U.S. Senate Passes OBBBA Without AI Moratorium, Preserving State Authority, July 2025

The United States Senate passed H.R.1, the One Big Beautiful Bill Act, on July 1, 2025, by a vote of 51 to 50, with Vice President J.D. Vance casting the tie-breaking vote. The enrolled bill reached President Trump's desk and was signed into law on July 4, 2025, as Public Law No. 119-21. Before final passage, the Senate adopted an amendment by Senator Marsha Blackburn that struck a provision from the House-passed version which would have imposed a ten-year moratorium on state and local enforcement of artificial intelligence laws. The Act does not include any federal AI preemption clause.

The provision removed by the Blackburn amendment had appeared in Section 43201 of the House-passed text, which would have prohibited state and local governments from enforcing any law, rule, regulation, or standard governing artificial intelligence systems or automated decision-making for a period of ten years after enactment. The Senate struck this provision entirely. No replacement federal AI preemption language was inserted. The version enacted as Public Law No. 119-21 therefore contains no AI-specific moratorium or preemption clause.

The practical effect is that state AI laws — including California's AB 2013 on AI training data transparency, Colorado's SB 205 on algorithmic discrimination in consequential decisions, Illinois's AIIA, and dozens of other enacted or pending state measures — remain in full force and are not preempted by the OBBBA. Companies that deploy AI-powered systems in consumer-facing, employment, housing, healthcare, or financial services contexts must continue to assess and comply with the patchwork of state-level AI obligations. The absence of federal preemption means that multi-state compliance programs cannot be replaced by a single federal standard.

The Senate's removal of the moratorium does not rule out future federal AI legislation. Legislative efforts to establish a federal AI preemption standard may resume in the next Congress or through standalone bills. Several Senate and House members have stated publicly that they favor some form of federal AI framework, but no bill to that effect has advanced through both chambers as of the date of this post. Companies operating across multiple U.S. states should audit their current AI deployments against applicable state laws without waiting for federal resolution.

Our firm advises technology companies, financial institutions, and other regulated entities on compliance with U.S. and cross-border artificial intelligence law, state privacy and algorithmic accountability statutes, legislative monitoring, regulatory gap analysis, and counsel on AI system governance. We also maintain a partnership network to assist on matters outside our direct jurisdictional coverage. Entities with questions about the impact of Public Law No. 119-21 on their AI compliance obligations are invited to contact us directly. Areas of work include: AI regulatory compliance, state AI law assessment, algorithmic accountability, AI governance programs, AI-related legislative analysis, multi-jurisdiction technology law.

Source: H.R.1, One Big Beautiful Bill Act, 119th Cong. (2025), Public Law No. 119-21, signed July 4, 2025; Actions record available at https://www.congress.gov/bill/119th-congress/house-bill/1/actions; confirmed March 23, 2026.

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