Introduction
On March 13, 2025 [4], the House Energy and Commerce Committee advanced a significant legislative proposal: a 10-year moratorium on state enforcement of laws regulating artificial intelligence (AI) and automated decision-making technology (ADMT). This move, part of a broader budget reconciliation package [4], aims to modernize federal IT systems with commercial AI technologies [4], enhancing efficiency [4], service delivery [4], automation [4], and cybersecurity [4]. However, it has sparked considerable debate due to its potential to override existing state-level regulations focused on consumer protection and algorithmic bias mitigation.
Description
On March 13, 2025 [4], the House Energy and Commerce Committee advanced a 10-year moratorium on state enforcement of laws regulating artificial intelligence (AI) and automated decision-making technology (ADMT). This provision [1] [3], part of a budget reconciliation package aimed at modernizing federal IT systems with commercial AI technologies [4], seeks to enhance efficiency [4], service delivery [4], automation [4], and cybersecurity [4]. It prohibits any state or political subdivision from enacting or enforcing regulations on AI models, systems [4], or automated decision systems for a decade following the legislation’s enactment [4], effectively overriding numerous existing state-level laws focused on consumer protection, algorithmic bias mitigation [1], and technology regulation [1].
The California Privacy Protection Agency (CPPA) has voiced strong opposition to the proposed moratorium [2], arguing that it threatens essential consumer protections established by the California Consumer Privacy Act (CCPA) [2], which was strengthened by voter approval in 2020 [2]. The CPPA is tasked with creating regulations that ensure consumers have access to their data and the ability to opt out of businesses’ use of ADMT [2], thereby enhancing transparency and control over personal information processing [2]. Critics of the moratorium, including several Democratic members such as Representatives Matsui, Castor [3], Ocasio-Cortez [3], and Menendez [3], contend that it undermines these vital consumer protections and that states have proactively regulated AI due to federal inaction. They emphasize the diverse state laws that would be hindered by the moratorium [3], particularly in light of existing regulations in states like California, Colorado [1] [4], and Utah [1] [2].
During a markup hearing [3], an amendment proposed by Ranking Member Frank Pallone to eliminate the moratorium provision was defeated along party lines [3]. Proponents of federal preemption for AI regulation [3], including Chairman Guthrie and Representatives Obernolte and Lee [3], expressed a commitment to developing bipartisan federal legislation and lifting the moratorium on state enforcement within a decade [3]. However, the proposed moratorium has attracted significant attention [3], with some commentators praising it as a necessary response to the increasing complexity of state AI laws [3], noting that over 1,000 AI-related bills have been introduced across various states in the first five months of 2025 [3].
Despite this support [4], the moratorium has faced backlash from state attorneys general [1] [4], advocacy organizations [1], and civil society groups [1], who argue that it grants excessive freedom to AI companies at a time when regulatory oversight is critically needed [1]. Critics have labeled the measure as short-sighted, emphasizing that it irresponsibly halts state action while federal legislation remains stagnant [1]. The proposed moratorium could undermine significant protections against privacy risks associated with profiling and automated processing of personal data [2], particularly in employment settings where sensitive information, such as an employee’s pregnancy status or sexual orientation [2], may be inadvertently disclosed.
The bill’s broad definition of AI encompasses any computational process that influences human decision-making [1], potentially hindering various initiatives [1], including whistleblower protections and regulations on algorithmic content [1]. Proponents argue that the moratorium will aid the Department of Commerce in acquiring AI systems without the complications of varying state laws [4], while industry leaders [4], including OpenAI’s CEO [4], have expressed support for a light-touch regulatory approach. However, the National Conference of State Legislatures warns that a federally imposed moratorium could leave communities vulnerable to the rapid advancement of AI technologies [1].
If enacted [1] [4], the moratorium could face legal challenges from state attorneys general in jurisdictions with existing AI regulations [4], jeopardizing the enforcement of AI-specific regulations already in place or under development [1]. The outcome of such challenges remains uncertain [4], and advocates contend that delaying regulation for a decade effectively promotes a deregulation agenda [1], leaving critical gaps in oversight as AI becomes increasingly integrated into daily life [1]. The CPPA remains dedicated to educating consumers about their privacy rights and the responsibilities of businesses under the CCPA [2], underscoring the importance of maintaining robust protections in the face of evolving technology.
Conclusion
The proposed 10-year moratorium on state enforcement of AI regulations presents a complex intersection of federal and state legislative priorities. While it aims to streamline the integration of AI technologies into federal systems, it raises significant concerns about the erosion of state-level consumer protections and the potential for unchecked AI development. The debate underscores the need for a balanced approach that considers both the benefits of technological advancement and the imperative of safeguarding individual rights and privacy. As the legislative process unfolds, the implications of this moratorium will continue to be a focal point of discussion among policymakers, industry leaders [4], and advocacy groups.
References
[1] https://www.forbes.com/sites/anishasircar/2025/05/22/total-control-to-ai-firms-us-house-bill-barring-state-oversight-draws-ire/
[2] https://cppa.ca.gov/announcements/2025/20250513.html
[3] https://www.jdsupra.com/legalnews/u-s-house-of-representatives-passes-2904313/
[4] https://www.techpolicy.press/us-house-committee-advances-10-year-moratorium-on-state-ai-regulation/
