On June 4, 2026, Representatives Jay Obernolte and Lori Trahan released a 269-page discussion draft, the Great American Artificial Intelligence Act of 2026, that would preempt state laws specifically regulating AI development for three years while imposing federal transparency and audit requirements on the largest developers.1 Broadband Breakfast 2026-06-04 The June 4 2026 Obernolte and Trahan draft preempts state development rules for three years while preserving use regulation, and follows a 10-year moratorium blocked 99-1. Open source 2 Roll Call 2026-06-04 269-page draft; frontier developers over $500M revenue face NIST-licensed semiannual audits reporting to CAISI and up to $1M daily penalties; Brad Carson warns of a floor-to-ceiling swap. Open source The draft preserves state authority over AI deployment and use, and sunsets the preemption in December 2029.3 Tech Policy Press 2026-06-06 Four titles, a December 2029 sunset, CAISI funding raised from $15M to $100M, whistleblower protections, and WARN Act updates requiring disclosure of AI-related layoffs. Open source Why it matters: it reframes preemption as an exchange, a federal rulebook in return for freezing state development rules, unlike the prior attempt that offered only a freeze. We assess, with moderate confidence, that pairing preemption with substantive federal obligations gives this effort a better chance of bipartisan traction than the moratorium that failed 99-1, but that the same coalition that blocked the earlier version will contest the preemption core.1 Broadband Breakfast 2026-06-04 The June 4 2026 Obernolte and Trahan draft preempts state development rules for three years while preserving use regulation, and follows a 10-year moratorium blocked 99-1. Open source 2 Roll Call 2026-06-04 269-page draft; frontier developers over $500M revenue face NIST-licensed semiannual audits reporting to CAISI and up to $1M daily penalties; Brad Carson warns of a floor-to-ceiling swap. Open source

The drivers

The draft is built on a line between building and using. States would lose the power to regulate how AI systems are developed for three years, which is the part critics say matters most for safety, while retaining authority over how systems are deployed and used, plus generally applicable laws such as privacy and consumer protection.1 Broadband Breakfast 2026-06-04 The June 4 2026 Obernolte and Trahan draft preempts state development rules for three years while preserving use regulation, and follows a 10-year moratorium blocked 99-1. Open source In practice that would preempt California requirements to publish training data summaries and to watermark AI content, the clearest current examples of state development rules.2 Roll Call 2026-06-04 269-page draft; frontier developers over $500M revenue face NIST-licensed semiannual audits reporting to CAISI and up to $1M daily penalties; Brad Carson warns of a floor-to-ceiling swap. Open source

In exchange, the draft attaches obligations the earlier moratorium lacked. Frontier developers, defined as companies with more than $500 million in annual revenue that have trained frontier models, a threshold that captures OpenAI, Anthropic, Google, Meta, and xAI, must publish safety frameworks addressing catastrophic risks and submit to independent audits.2 Roll Call 2026-06-04 269-page draft; frontier developers over $500M revenue face NIST-licensed semiannual audits reporting to CAISI and up to $1M daily penalties; Brad Carson warns of a floor-to-ceiling swap. Open source 3 Tech Policy Press 2026-06-06 Four titles, a December 2029 sunset, CAISI funding raised from $15M to $100M, whistleblower protections, and WARN Act updates requiring disclosure of AI-related layoffs. Open source Those audits run every six months, conducted by verification organizations licensed through NIST and reporting to the Center for AI Standards and Innovation, with civil penalties up to $1 million per day for non-compliance.2 Roll Call 2026-06-04 269-page draft; frontier developers over $500M revenue face NIST-licensed semiannual audits reporting to CAISI and up to $1M daily penalties; Brad Carson warns of a floor-to-ceiling swap. Open source Catastrophic risk is defined precisely: a foreseeable risk of death or serious injury to more than 50 people, or more than $1 billion in property damage, from models enabling weapons, cyberattacks, or harmful autonomous action.2 Roll Call 2026-06-04 269-page draft; frontier developers over $500M revenue face NIST-licensed semiannual audits reporting to CAISI and up to $1M daily penalties; Brad Carson warns of a floor-to-ceiling swap. Open source The draft is organized into four titles covering frontier governance, workforce, cybersecurity, and research and international cooperation, and would raise CAISI funding from $15 million to $100 million a year.3 Tech Policy Press 2026-06-06 Four titles, a December 2029 sunset, CAISI funding raised from $15M to $100M, whistleblower protections, and WARN Act updates requiring disclosure of AI-related layoffs. Open source

Second order effects and the ledger

The gains and losses do not split cleanly along party or industry lines. Frontier labs gain relief from a growing state patchwork and a single federal development standard, but pay for it with mandatory public safety frameworks, semiannual full-access audits, and personal exposure through whistleblower protections that offer reinstatement, double back pay, and damages for retaliation.3 Tech Policy Press 2026-06-06 Four titles, a December 2029 sunset, CAISI funding raised from $15M to $100M, whistleblower protections, and WARN Act updates requiring disclosure of AI-related layoffs. Open source That is a heavier federal hand than the labs faced under any prior draft, so the trade is real, not one-sided.

State legislatures and attorneys general lose the ability to legislate on model development for three years, the window in which many of them had planned to act.1 Broadband Breakfast 2026-06-04 The June 4 2026 Obernolte and Trahan draft preempts state development rules for three years while preserving use regulation, and follows a 10-year moratorium blocked 99-1. Open source Safety advocates read the exchange as a net loss: Brad Carson of Americans for Responsible Innovation warned it would turn the current floor on state AI legislation into a federal ceiling, undermining protections built at the state level.2 Roll Call 2026-06-04 269-page draft; frontier developers over $500M revenue face NIST-licensed semiannual audits reporting to CAISI and up to $1M daily penalties; Brad Carson warns of a floor-to-ceiling swap. Open source Workers gain a narrower but concrete benefit, since Title II would update the WARN Act to require employers to disclose AI-related layoffs and would establish an AI Workforce Research Hub.3 Tech Policy Press 2026-06-06 Four titles, a December 2029 sunset, CAISI funding raised from $15M to $100M, whistleblower protections, and WARN Act updates requiring disclosure of AI-related layoffs. Open source

The mechanism that makes this different from the failed moratorium is the sunset plus the substantive federal regime: a three-year freeze that expires in December 2029, attached to enforceable obligations, is a smaller and more defensible ask than a bare 10-year preemption.1 Broadband Breakfast 2026-06-04 The June 4 2026 Obernolte and Trahan draft preempts state development rules for three years while preserving use regulation, and follows a 10-year moratorium blocked 99-1. Open source 3 Tech Policy Press 2026-06-06 Four titles, a December 2029 sunset, CAISI funding raised from $15M to $100M, whistleblower protections, and WARN Act updates requiring disclosure of AI-related layoffs. Open source

The counter-case

The thesis that the trade improves the odds could be wrong because the preemption is still the load-bearing element, and the coalition that killed the last attempt objected to preemption itself, not to the absence of a federal rulebook. The prior 10-year moratorium in the One Big Beautiful Bill was stripped 99-1 after Senator Marsha Blackburn moved against it, a margin that reflects how isolated the preemption position was.2 Roll Call 2026-06-04 269-page draft; frontier developers over $500M revenue face NIST-licensed semiannual audits reporting to CAISI and up to $1M daily penalties; Brad Carson warns of a floor-to-ceiling swap. Open source If safety advocates and state officials treat any development preemption as a floor-to-ceiling swap regardless of the obligations attached, the federal regime becomes a sweetener that does not change the vote.2 Roll Call 2026-06-04 269-page draft; frontier developers over $500M revenue face NIST-licensed semiannual audits reporting to CAISI and up to $1M daily penalties; Brad Carson warns of a floor-to-ceiling swap. Open source For this draft to succeed where the moratorium failed, the added obligations would need to peel off members who opposed preemption on safety grounds, and it is a discussion draft soliciting feedback, not an introduced bill, so its final shape and its votes are both unsettled.3 Tech Policy Press 2026-06-06 Four titles, a December 2029 sunset, CAISI funding raised from $15M to $100M, whistleblower protections, and WARN Act updates requiring disclosure of AI-related layoffs. Open source

What to watch

  • The draft becomes a bill. Formal introduction of the Act, as opposed to the discussion draft, within the next two quarters would signal the sponsors believe they have the feedback and support to move; continued draft status signals stalled negotiation.3 Tech Policy Press 2026-06-06 Four titles, a December 2029 sunset, CAISI funding raised from $15M to $100M, whistleblower protections, and WARN Act updates requiring disclosure of AI-related layoffs. Open source
  • A Senate sponsor emerges. Because the last attempt died in the Senate, a credible Senate co-sponsor, especially one who opposed the prior moratorium, would be the clearest sign the trade is working.2 Roll Call 2026-06-04 269-page draft; frontier developers over $500M revenue face NIST-licensed semiannual audits reporting to CAISI and up to $1M daily penalties; Brad Carson warns of a floor-to-ceiling swap. Open source
  • The preemption scope narrows. Watch whether the three-year development freeze survives markup intact or is trimmed to preserve more state authority; narrowing would indicate the preemption core remains the sticking point.1 Broadband Breakfast 2026-06-04 The June 4 2026 Obernolte and Trahan draft preempts state development rules for three years while preserving use regulation, and follows a 10-year moratorium blocked 99-1. Open source
  • Safety groups shift. If organizations like Americans for Responsible Innovation move from opposition to conditional support in response to the audit and framework requirements, the exchange is changing votes; continued opposition means it is not.2 Roll Call 2026-06-04 269-page draft; frontier developers over $500M revenue face NIST-licensed semiannual audits reporting to CAISI and up to $1M daily penalties; Brad Carson warns of a floor-to-ceiling swap. Open source