Senate Strikes Budget Proposal on State Regulation of AI

The Senate voted to remove a 2025 budget reconciliation bill provision that would have imposed a moratorium on enforcing state-level artificial intelligence laws or regulations.

The Senate voted 99–1 to strike down the proposed moratorium, which was intended to support AI development under the Broadband Equity, Access, and Deployment ("BEAD") Act. As originally proposed, the amendment (at p.31) would have imposed a 10-year ban on state-level regulation of artificial intelligence. The provision contained the threat that grants under the $500 million BEAD funding could be withheld from states that imposed restrictions on AI. The proposed moratorium was later amended to condition the disbursement of BEAD funding on a five-year moratorium, during which states would refrain from enforcing AI-specific regulations. The revised version would have permitted states to enforce "generally applicable" laws that relate to AI.

NASAA President Leslie Van Buskirk, concerned about the impact the moratorium would have had on BEAD grants for funds to expand broadband access, praised the near unanimous decision stating that it was "a clear message that the states should not be forced to make an impossible choice between enforcing laws that foster innovation and fight fraud and accepting federal funding to expand broadband access."