On September 10, Senate Commerce, Science, and Transportation Committee Chair Ted Cruz (R-TX) released what he called a “light-touch” regulatory framework for federal AI legislation, outlining five pillars for advancing American AI leadership.  In parallel, Senator Cruz introduced the Strengthening AI Normalization and Diffusion by Oversight and eXperimentation (“SANDBOX”) Act (S. 2750), which would establish a federal AI regulatory sandbox program that would waive or modify federal agency regulations and guidance for AI developers and deployers.  Collectively, the AI framework and the SANDBOX Act mark the first congressional effort to implement the recommendations of AI Action Plan the Trump Administration released on July 23. 

1. Light-Touch AI Regulatory Framework

Senator Cruz’s AI framework, titled “A Legislative Framework for American Leadership in Artificial Intelligence,” calls for the United States to “embrace its history of entrepreneurial freedom and technological innovation” by adopting AI legislation that promotes innovation while preventing “nefarious uses” of AI technology.  Echoing President Trump’s January 23 Executive Order on “Removing Barriers to American Leadership in Artificial Intelligence” and recommendations in the AI Action Plan, the AI framework sets out five pillars as a “starting point for discussion”:

• Unleashing American Innovation and Long-Term Growth.  The AI framework recommends that Congress establish a federal AI regulatory sandbox program, provide access to federal datasets for AI training, and streamline AI infrastructure permitting.  This pillar mirrors the priorities of the AI Action Plan and President Trump’s July 23 Executive Order on “Accelerating Federal Permitting of Data Center Infrastructure.”
• Protecting Free Speech in the Age of AI.  Consistent with President Trump’s July 23 Executive Order on “Preventing Woke AI in the Federal Government,” Senator Cruz called on Congress to “stop government censorship” of AI (“jawboning”) and address foreign censorship of Americans on AI platforms.  Additionally, while the AI Action Plan recommended revising the National Institute of Standards & Technology (“NIST”)’s AI Risk Management Framework to “eliminate references to misinformation, Diversity, Equity, and Inclusion, and climate change,” this pillar calls for reforming NIST’s “AI priorities and goals.”
• Prevent a Patchwork of Burdensome AI Regulation.  Following a failed attempt by Congressional Republicans to enact a moratorium on the enforcement of state and local AI regulations in July, the AI Action Plan called on federal agencies to limit federal AI-related funding to states with burdensome AI regulatory regimes and on the FCC to review state AI laws that may be preempted under the Communications Act.  Similarly, the AI framework calls on Congress to enact federal standards to prevent burdensome state AI regulation, while also countering “excessive foreign regulation” of Americans.
• Stop Nefarious Uses of AI Against Americans.  In a nod to bipartisan support for state digital replica protections – which ultimately doomed Congress’s state AI moratorium this summer – this pillar calls on Congress to protect Americans against digital impersonation scams and fraud.  Additionally, this pillar calls on Congress to expand the principles of the federal TAKE IT DOWN Act, signed into law in May, to safeguard American schoolchildren from nonconsensual intimate visual depictions.
• Defend Human Value and Dignity.  This pillar appears to expand on the policy of U.S. “global AI dominance in order to promote human flourishing” established by President Trump’s January 23 Executive Order by calling on Congress to reinvigorate “bioethical considerations” in federal policy and to “oppose AI-driven eugenics and other threats.”

2. SANDBOX Act

Consistent with recommendations in the AI Action Plan and AI Framework, the SANDBOX Act would direct the White House Office of Science & Technology Policy (“OSTP”) to establish and operate an “AI regulatory sandbox program” with the purpose of incentivizing AI innovation, the development of AI products and services, and the expansion of AI-related economic opportunities and jobs.  According to Senator Cruz’s press release, the SANDBOX Act marks a “first step” in implementing the AI Action Plan, which called for “regulatory sandboxes or AI Centers of Excellence around the country where researchers, startups, and established enterprises can rapidly deploy and test AI tools.”

Program Applications.  The AI regulatory sandbox program would allow U.S. companies and individuals, or the OSTP Director, to apply for a “waiver or modification” of one or more federal agency regulations in order to “test, experiment, or temporarily provide” AI products, AI services, or AI development methods.  Applications must include various categories of information, including:

• Contact and business information,
• A description of the AI product, service, or development method,
• Specific regulation(s) that the applicant seeks to have waived or modified and why such waiver or modification is needed,
• Consumer benefits, business operational efficiencies, economic opportunities, jobs, and innovation benefits of the AI product, service, or development method,
• Reasonably foreseeable risks to health and safety, the economy, and consumers associated with the waiver or modification, and planned risk mitigations,
• The requested time period for the waiver or modification, and
• Each agency with jurisdiction over the AI product, service, or development method.

Agency Reviews and Approvals.  The bill would require OSTP to submit applications to federal agencies with jurisdiction over the AI product, service, or development method within 14 days.  In reviewing AI sandbox program applications, federal agencies would be required to solicit input from the private sector and technical experts on whether the applicant’s plan would benefit consumers, businesses, the economic, or AI innovation, and whether potential benefits outweigh health and safety, economic, or consumer risks.  Agencies would be required to approve or deny applications within 90 days, with a record documenting reasonably foreseeable risks, the mitigations and consumer protections that justify agency approval, or the reasons for agency denial.  Denied applicants would be authorized to appeal to OSTP for reconsideration.  Approved waivers or modifications would be granted for a term of two years, with up to four additional two-year terms if requested by the applicant and approved by OSTP. 

Participant Terms and Requirements.  Participants with approved waivers or modifications would be immune from federal criminal, civil, or agency enforcement of the waived or modified regulations, but would remain subject to private consumer rights of action.  Additionally, participants would be required to report incidents of harm to health and safety, economic damage, or unfair or deceptive trade practices to OSTP and federal agencies within 72 hours after the incident occurs, and to make various disclosures to consumers.  Participants would also be required to submit recurring reports to OSTP throughout the term of the waiver or modification, which must include the number of consumers affected, likely risks and mitigations, any unanticipated risks that arise during deployment, adverse incidents, and the benefits of the waiver or modification.

Congressional Review.  Finally, the SANDBOX Act would require the OSTP Director to submit to Congress any regulations that the Director recommends for amendment or repeal “as a result of persons being able to operate safely” without those regulations under the sandbox program.  The bill would establish a fast-track procedure for joint resolutions approving such recommendations, which, if enacted, would immediately repeal the regulations or adopt the amendments recommended by OSTP.

The SANDBOX Act’s regulatory sandbox program would sunset in 12 years unless renewed.  The introduction of the SANDBOX Act comes as states have pursued their own AI regulatory sandbox programs – including a sandbox program established under the Texas Responsible AI Governance Act (“TRAIGA”), enacted in June, and an “AI Learning Laboratory Program” established under Utah’s 2024 AI Policy Act.  The SANDBOX Act would require OSTP to share information these state AI sandbox programs if they are “similar or comparable” to the SANDBOX Act, in addition to coordinating reviews and accepting “joint applications” for participants with AI projects that would benefit from “both Federal and State regulatory relief.”