State privacy officials are asking lawmakers to remove a 10-year moratorium on state artificial intelligence regulation from the massive reconciliation package when it hits the Senate floor as early as this week, after failing to persuade the parliamentarian to rule the provision out of order.
“We object to any proposal that would unduly constrain states’ authority to regulate AI, whether it’s a straightforward preemption of state law, or conditioning federal funds on compliance with federal policy,” the state “privacy authorities” from six states say in a June 23 letter to Senate Majority Leader John Thune (R-SD) and Minority Leader Charles Schumer (D-NY).
“The Enforcement Moratorium’s sweeping provisions could rob millions of Americans of rights they already enjoy. We urge the Senate to reject the Enforcement Moratorium that would strip states of their ability to safeguard their residents’ privacy rights from AI-related harms,” the state officials say.
Senate Commerce Chairman Ted Cruz (R-TX) added the AI moratorium to his committee’s contribution to the reconciliation package, known as the “One Big Beautiful Bill,” which would implement President Trump’s tax and spending agenda. Senate leaders are trying to bring the measure to the floor this week.
The Senate parliamentarian determined on June 21 that the moratorium provision passes muster under the Senate’s Byrd Rule for inclusion in reconciliation legislation, after it was challenged by Commerce ranking member Maria Cantwell (D-WA). She said it would “prohibit AI policy that is already on the books” at the state level.
The Byrd Rule prohibits “extraneous provisions” in reconciliation legislation including “those which do not change revenues or spending” or provisions “where the change in revenue or spending is ‘merely incidental’ to the non-budgetary changes.”
The latest letter from state officials opposing the moratorium was signed by California Attorney General Rob Bonta and the attorneys general of Connecticut, Delaware, New Jersey, Oregon and Vermont. They are all members of the Consortium of Privacy Regulators. Also on the letter was the head of the California Privacy Protection Agency.
“States have consistently led on privacy and technology because they have the proximity and agility to identify emerging threats and implement innovative solutions,” they say. “State privacy authorities are often the first to receive consumer complaints and identify problematic practices. States also possess the nimbleness to respond quickly to privacy threats, as demonstrated by recent action in Colorado to extend privacy protections to neural data and other novel categories of personal information in response to new technologies, which has since been mirrored by other states.”
The state officials say, “Artificial intelligence systems pose immediate and tangible privacy risks that cannot wait a decade for federal action. AI applications currently collect, process, and make decisions based on vast amounts of personal data, often without meaningful consent or transparency.”
Further, they say, “The often-cited concerns about a patchwork of state laws are overstated, as states regularly work together and build upon one another’s legislative frameworks, creating coherent approaches that respect both innovation and consumer protection. The state privacy laws, for example, are remarkably consistent with one another because of intentional collaboration among the states.”
The letter from the privacy consortium members follows a letter to Congress from 40 state attorneys general opposing the moratorium. The House-passed reconciliation bill also contains a 10-year moratorium on state AI regulation -- structured differently, but attracting opposition from the same roster of state officials, civil society groups and some tech groups.
From civil society
The Consumer Federation of America, among the civil society groups that have sharply criticized the moratorium proposal, weighed in after the Senate parliamentarian ruled it could remain in the reconciliation bill.
“This extreme measure is a clear gift to Big Tech at the expense of everyday people,” said Ben Winters, CFA’s director of AI and data privacy. “Barring states from regulating AI that harms their residents should be a complete nonstarter for lawmakers who want to put the people they represent over the profits of tech companies.”
Winters said, “This provision should have been stopped procedurally. It is a reckless overreach that is not only bad for consumers but for responsible innovators. This provision would leave the use of this technology unregulated and unaccountable.”
Eric Null of the Center for Democracy and Technology said in a statement, “Even if the AI moratorium were narrowed, it’s still a bad policy that would force states to choose between accepting more funds to get communities online and protecting their residents from AI harms for 10 years. AI protections and broadband infrastructure buildout should happen hand-in-hand, not be an either-or choice."
Null said, "AI companies in the states that take more BEAD funding will have no accountability for their practices under either state or federal law. Congress should eliminate the provision from the reconciliation bill.”