AI Legislative Update: July 3, 2025

July 3, 2025 — During the state legislative season TCAI offers weekly updates every Friday on a variety of AI-related bills making progress in around the nation. We’re publishing on Thursday this week due to the July 4 holiday on Friday.

This week: An eleventh-hour amendment removed the state AI law moratorium from the Congressional budget bill, and a number of AI-related bills in California moved forward ahead of the scheduled July 19-August 17 recess in Sacramento.

U.S. Congress

The Senate voted on Tuesday morning, July 1, to remove a proposed federal moratorium on state regulation of artificial intelligence from President Trump's sweeping budget bill.

Lawmakers voted 99-1 to strike the ban from the bill by adopting an amendment offered by Sen. Marsha Blackburn (R-TN) and Sen. Maria Cantwell (D-WA). The action came during a marathon session known as a "vote-a-rama," in which lawmakers offered numerous amendments to the legislation that Republicans eventually hope to pass.

Transparency Coalition Co-founders Rob Eleveld and Jai Jaisimha said in a statement following the vote:

“We thank Senators Blackburn and Cantwell for their leadership on this critical issue and for supporting the role of state lawmakers in protecting their citizens from the harmful effects of AI. State legislatures are the laboratories of American democracy, and we hope that the rapid innovation in AI policy we see at the state level will let us collectively uncover the best ideas for a federal AI policy in the near future.”

Senators remained in session throughout Monday night into Tuesday morning, voting on a long series of amendments, part of the arcane process Republicans are using to bypass Democratic objections under Senate rules that normally require 60 of the chamber's 100 members to agree on legislation.

The Senate passed the full package at noon Tuesday, 51-50, with Vice President Vance casting the deciding vote.

The measure moved to the House, which was still in session as of noon Thursday, closing in on a full floor vote prior to the July 4 recess.

California

California legislators entered into a busy two-week period prior to the annual scheduled summer recess (July 19-August 17).

SB 11: AI Abuse Protection Act

SB 11, authored by Sen. Angelique Ashby, was passed out of the Assembly Committee on Public Safety following a scheduled hearing on July 1. It’s next scheduled to be heard by the Assembly Committee on Privacy and Consumer Protection on July 8.

SB 11 would make computer-manipulated or AI-generated images or videos subject to the state’s right of publicity law and criminal false impersonation statutes.  The proposal passed the Senate and is now making its way through the Assembly.

“The lack of a comprehensive legal framework for addressing deepfakes and non-consensual fraud is beyond troubling,” Sen. Ashby said at the July 1 hearing. “It leaves individuals vulnerable to various forms of exploitation, identity theft, scams, misinformation, and misrepresentation of character.”

Sen. Ashby was joined by Transparency Coalition Senior Technical and Policy Advisor Steve Wimmer, who testified to the bill’s protective measures for both individuals and the state’s judicial system.

“This legislation protects people from harm—harm resulting from the creation and misuse of AI-genreated digital replicas, harm that can impact our kids, our loved ones, our reputations, and our livelihoods,” he said. “Coupled with the deep analysis of the rules of evidence, the impact of SB 11 is one of great safety and trust of AI at a time when it’s needed most.”

Video of Tuesday’s hearing is available below.

AB 853: California AI Transparency Act

Assm. Buffy Wicks (D-Berkeley) introduced AB 853, which would require large online platforms (LOPs) to label whether content is AI-generated or authentic. It would also require manufacturers of phones, cameras, or any device that captures images or audio to give users the option to apply digital signatures to authentic material they produce. The bill passed the Assembly on June 2 and was sent to the Senate.

AB 853 is next scheduled for a hearing before the Senate Judiciary Committee on July 15.

AB 412: AI Copyright Protection Act

Assm. Rebecca Bauer-Kahan’s AB 412, the AI Copyright Protection Act, was passed by the full Assembly on May 12 and sent on to the Senate. The Senate has assigned it to both the Judiciary and Appropriations committees, where it remains.

AB 1064: LEAD for Kids Act

The Leading Ethical AI Development (LEAD) for Kids Act, authored by Assm. Bauer-Kahan, would create a new AI standards board within the state’s Government Operations Agency, and charge its members with evaluating and regulating AI technologies for children. It would also impose a series of checks and balances—with an emphasis on transparency and privacy protections—to ensure only the safest AI tools make it into the hands of children.

The bill passed the Assembly, 59-12, on June 2. It’s scheduled for a hearing before the Senate Judiciary Committee on July 15.

SB 243: Companion Chatbots

California Senator Steve Padilla (D-San Diego) sponsored SB 243, which would require AI platforms to provide regular reminders to minors that the chatbot is not human. The proposal passed in the Senate on June 3. It was then sent to the Assembly, where it was read for the first time. On June 9 it was sent to the Committees of the Judiciary and Privacy and Consumer Protection.

SB 243 is scheduled to be heard by the Assembly Privacy and Consumer Protection Committee on July 8.

SB 833: Human Oversight of AI in Critical Infrastructure

Sen. Jerry McNerney sponsored SB 833, which would require human oversight is maintained when AI systems are used to control critical infrastructure, including: transportation, energy, food and agriculture, communications, financial services, or emergency services. SB 833 passed in the Senate on June 3. It was then sent to the Assembly where it was read for the first time. On June 9 it was referred to the Committee on Privacy and Consumer Protection, where it remains.

SB 53: CalCompute

Sen. Scott Wiener (D-San Francisco) sponsored SB 53, which is a more dialed-back version of his Safe & Secure Innovation for Frontier AI Models Act (SB 1047), which passed both chambers last year before California Gov. Gavin Newsome vetoed it.

The bill would protect whistleblowers who work for developers of “foundational models” for AI platforms trained on broad sets of data. If the bill passes, whistleblowers working for these AI companies would be protected if they disclose information to the California Attorney General or other authorities regarding potential critical risks posed by the developer’s activities or any alleged false or misleading statements made by the company about risk management practices. 

The bill passed the Senate on May 28. The Assembly Judiciary Committee heard and approved the bill, 12-0, on July 1, and referred it to the Assembly Committee on Privacy and Consumer Protection.