Reps. Jay Obernolte (R-Calif.) and Lori Trahan (D-Mass.) dropped a 269-page discussion draft of the Great American AI Act of 2026 on June 4, and the reaction across the AI policy world was nearly uniform: the audits are interesting, the preemption is fatal.

The structure is the trade. Companies clearing a $500 million prior-year revenue threshold become “large frontier developers,” obligated to publish frameworks addressing catastrophic risk and submit to semi-annual audits by state-licensed Independent Verification Organizations carrying a liability shield. Penalties run to $1 million per day per violation, well above the $1–3 million per-violation caps in California, New York, and Illinois. In exchange, states lose the power to legislate on AI development for three years. Trahan’s office confirmed California’s AB 2013 training-data disclosure law and part of SB 942’s watermarking regime would be preempted on day one. The bill also codifies the Center for AI Standards and Innovation and extends the Cybersecurity Information Sharing Act through FY2035.

Co-sponsors include Reps. Suhas Subramanyam, Scott Franklin, Scott Peters, and Erin Houchin. That bipartisan cover hasn’t bought much goodwill. Three House Democratic commissioners on the Democratic Commission on AI and the Innovation Economy are already opposed, with the body calling the draft unworkable as currently written but acknowledging it as “the basis for productive dialogue.” Americans for Responsible Innovation said the draft “turns the current floor on state AI legislation” into a “federal ceiling.” The ACLU’s Jina John was blunter: the bill “takes that power away from the states.”

The precedent everyone is reading from is last July, when the Senate killed an identical preemption-for-federal-rules swap 99-1 inside the budget reconciliation fight. Obernolte’s office is collecting feedback before formal introduction; an August recess floor path looks remote. The audit architecture is the most serious frontier-safety scaffolding Congress has put on paper. It’s bolted to the one provision the upper chamber has already voted, almost unanimously, to reject.

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