AI Law Wiki News for August 6, 2026

August 6, 2026 — Representative Ro Khanna announced a proposed “Data Center Bill of Rights” resolution intended to give local communities authority to reject data-center projects and protect residents from utility, water, and pollution burdens associated with AI infrastructure. Representatives Greg Casar, Valerie Foushee, and Sara Jacobs also unveiled the AI Tax and Work Protection Act, which would tax certain large-model activity and use the revenue for a federal job-creation program. A Connecticut Superior Court also restricted a self-represented plaintiff to in-person paper filings after finding that he repeatedly concealed prompt-injection instructions and other hidden text in court filings. A New Mexico court also ordered Meta to pay $567 million into a youth-harm abatement fund and make changes to Facebook and Instagram after an earlier jury verdict against the company.

Contents

1. Khanna proposes community “Data Center Bill of Rights”
2. House Democrats unveil AI Tax and Work Protection Act
3. New Mexico court orders $567 million Meta youth-harm remedy
4. Connecticut court bars concealed prompt injections in filings

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Khanna proposes community “Data Center Bill of Rights”

Khanna said the resolution would establish rights for local communities to reject proposed data centers through a transparent process and to prohibit facilities within 2,500 feet of homes, schools, childcare facilities, hospitals, or nursing homes.

The proposal would preserve states’ ability to pause new data centers until safeguards address electricity-rate increases, local water supplies, and pollution standards. It would also preserve municipal authority to regulate data-center development without state preemption, require clean and reliable energy and compliance with pollution limits, and allow communities to demand that utility bills not increase because of the projects.

Khanna said opposition to data centers was the strongest feedback he received during recent travel in Pennsylvania and argued that communities should be able to prevent facilities from being placed in farmland or residential areas.

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House Democrats unveil AI Tax and Work Protection Act

Casar, Foushee, and Jacobs unveiled the AI Tax and Work Protection Act, which would tax companies that develop or sell access to certain large AI models and companies that use those models to reduce their workforces.

The proposal would raise tax rates when unemployment exceeds 5 percent, while permitting the Treasury Department to suspend those increases when higher unemployment results from a war, pandemic, or another major shock unrelated to AI. It would create a Work Protection Administration within the Department of Labor to award job-creation grants to state and local governments for fields including child care, construction, education, health care, housing, infrastructure, and environmental conservation.

Casar had previously argued that an AI tax should combine token use and underlying computing power, apply to providers rather than consumers, and charge more for use by large corporations, with revenue directed to employment programs.

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New Mexico court orders $567 million Meta youth-harm remedy

Judge Bryan Biedscheid ordered Meta to pay $567 million to address harms to young people from Facebook and Instagram, with $420 million allocated to treatment services and the balance assigned to awareness, prevention, screening, and other costs over five years.

The remedy followed a first-phase jury award of $375 million in civil penalties after jurors found that Meta knowingly harmed children's mental health and concealed information about child sexual exploitation on its platforms.

The court also ordered Facebook and Instagram to provide recurring banners and informational screens explaining protection features, best practices, and tools for handling inappropriate comments, with those changes and a New Mexico educational campaign subject to state review. Meta said it disagreed with the ruling and would appeal. An August 8 AP follow-up reported that the order also sets a 90-hour monthly limit for New Mexico users under 18, restricts minors’ interactions with AI chatbots, and requires platform warnings; AP noted that Meta had no implementation deadline and planned to appeal.

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Connecticut court bars concealed prompt injections in filings

In Elliott v. New York Bariatric Group, LLC, Connecticut Superior Court Judge Walter M. Spader Jr. found that July 24 filings contained tiny white-on-white text directing an AI model to agree with the plaintiff and seek reversal of an earlier default ruling.

The court held that concealed instructions to automated systems are not permitted in pleadings and compared the tactic to a secret ex parte communication intended to influence a decision-making tool without notice to the opposing party. The order said the Connecticut Judicial Branch does not use AI to review or decide filings and that the hidden instruction did not affect the court's merits ruling.

After the plaintiff continued placing hidden messages in filings following a July 31 warning, the August 6 order rescinded his electronic-filing access and required future pleadings and exhibits to be filed in person on paper, while leaving him able to file at the clerk's office.