Gov Hochul’s Budget: No New Taxes But Important Political Communications, “AI” and Issues for Broadcasters

The good news first.  There are no proposed taxes on advertising in the Governor’s Budget.  This is welcome news, especially given the proposed cutbacks in federal spending. However, there are several other issues that should interest broadcasters.

New Political AI Rules: Two years ago, we fought proposed legislation that would have required stations to include disclosures on materially deceptive political ads created with AI.  This obligation was adopted as part of the 2024 NY budget.  At the time we noted that under federal law, stations cannot edit ads from authorized campaign committees, and this included placing disclosure labels on the ads. Moreover, local stations have no way of knowing whether an ad contains a “materially deceptive message” that was made with AI.

We were able to modify the legislation a few months later.  As a result of our efforts, stations did not have to insert labels on political advertisements.  Instead, stations were required to adopt a policy regarding materially deceptive AI and communicate that policy to entities purchasing political time.

This time, the Governor is proposing several significant changes.  All political communications must contain “provenance” information where technically feasible and reasonable.  It is a way to track who is responsible for creating political communications.  This type of “meta data” would not appear on screen.  The proposal needs to be clarified to make sure it applies only to those responsible for creating the political communications, i.e., the campaigns, and not broadcasters. 

The legislation also prevents any entity from publishing or distributing materially deceptive media where the entity knows or should have known that the political communication:

• Takes place within 90 days of an election.

• Is made without the express written consent of any depicted individual, and

• Is made with the intent to influence an election.

This language effectively bans “AI” depictions of candidates 90 days before an election.  It is not clear whether the new “ban” placed liability on to those who created the political communications or whether liability applies to entities, like broadcasters, in the distribution chain that receive political communications from third parties and the broadcast them. We believe liability should rest with the entity that has created the political communications and not the broadcaster. 

There is also a fundamental question whether the new proposal will require stations to edit or even refuse to accept ads from third parties, including authorized campaign committees.  Such an interpretation raises possible conflicts with federal law.  We are meeting with the Governor’s office and other elected officials to address our concerns.  The Governor’s budget process is usually resolved by early April.

You can see a memo we published in NewStream on the current law here.

You can see the legislation proposed in the Governor’s Budget (Part S) here.  New proposed language is underlined.