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AI Tax and Work Protection Act
Introduced Aug 6, 2026 · Last action Aug 6, 2026 — Referred to the Committee on Education and Workforce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
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Summary
This legislation is called the AI Tax and Work Protection Act. It is being reviewed by a committee.
Full bill text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 10044 Introduced in House (IH)]
<DOC>
119th CONGRESS
2d Session
H. R. 10044
To impose a tax on artificial intelligence token usage and establish a
Work Protection Administration within the Department of Labor, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
August 6, 2026
Mr. Casar (for himself, Mrs. Foushee, and Ms. Jacobs) introduced the
following bill; which was referred to the Committee on Education and
Workforce, and in addition to the Committee on Ways and Means, for a
period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To impose a tax on artificial intelligence token usage and establish a
Work Protection Administration within the Department of Labor, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``AI Tax and Work
Protection Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--IMPOSITION OF TAX ON ARTIFICIAL INTELLIGENCE TOKEN USAGE
Sec. 101. Imposition of tax on artificial intelligence token usage.
TITLE II--TRUST FUND
Sec. 201. Establishment.
Sec. 202. Use of funds.
TITLE III--OFFICE OF JOB CREATION AT DEPARTMENT OF LABOR
Sec. 301. Establishment.
Sec. 302. Duties.
TITLE IV--JOBS PROGRAM
Sec. 401. Establishment of grant program.
Sec. 402. Use of funds.
Sec. 403. Report.
Sec. 404. Advisory committee.
Sec. 405. Bureau of Labor Statistics duties.
Sec. 406. Additional Workforce Innovation and Opportunity Act funding.
Sec. 407. Definitions.
TITLE I--IMPOSITION OF TAX ON ARTIFICIAL INTELLIGENCE TOKEN USAGE
SEC. 101. IMPOSITION OF TAX ON ARTIFICIAL INTELLIGENCE TOKEN USAGE.
(a) Chapter 36 of subtitle D of the Internal Revenue Code of 1986
is amended by adding at the end the following new subchapter:
``Subchapter D--Artificial Intelligence
``Sec. 4491. Excise tax on foundation models.
``SEC. 4491. EXCISE TAX ON FOUNDATION MODELS.
``(a) In General.--There is hereby imposed a tax on each covered
person for each taxable year equal to the applicable amount.
``(b) Definitions.--For purposes of this section--
``(1) Applicable amount.--The term `applicable amount'
means the greater of--
``(A) the product of--
``(i) the fair market value of the tokens
processed by the taxpayer in covered
transactions during the taxable year,
multiplied by
``(ii) the applicable token percentage, or
``(B) the product of--
``(i) the sum of--
``(I) the value of all
consideration received by the taxpayer
in exchange for artificial intelligence
services in covered transactions, plus
``(II) the fair market value of all
covered transactions with a related
party, multiplied by
``(ii) the applicable transaction
percentage.
``(2) Covered transaction.--
``(A) In general.--The term `covered transaction'
means--
``(i) the provision of use or access to a
foundation model to an unrelated party in the
course of the trade or business of the
taxpayer, or
``(ii) the use of a foundation model by the
taxpayer or a sale, license, or exchange of
such use or access to a foundation model to a
related party if such use enables or results in
a reduction in the workforce of the taxpayer or
of such related party.
``(B) Exclusion.--Such term does not include any
use, sale or license of use, or access to a foundation
model for the purpose of research and development by
any of the following entities:
``(i) A Federal, State, or local
government.
``(ii) An institution of higher education
(as such term is used in section 101(a) of the
Higher Education Act of 1965).
``(iii) A Federally Funded Research and
Development Center (as defined in section 2.101
of title 48, Code of Federal Regulations or any
successor regulation thereto).
``(iv) An organization that is described in
section 501(c)(3) and is exempt from taxation
under section 501(a).
``(3) Applicable token percentage.--The term `applicable
token percentage' means--
``(A) in the case of a taxable year with respect to
which the applicable unemployment rate does not exceed
5 percent, 2 percent,
``(B) in the case of a taxable year with respect to
which the applicable unemployment rate exceeds 5
percent and does not exceed 7 percent, the sum of--
``(i) 2 percent, plus
``(ii) the percentage by which such rate
exceeds 5 percent, or
``(C) in the case of a taxable year with respect to
which the applicable unemployment rate exceeds 7
percent, the sum of--
``(i) 2 percent, plus
``(ii) twice the percentage by which such
rate exceeds 5 percent.
``(4) Applicable transaction percentage.--The term
`applicable transaction percentage' means--
``(A) in the case of a taxable year with respect to
which the applicable unemployment rate does not exceed
5 percent, 3 percent,
``(B) in the case of a taxable year with respect to
which the applicable unemployment rate exceeds 5
percent and does not exceed 7 percent, the sum of--
``(i) 3 percent, plus
``(ii) the percentage by which such rate
exceeds 5 percent, or
``(C) in the case of a taxable year with respect to
which the applicable unemployment rate exceeds 7
percent, the sum of--
``(i) 3 percent, plus
``(ii) twice the percentage by which such
rate exceeds 5 percent.
``(5) Applicable unemployment rate.--The term `applicable
unemployment rate' means, with respect to a covered
transaction, the U-4 defined measure as published in the
monthly Employment Situation release by the Bureau of Labor
Statistics for the calendar year for which such measure was
highest during the 3 calendar years preceding the year in which
such covered transaction occurs, determined without regard to
any calendar year which began before the date of the enactment
of this section.
``(6) Covered person.--The term `covered person' means a
person that--
``(A) develops a foundation model, sells access to
a foundation model, or modifies an existing open-weight
foundation model, and
``(B) generates revenue from a covered transaction
or uses the foundation model to reduce the workforce of
such person.
``(7) Foundation model.--The term `foundation model' means
an artificial intelligence model--
``(A) is trained on broad data,
``(B) generally uses self supervision,
``(C) which is trained--
``(i) using a quantity of computing power
equal to or greater than 10\25\ integer or
floating-point operations, or
``(ii) using such quantity of integer or
floating-point operations as the Secretary
determines necessary to achieve comparable
model capability for the calendar year, and
``(D) is applicable across a wide range of
contexts.
``(8) Open-weight foundation model.--A foundation model the
trained model parameters of which are made publicly available
for others to download and use, allowing developers and
researchers to run, fine-tune, or adapt the model.
``(9) Artificial intelligence.--The term `artificial
intelligence' has the meaning given such term in section 5002
of the National Artificial Intelligence Initiative Act of 2020.
``(10) Token.--The term `token' means a discrete unit of
data, such as text, code, image, audio, or video data, that an
artificial intelligence model processes, used for the purpose
of measuring the volume of model input or output.
``(c) Suspension of Higher Rates.--Upon a determination by the
Secretary may, in consultation with the Secretary of Labor, that an
unemployment rate in excess of 5 percent occurred by reason of a war,
pandemic, or any other massive economic shock unrelated to the use of
artificial intelligence, the Secretary may apply paragraphs (3) and (4)
of subsection (b) without regard to so much of the unemployment rate as
the Secretary determines is the result of such unrelated cause.
``(d) Related Party.--For purposes of this section, a person is a
related party to another person if such sons are treated as a single
employer under subsection (a) or (b) of section 52 or subsection (m) or
(o) of section 414.
``(e) Regulations.--The Secretary shall issue and annually revise
such regulations or other guidance as may be necessary or appropriate
to carry out the purposes of this section, including determining, in
consultation Secretary of Commerce, the fair market value of a token
for purposes of subsection (b)(1)(A)(i).''.
(b) Clerical Amendment.--The table of subchapters for chapter 36 of
subtitle D of such Code is amended by inserting after the item relating
to subchapter D the following new item:
``subchapter d. artificial intelligence''.
(c) Effective Date.--The amendments made by this section shall
apply to covered transactions (as defined in section 4491(c) of such
Code, as added by this section) which occur after the date which is 1
year after the date of the enactment of this Act.
TITLE II--TRUST FUND
SEC. 201. ESTABLISHMENT.
There is established in the Treasury of the United States a trust
fund consisting of such amounts (to be appropriated out of any moneys
in the Treasury not otherwise appropriated) equivalent to 100 percent
of the taxes imposed by section 4491 of the Internal Revenue Code of
1986 for the fiscal year 2027, and for each fiscal year thereafter.
SEC. 202. USE OF FUNDS.
Such funds appropriated to the trust fund established under section
201 shall be used to carry out titles III and IV.
TITLE III--OFFICE OF JOB CREATION AT DEPARTMENT OF LABOR
SEC. 301. ESTABLISHMENT.
Not later than 90 days after the date of the enactment of this Act,
the Secretary of Labor shall establish a Work Protection Administration
(in this Act referred to as the ``WPA'') within the Department of
Labor, to be headed by the Director of the Work Protection
Administration.
SEC. 302. DUTIES.
The WPA established under section 301 shall develop and implement a
jobs program under title IV to award grants to eligible entities.
TITLE IV--JOBS PROGRAM
SEC. 401. ESTABLISHMENT OF GRANT PROGRAM.
(a) In General.--Subject to the availability of funds in the trust
fund established under title II, the Director shall establish a grant
program to award funds to eligible entities on a competitive basis to
create employment opportunities for individuals under section 402.
(b) Criteria for Awarding Grant Funds.--
(1) Priorities.--In awarding grants under this title, the
Director shall--
(A) give priority to eligible entities that plan to
use such grant funds to create jobs to be filled by
permanent and full-time employees; and
(B) in the case of eligible entities that plan to
use such grant funds for functions typically performed
by State governments or units of general local
government, give priority to eligible entities that are
State governments or units of general local government.
(2) Additional criteria.--In awarding grants under this
title, the Director shall take into consideration--
(A) any recommendations of the advisory committee
established in section 404; and
(B) any information, including reports provided
pursuant to section 405, from the Bureau of Labor
Statistics on the impacts of artificial intelligence on
the labor market.
(c) Application.--To be eligible to receive a grant under this
title, an eligible entity shall submit to the Director an application--
(1) at such time, in such manner, and containing such
information as the Director may require; and
(2) which shall include such assurances as may be necessary
to ensure that such entity has the policies described in
subsection (e).
(d) Interagency Task Force.--The Director shall establish an
interagency task force to assist the Director in reviewing any
applications submitted under subsection (c), which shall include
Federal agencies selected by the Director.
(e) Additional Requirements for Eligible Entities.--To be eligible
to receive a grant under this section, an eligible entity shall be
required to have each of the following policies with respect to any
employee hired using grant funds awarded under this title:
(1) Collective bargaining.--A collective bargaining
agreement, or written policy, not to prevent employees from
exercising the rights guaranteed to employees under section 7
of the National Labor Relations Act (29 U.S.C. 157).
(2) Notice requirement.--Policies that require--
(A) the posting and maintenance of notices that
contain information regarding the rights of such
employees under the National Labor Relations Act (29
U.S.C. 151 et seq.) in any workplace of an eligible
entity in which employees described in section 402(c)
work;
(B) that such employees are provided with notice
and information regarding the benefits and pay required
for each job created under this Act in section 402(d)
at the start of employment; and
(C) such eligible entity to recognize the exclusive
representative selected by the employees in the case
that more than 50 percent of the employees indicate the
desire to be represented by such exclusive
representative.
(3) Local hiring.--Policies that provide a preference for
hiring employees in the same metropolitan area as the site of
employment, as determined by the eligible entity, consistent
with applicable Federal law and subject to rules issued by the
Secretary of Labor.
(4) Limitation.--An eligible entity that is a tribal
government shall not be subject to the requirements of this
subsection.
SEC. 402. USE OF FUNDS.
(a) In General.--Each eligible entity awarded a grant under section
401 shall use such funds to hire employees for jobs for which the
primary duties are to be carried out by a natural person and that
provide--
(1) the support described in subsection (b); and
(2) the benefits described in subsection (d).
(b) Use of Funds.--An eligible entity shall use such grant funds to
hire employees for jobs that provide job creation and support for any
of the following in the geographic area in which such grant recipient
is located:
(1) Job creation to expand child care and early childhood
education programs, including staffing licensed child care
facilities, supporting preschool and early learning programs,
and providing classroom assistance, after-school programming,
before-school programming, family engagement services,
developmental screenings, literacy initiatives, and nutrition
support for young children.
(2) Job creation to support public education programs,
including tutoring, mentoring, classroom assistance, special
education support, school library services, educational
technology assistance, adult literacy instruction, English
language learning programs, science, technology, engineering,
and mathematics education, career and technical education
support, school-based mental health care professionals, and
enrichment programs for students of all ages.
(3) Job creation to support health initiatives and
programs, including support for mental health professionals,
health care workers at underserved hospitals and clinics,
community health outreach, vaccination campaigns, disease
prevention programs, behavioral health support, substance use
prevention, public health education, health data collection,
emergency preparedness, and assistance to local health
departments.
(4) Job creation to support elder care and disability
support services, including non-medical in-home assistance,
companionship services, transportation assistance, meal
delivery, respite care, case management support, accessibility
improvements, independent living services, and programs that
enable older adults and individuals with disabilities to remain
safely in their communities.
(5) Job creation to support housing construction and
rehabilitation, including the construction, rehabilitation,
weatherization, accessibility modifications, lead hazard
remediation, energy efficiency upgrades for homes.
(6) Job creation to support housing-insecure or homeless
individuals, including homelessness outreach and supportive
housing services.
(7) Job creation to support community violence prevention
and public safety, including violence interruption initiatives,
youth mentoring, neighborhood outreach, victim assistance,
crisis intervention support, emergency preparedness education,
and other evidence-based public safety programs.
(8) Job creation to support scientific research and
innovation, including technical support for federally funded
research, laboratory operations, environmental monitoring,
scientific field work, research data management, technology
development, public-interest innovation, and research
assistance performed by Federally Funded Research and
Development Centers (as such term is defined in section 2.101
of title 48, Code of Federal Regulations, or any successor
regulation) or an institution of higher education operated by a
State or political subdivision of a State.
(9) Job creation to support the construction, repair,
maintenance, modernization, and inspection of roads, bridges,
rail systems, airports, ports, public buildings, drinking water
systems, wastewater facilities, broadband infrastructure,
sidewalks, bicycle facilities, parks, and other public
infrastructure.
(10) Job creation to support the commissioning of public
art projects, museum support, archival preservation, library
services, digitization of historical records, cultural
programming, preservation of historic sites, documentation of
local history, and community arts education.
(11) Job creation to support strengthening environmental
conservation and climate resilience including through habitat
restoration, wetland conservation, invasive species removal,
urban forestry, watershed protection, coastal restoration, soil
conservation, carbon sequestration projects, renewable energy
deployment, energy efficiency improvements, and climate
adaptation initiatives.
(12) Job creation to support wildfire prevention and
disaster preparedness programs, including forest management,
hazardous fuel reduction, flood mitigation, emergency shelter
preparation, disaster planning, emergency logistics, post-
disaster debris removal, hazard mapping, community resilience
projects, and recovery assistance following federally declared
disasters.
(13) Job creation to support the repair, remodeling, and
beautification of schools, community centers, libraries, and
other community-based public facilities, and the increase in
the number of workers at such schools, community centers,
libraries, and other community-based public facilities.
(14) Job creation to support the renovation, enhancement,
and maintenance of parks, playgrounds, public and tribal lands,
trails, and other public spaces.
(15) Job creation to support local news and journalism,
including local news funds, local news and community
information organizations, journalism fellowship programs, and
the maintenance and expansion of local, nonprofit, and public-
interest news gathering and reporting capacity.
(16) Job creation to support programs and training
activities under the Workforce Innovation and Opportunity Act
(29 U.S.C. 3101 et seq.).
(17) Job creation to support other activities as determined
by the Director and the advisory committee established under
section 404 to address public needs.
(c) Employee of an Eligible Entity.--
(1) In general.--To be eligible to be an employee hired by
an eligible entity with grant funds awarded under this title,
an individual shall--
(A) be 18 years or older; and
(B) subject to paragraph (2), be hired to perform
any service for an eligible entity as an employee of
such entity.
(2) Exceptions.--An individual hired to perform any service
for an eligible entity shall not be considered an employee of
such entity if--
(A) such individual is free from control and
direction in connection with the performance of such
service, both under any contract for the performance of
such service and in fact;
(B) the service performed by such individual is
outside the usual course of the business of the entity;
or
(C) such individual is customarily engaged in an
independently established trade, occupation,
profession, or business of the same nature as that
involved in such service.
(d) Job Requirements.--An eligible entity awarded a grant under
section 401 shall provide each employee described under subsection (c)
hired for the purpose of providing support under subsection (b) with--
(1) a wage of not less than the greater of--
(A) the minimum wage rate as established under
section 6 of the Fair Labor Standards Act of 1938 (29
U.S.C. 206);
(B) the minimum wage rate as established under
applicable State or local law; or
(C) the prevailing wage rate paid to workers in the
same locality for similar work, as determined by the
Secretary of Labor, and not less than the greater of
the prevailing wage required under applicable Federal,
State, or local prevailing wage statute;
(2) coverage under a health insurance benefits plan
comparable to the health insurance benefits plan offered to
Federal employees under the Federal Employees Health Benefits
Program established under chapter 89 of title 5, United States
Code;
(3) at least 12 workweeks of family and medical leave
benefits during any 12-month period under section 102(a) of the
Family and Medical Leave Act of 1993 (29 U.S.C. 2612(a)) except
that such employee shall be paid at a rate equal to their
regular rate of pay for each week of such leave; and
(4) the ability to earn 1 hour of paid leave for every 30
hours worked, but not greater than 56 hours of such leave in a
year unless such entity chooses to set a higher limit, to be
used by such employee for any purpose.
(e) Nondisplacement.--
(1) Nondisplacement of existing employees.--An eligible
entity may not use grant funds awarded under section 401 to
hire an employee that meets the requirements of subsection (c)
for a job created under this section if--
(A) employing such employee will result in the
layoff or partial displacement of an existing employee
of such entity;
(B) such employee will assume any of the duties or
responsibilities of an existing employee of such entity
who is on strike; or
(C) such employee will perform work that is the
same or substantially similar to the work performed by
any existing employee at the same site of employment,
and if such existing employee--
(i) has been laid off or partially
displaced as a result of such employee hired
from grant funds awarded under section 401; and
(ii) has not been offered to be restored to
the position such existing employee had
immediately prior to being laid off or
partially displaced.
(2) Existing employee defined.--The term ``existing
employee'', when used with respect to an eligible entity, means
an employee who was an employee of the eligible entity on the
date prior to the date an individual was hired using grant
funds under this title.
SEC. 403. REPORT.
Not later than one year after the first grant is awarded under
section 401, and annually thereafter, the Director shall submit a
report to the Committees on Education and Workforce of the House of
Representatives and the Committee on Health, Education, Labor, and
Pensions of the Senate, including--
(1) the number of grants awarded under section 401; and
(2) data on the jobs created under section 402 as a result
of such grants, including--
(A) the number of jobs created for each grant
awarded under section 401; and
(B) the average and median wage and the wage range
paid by eligible entities for such jobs.
SEC. 404. ADVISORY COMMITTEE.
(a) Establishment.--Not later than 180 days after the date of
enactment of this Act, or 90 days after the establishment of the Office
under title III, whichever is sooner, the Director shall establish an
advisory committee (in this section referred to as the ``Committee'')
to advise the Office regarding the grant program established under
section 401.
(b) Membership.--The Committee shall be composed of the following
members:
(1) A designee of the Secretary of Labor.
(2) A designee of the Secretary of Commerce.
(3) A designee of the Secretary of Education.
(4) A designee of the Chair of the Federal Reserve.
(5) A designee of the Chair of the National Labor Relations
Board.
(6) One representative from the National Science
Foundation.
(7) One representative from the Council of Economic
Advisors of the Executive Office of the President.
(8) One representative from the Office of Science and
Technology Policy of the Executive Office of the President.
(9) Not less than one representative from any union with
two or more branches located in the States or territories of
the United States and whose membership exceeds 50,000 members.
(10) The governor of each State or their designee.
(11) Two economists studying macroeconomic labor trends.
(c) Chairperson.--The Chairperson of the Committee shall be
designated by the Director.
(d) Meetings.--Not later than 30 days after the date of enactment
of this Act, and on a quarterly basis thereafter, the Committee shall
meet with the Office to advise the Director on the development and
implementation of the jobs program under this title.
(e) Inapplicability of the Federal Advisory Committee Act.--Chapter
10 of title 5, United States Code (commonly known as the ``Federal
Advisory Committee Act''), shall not apply to the Committee.
SEC. 405. BUREAU OF LABOR STATISTICS DUTIES.
(a) In General.--The Bureau of Labor Statistics shall collect,
collate, and report on the impacts of artificial intelligence on the
workforce, including impacts beyond--
(1) job displacement as a result of artificial
intelligence; and
(2) the degradation of existing jobs, including employees
receiving lower pay or fewer hours or such jobs becoming
temporary as a result of artificial intelligence.
(b) Authorization of Appropriations.--There is authorized to be
appropriated to the Bureau of Labor Statistics 20 million dollars for
each fiscal year beginning fiscal year 2027 and ending fiscal year 2031
to carry out this section.
SEC. 406. ADDITIONAL WORKFORCE INNOVATION AND OPPORTUNITY ACT FUNDING.
For the fiscal year 2027, and for each fiscal year thereafter,
there is authorized to be appropriated not greater than 20 percent of
the funds appropriated to the trust fund established under section 201
to fund programs and training activities under the Workforce Innovation
and Opportunity Act (29 U.S.C. 3101 et seq.).
SEC. 407. DEFINITIONS.
In this Act:
(1) Artificial intelligence.--The term ``artificial
intelligence'' has the meaning given such term in section 5002
of the National Artificial Intelligence Initiative Act of 2020
(15 U.S.C. 9401).
(2) Director.--The term ``Director'' means the Director of
the Office of Job Creation.
(3) Eligible entity.--The term an ``entity eligible''
means--
(A) a State government;
(B) a unit of general local government, as defined
in section 3 of the Workforce Innovation and
Opportunity Act (29 U.S.C. 3102);
(C) a tribal government;
(D) an elementary school or a secondary school, as
defined in section 8101 of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 7801), that derive
their support entirely or primarily from public funds;
(E) a local or State educational agency, as defined
in section 8101 of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 7801);
(F) an institution of higher education; or
(G) an organization described in section 501(c) of
the Internal Revenue Code of 1986 and exempt from
taxation under section 501(a) of such Code.
(4) Full-time employee.--The term ``full-time employee''
means an employee who is employed, on average, at least 30
hours a week in a calender month.
(5) Institution of higher education.--The term
``institution of higher education'' has the meaning given such
term in section 101 of the Higher Education Act of 1965 (20
U.S.C. 1001).
(6) Partial displacement.--The term ``partial
displacement'' means any reduction in hours, wages, or
employment benefits of an employee.
(7) Permanent employee.--The term ``permanent employee''
means an employee who is not designated as a temporary employee
and whose employment does not terminate after 1 year or less
after the date on which such employee began work at such job.
<all>Official legislative text sourced from the public record (cached on CivicsHQ).
Official source
View the original bill, actions, and full legislative record on Congress.gov.
Status
In Committee
- 1Introduced
- 2Committee
- 3Floor
- 4Passed
- 5Signed
Timeline reflects current normalized status only. Full action history is not yet stored in the API.
Sponsors
- Rep. Casar, Greg [D-TX-35]DHouseTX
Votes
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