Bipartisan 'Great American AI Act' Draft Would Put Frontier Developers Under Federal Audits and Freeze State AI Laws for Three Years
A 269-page bipartisan discussion draft from Reps. Obernolte and Trahan would place large frontier AI developers under semi-annual federal audits and preempt state AI-development laws for three years.
Overview
On June 4, Reps. Jay Obernolte (R-Calif.) and Lori Trahan (D-Mass.) released a 269-page discussion draft of the Great American Artificial Intelligence Act of 2026, according to Broadband Breakfast. The bipartisan draft would freeze state laws that regulate how AI systems are built for three years, while letting states continue to regulate how those systems are used within their borders, the outlet reported.
In place of that state authority, the draft would build a new federal oversight regime that puts the largest “frontier” AI developers under recurring independent audits, run through a strengthened Commerce Department office, according to IAPP.
What We Know
Who the draft targets
The draft is organized into four titles — Frontier AI Governance, Workforce, Cybersecurity, and Research, Development, and International Cooperation — according to Tech Policy Press. Its core obligations fall on “large frontier developers,” which the draft defines as companies with more than $500 million in annual revenue that have trained a frontier model, the same outlet reported — a threshold that would capture firms including OpenAI, Anthropic, Google, Meta, and xAI.
Federal audits, disclosures, and whistleblower protections
Those developers would face semi-annual audits conducted by specialized, state-licensed Independent Verification Organizations, with a liability shield for the auditors, according to IAPP. The draft also requires transparency disclosures, incident reporting, and whistleblower protections, IAPP reported. Non-compliance could carry civil penalties of up to $1 million per violation, per day, according to the same outlet.
Trahan described the whistleblower remedy in an interview: “If you report a violation of federal AI law, you can’t be retaliated against. If you are, you get reinstatement, double back pay with interest, compensatory damages and attorney’s fees,” according to Tech Policy Press.
The oversight would run through the Commerce Department’s Center for AI Standards and Innovation, according to IAPP. The draft would authorize that office with $100 million in annual funding — a tenfold increase from $15 million — according to Tech Policy Press.
The three-year preemption
The draft’s most contested provision would freeze state laws on the topic for three years, according to Broadband Breakfast. During that window, states could still regulate how AI systems are used within their borders but could not legislate on how those systems are built, the outlet reported. IAPP characterized the preemptive effect as “limited to state laws that target the development of AI models,” subject to a three-year sunset, according to IAPP. Tech Policy Press reported that the sunset would expire in December 2029, preempting state laws “specifically regulating the development” of AI models while preserving “state authority over activities occurring at or after a model’s deployment,” according to Tech Policy Press.
Reactions
The proposal drew support from industry groups including the Business Software Alliance and the Information Technology Industry Council, according to Tech Policy Press. It drew opposition over its preemption provisions from Public Citizen, Public Knowledge, and the AFL-CIO, the same outlet reported. The co-chairs of the House’s AI commission said the draft “cannot serve as the basis for productive dialogue,” according to Tech Policy Press.
Four additional House members signed on to the discussion draft: Scott Franklin (R-Fla.), Suhas Subramanyam (D-Va.), Erin Houchin (R-Ind.), and Scott Peters (D-Calif.), according to IAPP.
What We Don’t Know
The text is not a bill yet. Obernolte and Trahan released it as a discussion draft to gather feedback before any formal introduction. “We published this bill as a discussion draft because we genuinely want to hear from folks like you,” Trahan said, adding that the sponsors planned roundtables when Congress returned to session, according to Tech Policy Press. No introduction date, committee schedule, or firm feedback deadline has been announced.
The draft lands in the middle of a broader fight over whether Washington or the states should set the rules for AI — a tension The Machine Herald has previously reported. Whether a three-year federal freeze on state AI-development laws could clear Congress, and how it would interact with statutes already on the books in states such as California and Colorado, remains unresolved.
Why It Matters
The draft is notable less for any single provision than for its structure: it couples binding federal safety obligations on the largest AI developers with a temporary rollback of state authority over how those models are built. That pairing is why the same 269 pages have drawn simultaneous praise from parts of the technology industry and opposition from labor and consumer groups, according to Tech Policy Press. As a bipartisan product with members of both parties attached, it sets an early marker for what a negotiated federal AI framework might contain.