House Republicans have passed through committee a nationwide, 10-year moratorium on the enforcement of state and local laws and regulations that impose requirements on AI and automated decision systems.  The moratorium, which would not apply to laws that promote AI adoption, highlights the widening gap between a wave of new state AI laws and the light-touch approach to AI regulation embraced by the Trump Administration and 119th Congress.  The proposed moratorium passed the House Energy and Commerce Committee 29-24 at the May 14 markup of its budget reconciliation bill, after overcoming united Democratic opposition and rejecting an amendment from Representative Frank Pallone (D-NJ) to remove the moratorium language.  The moratorium, if enacted, could reshape the AI regulatory landscape in the United States, restricting state efforts to regulate AI regardless of whether Congress moves forward with its own regulatory framework.  However, the moratorium likely faces procedural hurdles in the reconciliation process, making its prospects uncertain.

The moratorium would prohibit state and local governments from enforcing “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.”  Notably, the moratorium would not apply to laws or regulations that (1) have the “primary purpose and effect” of removing legal impediments to, facilitating, or streamlining procedures for the deployment or operation of AI, (2) impose AI requirements required by federal law or “generally applicable laws” that apply “in the same manner” to other technical systems with “comparable functions” to AI, or (3) that impose “reasonable and cost-based” fees or bonds that apply to both AI and non-AI models and systems alike.

The release of the proposed moratorium follows mounting concerns from Republican members of Congress and the AI industry about the effects of a patchwork of state AI laws on U.S. innovation, national security, and competitiveness in AI.  The moratorium signals that the GOP Congress may be willing to take on a greater role in U.S. AI regulation – echoing debates around state privacy law preemption in recent years.

Nevertheless, passage of the moratorium is likely to face significant obstacles in the reconciliation process.  Specifically, the Senate’s Byrd Rule prohibits reconciliation bills from containing policy provisions that are “extraneous” to the budgetary goals of reconciliation, including provisions that do not produce a change in federal outlays or revenues or have budgetary effects that are “merely incidental” to the provision’s policy goals.  If the reconciliation bill that includes the AI moratorium provision passes the full House, Democratic senators could raise a point of order on the Senate floor to challenge the moratorium under the Byrd Rule.  If the presiding officer sustains the point of order, the Senate may only overturn the decision with a 60-vote majority.  Senate Republicans, who currently hold a 53-47 seat majority, would need at least seven Democratic votes to meet this threshold.

At the May 14 House Energy and Commerce markup, Representative Jay Obernolte (R-CA) sought to address potential issues with the Byrd Rule, stating that the moratorium was needed to “safeguard” the reconciliation bill’s proposed $500 million in funding for the Department of Commerce to “modernize” federal IT systems using AI.  Because a moratorium on state AI rules does not bear directly on federal budget outlays or savings, the Senate parliamentarian could potentially rule that any budgetary impact of the moratorium is merely incidental to its policy goals, rejecting the language as violating the Byrd rule.

The proposed AI moratorium comes as state legislatures consider hundreds of new AI laws in the 2025 legislative session, with dozens of state AI laws enacted in 2024 and 2025 so far.  While the moratorium may face opposition from lawmakers in states with AI laws on the books, others may support the House GOP’s approach – including Colorado Governor Jared Polis (D), who signed the Colorado AI Act into law in 2024 and has expressed support for a two- to four-year moratorium to allow Congress the opportunity to establish a federal AI regulatory framework.

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Follow our Global Policy Watch, Inside Global Tech, and Inside Privacy blogs for ongoing updates on key AI and other technology legislative and regulatory developments.

Tags: AI, Artificial Intelligence (AI), Congress
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Photo of Holly Fechner Holly Fechner

Holly Fechner advises clients on complex public policy matters that combine legal and political opportunities and risks. She leads teams that represent companies, entities, and organizations in significant policy and regulatory matters before Congress and the Executive Branch.

She is a co-chair of…

Holly Fechner advises clients on complex public policy matters that combine legal and political opportunities and risks. She leads teams that represent companies, entities, and organizations in significant policy and regulatory matters before Congress and the Executive Branch.

She is a co-chair of the Covington’s Technology Industry Group and a member of the Covington Political Action Committee board of directors.

Holly works with clients to:

Develop compelling public policy strategies
Research law and draft legislation and policy
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Advocate before Congress and the Executive Branch
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She is the Executive Director of Invent Together and a visiting lecturer at the Harvard Kennedy School of Government. She serves on the board of directors of the American Constitution Society.

Holly served as Policy Director for Senator Edward M. Kennedy (D-MA) and Chief Labor and Pensions Counsel for the Senate Health, Education, Labor & Pensions Committee.

She received The American Lawyer, “Dealmaker of the Year” award in 2019. The Hill named her a “Top Lobbyist” from 2013 to the present, and she has been ranked by Chambers USA – America’s Leading Business Lawyers from 2012 to the present. One client noted to Chambers: “Holly is an exceptional attorney who excels in government relations and policy discussions. She has an incisive analytical skill set which gives her the capability of understanding extremely complex legal and institutional matters.” According to another client surveyed by Chambers, “Holly is incredibly intelligent, effective and responsive. She also leads the team in a way that brings out everyone’s best work.”

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Photo of Matthew Shapanka Matthew Shapanka

Matthew Shapanka practices at the intersection of law, policy, and politics. He advises clients before Congress, state legislatures, and government agencies, helping businesses to navigate complex legislative, regulatory, and investigations matters, mitigate their legal, political, and reputational risks, and capture business opportunities.

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Matthew Shapanka practices at the intersection of law, policy, and politics. He advises clients before Congress, state legislatures, and government agencies, helping businesses to navigate complex legislative, regulatory, and investigations matters, mitigate their legal, political, and reputational risks, and capture business opportunities.

Drawing on more than 15 years of experience on Capitol Hill and in private practice, state government, and political campaigns, Matt develops and executes complex, multifaceted public policy initiatives for clients seeking actions by Congress, state legislatures, and federal and state government agencies. He regularly counsels and represents businesses in legislative and regulatory matters involving intellectual property, national security, regulation of critical and emerging technologies like artificial intelligence, connected and autonomous vehicles, and other tech policy issues. He also represents clients facing congressional investigations or inquiries across a range of committees and subject matters.

Matt rejoined Covington after serving as Chief Counsel for the U.S. Senate Committee on Rules and Administration, where he advised Chairwoman Amy Klobuchar (D-MN) on all legal, policy, and oversight matters before the Committee, particularly federal election and campaign finance law, Federal Election Commission nominations, and oversight of the legislative branch. Most significantly, Matt led the Committee’s staff work on the Electoral Count Reform Act – a landmark bipartisan law that updates the procedures for certifying and counting votes in presidential elections—and the Committee’s bipartisan joint investigation (with the Homeland Security Committee) into the security planning and response to the January 6th attack.

Both in Congress and at Covington, Matt has prepared dozens of corporate and nonprofit executives, academics, government officials, and presidential nominees for testimony at congressional committee hearings and depositions. He is a skilled legislative drafter who has composed dozens of bills and amendments introduced in Congress and state legislatures, including several that have been enacted into law across multiple policy areas. Matt also leads the firm’s state policy practice, advising clients on complex multistate legislative and regulatory matters and managing state-level advocacy efforts.

In addition to his policy work, Matt advises and represents clients on the full range of political law compliance and enforcement matters involving federal election, campaign finance, lobbying, and government ethics laws, the Securities and Exchange Commission’s “Pay-to-Play” rule, and the election and political laws of states and municipalities across the country.

Before law school, Matt served in the administration of former Governor Deval Patrick (D-MA) as a research analyst in the Massachusetts Recovery & Reinvestment Office, where he worked on policy, communications, and compliance matters for federal economic recovery funding awarded to the state. He has also staffed federal, state, and local political candidates in Massachusetts and New Hampshire.

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Photo of August Gweon August Gweon

August Gweon counsels national and multinational companies on data privacy, cybersecurity, antitrust, and technology policy issues, including issues related to artificial intelligence and other emerging technologies. August leverages his experiences in AI and technology policy to help clients understand complex technology developments, risks…

August Gweon counsels national and multinational companies on data privacy, cybersecurity, antitrust, and technology policy issues, including issues related to artificial intelligence and other emerging technologies. August leverages his experiences in AI and technology policy to help clients understand complex technology developments, risks, and policy trends.

August regularly provides advice to clients on privacy and competition frameworks and AI regulations, with an increasing focus on U.S. state AI legislative developments and trends related to synthetic content, automated decision-making, and generative AI. He also assists clients in assessing federal and state privacy regulations like the California Privacy Rights Act, responding to government inquiries and investigations, and engaging in public policy discussions and rulemaking processes.

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