Saturday, June 7, 2025

AI Moratorium in US tax bill faces opposition from State lawmakers

Date:

US President Donald Trump’s much-debated tax and budget bill, aka the Big Beautiful Bill, is facing opposition from state lawmakers over the proposed 10-year freeze regulation of AI and automated decision system.A group of 260 state lawmakers, in a letter addressed to members of both houses, expressed strong opposition to the provision in Subtitle C, Part 2 of the tax and budget reconciliation bill, which would undermine ongoing work in the states to address the impact of artificial intelligence (AI).
The concerned provision bans States from limiting, restricting, or otherwise regulating AI models, AI systems, or automated decision systems entered into interstate commerce, according to the official document.
The bill explains the rationale behind this provision is to remove legal impediments to, or facilitate the deployment or operation of AI system and automated decision system.In the letter, the State lawmakers argued that the proposed ban would cut short democratic discussion of AI policy in the states with a sweeping moratorium that threatens to halt a broad array of laws and restrict policymakers from responding to emerging issues.

Urging both the houses to reject any provision that preempts state and local AI legislation, the lawmakers called for working towards the enactment, rather than the erasure, of thoughtful AI policy solutions.

As per reports, the states of California, Colorado, Utah, and Tennessee have enacted laws specifically targeting AI, while several others have proposed similar measures.

Previously, the National Association of State Chief Information Officers in a letter said that they were “extremely concerned” by the proposal to prohibit states from enforcing their AI statutes and regulations for the next ten years.

Moreover, at least two senators – Josh Hawley and Marsha Blackburn – reportedly have expressed opposition to the AI ban provision in the bill.

What is an AI model, AI system and automated decision system

According to the bill, AI Model means a software component of an information system that implements AI technology and uses computational, statistical, or machine-learning techniques to produce outputs.

Meanwhile, AI system is any data system, hardware, tool, or utility that operates, in whole or in part, using AI.

Finally, automated decision system’ is described as any computational process derived from machine learning, statistical modeling, data analytics, or AI that issues a simplified output for materially influencing or replacing human decision making.

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