H.R. 3961

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3961 Introduced in House (IH)]

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119th CONGRESS
1st Session
H. R. 3961

To prohibit the Secretary of Defense from entering into software source 
code contracts with entities with certain relationships with China, and 
for other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

June 12, 2025

Mr. Fallon (for himself, Mrs. Kiggans of Virginia, Mr. McGuire, Mr. 
Higgins of Louisiana, Mr. McCormick, and Mr. Gooden) introduced the 
following bill; which was referred to the Committee on Armed Services

_______________________________________________________________________

A BILL

To prohibit the Secretary of Defense from entering into software source 
code contracts with entities with certain relationships with China, 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. PROHIBITION ON SOFTWARE SOURCE CODE CONTRACTS WITH ENTITIES 
WITH CERTAIN RELATIONSHIPS WITH CHINA.

(a) In General.--The Secretary of Defense may not enter into, 
renew, or extend a contract for the provision of software source code 
with a person described in subsection (b).
(b) Person Described.--A person described in this subsection is a 
person that--
(1) owns, operates, substantially funds, or has a material 
interest in a facility located in covered country, if such 
facility has a primary purpose (as determined by the Secretary) 
of researching or developing artificial intelligence;
(2) has allowed a covered country to access to the 
software, or the source code relating to such software, that is 
the subject of the contract, where such access could allow the 
covered country to reverse engineer such software source code; 
or
(3) operates a data center (as such term is defined in 
section 453 of the Energy Independence and Security Act of 2007 
(42 U.S.C. 17112)) in a covered country with respect to such 
software source code, including a data center operated--
(A) by a parent, subsidiary, or affiliate of an 
entity seeking to enter into, renew, or extend a 
contract with the Secretary; or
(B) on behalf of such an entity by a covered 
country.
(c) Waiver Authority.--The Secretary may waive the prohibition 
under this section if the Secretary determines such a waiver is in the 
national security interests of the United States.
(d) Applicability.--This section shall apply only with respect to 
contracts entered into, renewed, or extended within three years after 
the date of the enactment of such section.
(e) Definitions.--In this Act:
(1) The term ``covered country'' has the meaning given the 
term ``covered foreign entity'' in section 812 of the National 
Defense AuthorizationAct for Fiscal Year 2024 (Public Law 118-
31; 10 U.S.C. 4501 note prec.).
(2) The term ``material interest'' means a financial or 
other interest that the Secretary determines is significant 
enough to influence a decision or action of an individual.
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