[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7509 Introduced in House (IH)]
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119th CONGRESS
2d Session
H. R. 7509
To amend the Internal Revenue Code of 1986 to deny certain tax credits
and deductions to businesses that use foreign adversary-controlled
technology, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 11, 2026
Mr. Moran introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to deny certain tax credits
and deductions to businesses that use foreign adversary-controlled
technology, 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.
This Act may be cited as the ``Deterring Adversarial Access to
Americans' Data Act''.
SEC. 2. TAX TREATMENT OF ENTITIES USING FOREIGN ADVERSARY-CONTROLLED
TECHNOLOGY.
(a) Entities Using Foreign Adversary-Controlled Technology Added to
List of Foreign-Influenced Entities.--Section 7701(a)(51) of the
Internal Revenue Code of 1986 is amended--
(1) in subparagraph (D)(i), by striking ``or'' at the end
of subclause (I), by striking the period at the end of
subclause (II) and inserting ``, or'' and by adding at the end
the following new subclause:
``(III) which uses foreign
adversary-controlled technology during
the taxable year.'', and
(2) in subparagraph (I), by adding at the end the following
new clause:
``(vii) Foreign adversary-controlled
technology.--The term `foreign adversary-
controlled technology' means any information
and communications technology or service that
is--
``(I) designed, developed,
manufactured, or provided by a
specified foreign entity or foreign-
influenced entity described in
subclause (I) or (II) of subparagraph
(D), or
``(II) dependent on, or
interoperable with, any other hardware,
firmware, operating system, middleware,
driver, embedded software, cloud
service, or network component described
in subclause (I) for core
functionality.
``(viii) Information and communications
technology or service.--The term `information
and communications technology or service' means
any hardware, software, or other product or
service primarily intended to fulfill or enable
the function of information or data processing,
storage, retrieval, or communication by
electronic means, including transmission,
storage, and display.''.
(b) Bonus Depreciation Denied for Foreign Adversary-Controlled
Technology and Property Owned by Prohibited Foreign Entities.--Section
168(k)(2) of such Code is amended--
(1) in subparagraph (A)--
(A) in clause (i)--
(i) by striking ``or'' at the end of
subclause (III),
(ii) by striking ``and or'' in subclause
(V) and inserting ``or'', and
(iii) by striking ``and'' at the end of
subclause (VI),
(B) in clause (ii), by striking the period at the
end and inserting a comma, and
(C) by adding at the end the following new clauses:
``(iii) which is not foreign adversary-
controlled technology, and
``(iv) which is not property owned by a
prohibited foreign entity.'', and
(2) by adding at the end the following new subparagraph:
``(I) Regulatory authority.--The Secretary shall
prescribe such regulations as may be necessary or
appropriate to carry out the purposes of clauses (iii)
and (iv) of subparagraph (A).''.
(c) Denial of Full Expensing of Domestic Research and Experimental
Expenditures for Foreign Adversary-Controlled Technology and Prohibited
Foreign Entities.--Section 174A(d) of such Code is amended by adding at
the end the following new paragraph:
``(4) Foreign adversary-controlled technology; prohibited
foreign entities.--This section shall not apply to any amount
paid or incurred--
``(A) for the acquisition or development of foreign
adversary-controlled technology, or
``(B) by a prohibited foreign entity.''.
(d) Modified Calculation of Adjusted Taxable Income for Purposes of
Business Interest Deduction.--
(1) In general.--Section 163(j)(8)(A) of such Code is
amended by striking ``and'' at the end of clause (v) and by
inserting after clause (vi) the following new clause:
``(vii) any item of income, gain,
deduction, or loss which is attributable to--
``(I) foreign adversary-controlled
technology, or
``(II) a trade or business owned by
a prohibited foreign entity, and''.
(2) Regulatory authority.--Section 163(j)(11) of such Code
is amended by inserting ``and which items of income, gain,
deduction, or loss are attributable to foreign adversary-
controlled technology or a trade or business owned by a
prohibited foreign entity under paragraph (8)(A)(vii)'' before
the period at the end.
(e) Denial of Credit for Increasing Research Activities in the Case
of Prohibited Foreign Entities.--Section 41(d)(4) of such Code is
amended by adding at the end the following new subparagraph:
``(D) Restrictions relating to prohibited foreign
entities.--No credit shall be allowed to a taxpayer
under subsection (a) for any taxable year if the
taxpayer is a specified foreign entity or a foreign-
influenced entity.''.
(f) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date which is one year after
the date of the enactment of this Act.
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