AI Special Economic Zones

On November 19th, 2024 the US-China Economic and Security Review Commission released its yearly report which called for “Congress [to] establish and fund a Manhattan Project-like program dedicated to racing to and acquiring an Artificial General Intelligence (AGI) capability”. In the spirit of that recommendation, here’s a bill to expand datacenter and relevant manufacturing facilties through the create of AI special economic zones.

Disclaimer: AI Alignment is important and rushing ahead willy nilly is not optimal. I just like writing bills that let america do things without falling into its vetocracy.

A BILL

To establish Special Economic Zones for Artificial Intelligence Infrastructure Development and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the “AI Infrastructure Special Economic Zones Act of 2025” or the “AI-SEZ Act”.

SECTION 2. FINDINGS AND PURPOSE.

FINDINGS.—Congress finds that:
1. The development of artificial intelligence capabilities is fundamental to the national security and economic competitiveness of the United States;
2. The United States faces significant strategic competition in artificial intelligence development from foreign powers;
3. The computational infrastructure required for artificial intelligence development represents a critical national capability;
4. Advanced semiconductor manufacturing is essential to national security and represents a strategic vulnerability given current geographic concentration of production capacity;
5. The United States must rapidly develop domestic semiconductor manufacturing capabilities to ensure supply chain security for critical AI infrastructure;
6. Current regulatory and permitting processes impede the rapid development of necessary artificial intelligence infrastructure and semiconductor manufacturing facilities; and
7. The creation of dedicated zones for accelerated infrastructure development will enhance national security and maintain U.S. technological leadership.
PURPOSE.—The purpose of this Act is to:
1. Accelerate the development of artificial intelligence infrastructure and semiconductor manufacturing capacity in the United States;
2. Remove unnecessary regulatory barriers to critical infrastructure development;
3. Ensure adequate computational capacity and semiconductor supply for artificial intelligence development;
4. Reduce strategic vulnerabilities in the semiconductor supply chain; and
5. Strengthen the United States' position in strategic competition regarding artificial intelligence capabilities.

SECTION 3. DEFINITIONS.

In this Act:

QUALIFYING INDUSTRY.—The term "qualifying industry" means any establishment primarily engaged in:
1. Electric Power Generation, Transmission and Distribution (NAICS 2211);
2. Semiconductor Machinery Manufacturing (NAICS 333242);
3. Computer and Electronic Product Manufacturing (NAICS 334);
4. Electrical Equipment Manufacturing (NAICS 3353);
5. Other Electrical Equipment and Component Manufacturing (NAICS 3359); or
6. Information (NAICS 51).
AI-SEZ.—The term "AI-SEZ" means an Artificial Intelligence Special Economic Zone designated under section 3 of this Act.
SECRETARY.—The term "Secretary" means the Secretary of Commerce.

SECTION 4. DESIGNATION OF AI SPECIAL ECONOMIC ZONES.

IN GENERAL.—The Secretary may designate any area within the United States as an AI-SEZ if:
1. The area is suitable for the development of qualifying industries;
2. The State and local government with jurisdiction over the area have:
  1. Committed to streamlined permitting processes for qualifying industries;
  2. Demonstrated adequate infrastructure capacity or plans for infrastructure development; and
  3. Provided written approval for the designation.
LIMITATION.—The Secretary may not designate more than 10 AI-SEZs in the first 5 years after enactment of this Act.

SECTION 5. LAND ACQUISITION AND MANAGEMENT.

FEDERAL LAND USE.—
1. IN GENERAL.—The Secretary may utilize any lands under federal ownership or control that are suitable for AI-SEZ development, subject to:
  1. Consultation with the federal agency having jurisdiction over such lands; and
  2. A determination that such use would not significantly impair existing federal operations or national security.
2. TRANSFER OF JURISDICTION.—Upon designation of federal lands as an AI-SEZ, administrative jurisdiction shall transfer to the Secretary for the duration of the AI-SEZ designation
EMINENT DOMAIN.—
1. AUTHORITY.—The Secretary may acquire lands necessary for AI-SEZ development through the exercise of eminent domain.
2. COMPENSATION.—Any taking under this subsection shall be compensated at 120 percent of fair market value, as determined by an independent appraisal.
3. PROCEDURE.—The Secretary shall follow the procedures set forth in chapter 176 of title 28, United States Code, except that:
  1. Any required judicial proceedings shall be subject to the jurisdictional limitations in section 5 of this Act; and
  2. The Secretary may take possession of acquired lands immediately upon payment of compensation.
LAND LEASING.—
1. LEASE TERMS.—
  1. The Secretary shall lease AI-SEZ lands to qualifying industries for terms not exceeding 30 years.
  2. LEASE RENEWAL.—
    1. A lessee may, at any time during their lease term, apply for early renewal of their lease.
    2. Upon approval of renewal, the lease term shall be reset to 30 years from the date the renewal takes effect.
    3. Renewed leases shall be subject to updated terms and conditions, including recalculation of annual lease payments based on current assessed land rent value.
    4. The Secretary shall approve renewal applications unless the lessee has materially violated lease terms or the renewal would conflict with the purposes of this Act.
  3. Annual lease payments shall be based on the assessed land rent value, as determined by independent appraisal every 5 years.
2. REVENUE SHARING.—Annual lease revenues shall be distributed as follows:
  1. 60 percent to the United States Treasury; and
  2. 40 percent to the State in which the leased parcel is located.
3. SUBLEASE.—Lessees may sublease portions of their leased land subject to Secretary approval and consistent with AI-SEZ purposes.
IMPROVEMENTS.—
1. OWNERSHIP.—All permanent improvements made by lessees shall remain their property during the lease term.
2. END OF TERM.—Upon lease termination:
  1. Lessees may remove any improvements they have made; or
  2. Transfer improvements to subsequent lessees at negotiated terms; or
  3. The Secretary may purchase improvements at fair market value.

SECTION 6. DEVELOPMENT RIGHTS.

BY-RIGHT DEVELOPMENT.—Within an AI-SEZ, any qualifying industry shall have the right to construct, expand, or modify facilities subject only to:
1. Federal environmental and safety regulations;
2. Building codes necessary to ensure structural integrity and worker safety; and
3. Utility connection requirements necessary for system reliability.
EXPEDITED PERMITTING.—
1. TIMELINE.—All necessary permits for qualifying industries within an AI-SEZ shall be approved or denied within 180 days of application submission.
2. DEFAULT APPROVAL.—Any permit application not explicitly denied within the timeline specified in paragraph (1) shall be deemed approved.
3. CATEGORICAL EXCLUSION.—Actions taken under this section shall be categorically excluded from the requirement to prepare an environmental assessment or environmental impact statement under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).
INFRASTRUCTURE REQUIREMENTS.—
1. POWER SYSTEMS.—
  1. Each facility within an AI-SEZ shall maintain:
    1. Redundant power distribution systems capable of maintaining full operation in the event of primary system failure;
    2. Battery backup systems capable of maintaining full operation for not less than 2 hours; and
    3. Automated transfer switching systems between power sources.
  2. INTERCONNECTION PRIORITY.—Applications for electrical grid interconnection from qualifying industries within AI-SEZs shall receive expedited review and prioritized queue position in applicable regional transmission organizations or independent system operators.

SECTION 7. JUDICIAL REVIEW.

EXCLUSIVE JURISDICTION.—
1. IN GENERAL.—The district courts of the United States shall have exclusive jurisdiction to hear all causes or claims arising from any action undertaken, or any decision made, by the Secretary pursuant to this Act.
2. CONSTITUTIONAL CLAIMS ONLY.—A cause of action or claim may only be brought alleging a violation of the Constitution of the United States. The court shall not have jurisdiction to hear any claim not specified in this paragraph.
TIME LIMITATION.—
1. FILING DEADLINE.—Any cause or claim shall be filed not later than 60 days after the date of the action or decision made by the Secretary. A claim shall be barred unless it is filed within the time specified.
2. EXPEDITED CONSIDERATION.—The court shall complete all judicial review, including rendering a final decision, within 180 days from the date of filing.
APPELLATE REVIEW.—An interlocutory or final judgment, decree, or order of the district court may be reviewed only upon petition for a writ of certiorari to the Supreme Court of the United States.

SECTION 8. INCENTIVES AND BENEFITS.

TAX INCENTIVES.—Qualifying industries operating within an AI-SEZ shall be eligible for:
1. Accelerated depreciation of capital investments;
2. Research and development tax credits at enhanced rates; and
3. Employment tax credits for technical training programs.
INFRASTRUCTURE SUPPORT.—
1. AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated $5,000,000,000 for fiscal years 2025 through 2030 to support infrastructure development within AI-SEZs.
2. USE OF FUNDS.—Funds may be used for:
  1. Electric grid capacity expansion;
  2. Water infrastructure;
  3. Transportation infrastructure; and
  4. Communications infrastructure.
3. COST SHARING.—The Federal share of the total project cost for any project funded under this subsection may be up to and including 100 percent of eligible costs.

SECTION 9. REGULATORY COORDINATION AND STREAMLINING.

LEAD AGENCY.—The Department of Commerce shall serve as the lead agency for coordinating Federal oversight of AI-SEZs.
INTERAGENCY COORDINATION.—The Secretary shall establish an interagency working group to:
1. WORKING GROUP.—The Secretary shall establish an interagency working group to:
  1. Coordinate permitting processes;
  2. Resolve conflicts between agency requirements; and
  3. Ensure timely review of applications.
2. UNIFIED PROCESS.—The Secretary shall establish a unified process for all Federal permits and approvals required for qualifying industries within AI-SEZs.
PREEMPTION.—
1. Federal, State, and local laws and regulations that conflict with or impede the purposes of this Act shall be preempted within AI-SEZs to the extent necessary to achieve the purposes of this Act.
2. The Secretary shall have authority to determine whether a law or regulation is preempted under this subsection.
EXPORT CONTROLS.—
1. All activities within AI-SEZs shall comply with applicable federal export control regulations, including those established under the Export Control Reform Act of 2018 (50 U.S.C. 4801 et seq.).
2. Nothing in this Act shall be construed to modify or supersede existing export control requirements.

SECTION 10. REPORTING REQUIREMENTS.

ANNUAL REPORT.—The Secretary shall submit an annual report to Congress on:
1. The number and location of designated AI-SEZs;
2. The volume and type of investment in each AI-SEZ;
3. Production metrics including:
  1. Total computational capacity installed and operational;
  2. Semiconductor manufacturing capacity by process node;
  3. Power consumption and capacity; and
  4. Projected expansion of production capacity over the next 24 months;
4. The effectiveness of streamlined permitting processes, including:
  1. Average time from application to approval;
  2. Number of permits processed; and
  3. Total capital investment enabled; and
5. Any recommendations for statutory or regulatory changes to improve the effectiveness of AI-SEZs.
CLASSIFICATION.—The Secretary may submit portions of the report required under subsection (a) in classified form if necessary to protect national security interests.

SECTION 11. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated such sums as may be necessary to carry out this Act.