House Commerce Proposes 10-Year Ban on State AI Regulations

Democrats call the provision, in the reconciliation package, a ‘giant gift to Big Tech.’

House Commerce Proposes 10-Year Ban on State AI Regulations
Photo of House Energy and Commerce Committee Chairman Rep. Brett Guthrie, R-Ky., from May 2020, by Greg Nash/AP

WASHINGTON, May 12, 2025 – A Republican budget proposal that would block state and local governments from regulating artificial intelligence for the next decade drew sharp criticism Monday.

Tucked into a broader budget reconciliation bill advanced by Republicans on the House Energy and Commerce Committee Monday, the provision would prohibit states, cities, and counties from passing or enforcing any law that regulates AI models or systems until 2035.

“The Republicans’ 10-year ban on the enforcement of state AI laws is a giant gift to Big Tech,” Rep. Jan Schakowsky, D-Ill., ranking member of the committee’s Commerce, Manufacturing, and Trade Subcommittee, said in response. “This ban will allow AI companies to ignore consumer privacy protections, let deepfakes spread, and allow companies to profile and deceive consumers using AI.”

The bill includes narrow carveouts allowing enforcement only of laws that facilitate AI adoption, such as those streamlining licensing or permitting. Substantive state rules on AI transparency, bias audits, or risk assessments would likely be blocked under the moratorium.

House Energy and Commerce Committee Chairman Rep. Brett Guthrie, R-Ky., pushed back on E&C Democrats’ criticism in a statement Monday afternoon, accusing opponents of mounting a “fear campaign to scare Americans without any of the details.”

Yet, the text of the bill’s language reads: “No State or political subdivision thereof may enforce any law or regulation regulating artificial intelligence models, artificial intelligence systems, or automated decision systems during the 10-year period beginning on the date of the enactment of this Act.”

Consumer Reports voiced strong opposition to the preemption language. 

“This incredibly broad preemption would prevent states from taking action to deal with all sorts of harms – from non-consensual intimate AI images to biased hiring systems and AI-driven threats to critical infrastructure,” said Grace Gedye, policy analyst at Consumer Reports. “Congress has long abdicated its responsibility to pass laws to address emerging consumer protection harms; under this bill, it would also prohibit the states from doing so.”

But Kristian Stout, director of innovation policy at the International Center for Law & Economics, defended the moratorium. Several elements in the bill echo comments he submitted to the Energy and Commerce Committee’s privacy working group last month.

“We don’t really know what AI is yet,” Stout told Broadband Breakfast. “The real risk is that states rush to create broad, compliance-heavy frameworks that consolidate the industry and freeze out the innovation we actually want. There are probably things we’ll want to regulate – but we don’t yet know what they are.”

The House Energy and Commerce Committee was expected to mark up its contributions to the budget reconciliation bill, H.Con.Res.14, in Rayburn 2123 at 2 p.m. on Tuesday, May 13. 

Because the legislation is moving through the budget reconciliation process, any provisions must survive scrutiny under the Byrd Rule, which limits what can be included in reconciliation to measures that directly impact federal spending or revenue. 

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