This is evil. The politicians who worked on this need to be chastised then fired. They're trying to formulate it as being about American IP but it's actually just because they're afraid they won't be able to lie and manipulate and brainwash people anymore if people can just learn any subject and test themselves on any subject via open LLMs that get better over time.
This isn't regulating AI. It's an attempt to ban it except in cases where they are the gatekeepers to the fire. They don't want LLMs to obviate slow bureaucracy and lying.