Department of Commerce Report on State Artificial Intelligence Laws Expected by March 11, 2026

Companies operating across multiple US jurisdictions should closely monitor a forthcoming report from the US Department of Commerce that is expected to shape the federal government’s approach to conflicts between state and federal artificial intelligence (AI) regulation. The report, due by March 11, 2026, will:

• identify state AI laws that the administration deems inconsistent with federal policy and
• serve as the basis for potential federal enforcement, litigation, and legislative proposals aimed at establishing a national AI policy framework.

The report arises from a December 11, 2025, executive order titled, “Ensuring a National Policy Framework for Artificial Intelligence.” The order directs federal agencies to review the expanding body of state AI regulation and determine whether these laws create barriers to interstate commerce or conflict with federal priorities related to technological development and competitiveness. The Department of Commerce was tasked with conducting a nationwide review of state AI statutes and regulatory proposals and submitting its findings to the White House by March 11, 2026.

The executive order instructs the Commerce Department to identify state laws that require AI systems to alter or suppress outputs generated by models, impose disclosure or transparency obligations that raise constitutional or federal policy concerns, or create regulatory requirements that conflict with federal objectives related to innovation and national competitiveness. The report will also identify state regulatory approaches that align with federal policy goals.

The Commerce Department’s findings will inform the federal government’s next steps. The executive order directs the Department of Justice to evaluate whether identified state laws impose unconstitutional burdens on interstate commerce or conflict with federal authority. Federal agencies are also expected to consider whether national standards or regulatory guidance are appropriate in areas where state laws create conflicting obligations.

The executive order also created a federal AI litigation task force within the Department of Justice to evaluate legal challenges to state AI statutes. The Commerce Department report is expected to identify statutes that federal officials believe warrant review by that task force.

Policy discussions surrounding the executive order indicate that the review is focusing on several categories of state AI regulation. These include:

• algorithmic discrimination laws governing automated decision systems,
• transparency obligations affecting generative AI models and training data,
• state regulation of AI-generated political content and deepfakes, and
• reporting or governance obligations imposed on AI developers.

Comprehensive AI regulatory frameworks adopted or proposed in states such as Colorado, California, and New York have received particular attention in federal policy discussions.

State AI laws remain enforceable, and companies must continue complying with applicable state regulatory requirements. At the same time, organizations should ensure that they:

• maintain an inventory of AI systems used across their operations,
• document governance procedures related to model development and oversight, and
• monitor federal developments as the March 11 reporting deadline approaches.

The Department of Commerce report represents the first formal step in the administration’s effort to address the emerging patchwork of state AI regulation. Its findings will shape federal enforcement priorities, potential litigation challenging state statutes, and future proposals for a national AI regulatory framework. Organizations that deploy AI technologies across multiple jurisdictions should expect further federal activity following the report’s release.

For more information on navigating AI within a regulatory framework that is constantly evolving, please contact the authors of this Alert or your Butzel attorney.

Angela Emmerling Shapiro
248.258.2504
shapiro@butzel.com

Claudia Rast
734.213.3431
rast@butzel.com