Sen. Kennedy files bill in North Carolina Senate to establish AI innovation trust fund

A new bill filed by Sen. Kennedy seeks to foster responsible AI innovation through financial support and regulatory oversight in North Carolina, according to the North Carolina State Senate.

The bill, filed as SB 735 on March 25 during the 2025 regular session, was formally listed with the short title: ‘AI Innovation Trust Fund.’

The following is our breakdown, based on the actual bill text, and may include interpretation to clarify its provisions.

In essence, this bill establishes the North Carolina Artificial Intelligence Innovation Trust Fund, aimed at fostering responsible AI development and governance. The fund, managed by the Secretary of Commerce, will provide financial assistance to companies and encourage AI entrepreneurship, with a focus on avoiding projects that infringe on constitutional rights or involve unlawful or deceptive practices. It outlines specific requirements for developers and operators of AI models, including implementing cybersecurity protections, conducting regular risk assessments, and ensuring compliance with safety protocols. The bill also mandates reporting of AI safety incidents and stipulates penalties for violations. It creates an advisory panel for oversight and guidance and requires annual compliance reviews and third-party investigations. Additionally, the bill appropriates $750,000 for the 2025-26 fiscal year to achieve these objectives. The act takes effect on July 1, 2025.

Of the three sponsors of this bill, Natalie S. Murdock proposed the most bills (74) during the 2025 regular session.

Bills in North Carolina follow a multi-step process before becoming law. A lawmaker starts by filing a bill, which is assigned to a committee for review. The bill must be read three times in each chamber. If one chamber changes the bill after the other passes it, both must agree on the final version. Once both chambers approve the same bill, it goes to the governor, who has 10 days (or 30 if the legislature is not in session) to sign, veto, or let it become law without a signature.

You can read more about the bills and other measures here.

Garrett graduated from the University of North Carolina at Greensboro in 2007 with a BSBA.

Garrett, a Democrat, was elected to the North Carolina State Senate in 2019 to represent the state’s 27th Senate district, replacing previous state senator Trudy Wade.