US states oppose AI regulation ban in Trump tax bill

Top attorneys representing 40 states signed a letter urging leaders in Congress to reject the AI regulation moratorium language added to the budget reconciliation bill.

"The impact of such a broad moratorium would be sweeping and wholly destructive of reasonable state efforts to prevent known harms associated with AI," the letter states.

"This bill will affect hundreds of existing and pending state laws passed and considered by both Republican and Democratic state legislatures."

The amendment added by the House Energy and Commerce Committee to the budget reconciliation bill imposes a 10-year prohibition on states from enforcing any state regulation addressing AI or "automated decision-making systems," according to the state attorneys.

"The amendment added to the reconciliation bill abdicates federal leadership and mandates that all states abandon their leadership in this area as well," the state attorneys general wrote.

"This bill does not propose any regulatory scheme to replace or supplement the laws enacted or currently under consideration by the states, leaving Americans entirely unprotected from the potential harms of AI."

The letter notes that states have put in place laws designed to protect against AI-generated porn, deepfakes intended to mislead voters, and spam calls or text messages.

Some state laws have also been crafted to prevent biases in AI models.

"These laws and their regulations have been developed over years through careful consideration and extensive stakeholder input from consumers, industry, and advocates," the letter read.

Republican fiscal hawks on Friday sunk a key vote on advancing the mega-bill that is the centerpiece of Trump's domestic agenda, in a significant setback for the US president's tax and spending policies.

Trump is pushing to usher into law his so-called "One Big, Beautiful Bill" pairing an extension of his first-term tax cuts with savings that will see millions of the poorest Americans lose their health care coverage.

But a congressional Republican Party rife with divisions and competition within its rank-and-file has complicated the process, raising serious doubts that the sprawling package can pass a vote of the full House of Representatives next week.

The budget committee's no vote is not the final word on the package, which will be reworked and sent back to the panel for more debate starting 10:00 pm on Sunday (0200 GMT Monday) and a fresh vote.