On June 4, Representatives Jay Obernolte (R-CA) and Lori Trahan (D-MA) released a sweeping discussion draft of their Great American Artificial Intelligence Act. The latest bipartisan AI legislation quickly met bipartisan skepticism, particularly concerning the draft’s approach to federal preemption of state AI rules, with many House Democrats opposing the broad preemption for frontier model developers, while many House Republicans and other stakeholders lamented the bill’s omission of preemption for state laws reaching other parts of the AI ecosystem. 

The bill would also establish mandatory disclosure and risk-mitigation requirements for frontier models and task the Center for Artificial Intelligence Standards and Innovation (CAISI) at the National Institute of Standards and Technology (NIST) with oversight of federal AI-related research and analysis, standards and guidelines development, and risk-mitigation activities.  

Federal Preemption

In contrast with earlier AI preemption legislation, the Obernolte-Trahan draft would preempt state laws “specifically regulating the development of any artificial intelligence model” for three years, while expressly declining to preempt state laws and regulations “applicable to activities occurring upon or after the deployment of an artificial intelligence model.” If the bill were enacted, states could no longer regulate the development of AI models but could continue to regulate the deployment and use of AI models and applications downstream, such as companion chatbots. The bill also would not preempt any state law or regulation of general applicability.

This preemption language is narrower than the sweeping legislation that Congress failed to advance last year as part of the budget reconciliation package known as the “One Big Beautiful Bill Act.”  The House had considered a ten-year “moratorium” on enforcing state and local rules to regulate AI.  Thereafter, Senator Ted Cruz (R-TX) offered revised language to impose a “pause” on AI rules as a condition of receiving additional Broadband Equity, Access, and Deployment (BEAD) funding; the Senate ultimately rejected this proposal 99-1, and the bill was enacted without any AI preemption or moratorium provision.

The draft also targets fewer state laws than President Trump’s December 2025 executive order, which orders the Justice Department to sue to invalidate state AI laws that run counter to Administration policy. 

However, even the more limited preemption language remains a nonstarter for some House Democrats who have expressed concern about the rapid development of the most capable AI models while Congress struggles to reach consensus on AI regulation.  Rep. Ted Lieu (D-CA), who has introduced his own comprehensive AI bill with Rep. Obernolte, criticized the proposal as failing to address the concerns of civil rights groups, labor organizations, and watchdog groups.  It has also drawn significant backlash from state lawmakers.  Meanwhile, industry groups have been slow to lend their support to the discussion draft, even as the state regulatory patchwork continues to expand in the absence of comprehensive federal rules.  The White House, on the other hand, supports more fulsome preemption and reportedly favors prioritizing preemption of state AI laws that focus on consumer protection.  

Frontier Model Developer Requirements

The bill’s requirements for frontier model developers generally mirror similar laws in California, Connecticut, and New York, as well as the recently passed SB 315 in Illinois. The bill would apply to “frontier developers” (defined as entities who train, or initiate the training of, a frontier model using computing power greater than 10^26 integer or floating point operations) and “large frontier developers” (defined as frontier developers with annual gross revenue over $500M in the preceding year) and requires entities to satisfy detailed public safety disclosure and reporting requirements. These requirements include:

  • Frontier AI Frameworks: Large frontier model developers must write, implement and disclose on a publicly available website a frontier AI framework for each of their frontier models that “includes information relating to how the developer carries out” catastrophic risk identification, assessment, mitigation, and third-party evaluation. The framework must also include information on how the developers address cybersecurity threats and critical safety incidents, as well as their internal governance practices to ensure the framework is implemented. The developer must review each framework at least once per year, and, where there are material updates, clearly and conspicuously publish the modified framework and a justification within 30 days.
  • Transparency Reports: Frontier model developers must, before or concurrently with deploying a new or substantially modified frontier model, publish on a publicly available website a transparency report that includes: a mechanism that enables an individual to communicate with the frontier developer; languages supported by the model; “output modalit[ies]” (i.e., format or means of transmitting information); the developer’s intended use cases for the model; any generally applicable restrictions or conditions on uses of the model; and any assessments the developer has conducted concerning potential catastrophic risks arising from use of the frontier model, including any third parties involved in the assessment.
  • Third Party Audits: Notably, the bill includes a third-party audit requirement similar to that imposed by SB 315 in Illinois.  The draft would require large frontier model developers to semi-annually retain a CAISI-licensed independent verification organization tobothverify compliance with their own frontier AI frameworks and assess the adequacy of the framework and other policies for mitigating catastrophic risks.
  • Reporting: CAISI must establish a mechanism that the frontier developer or member of the public can use to report a critical safety incident, and frontier developers must report a critical safety incident to CAISI within 15 days of discovery. Frontier developers must also report a critical safety incident that poses an imminent risk of death or serious physical injury to a law enforcement agency with relevant jurisdiction within 24 hours of discovery.

Representatives Obernolte and Trahan have not yet formally introduced their discussion draft.  While Congress could conceivably move quickly to consider the bill or any other AI legislation, in light of bipartisan disagreement over the core issue of federal preemption and the dwindling number of legislative days remaining in the 119th Congress, it is unlikely the Great American AI Act will advance as drafted this year.  However, as more advanced AI models become available and states continue to enact AI regulations despite the threat of federal litigation, members of Congress from both parties may feel increased pressure to find a consensus approach on preemption.

Matthew Shapanka

Matthew Shapanka draws on more than 15 years of experience – including on Capitol Hill, at Covington, and in state government – to advise and counsel clients across a range of industries on significant legislative, regulatory, and enforcement matters. He develops and executes…

Matthew Shapanka draws on more than 15 years of experience – including on Capitol Hill, at Covington, and in state government – to advise and counsel clients across a range of industries on significant legislative, regulatory, and enforcement matters. He develops and executes complex, multifaceted public policy initiatives for clients seeking actions by Congress, state legislatures, and federal and state government agencies, many with significant legal and political opportunities and risks.

Matt rejoined Covington after serving as Chief Counsel for the U.S. Senate Committee on Rules and Administration, where he advised Chairwoman Amy Klobuchar (D-MN) on all legal, policy, and oversight matters within the Committee’s jurisdiction, including federal election law and campaign finance, and oversight of the Federal Election Commission, legislative branch agencies, security and maintenance of the U.S. Capitol Complex, and Senate rules and regulations.

Most significantly, Matt led the Rules Committee staff work on the Electoral Count Reform and Presidential Transition Improvement Act – landmark bipartisan legislation to update the antiquated process of certifying and counting electoral votes in presidential elections that President Biden signed into law in 2022.

As Chief Counsel, Matt was a lead attorney on the joint bipartisan investigation (with the Homeland Security and Governmental Affairs Committee) into the security planning and response to the January 6, 2021 attack on the Capitol. In that role, he oversaw the collection review of documents, led interviews and depositions of key government officials, advised the Chairwoman and Committee members on two high-profile joint hearings, and drafted substantial portions of the Committees’ staff report on the attack. He also led oversight of the Capitol Police, Architect of the Capitol, Senate Sergeant at Arms, and executive branch agencies involved in implementing the Committees’ recommendations, including additional legislation and hearings.

Both in Congress and at the firm, Matt has prepared many corporate and nonprofit executives, academics, government officials, and presidential nominees for testimony at legislative, oversight, or nomination hearings before congressional committees, as well as witnesses appearing at congressional depositions and transcribed interviews. He is also an experienced legislative drafter who has composed dozens of bills introduced in Congress and state legislatures, including several that have been enacted into law across multiple policy areas.

In addition to his policy work, Matt advises and represents clients on the full range of political law compliance and enforcement matters involving federal election, campaign finance, lobbying, and government ethics laws, the Securities and Exchange Commission’s “Pay-to-Play” rule, as well as the election and political laws of states and municipalities across the country.

Before law school, Matt worked as a research analyst in the Massachusetts Recovery & Reinvestment Office, where he worked on all aspects of state-level policy, communications, and compliance for federal stimulus funding awarded to Massachusetts under the American Recovery & Reinvestment Act of 2009. He has also worked for federal, state, and local political candidates in Massachusetts and New Hampshire.

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Samuel Klein

Samuel Klein helps clients realize their policy objectives, manage reputational risks, and navigate the regulatory environment governing political engagement.

As a member of Covington’s Election and Political Law practice, Sam assists clients facing Congressional investigations and offers guidance on ethics laws; with the…

Samuel Klein helps clients realize their policy objectives, manage reputational risks, and navigate the regulatory environment governing political engagement.

As a member of Covington’s Election and Political Law practice, Sam assists clients facing Congressional investigations and offers guidance on ethics laws; with the firm’s Public Policy group, Sam supports strategic advocacy across a breadth of policy domains at the federal, state, and local levels.

Sam spent one year as a law clerk at the Federal Election Commission. His prior experience includes serving as an intern to two senior members of Congress and helping clients communicate nuanced policy concepts to lawmakers and stakeholders as a public-affairs consultant.

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