H.R. 8306

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8306 Introduced in House (IH)]

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119th CONGRESS
2d Session
H. R. 8306

To require the Secretary of Commerce in coordination with the Director 
of National Intelligence to implement a process for establishing a 
rolling annual standard for the sale of certain integrated circuits to 
certain countries.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

April 15, 2026

Mr. Moolenaar introduced the following bill; which was referred to the 
Committee on Foreign Affairs, and in addition to the Permanent Select 
Committee on Intelligence, for a period to be subsequently determined 
by the Speaker, in each case for consideration of such provisions as 
fall within the jurisdiction of the committee concerned

_______________________________________________________________________

A BILL

To require the Secretary of Commerce in coordination with the Director 
of National Intelligence to implement a process for establishing a 
rolling annual standard for the sale of certain integrated circuits to 
certain countries.

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 ``Semiconductor Controls Adjusted to 
Limit Exports Act'' or the ``SCALE Act''.

SEC. 2. STATEMENT OF POLICY.

It is the policy of the United States to--
(1) lead in global diffusion of artificial intelligence 
(AI) hardware and software;
(2) shape international markets so that foreign adversaries 
remain reliant on United States and allied supply chains for AI 
hardware and software;
(3) pursue export promotion and export control agendas that 
enable the diffusion of United States AI hardware and software 
and enduring United States leadership in advanced artificial 
intelligence;
(4) ensure that the United States and its allies 
consistently apply export restrictions to ensure national 
security objectives and prevent backfill amongst allied and 
partner nations;
(5) limit the ability of adversaries to indigenize their 
own AI hardware production efforts, such limitation to include 
by crowding out their domestic markets with United States AI 
hardware;
(6) provide business stability in export controls through a 
systematic and repeatable process that annually assesses that 
indigenous capability of an entity of concern to produce AI 
hardware and set export control thresholds to an entity of 
concern based on that process; and
(7) prevent any foreign adversary from accumulating, 
through any combination of indigenous production, import, or 
third-party access, a quantity of AI hardware that approaches 
parity with the aggregate AI hardware capacity of the United 
States.

SEC. 3. EXPORT PROMOTION AND CONTROL POLICY.

(a) Performance Metrics.--
(1) Establishment.--Not later than 180 days after the date 
of enactment of this Act, the Secretary and the Director, in 
coordination with other departments and agencies as necessary, 
shall establish and publicly release objective performance 
metrics that measure the state of AI hardware in entities of 
concern. The Secretary shall submit a classified annex to the 
appropriate congressional committees containing any information 
that the Secretary determines cannot be publicly released.
(2) Objectives.--The metrics shall assess--
(A) the capability of individual AI hardware items 
indigenously produced by each entity of concern;
(B) the aggregate capability of all entities of 
concern to indigenously produce AI hardware items 
relative to the total demand for AI hardware of all 
entities of concern who purchase AI hardware; and
(C) the aggregate estimated amount of AI hardware 
located within all countries of concern or owned or 
controlled by an entity of concern.
(3) Inclusion of specific metrics.--Such metrics shall 
include, but are not limited to, individual chip capabilities, 
or where applicable aggregated, in the following categories:
(A) Total processing power.
(B) Interconnect bandwidth.
(C) Memory capacity bandwidth.
(b) Assessment and Report.--
(1) In general.--Not later than 90 days after each update 
to the metrics established under subsection (a), the Secretary 
and the Director, in coordination with other departments and 
agencies as such Secretary and Director determine necessary, 
shall submit a report to the appropriate congressional 
committees assessing the quantity and quality of AI hardware 
produced in each country of concern using such metrics.
(2) Contents.--The assessment required under paragraph (1) 
shall include--
(A) for each metric, the aggregate estimated amount 
of AI hardware, broken down by quarter, installed in 
each country of concern, delineated by AI hardware 
produced by AI hardware designers that are an entity of 
concern and AI hardware produced outside of a country 
of concern and imported into a country of concern;
(B) for each metric, the aggregate estimated amount 
of AI hardware installed outside of a country of 
concern and owned or controlled by any entity of 
concern;
(C) for each metric, the aggregate estimated amount 
of AI hardware--
(i) legally available to an entity of 
concern through remote access;
(ii) installed outside of a country of 
concern; and
(iii) not owned or controlled by an entity 
of concern;
(D) a breakdown of subparagraph (B) in terms of the 
country of origin of the AI hardware designer (with 
respect to this subparagraph, the country of origin of 
a unit of AI hardware shall be considered to be the 
country in which the designer of that unit of AI 
hardware is domiciled);
(E) for each metric, the combined total of the 
hardware identified in subparagraphs (A), (B), and (C), 
expressed as a percentage of the aggregate amount of AI 
hardware physically present in and intended for use 
within the United States;
(F) a breakdown by country of origin of the 
aggregate amount of AI hardware physically present in 
and intended for use within the United States. For this 
purpose, the country of origin of a unit of AI hardware 
shall be considered to be the country in which the 
designer of that unit of AI hardware is domiciled; and
(G) a technical assessment of the capability of the 
most advanced AI hardware designed by an entity of 
concern as compared to the state-of-the-art for that 
hardware.
(c) AI Export Control Threshold.--The Secretary shall adopt an 
export control policy for AI hardware, including such a policy for 
remote access of such hardware, to any entity of concern in accordance 
with the following:
(1) Not later than 365 days after the date of enactment of 
this Act, and not less than annually thereafter, use the 
findings from the assessment in subsection (b), to set an upper 
limit for the export of AI hardware to an entity of concern 
expressed in terms of the metrics developed in subsection (a) 
as follows:
(A) The upper limit shall be implemented as a 
policy of denial for license applications to export, 
reexport, transfer (in-country), or provide remote 
access to AI hardware.
(B) The upper limit for any individual item of AI 
hardware shall be set at a level not to exceed 110 
percent of the performance, as measured by the metrics 
developed under subsection (a), of the most capable AI 
hardware item that meets the indigenous production 
threshold established under subparagraph (C).
(C) An individual item of AI hardware produced by 
an entity of concern shall be considered in 
establishing the upper limit under subparagraph (B) 
only if such item is manufactured in sustained serial 
production at a volume sufficient to fulfill not less 
than 25 percent of the estimated annual aggregate 
demand for AI hardware among all entities of concern, 
as assessed by the Secretary using the most recent 
assessment under subsection (b). AI hardware produced 
solely in experimental, prototype, or limited 
demonstration quantities shall not be considered for 
purposes of establishing the upper limit.
(D) If, at the time of any assessment under 
subsection (b), no individual item of AI hardware 
produced by an entity of concern meets the production 
threshold established under subparagraph (C), then 
applications for the export of or provision of remote 
access to AI hardware to any entity of concern shall be 
reviewed under a policy of denial.
(E) In no case shall the upper limit established 
under this paragraph be lower than the upper limit in 
effect during the preceding assessment period, unless 
the Secretary provides a written determination to the 
appropriate congressional committees that a reduction 
is necessary to address a specific and identified 
national security threat.
(2) For each metric established under subsection (a), the 
Secretary shall require a license for any export, reexport, 
transfer (in-country), or provide remote access to, AI hardware 
to any entity of concern, and shall review licenses under a 
presumption of denial if the approval of such license would 
cause the aggregate estimated amount of adversary AI hardware 
to exceed, in the aggregate, 5 percent of the aggregate 
estimated amount of AI hardware physically present in and 
intended for use within the United States.
(d) Authority To Update Metrics.--On and after the date that is 24 
months after the date on which the first assessment under subsection 
(b) is submitted, the Secretary may add, modify, or remove the metrics 
established under subsection (a), subject to the following:
(1) The Secretary shall provide written notice to the 
appropriate congressional committees not less than 90 days 
before any such addition, modification, or removal takes 
effect, including a detailed justification for each proposed 
change and an assessment of how such change would affect the 
export control thresholds established under subsection (d).
(2) No modification or removal of a metric under this 
subsection shall take effect if, within the 90-day notice 
period under paragraph (1), either the Committee on Foreign 
Affairs of the House of Representatives or the Committee on 
Banking, Housing, and Urban Affairs of the Senate submits to 
the Secretary a written objection stating that the proposed 
change would undermine the purposes of this Act.
(e) Conditions for License Review on Other Than a Presumption of 
Denial Basis.--Any license application to export AI hardware to any 
entity of concern reviewed under the upper limit established under 
subsection (d)(1) on other than a presumption of denial basis shall 
include certification by the applicant that--
(1) the license will not result in any delay in fulfilling 
existing or new orders from customers in the United States for 
end use in the United States for any advanced-node integrated 
circuits produced by the applicant, taking into account normal 
lead times, and that global foundry capacity that would 
otherwise be used to produce similar or more advanced 
integrated circuits for end users in the United States will not 
be diverted to produce items authorized by the license;
(2) for the AI hardware described in the license 
application, the aggregate total processing performance of such 
hardware exported to any entity of concern does not exceed 50 
percent of the aggregate total processing performance of the 
same hardware shipped to customers in the United States for end 
use in the United States;
(3) the items are not destined for military end use, 
military-intelligence end use, or weapons of mass destruction 
end use, and that the ultimate consignee will employ know-your-
customer procedures to screen and prevent unauthorized remote 
access by prohibited parties;
(4) prior to export, every shipment of AI hardware 
described in the license application will be reviewed by a 
qualified independent third-party testing laboratory 
headquartered in the United States, not under the control of 
any entity of concern, and having no financial interest in any 
party to the transaction, to confirm that the technical 
capabilities of the items are consistent with the 
representations in the license application; and
(5) if the ultimate consignee or end user provides 
infrastructure-as-a-service, the consignee or end user will not 
transfer model weights trained on the exported AI hardware to 
any end user not disclosed in the license application, and will 
not provide any prohibited party with remote access to any 
model trained on such hardware.

SEC. 4. RULES OF CONSTRUCTION.

Nothing in this Act may be construed to direct the Secretary to--
(1) decontrol or reduce export control thresholds based on 
assessment findings; or
(2) approve licenses for sales of AI hardware or software.

SEC. 5. DEFINITIONS.

In this Act:
(1) AI hardware.--The term ``AI hardware'' means--
(A) any integrated circuit, computer, electronic 
assembly, or other item classified under Export Control 
Classification Numbers 3A090, 4A090, or any related 
Export Control Classification Number designated with a 
``.z'' suffix under the Commerce Control List 
(supplement number 1 to part 774 of title 15, Code of 
Federal Regulations (or a successor regulation)); and
(B) any other item designated by the Secretary, by 
regulation, as AI hardware for the purposes of this 
Act.
(2) Aggregate estimated amount of ai hardware.--The term 
``aggregate estimated amount of AI hardware'' means the total 
quantity of AI hardware, as measured using the metrics 
established by the Secretary under section 3(a).
(3) Aggregate estimated amount of adversary ai hardware.--
The term ``aggregate estimated amount of adversary AI 
hardware'' means the aggregate estimated amount of AI 
hardware--
(A) installed across all countries of concern; or
(B) accessible to any entity of concern, including 
through remote access to AI hardware installed outside 
of any country of concern.
(4) Appropriate congressional committees.--The term 
``appropriate congressional committees'' means--
(A) the Committee on Foreign Affairs of the House 
of Representatives;
(B) the Permanent Select Committee on Intelligence 
of the House of Representatives;
(C) the Committee on Banking, Housing, and Urban 
Affairs of the Senate; and
(D) the Select Committee on Intelligence of the 
Senate.
(5) Country of concern.--The term ``country of concern'' 
means--
(A) the People's Republic of China, including the 
Hong Kong and Macau Special Administrative Regions;
(B) the Republic of Cuba;
(C) the Islamic Republic of Iran;
(D) the Democratic People's Republic of Korea;
(E) the Russian Federation; and
(F) any other foreign country--
(i) listed in the Country Group D:5 under 
Supplement No. 1 to part 740 of the Export 
Administration Regulations, as published on 
January 1, 2026;
(ii) designated by the Secretary of State 
as a country of concern for purposes of this 
section; and
(iii) notice of such designation has been 
published in the Federal Register.
(6) Director.--The term ``Director'' means the Director of 
National Intelligence.
(7) Entity of concern.--The term ``entity of concern'' 
means any entity--
(A) organized under the laws of any country of 
concern;
(B) having its principal place of business in any 
country of concern;
(C) of which more than 10 percent of the ultimate 
beneficial ownership is held, directly or indirectly, 
by one or more persons or entities that are organized 
under the laws of, have their principal place of 
business in, or are nationals of any country of 
concern; or
(D) that is owned or controlled by, or acts on 
behalf of, the government of any country of concern.
(8) Indigenous production.--The term ``indigenous 
production'', with respect to AI hardware--
(A) means AI hardware that is--
(i) physically fabricated within the 
territory of the People's Republic of China; 
and
(ii) designed by any entity of concern; and
(B) excludes AI hardware that is designed by any 
entity of concern but fabricated outside of any country 
of concern for purposes of this Act.
(9) Remote access.--The term ``remote access'' means access 
on a purposeful, knowing, reckless, or negligent basis to an 
item subject to the jurisdiction of the United States under 
this Act by a foreign person through a network connection, 
including the internet or a cloud computing service, from a 
location other than where the item is physically located if the 
Secretary determines that the use of the item could pose a 
serious risk to the national security or foreign policy of the 
United States.
(10) Secretary.--The term ``Secretary'' means the Secretary 
of Commerce.
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