House Unveils Great American AI Act to Preempt State Laws and Create Federal Framework

--- headline: "House Unveils Great American AI Act to Preempt State Laws and Create Federal Framework" slug: great-american-ai-act-house-draft category: policy story_number: 2 date: 2026-06-04 authors: - The Vault AI Staff tags: - ai-regulation - congress - federal-policy - state-preemption - frontier-ai ---

# House Unveils Great American AI Act to Preempt State Laws and Create Federal Framework

A sweeping 269-page bipartisan discussion draft would override state AI development laws for three years, impose new safety mandates on frontier labs, and funnel $300 million into a federal standards body -- but critics warn it hands Big Tech a free pass.

WASHINGTON -- After more than 18 months of false starts, congressional gridlock, and a patchwork of state-level AI laws spreading across the country, the U.S. House took its most significant step yet toward comprehensive artificial intelligence regulation on Thursday. Reps. Jay Obernolte (R-Calif.) and Lori Trahan (D-Mass.) released a 269-page discussion draft of the Great American Artificial Intelligence Act, a bill that would establish a unified federal framework for governing the technology and temporarily block states from regulating how AI models are built.

The timing is deliberate. The draft lands just two days after President Trump signed an executive order creating a voluntary government testing process for unreleased AI models, and it represents Congress's first substantive response to a White House AI policy wish list delivered earlier this year. Four additional co-sponsors joined the effort: Reps. Scott Franklin (R-Fla.), Suhas Subramanyam (D-Va.), Erin Houchin (R-Ind.), and Scott Peters (D-Calif.).

"The question before Congress isn't whether AI will be governed," Obernolte and Trahan wrote in an accompanying Bloomberg Law op-ed. "It's whether we will build a clear national framework that protects Americans, supports innovation, and ensures the U.S. leads the world in shaping this technology."

What the Bill Does

At its core, the draft rests on four pillars: frontier AI model governance, workforce impact monitoring, cybersecurity hardening, and expanded research and development.

The most contentious provision is a three-year preemption of state laws that specifically regulate AI model development. States would retain authority over how AI systems are used and deployed, but would lose the ability to dictate how they are built. According to a FAQ released by Trahan's office, California's AB 2013 training-data transparency law and portions of California's SB 942 watermarking requirements would be overridden, while frontier safety laws in California, New York, and Illinois would be "federalized" under a single national standard.

The bill would formally codify the Center for AI Standards and Innovation within the Commerce Department -- the office formerly known as the AI Safety Institute under the Biden administration, rebranded by Commerce Secretary Howard Lutnick last June. CAISI would receive $100 million per year for fiscal years 2027 through 2029, totaling $300 million in authorized funding, and would be tasked with developing voluntary guidelines, licensing independent verification organizations to audit AI labs, and evaluating both domestic and foreign AI systems for security vulnerabilities.

Large frontier developers -- defined as companies with more than $500 million in annual gross revenue -- would face new transparency mandates. They would be required to publish a public "frontier AI framework" detailing how they evaluate catastrophic risks, defined as foreseeable threats that could cause death or serious injury to more than 50 people or more than $1 billion in property damage. Critical safety incidents would need to be reported to CAISI within 15 days of discovery, with imminent risks requiring notification within 24 hours. Violations could trigger penalties of up to $1 million per day.

The draft also includes whistleblower protections for employees who report AI safety violations, increased penalties for AI-enabled financial fraud and impersonation of federal officials, grants for AI literacy education from K-12 through higher education, and a reauthorization of the Cybersecurity Information Sharing Act of 2015 through fiscal 2035.

The Preemption Flashpoint

The state preemption clause has already ignited a fierce backlash. Brad Carson, president of Americans for Responsible Innovation and a former Democratic representative from Oklahoma, called the provision a generational mistake.

"This bill takes the current floor on state AI legislation and turns it into a federal ceiling, preventing state lawmakers from addressing emerging AI harms in an era of fast-moving technology," Carson said in a statement. "Over the past two decades, state lawmakers have proven to be a backstop for tech accountability, fighting for families and communities even as Congress has stalled on creating guardrails."

Brendan Steinhauser, CEO of the Alliance for Secure AI, offered a more measured critique. While praising the bill's bipartisan approach and its focus on catastrophic risk, he said it "falls short of the framework necessary to keep Americans safe from the dangers of advanced AI" and does not justify stripping states of their authority to pass their own safeguards.

The House Democratic Commission on AI and the Innovation Economy, chaired by Reps. Valerie Foushee (D-N.C.), Ted Lieu (D-Calif.), and Josh Gottheimer (D-N.J.), declined to support the draft entirely. "This document cannot serve as the basis for productive dialogue," the commission said.

Not everyone opposes the framework. Rep. Erin Houchin argued that a unified approach is essential for competitiveness: "America should lead the world in artificial intelligence, not regulate ourselves into falling behind China through a patchwork of fifty different state laws." The tech industry group NetChoice welcomed the effort, though it flagged concerns about the auditing regime and data-sharing requirements that could jeopardize trade secrets.

A Long Road Ahead

The sponsors have been careful to frame this as a conversation starter, not a finished product. They are soliciting feedback from stakeholders, experts, and the public before formally introducing the legislation. No timeline for introduction has been set.

The draft arrives at a moment of acute tension in AI governance. The Trump administration has favored a largely hands-off approach to regulation even as public anxiety over AI's impact on jobs, national security, and children's safety has intensified. The Senate came close to passing an AI state-law moratorium last year, but the effort collapsed at the last minute. Whether this House proposal can navigate the same political minefield -- satisfying industry demands for regulatory clarity while addressing safety advocates' concerns about accountability -- will determine whether Washington can finally catch up to the technology it is trying to govern.

For now, the Great American AI Act is exactly what its authors say it is: a discussion draft. But at 269 pages and with bipartisan backing, it is the most detailed blueprint yet for what federal AI regulation could look like -- and the fiercest test yet of whether Congress can agree on what it should.