[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,