Federal legislation to “pause” state artificial intelligence regulations will not become law—for now—after the Senate stripped the measure from the budget reconciliation package, the One Big Beautiful Bill Act (H.R. 1).

The Senate voted 99–1 to strike the moratorium language from the bill during a marathon 27-hour “vote-a-rama” on July 1. The Senate voted 51–50, with Vice President J.D. Vance breaking the tie, to pass the bill (without the moratorium) and send it back to the House.  The House passed the Senate-amended bill on July 3 by a vote of 218–214, with all Democrats and two Republicans voting against.  President Trump signed the bill into law on July 4.

The vote to remove the moratorium concluded a multi-week negotiation during which senators, led by Senate Commerce, Science and Transportation Committee Chair Ted Cruz (R-TX), revised the House-passed version of the measure to comply with Senate rules.  Rather than adopt the House’s approach of imposing a ten-year moratorium on states, the initial Senate version was modified to overcome the Byrd Rule, which restricts the Senate from passing provisions through reconciliation that primarily relate to non-budgetary policy matters.  The initial Senate version would have made states comply with the moratorium—rebranded as a “temporary pause”—in order to remain eligible for additional Broadband Equity, Access, and Deployment (BEAD) funding. 

While the Senate parliamentarian concluded that Senator Cruz’s proposal complied with the Byrd Rule, the proposal drew bipartisan opposition in both chambers of Congress, state legislators from all 50 states, 40 state attorneys general, and 17 Republican governors.

One opponent, Senator Marsha Blackburn (R-TN), ultimately reached an agreement with Senator Cruz to modify the moratorium, arguing in part that the initial Senate language would undermine state laws protecting child safety online and consumer privacy.  The proposed compromise would have reduced the moratorium period from 10 years to 5 years and exempted certain state laws from the pause.

However, during the Senate’s vote-a-rama, the deal collapsed and a bipartisan group of senators, including Senator Blackburn, Senate Commerce Committee Ranking Member Maria Cantwell (D-WA), and Senators Ed Markey (D-MA) and Susan Collins (R-ME), offered an amendment to strip the moratorium from the reconciliation bill.  The amendment passed 99–1, with only Senator Thom Tillis (R-NC) voting “no.”

Although a pause on state AI regulations did not become law in the One Big Beautiful Bill Act, Congress could still consider similar legislation in another vehicle later this year.  While the strong bipartisan resistance to the moratorium casts doubt on future attempts to pause state AI regulations, at least one member, House Energy and Commerce Committee Chair Brett Guthrie (R-KY) has pledged to keep trying: “We’re still gonna work it, and hopefully we’re gonna have to have state preemption in the end.”

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
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
Draft testimony, comments, fact sheets, letters and other documents
Advocate before Congress and the Executive Branch
Form and manage coalitions
Develop communications strategies

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.”

Read more about Holly FechnerEmail
Show more Show less
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.

Drawing…

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.

Read more about Matthew ShapankaEmail
Show more Show less
Photo of Samuel Klein Samuel Klein

Samuel Klein helps clients realize their policy objectives, manage reputational risks, and navigate the regulatory environment governing political engagement.

As a member of Covington’s Election and Political Law practice, Sam assists clients facing Congressional investigations and offers guidance on ethics laws; with the…

Samuel Klein helps clients realize their policy objectives, manage reputational risks, and navigate the regulatory environment governing political engagement.

As a member of Covington’s Election and Political Law practice, Sam assists clients facing Congressional investigations and offers guidance on ethics laws; with the firm’s Public Policy group, Sam supports strategic advocacy across a breadth of policy domains at the federal, state, and local levels.

Sam spent one year as a law clerk at the Federal Election Commission. His prior experience includes serving as an intern to two senior members of Congress and helping clients communicate nuanced policy concepts to lawmakers and stakeholders as a public-affairs consultant.

Read more about Samuel KleinEmail
Show more Show less