Tech Bills of the Week: Deterring AI distillation; Taxing AI developers; and more

Deterring AI distillation

Lawmakers are looking to address the threat of AI model distillation by adversaries, with a new bill introduced by Sen. Bill Hagerty, R-Texas targeting illicit intellectual property infringement by Chinese actors.

The Blocking Large-Scale Adversarial Distillation Efforts — or BLADE — Act of 2026 was introduced on Wednesday, just weeks after the White House voiced concern over Chinese AI developers training their models on American AI systems in a process called distillation. The BLADE Act mandates that the Executive Branch identify and consolidate the specific foreign entities driving illegal distillation operations. 

“As the United States must remain at the forefront of competitiveness in artificial intelligence, we cannot allow our adversaries to steal the intellectual property of America’s top AI companies and thereby threaten U.S. national security and economic security,” said Hagerty in a press release. “The BLADE Act will expose and punish foreign entities that conduct hostile distillation campaigns against our frontier AI companies. Our nation must counter malign actors who seek to subvert our nation’s leadership and innovation in artificial intelligence.”

After composing and publicly releasing the list of entities engaging in AI model distillation, the Department of Commerce and Department of Treasury would be tasked with imposing export controls and financial sanctions, respectively, on the listed entities. 

The BLADE Act boasts bipartisan support, with Sens. Tim Scott, R-S.C., Andy Kim, D-N.J., and Catherine Cortez Mastro, D-Nev., joining Hagerty in introducing the bill. 

Taxing AI-driven unemployment

A group of House Democrats introduced a new bill on Thursday designed to fight predicted mass layoffs spurred by the rapid advancement and widespread deployment of artificial intelligence.

Reps. Greg Casar, D-Texas, Valerie Foushee, D-N.C., and Sara Jacobs, D-Calif., introduced the AI Tax and Work Protection Act to prevent mass unemployment through a new oversight office created by taxes levied on AI developers.

In a press call, Casar described the pending economic situation as an “emergency” that demands federal intervention.

“Right now, no one in Washington has a plan to deal with the threat that AI could pose to the workforce, and no one really knows what Democrats' policy position is on AI and job loss,” Casar said on Thursday. “We are not going to let millions of Americans go without work just so a few billionaires can become trillionaires, and we're not going to let AI CEOs take your job and make you unemployed.”

The bill creates a new Work Protection Administration, funded completely by taxes on AI companies based on the input tokens required for a given AI system or the total revenue generated by selling AI products, whichever is higher. 

The Work Protection Administration’s purpose is to create jobs to offset AI-linked layoffs. With the tax revenue, the office will invest in job creation in sectors like housing construction, infrastructure modernization, child care and elder care via local grants. 

“The tax starts small, but if unemployment goes up, the tax rate goes up, and we use that money to invest in jobs that need doing, taking care of our elderly, teaching our kids, fixing our broken infrastructure,” Casar said. 

Studying AI’s impact in classrooms 

Rep. George Whitesides, D-Calif., introduced a new bill on Monday that would instruct the National Science Foundation to develop more workshops that examine how to effectively deploy AI in education environments.

The Understanding AI in the Classroom Act specifically aims to examine the impact AI has on kids’ attention spans; their cognitive, social and behavioral development; and their burgeoning dependencies.

Six months after the workshops are completed, the NSF director will then compile a report on the findings and share them with the House Committee on Science, Space and Technology and the Senate Committee on Commerce, Science and Transportation.

Evaluating AI in the financial sector

Sen. Mark Warner, D-Va., introduced a new bill on Thursday that would amend the Financial Stability Act of 2010 to establish more oversight of AI’s presence in the financial sector by giving the Financial Stability Oversight Council duties specific to that technology. 

Warner’s new bill follows a letter he and other Democrats sent to the Trump administration calling for information on the new framework officials established for evaluating AI models and their cybersecurity risks but have not released publicly. 

Disclosing AI in healthcare claims

A proposed amendment to the Public Health Service Act and the Social Security Act includes provisions mandating that insurance providers disclose if AI has been used to evaluate insurance claims and coverage decisions.

The Health Insurance Transparency for Patients Act, introduced on Monday by Rep. Ashley Hinson, R-Iowa, outfits the landmark health bills with clauses designed to help patients when a denied claim had been processed with the help of AI tools. 

“Big health insurance companies have a pattern of purposely denying patients coverage based on technicalities to protect their own bottom line,” Hinson said in a press release. “And they get away with it because nobody can see how they’re making these decisions. My bill holds them accountable by exposing these unfair practices, so patients are no longer in the dark and Iowans can get better healthcare coverage.”

Aligning immigration with AI dominance 

A bill introduced on Thursday seeks to better align immigration policy with the need to fortify the U.S. AI sector.

S.5307, introduced by Sen. Chris Coons, D-Del., seeks to create a strategy specifically focused on harmonizing U.S. immigration policy with the national security need to lead globally in developing a robust AI sector. In addition to AI, the bill also looks to examine how immigration policy alignment can fortify innovation in the broader U.S. scientific, technological and entrepreneurial ecosystem.