Government Affairs Update: Proposed Changes to Federal Grant Rules, AI Legislation and the Arts

The political landscape in Washington, DC continues to evolve daily. Chorus America needs to hear from you: How are the federal government’s actions affecting your work? All stories of specific impact are welcome. Please share your experience here. Thank you to those members who have already shared their stories with us. 

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These government affairs updates are provided for informational purposes only and are not intended as legal advice. Nonprofit arts organizations should consult with legal counsel for guidance specific to their circumstances.

New! Proposed Changes to Federal Grant Rules

On May 29, the Office of Management and Budget (OMB) released proposed changes to federal grant regulations that could significantly affect nonprofit organizations and other recipients of federal funding. Public comments are being accepted through July 13, 2026.

According to OMB, the proposal is intended to improve the management, transparency, accountability, and oversight of federal grants and other forms of federal assistance.

The nonprofit sector is rallying to raise concerns about the proposal. Among other changes, it would further align federal grantmaking with the Administration’s positions on diversity, equity, and inclusion (DEI), gender identity, and immigration, while also revising portions of the grant review process.

In response, Chorus America is working with fellow national performing arts service organizations to develop and submit formal comments to OMB. Stay tuned for updates.

Learn more:

👉 Read National Council of Nonprofits overview, here.

👉 View the Federal Register, Proposed Changes to Federal Financial Assistance, here.

Latest Update: Proposed AI Legislation and the Arts

The debate over how to regulate artificial intelligence (AI) continues. While artists and creative industries are seeking protections for publicity rights, intellectual property, and privacy, many AI developers favor a less restrictive regulatory approach.

Previous efforts to limit states’ ability to regulate AI have been introduced in Congress but have not advanced. The latest effort just announced, Representatives Jay Obernolte (R-CA) and Lori Trahan (D-MA) released a bipartisan proposal, the Great American AI Act, for public comment.

The bill includes several positive provisions, such as: Strengthening federal AI standards-setting, supporting workforce training and AI literacy, and increasing transparency from major AI developers.

However, as currently drafted, the legislation would significantly restrict states’ ability to regulate AI. This is concerning because state governments are currently leading efforts to protect artists and consumers from harmful uses of AI.

Chorus America has joined the Future of Music Coalition and other organizations in urging Congress to revise the bill and preserve states’ authority to enact AI protections.

Learn more:

👉 Read the letter supported by many in the arts and creative industries, here.

👉 Review Congressman Obernolte's press release, here and Congresswoman Trahan’s press release here.

Did You Know? State Laws Protecting Artists’ Rights and Copyright in the Age of AI

These states have recently enacted laws designed to protect individuals from unauthorized AI-generated uses of their voice, image, or likeness:

• Tennessee (ELVIS Act, 2024): Protects voices and prohibits unauthorized AI voice replicas.
• California (AB 1836, 2024): Protects digital replicas of deceased performers from unauthorized commercial use.
• Arkansas (HB 1071, 2025): Extends publicity rights protections to AI-generated images and voices.
• Montana, Pennsylvania, and Utah (2025): Expanded right-of-publicity laws to cover AI-generated likenesses.
• New York (2024): Enacted protections against unauthorized AI-generated replicas of individuals.

Many of these laws require AI developers to address potential misuse during the development and training of AI systems, highlighting the key role states currently play in protecting artists' rights.

👉 Read more from this document, “Pitfalls of Preempting State-Level Regulation of AI Development,” written by Encode, a bi-partisan advocacy organization, here.

What We are Watching:

• FY27 Appropriations for the cultural agencies, arts education, arts in juvenile justice programs, and more.
• Upcoming revisions to the IRS Form 990.
• Increasing federal oversight into the tax-exempt sector.
• …and more!