A Republican proposal to penalize states that regulate artificial intelligence can move forward without requiring approval from 60 senators, the Senate parliamentarian decided on Saturday. But the moratorium on state AI laws did not have unanimous Republican support and has reportedly been watered down in an effort to push it toward passage.
In early June, Sen. Ted Cruz (R-Texas) proposed enforcing a 10-year moratorium on AI regulation by making states ineligible for broadband funding if they try to impose any limits on development of artificial intelligence. While the House previously approved a version of the so-called "One Big Beautiful Bill" with an outright 10-year ban on state AI regulation, Cruz took a different approach because of the Senate rule that limits inclusion of "extraneous matter" in budget reconciliation legislation.
Under the Senate's Byrd rule, a senator can object to a potentially extraneous budget provision. A motion to waive the Byrd rule requires a vote of 60 percent of the Senate.
As originally drafted, Cruz's backdoor ban on state AI laws would have made it impossible for states to receive money from the $42 billion Broadband Equity, Access, and Deployment (BEAD) program if they try to regulate AI. He tied the provision into the budget bill by proposing an extra $500 million for the broadband-deployment grant program and expanding its purpose to also subsidize construction and deployment of infrastructure for artificial intelligence systems.
Punchbowl News reported today that Cruz made changes in order to gain more Republican support and comply with Senate procedural rules. Cruz was quoted as saying that under his current version, states that regulate AI would only be shut out of the $500 million AI fund.
This would seem to protect states' access to the $42 billion broadband deployment fund that will offer subsidies to ISPs that expand access to Internet service. Losing that funding would be a major blow to states that have spent the last couple of years developing plans to connect more of their residents to modern broadband. The latest Senate bill text was not available today. We contacted Cruz's office and will update this article if we get a response.