Surrogacy is a complex legal issue in the US with various states adopting different stances on it. For instance, in Michigan and D.C., surrogacy contracts are void and parties to the contract can be penalized with a $10,000 fine or jailed for a year. Some other states allow surrogacy but regulate it differently.
How surrogacy is treated in the US
Bans: Arizona, District of Columbia
Voids and Penalizes: Michigan, New York
Voids: Indiana, Kentucky, Louisiana, Nebraska
Prohibits some/Allows others: North Dakota, Washington,
Allows but regulates: Arkansas, Florida, Illinois, Nevada, New Hampshire, Texas, Utah, Virginia
Case law: California has case law on surrogacy, not codified law. It allows and recognizes surrogacy contracts.
But there are still many states, which do not have a surrogacy law. This can sometimes push surrogacy into a grey area and make matters difficult for parties involved in a surrogacy contract.
In India, a surrogacy law is on the anvil. It will largely be based on the surrogacy guidelines currently in use for ART clinics in India laid down by the Indian Council of Medical Research. This draft law is expected to be enacted into law by the Indian Parliament soon.