Federal Budget Bill Threatens Texas AI Regulation Framework

The U.S. House of Representatives Committee on Energy and Commerce on Wednesday voted to advance a decadelong moratorium on state AI regulations as part of the federal budget reconciliation bill.

Introduced by House Republicans late Sunday, the specific language of the bill states that “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 moratorium would render AI measures implemented by states — including the Texas Responsible Artificial Intelligence Governance Act (TRAIGA) and other AI bills introduced this session — impossible to enforce.

Commerce, Manufacturing and Trade Subcommittee Ranking Member Jan Schakowsky, D-Ill., called the moratorium “a giant gift to Big Tech,” adding, “This ban will allow AI companies to ignore consumer privacy protections, let deepfakes spread and allow companies to profile and deceive consumers using AI.”

In defense of the moratorium, Republican lawmakers argued for a full embrace by the Commerce Department of AI and that regulations across 50 states pose too great a challenge for the federal rules to be developed.

Sen. Ted Cruz, R-Texas, supported the moratorium during a Senate Committee on Commerce, Science and Transportation meeting — despite efforts in his own state to address legal and ethical concerns of the technology’s use — comparing the proposal to an “Internet tax moratorium” enacted in the late ’90s.

“In 1998, Congress enacted a 10-year Internet tax moratorium so that state laws wouldn't balkanize and stymie the promise of e-commerce,” said Cruz. “The results of these decisions were extraordinary.”

If the bill passes to the Senate, the proposed moratorium could still be stricken from the budget resolution should its language be deemed extraneous.