AI Takes Center Stage at State Legislative Gatherings
Key highlights this week:
We’re tracking 1,079 bills in all 50 states related to AI during the 2025 legislative session.
President Trump unveiled a federal “AI Action Plan” and signed three AI-focused executive orders addressing the data center buildout, exporting the “American AI Technology Stack,” and preventing “woke” AI.
Colorado lawmakers are preparing for a potential special legislative session in the next month or two to make amendments to the state’s algorithmic discrimination law, which itself is set to go into effect in 2026.
Budget bills signed into law in Wisconsin and Ohio will require health insurers to disclose AI use in reviewing claims and mandate schools to develop artificial intelligence policies, respectively.
And as summer rolls on, state lawmakers are gathering at major industry meetings to debate model AI policy, which is the subject of this week’s deep dive.
The summer is an interesting time for state lawmakers, as most of their legislative sessions have come to a close for the year. But some of the most engaged lawmakers participate in several of the big meetings organized by “the groups.” Some, but not all, of these multi-state lawmaker organizations produce model policies as a means for lawmakers to return to their own state and introduce similar policy ideas. Unsurprisingly, artificial intelligence has been a hot topic at these meetings this summer.
We’re going to try something a little different this week, and review what we know about these multi-state lawmaker groups’ intentions on AI policy this summer, which will both preview where lawmakers' thinking might be for next year’s legislative sessions as well as review what they learned from this year.
American Legislative Exchange Council (ALEC)
One of the most influential of the model legislation groups is the conservative American Legislative Exchange Council (ALEC). Over 400 state lawmakers met last week in Indianapolis for ALEC’s Annual Meeting. At the meeting, members of policy task forces (made up of both public and private sector participants) approved several AI-related model policies. The three policies below include ALEC’s own description and a link to the full text.
Right to Compute Act (Communications and Technology Task Force): This Act finds that the rights to acquire, process, and protect property under the State Constitution also embody the notion of a fundamental right to own and make use of technological tools, including computational resources. Any government restrictions on the lawful use of computational resources—including but not limited to hardware, software, algorithms, machine learning, cryptography, platforms, services, and quantum applications—must be narrowly tailored and demonstrably necessary to fulfill a compelling government interest.
Technology-Neutral Anti-Discrimination Clarification Act (Communications and Technology Task Force): This act reaffirms that discrimination based on protected characteristics is unlawful whether it occurs in housing, employment, public accommodations, education, credit, or any other context covered by state civil‑rights statutes. Advances in software, automation, algorithmic decision‑making, artificial intelligence, and other digital technologies do not create a lawful avenue to engage in conduct that existing law already prohibits. Clarifying that discriminatory conduct remains unlawful regardless of the tools used will remove any doubt that digital implementation does not confer legal immunity, keep state law neutral toward future technologies, and avoid imposing vicarious liability on technology developers who neither intend nor knowingly facilitate discriminatory conduct.
The Artificial Intelligence Tax Non-Discrimination Act (Tax and Fiscal Policy Task Force & Communications and Technology Task Force): This Act prohibits discriminatory tax measures unfairly targeting artificial intelligence, algorithms, and automated decision systems, including taxes on computing power, a remote-only access sales tax, differential treatment of AI subscriptions, differential treatment of AI-derived income, and any other discriminatory tax as defined. The Act clarifies that AI services shall not be treated as telecommunications services for the purposes of taxation unless uniformly applied to all software or digital applications providing similar functionalities. Finally, this Act expresses the sense of the State that Congress should act to prohibit the imposition of discriminatory federal taxes on AI systems, algorithms, and automated decision-making technologies, and that municipal, county, and other forms of local government shall not enact similar discriminatory taxes of their own.
National Conference of State Legislatures (NCSL)
Thousands of lawmakers from across the political spectrum will gather for the largest state legislative meeting of the year as the National Conference of State Legislatures (NCSL) hosts its 50th Legislative Summit in Boston next month. Unlike ALEC (and CSG below), NCSL’s Policy Directives and Resolutions are not intended as policies for lawmakers to introduce in their own states but instead express preferences on federal policy from the perspective of the states and state legislatures. NCSL standing committees are expected to consider the following Policy Directives and Resolutions at the Boston conference, with a final vote taking place on Aug. 6. (Again, these are NCSL’s official summaries of these policies.)
Policy Directives:
Artificial Intelligence: This is an existing resolution that is being made a directive. It encourages the federal government to collaborate with states when legislating in the AI space and to refrain from enacting federal laws and regulations that would preempt states' ability to adopt their own laws to keep pace with and respond to rapid AI technological advances. It urges the federal government to invest in research initiatives, workforce opportunities, and cybersecurity protections related to AI. (Sponsored by Massachusetts Rep. Angelo Puppolo)
Artificial Intelligence in Financial Services (Joint With Banking, Financial Services and Insurance): This is an existing resolution that is being made a directive urging Congress and federal agencies to consult with states as they debate and develop AI legislation and regulations related to financial services and to pay particular attention to how any federal law or regulation will impact state laws governing AI in the financial services space. (Committee-sponsored update)
Liability Insurance for Artificial Intelligence (Joint With Banking, Financial Services and Insurance): This is an existing resolution that is being made a directive requesting that Congress work with state insurance regulators to encourage the insurance industry to develop liability insurance for the developers and deployers of advanced AI systems. (Sponsored by Rhode Island Sen. Victoria Gu)
Resolutions:
Artificial Intelligence in Health Care (NEW) (Joint With Health): This is a new resolution that urges the federal government to collaborate with states on the responsible development and oversight of Artificial Intelligence in health care. The resolution emphasizes the importance of transparency, data privacy, workforce development, and continuous evaluation of AI systems, while opposing federal preemption that could hinder state-led innovation and regulation. NCSL calls for a federal-state partnership that sets strong national standards while preserving state flexibility to address unique health care needs. (Committee draft with input from the Health Innovations Task Force)
Autonomous Vehicles: This is a renewal of an existing resolution calling for the clear definition of state and federal roles regarding autonomous vehicles and asking the federal government to provide relevant information in a timely manner, include state legislators in federal advisory councils, and share cybersecurity information.
Council of State Governments (CSG)
The third large state legislative group is the Council of State Governments (CSG), which will hold its National Conference in Chicago this December. CSG organizes an annual volume of Shared State Legislation, which is a collection of innovative legislation already adopted by a state. The idea is for lawmakers to learn from their fellow state legislators. The SSL proposals have not been released yet, but I’d be surprised if we don’t see some AI-related submissions this year.
National Council of Insurance Legislators (NCOIL)
Finally, the National Council of Insurance Legislators (NCOIL) is a specialized legislative organization comprising legislators serving on state insurance and financial institutions committees nationwide. NCOIL held its Summer Meeting in Chicago earlier this month, attended by over 60 state lawmakers. At this meeting, lawmakers introduced a Model Act Regarding Insurers’ Use of Artificial Intelligence. This proposed model legislation would regulate how insurance companies use AI in claims processing by requiring that all claim denials be made by qualified human professionals rather than automated systems. This was the first meeting that the Insurers’ Use of AI model act was introduced, it will be discussed, and possibly amended, at two additional meetings before a committee vote.
MultiState will have staff at all these meetings (and many more), so if you’re attending or would like to learn more about any of them, please let me know!
Recent Developments
Major Policy Action
Federal: On Wednesday, President Trump unveiled an “AI Action Plan” and signed three AI-focused executive orders addressing the data center buildout, exporting the “American AI Technology Stack,, and preventing “woke” AI. Notably, the Action Plan proposes withholding federal funds as a lever against state-level regulation of AI, recommending that agencies consider a state’s AI regulatory climate when making funding decisions. President Trump told the audience, “You can’t have one state holding you up, you can’t have two or four states holding you up. You have to have a federal rule and regulation. We need one commonsense federal standard that supersedes all states.”
Colorado: We’re expecting a special legislative session for lawmakers to make amendments to last year’s SB 205, which is the state’s algorithm discrimination law that’s set to go into effect in 2026. The special session will likely take place sometime in August or September, and we expect Sen. Rodriguez’ proposed amendments that failed to pass before the end of this year’s session to be a starting point for potential amendments.
Wisconsin: The governor signed a budget bill into law (WI SB 45) that requires disclosure by an insurer for the use of algorithms or artificial intelligence in reviewing claims.
Ohio: A budget bill enacted into law (OH HB 96) will require schools to develop artificial intelligence policies.
Delaware: Gov. Matt Meyer (D) signed a resolution (DE HJR 7) to direct the Delaware AI Commission to draft regulatory sandbox legislation for the 2026 session. Texas and Utah have set up similar programs that allow the testing of innovative and novel technologies that utilize agentic artificial intelligence with reduced regulatory oversight.
Notable Proposals
Texas: Lawmakers are in special session and have introduced a bill this week (TX HB 142) that would prohibit political deepfakes without a disclosure. Similar bills were introduced in the regular session, but fell short of being enacted.
