H.R. 7509

[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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