Lawmakers from both parties are celebrating the Senate’s decision to cut a provision that would have put a 10-year pause on state-level regulation of artificial intelligence from the reconciliation bill hours before it passed.
California lawmakers are among those who are most relieved that they narrowly avoided this provision getting tucked into the legislation. The AI provision would have disproportionately affected California, where most advanced AI labs like OpenAI and Anthropic are located and legislators are eager to regulate the new technology given its prominence in the tech industry.
“Congress finally came to its senses and voted overwhelmingly to remove the AI moratorium provision,” California state Sen. Josh Becker, a lawmaker who has pushed for regulation of AI in California, told NOTUS in a statement.
“In the absence of a strong federal standard, states must retain the flexibility to advance AI in ways that do not compromise safety, privacy, or the rights of our residents,” he wrote.
Even after several rewrites to comply with Senate procedural rules and concessions to appease opponents, the provision, led by Sen. Ted Cruz, was ultimately cut by a vote of 99-1. Cruz’s office did not immediately respond to a request for comment. Sen. Thom Tillis of North Carolina was the only one to vote against cutting it.
Proponents of the provision said it was important to include in the reconciliation package to avoid a patchwork of different laws across states. Opponents of the provision said it would take power away from the states and block them from passing regulation that could protect their residents.
South Bay, San Jose Mayor Matt Mahan wants to explore creating incentives for AI companies to move or expand in the city. He wants to research opportunities to make city services more efficient and accessible through AI.
The city has been integrating the technology into every day government services to improve the lives of residents. Mahan along with other city officials are using it to identify problems and strategize solutions. San Jose is already using AI to optimize public transit, translate languages, review documents and find street issues like potholes, graffiti, broken street lights, illegal dumping and more — all before they’re noticed by residents.
California’s state legislature has advanced several pieces of legislation intended to regulate AI. And several state legislators petitioned Congress in May to strike down the provision.
State Sen. Aisha Wahab — who represents Silicon Valley — said in a statement that the AI provision would have been detrimental to California and that it is important to “balance necessary guardrails while encouraging innovation.”
“Technology evolves at a faster pace than we can legislate, and an AI moratorium would have stifled California’s ability to establish necessary oversight of AI and all the technologies it is embedded in,” Wahab added.
State Sen. Tom Umberg, who like Wahab signed onto the letter asking Congress to strike down the provision, told NOTUS the Senate’s decision would allow the legislature to attend to their constituents.
“We are pleased that California will have the ability to create its own regulatory framework to advance the benefits of Artificial Intelligence while simultaneously mitigating the risks to protect all Californians,” Umber told NOTUS in a statement.
Rep. Ami Bera, a California Democrat, told NOTUS he welcomed the Senate’s decision to leave it out of the package, adding that Congress now needs to work on providing clear guardrails for AI.
“We can’t have a patchwork of 50 different AI laws and regulations. Congress needs to do its job, create a federal regulatory framework and pass sensible and bipartisan AI regulations,” Bera said.
Some federal lawmakers in Congress who supported the AI provision said having different regulations for each state amounted to a commercial obstacle. Others argued it gave the federal government too much power.
Sen. Josh Hawley, a Republican critic of the provision, wrote on X that the Senate’s decision was a “big victory for parents, kids and workers.”
Sen. Marsha Blackburn, another Republican opponent of the provision, said on the Senate floor Tuesday morning that Congress has been unable to regulate AI effectively and that in the meantime the issue should be left to the states.
“This body has proven that it cannot legislate on emerging technology. It is frustrating,” Blackburn said. “There are all of these pieces of legislation dealing with AI and we haven’t passed them. You know who has passed them? It is our states.”
The Senate and House still need to finalize the language of the reconciliation bill before it heads to President Donald Trump’s desk for signing. But back in the House, where the reconciliation package originally passed with the AI moratorium provision, there’s also some pushback.
Republican Rep. Marjorie Taylor Greene said last month that she regretted voting for the provision in the reconciliation bill, writing on X that the measure violated states’ rights.
California Rep. Luz Rivas, who introduced an amendment in May to cut the provision from the House reconciliation bill, told NOTUS in a statement that the federal government needs to collaborate with states on this issue as AI becomes more prevalent in American life.
“We should be learning from how states address current and new challenges from Artificial Intelligence systems, not blocking their progress and their ability to innovate,” Rivas said. “We must continue to ensure that all levels of government are able to address current and future challenges emerging technologies like AI can pose.”
Samuel Larreal is a NOTUS reporter and an Allbritton Journalism Institute fellow. This story was produced as part of a partnership between NOTUS and San José Spotlight
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