerce exclusively to this body, to the Congress, not to the states. And so much of this deployment of AI is obviously interstate commerce.

Now, no one is suggesting that AI should be unregulated. I certainly don't believe that. I don't think anyone on this dais believes that. But the appropriate body for doing that regulation is the US Congress and colleagues, we have the ability to do this.

Justin Hendrix:

Opponents call it a dangerous giveaway to tech firms that would leave consumers, particularly vulnerable communities and children, unprotected and wipe out a flurry of state laws that address everything from deep fakes to discrimination and automated hiring. Here's Representative Yvette Clarke, a Democrat from New York at the markup hearing.

Rep. Yvette Clarke (D-NY):

Pausing AI regulations for 10 years is extremely dangerous, given the rapid proliferation of AI technology. We don't know what AI will be capable of a year from now, let alone a decade from now. And while we in Congress absolutely must pass federal data privacy legislation and a framework, regulatory framework for artificial intelligence, it is short-sighted and foolish to prevent states from stepping in to protect their citizens in the meantime. It is crazy. I can't even believe that we are sitting here debating this. Let me be clear. No one stands to benefit from this provision other than Donald Trump's big tech billionaire bros.

Justin Hendrix:

As the bill moves over to the Senate, the debate over the AI moratorium will continue. We've already published multiple perspectives on it at Tech Policy Press, and we invite more in the days and weeks ahead. One thing is clear, if enacted, this moratorium would be one of the most important tech policy decisions in the US this century.

To explore the contours of the debate, I sat down with Tech Policy Press Associate Editor Cristiano Lima-Strong. Cristiano, how's it going today?

Cristiano Lima-Strong:

I'm doing well. How are you, Justin?

Justin Hendrix:

Well. Let's talk about what happened yesterday, or I should say over the course of the last few days in the House of Representatives. It was a giant budget process, the Big Beautiful Bill that Republicans and the Trump administration wanted to push through to reflect his agenda. How did things pan out when it comes to tech policy, artificial intelligence?

Cristiano Lima-Strong:

So the biggest development was that the version that passed the House through the reconciliation process did include this 10-year moratorium on state AI laws. And so basically what it would do is it would bar states from enforcing laws that target artificial intelligence use, and there is a definition of that, for a 10-year period. And so there's been a lot of concern since this was first raised at the House Energy and Commerce Committee that we've heard a lot of digital rights groups and advocates, folks that have been pushing for more regulation in the sector warn that this would be a huge setback for their efforts to set some guardrails around the technology at the state level, where there has been a ton of action in contrast to Congress, where they've yet to pass major reforms here.

Justin Hendrix:

It feels like we weren't talking about an AI moratorium a couple of weeks ago and then suddenly, people were talking about it. You had Ted Cruz kind of talking about the idea in a Senate hearing that included Sam Altman and other tech executives.

Sen. Ted Cruz (R-TX):

Final question for each of you. Would you support a 10-year learning period on states issuing comprehensive AI regulation or some form of federal preemption to create an even playing field for AI developers and deployers?

Sam Altman:

I'm not sure what a 10-year learning period means, but I think having one federal approach focused on light touch and an even playing field sounds great to me.

Justin Hendrix:

And then it seemed like literally over the weekend, after that hearing, we saw the chairman of the Energy and Commerce Committee, Brett Guthrie, put forward this language. How surprising was this on the hill?

Cristiano Lima-Strong:

So, two big things here. On one hand, Republicans have been generally supportive of legislation that preempts state standards on tech issues for some time. We've seen them pushing for this in the context of data privacy for years and years and years, along with other spaces. So it's not inherently surprising that Republicans would want something like this. But how quickly this has gone from, as you mentioned, an idea that's in the ether to actual legislative text that's passing a chamber of Congress is pretty staggering. I alluded to the privacy debate. There have been bills to preempt state privacy standards for years, and none of those have been signed into law, whereas around AI, discussions about legislation have really only picked up in the past couple of years, in the dawn of ChatGPT. And yet this went very quickly from introduction to markup to passage in the House to where we're talking about, is this thing actually going to become a federal law, and that's pretty striking.

Justin Hendrix:

Been a lot of changes in the language through the week, and we're just now assessing what's in the final version. But what can you tell about what types of laws would be impacted? How sweeping is this ultimately?

Cristiano Lima-Strong:

Yeah, the AI moratorium, the crux of it is largely intact from when it was first introduced. And I would say that it's both brief and sweeping, and part of that brevit,y I think, feeds into that. It talks about regulations that would restrict AI use. There's been some discussion for a while on Capitol, how do you even define AI? It talks about AI models, AI systems, and automated decision systems, and particularly ones that deal with interstate commerce. This was one that was added. I think there are still a lot of people trying to figure out exactly what that would entail, what laws would be impacted, and so it's still a big question, but it's fairly sweeping in scope. A couple of exceptions that are notable, though, and exemptions that were included in the law, is that it does say that it would not apply to, "Generally applicable laws."

Some of the lawmakers that have been pushing for this have talked about that basically the intent here is if you have, say for example, a state consumer protection law dealing with fraud or some other harm, and it's not specifically calling out AI, but the harm just happens to occur with the use of AI, that those would be exempted. So that's in there. One of the changes that has been made since we've seen the House Energy and Commerce consideration is that they included this exemption that it would not apply to violations dealing with criminal penalties in dealing with AI. One effect of that, if we do see this pass, is that you could see more of an effort at the state level for legislators to criminalize AI harms. That's one potential consequence here. So that's a bit of an overview, but I think there are still major questions about how much this would extend to and which state laws exactly would be impacted.

Justin Hendrix:

That does seem to be one of the main fissures that folks are arguing about who were for and against this moratorium. So what's next? It's headed to the Senate. Tell us a little bit about the Senate process, what to expect, whether it will get by the parliamentarian. The Byrd Rule is something that listeners may have heard of in the past but might need a refresher on.

Cristiano Lima-Strong:

Yeah, so I think there are two big questions here. One is, can they do this? And two, will they have the support to do this? So on the can they do this front, you mentioned the Byrd Rule. Basically, how Republicans in the House passed this was they included this section through the reconciliation process, which is a way that they can get bills over the finish line with a simple majority vote and so they don't necessarily need democratic buy-in to get something done with Republicans controlling both chambers. But each chamber has its own rules on this. And in the Senate, the Byrd Rule basically states that provisions dealing with reconciliation have to actually not be extraneous to the budget process. And so Republicans in the House included this with language that appropriated funds to the Commerce Department for the purpose of modernizing their technology systems. And so the parliamentarian in the Senate is going to have to make a decision on whether that holds muster by their rules.

Now, Republicans in the Senate could override the parliamentarian. We just saw them do this recently. So that's not necessarily conclusive. But if they were to go against the parliamentarian, that could also open them potentially to more legal challenges from states who will say, "Wait a minute, the parliamentarian just ruled against this. Why are you still doing this?" So those are a couple of hurdles. And then we could also perhaps get into some of the politics of this, which is we've heard a couple of Republican senators, Senator Blackburn from Tennessee, Senator Hawley from Missouri, express concerns about this. They have been pushing for a lot of regulation in this sector. And part of what Senator Blackburn said during a hearing that she held this week is that she's concerned that it would impact laws like the ones legislators have passed in her state of Tennessee. One in particular that she highlighted is the ELVIS Act, which deals with AI deep fakes targeting content produced by artists and musicians.

Sen. Marsha Blackburn (R-TN):

I do want to mention that Tennessee passed the Elvis Act, which is like our first generation of the NO FAKES Act. And we certainly know that in Tennessee, we need those protections. And until we pass something that is federally preemptive, we can't call for a moratorium.

Cristiano Lima-Strong:

And she basically said we shouldn't be passing things that are preemptive if we're not passing laws ourselves, because it should be noted this moratorium, it's not setting standards on AI, it is just preempting the regulation of state AI proposals. And so we'll have to see how much of an issue this is for those senators. Is this something where they're willing to go against the One Big Beautiful Bill? Are they going to die on that hill? That's a question. Or is this something where perhaps they can negotiate carve-outs? Maybe there's a carve-out for that Tennessee measure where they make some deals to cut out parts of this, but where there's enough support to get it done. So those are all major questions that Republicans are going to be contending with in the coming weeks.

Justin Hendrix:

Of course, there's going to be a lot of folks raising their voices outside. We've already heard from state's Attorney General, we've heard from state lawmakers across the country who don't want to be preempted, who feel like they've put a lot of effort into these things. What's the timeline for this fight? What would we be looking for here with regard to the Senate process and when this becomes law, might the fight continue?

Cristiano Lima-Strong:

Yeah, so Republicans have said that they want to try to get this done by July 4th. I'm sure President Trump would love to have a signing of his big domestic package on Independence Day. And so that's the goal. There've already been some Republican senators kind of tempering expectations around that. Congress does not tend to move as fast as it likes to. I think that's fair to say. I think certainly they're trying to get something done by August recess, but that's the target date, and so we'll have to see if they move quickly enough. Specifically on the AI moratorium front, we could see a decision in the more near term. The parliamentarian is going to have to make a determination on what's in or what's out. Senate Republicans have talked about potentially there being a committee process. And so we could find out earlier on what are Senate Republicans going to include in their version of this? What are they going to bounce out and how is the AI moratorium going to fit into that?

Justin Hendrix:

And if this fails to make it through reconciliation, do we see it advancing as a standalone potentially? I mean, going back to Senator Cruz, I mean, he's said he's going to bring forward legislation. This appears to be one of the things he'd like to include in it.

Sen. Ted Cruz (R-TX):

We need to advance legislation that promotes long-term AI growth and innovation. That's why I will soon release a new bill that creates a regulatory sandbox for AI, modeled on the approach taken by Congress and President Clinton at the dawn of the internet, that will remove barriers to AI adoption, prevent needless state overregulation, and allow the AI supply chain to rapidly grow here in the United States.

Cristiano Lima-Strong:

Senator Cruz is the key player in that regard. He chairs the Commerce Committee, which is what legislation like this would have to go through. He raised the specter of this at a hearing recently, where a lot of tech executives expressed support for this very type of thing, preemptive standard in some regard. And so if it fails to make it through reconciliation, we could see it come back either in a package that's led by Senator Cruz as a standalone measure.

He's talked about wanting to introduce an AI framework of his own, so we could see that advance as a standalone measure. Or in a few months, we could again see lawmakers try to incorporate this in another must-pass-type bill. As we often see with these tech bills, there's a lot of discussion of, are they going to make it in the defense package? Are they going to make it in the spending package? So even if the folks that you alluded to that are expressing concern about this managed to defeat this in this iteration, I don't think that this will be dead. I think we're going to be talking about this for some time.

Justin Hendrix:

And how do you contextualize this more generally? I mean, the debate has certainly shifted in Congress on AI. Debate has shifted around the world, it seems, as a kind of general change in the zeitgeist in terms of favoring innovation over favoring regulation.

Cristiano Lima-Strong:

Yeah, I mean, the first thing I thought of when I heard of the moratorium was I flashed back to these hearings that I covered in 2019 on the House Oversight Committee where it was led by the late Congressman Elijah Cummings, where they talked about having a moratorium on the use of facial recognition technology, so a subset of AI. And at the time, a lot of the discussion was, is there enough bipartisan support for this? And seemingly there was some.

Rep. Elijah Cummings (D-MD):

I want to make clear at the onset that this is a bipartisan issue. Both the conservatives and liberals alike have real questions about when they are being monitored, why they are being monitored, who is monitoring them, and what happens to this information after it is collected.

Cristiano Lima-Strong:

Now, obviously, there were differences about are we talking just about how the federal government is using it, how much are we talking about private sector use? Jim Jordan was the ranking member on the committee at the time, but there was some bipartisan support for this idea of how do we check this technology? And so now, fast-forward six years, we've flipped completely in the other direction, where we're very much talking about, well, should any states be passing regulation in this regard? We've also heard lawmakers at the federal level pump the brakes on comprehensive packages. They've talked about wanting to do things more piecemeal. So the debate has really shifted fairly dramatically in the past couple years as the technology has boomed, but also the industry has taken more of an interest in exerting its power in Washington and pushing for standards like this that we're seeing.

Justin Hendrix:

We've had many perspectives on this already at Tech Policy Press. I'm sure we'll have multiple contributions in the weeks ahead as this continues to unfold. And Cristiano, of course, we'll be looking to you to cover these issues. Thank you very much.

Cristiano Lima-Strong:

Thanks so much, Justin.