Legislation introduced by Rep. Nathaniel Moran, R-Texas, on Feb. 11 would deny tax incentives to companies that use foreign adversary-controlled technology.
The Deterring Adversarial Access to Americans’ Data Act would close a gap in the Internal Revenue Code by extending Foreign Entity of Concern (FEOC) restrictions to major business tax incentives.
Under current statute, FEOC restrictions only apply to certain energy incentives but do not cover major business tax provisions, a press release from Moran’s office said.
The bill changes that by requiring companies to sever ties with foreign adversary-controlled technology to stay eligible for tax incentives including bonus depreciation, research and development expenses, research tax credits, and interest deductibility, the release said.
“Taxpayer dollars should not subsidize business decisions that expose American data and supply chains to foreign adversaries,” Moran said in a statement. “Companies remain free to choose the technology they use, but eligibility for federal tax incentives is a privilege that should come with a responsibility to protect our economic and national security.”
Moran’s act is the latest effort from Congress to close off American use of adversary-linked technology.
In November, a group of top Republicans wrote to the secretary of commerce requesting an investigation into U.S.-based companies’ use of China-linked technology, warning that use of such technology or components could undermine U.S. national security.
Similar legislation aimed at limiting adversary-controlled technology includes a bill from Sen. Rick Scott, R-Fla. The bill, introduced legislation in August, would require the secretary of commerce to assess and report on the risks of foreign-controlled technologies to the electric grid.