What Happened to the Big Beautiful Bill’s AI Regulation Enforcement Pause?

Budget reconciliation bill H.R.1, the “One Big Beautiful Bill Act,” currently pending in the U.S. Senate, originally included not only tax and spending provisions but also a proposed multi-year pause on state and local enforcement of laws or regulations “limiting, restricting, or otherwise regulating” AI models, AI systems, or automated decision systems (the “AI Enforcement Pause”).

Reports from the Senate this morning indicated that the proposed AI Enforcement Pause has been voted down and, at this time, is unlikely to be included in the final text of the bill. As a result, AI-specific laws and regulations at the state level will continue to be enforceable — at least for the time being.

Please note that H.R.1 was in active debate in the Senate at the time this article was published, and the status and content of the bill may evolve in the coming days.

What Would the AI Enforcement Pause Have Meant for State and Local AI Regulation?

The AI Enforcement Pause would have required states and local governments to stop enforcing most AI-specific laws for at least the next five years. The U.S. Senate Committee on Commerce, Science, and Transportation (the “Committee”) and its Senators had proposed tying the AI Enforcement Pause to states’ receipt of federal broadband funding. Specifically, the Committee’s proposal would have denied states $500 million to build and deploy infrastructure for AI tools under the Broadband Equity, Access, and Deployment (BEAD) grant program if they enforce any AI safety laws.

On June 26, the Ranking Member of the Committee, Senator Maria Cantwell (D-WA), released a memo warning that the proposed text of the AI Enforcement Pause purportedly “include[d] a built in backdoor to apply [the] new AI [Enforcement Pause] requirements to the entire $42.45 billion program, not just the new $500 million” conditional funds.

Which Laws Would Have Been Impacted by the AI Enforcement Pause?

The AI Enforcement Pause contained exceptions for, among other things, state enforcement of federal law or any “generally applicable law or regulation … that may address, without undue or disproportionate burden, artificial intelligence models, artificial intelligence systems, or automated decision systems to reasonably effectuate the broader underlying purposes of the law or regulation, such as a body of common law,” or laws that support the deployment of AI tools or that streamline licensing to promote the adoption of AI tools.

The AI Enforcement Pause would have disrupted the patchwork of AI-specific legislation enacted by the states in the absence of federal legislation. For example, the AI Enforcement Pause could have impacted states’ ability to enforce AI-specific consumer protection laws, like the California AI Transparency Act, the Colorado AI Act, or the recently enacted Texas Responsible AI Governance Act. The AI Enforcement Pause could have also impacted sector-specific AI legislation, including in real estate, insurance, and healthcare.

Will the AI Enforcement Pause Come Back?

As of July 1, the Senate has voted to remove the AI Enforcement Pause from the reconciliation bill. Congress could introduce AI legislation designed to preempt state law in a future standalone bill or include it in another package. However, there has been no progress on passing similar federal AI legislation at this time.

For more information on navigating AI laws and regulations, visit Orrick’s AI Law Center or reach out to any of the authors.

Domenic Boresta contributed to this article.