Congress wants to stop states from passing AI laws

It’s a small paragraph that should ring some big alarm bells for AI governance enthusiasts. As the House and the Senate work to reconcile their versions of the 2025 federal budget, lawmakers in the House have included a provision designed to prevent states from making their own laws around AI governance – except to remove legal barriers that might make it more difficult for AI models (or the companies that develop them) to flourish. 

The moratorium reads as follows: 

Except as provided in paragraph (2), no State or political subdivision thereof may enforce 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. 

The exceptions in paragraph (2) are for laws that: 

• Remove legal impediments to, or facilitate the deployment or operation of AI models or systems 
• Streamline licensing, permitting, routing, zoning, procurement, or reporting procedures in a manner that facilitates the adoption of AI models 
• [Do] not impose any substantive design, performance, data handling, documentation, civil liability, taxation, fee, or other requirement on AI models 
• [Do] not impose a fee or bond unless such fee or bond is reasonable and cost-based; and under such fee or bond, AI models, artificial intelligence systems, and automated decision systems are treated in the same manner as other models and systems that perform comparable functions

If passed as part of the larger budget legislation, this provision could have major implications for local oversight of how healthcare organizations deploy AI models throughout the clinical environment and how states handle the consequences of poorly designed or poorly implemented tools that have direct impacts on healthcare consumers and their care. 

Given that the current Trump Administration already made it a day-one priority to throw the existing AI ethics framework into the trash, and replaced it with an executive order focused more on supporting the growth of big tech companies than protecting consumers, it doesn’t seem likely that the federal government will be taking much action on strong, consumer-focused guardrails during a crucial period in AI development. 

Tying the hands of legislators at the state level, including those in progressive, trendsetting states like California which tend to be more aggressive with consumer protections, could lead to some of the negative consequences that AI ethicists fear most, including exacerbated disparities in access and outcomes and patient safety concerns related to AI technologies in the healthcare setting. 

The House Committee on Energy and Commerce is due to start marking up the budget reconciliation bill on May 13.  

The other big ticket AI topic up for review during this session is the appropriation of $500 million for using AI to modernize and secure federal information technology systems, with the goal of supporting “the replacement and modernization of legacy business systems with state-of-the-art commercial AI systems, the adoption of AI models that increase operational efficiency and service delivery, and improve the cybersecurity posture of Federal information technology systems through modernized architecture, automated threat detection, and integrated AI solutions.” 

Healthcare’s AI community would be wise to keep an eye on the debate process and start to consider how a ban on local- and state-level enforcement of laws surrounding AI will affect their implementation plans as well as their protocols for maintaining accountability and implementing meaningful governance in an extremely high-risk area of AI adoption. 

Jennifer Bresnick is a journalist and freelance content creator with a decade of experience in the health IT industry.  Her work has focused on leveraging innovative technology tools to create value, improve health equity, and achieve the promises of the learning health system.  She can be reached at [email protected].