,i #aaith ,,congress #b;d ,session ,h4 ,r4 #hcjf ,,in ,,the ,,house ,,of ,,representatives ,april #ae1 #bjbf,mr4 ,moolenaar introduced the following bill2 which was referred to the ,committee on ,foreign ,affairs1 and in addition to the ,permanent ,select ,committee on ,intelligence1 for a period to be subsequently determined by the ,speaker1 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 countries4 #a4 ,short title ,this ,act may be cited as the ,semiconductor ,controls ,adjusted to ,limit ,exports ,act or the ,,scale ,act4 #b4 ,statement of policy ,it is the policy of the ,united ,states to-- 7#a7 lead in global diffusion of artificial intelligence 7,,ai7 hardware and software2 7#b7 shape international markets so that foreign adversaries remain reliant on ,united ,states and allied supply chains for ,,ai hardware and software2 7#c7 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 intelligence2 7#d7 ensure that the ,united ,states and its allies consistently apply export restrictions to ensure national security objectives and prevent backfill amongst allied and partner nations2 7#e7 limit the ability of adversaries to indigenize their own ,,ai hardware production efforts1 such limitation to include by crowding out their domestic markets with ,united ,states ,,ai hardware2 7#f7 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 process2 and 7#g7 prevent any foreign adversary from accumulating1 through any combination of indigenous production1 import1 or third-party access1 a quantity of ,,ai hardware that approaches parity with the aggregate ,,ai hardware capacity of the ,united ,states4 #c4 ,export promotion and control policy 7a7 ,performance metrics 7#a7 ,establishment ,not later than #ahj days after the date of enactment of this ,act1 the ,secretary and the ,director1 in coordination with other departments and agencies as necessary1 shall establish and publicly release objective performance metrics that measure the state of ,,ai hardware in entities of concern4 ,the ,secretary shall submit a classified annex to the appropriate congressional committees containing any information that the ,secretary determines cannot be publicly released4 7#b7 ,objectives ,the metrics shall assess-- 7,a7 the capability of individual ,,ai hardware items indigenously produced by each entity of concern2 7,b7 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 hardware2 and 7,c7 the aggregate estimated amount of ,,ai hardware located within all countries of concern or owned or controlled by an entity of concern4 7#c7 ,inclusion of specific metrics ,such metrics shall include1 but are not limited to1 individual chip capabilities1 or where applicable aggregated1 in the following categories3 7,a7 ,total processing power4 7,b7 ,interconnect bandwidth4 7,c7 ,memory capacity bandwidth4 7b7 ,assessment and report 7#a7 ,in general ,not later than #ij days after each update to the metrics established under subsection 7a71 the ,secretary and the ,director1 in coordination with other departments and agencies as such ,secretary and ,director determine necessary1 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 metrics4 7#b7 ,contents ,the assessment required under paragraph 7#a7 shall include-- 7,a7 for each metric1 the aggregate estimated amount of ,,ai hardware1 broken down by quarter1 installed in each country of concern1 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 concern2 7,b7 for each metric1 the aggregate estimated amount of ,,ai hardware installed outside of a country of concern and owned or controlled by any entity of concern2 7,c7 for each metric1 the aggregate estimated amount of ,,ai hardware-- 7i7 legally available to an entity of concern through remote access2 7ii7 installed outside of a country of concern2 and 7iii7 not owned or controlled by an entity of concern2 7,d7 a breakdown of subparagraph 7,b7 in terms of the country of origin of the ,,ai hardware designer 7with respect to this subparagraph1 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 domiciled72 7,e7 for each metric1 the combined total of the hardware identified in subparagraphs 7,a71 7,b71 and 7,c71 expressed as a percentage of the aggregate amount of ,,ai hardware physically present in and intended for use within the ,united ,states2 7,f7 a breakdown by country of origin of the aggregate amount of ,,ai hardware physically present in and intended for use within the ,united ,states4 ,for this purpose1 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 domiciled2 and 7,g7 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 hardware4 7c7 ,,ai export control threshold ,the ,secretary shall adopt an export control policy for ,,ai hardware1 including such a policy for remote access of such hardware1 to any entity of concern in accordance with the following3 7#a7 ,not later than #cfe days after the date of enactment of this ,act1 and not less than annually thereafter1 use the findings from the assessment in subsection 7b71 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 7a7 as follows3 7,a7 ,the upper limit shall be implemented as a policy of denial for license applications to export1 reexport1 transfer 7in-country71 or provide remote access to ,,ai hardware4 7,b7 ,the upper limit for any individual item of ,,ai hardware shall be set at a level not to exceed #aaj percent of the performance1 as measured by the metrics developed under subsection 7a71 of the most capable ,,ai hardware item that meets the indigenous production threshold established under subparagraph 7,c74 7,c7 ,an individual item of ,,ai hardware produced by an entity of concern shall be considered in establishing the upper limit under subparagraph 7,b7 only if such item is manufactured in sustained serial production at a volume sufficient to fulfill not less than #be percent of the estimated annual aggregate demand for ,,ai hardware among all entities of concern1 as assessed by the ,secretary using the most recent assessment under subsection 7b74 ,,ai hardware produced solely in experimental1 prototype1 or limited demonstration quantities shall not be considered for purposes of establishing the upper limit4 7,d7 ,if1 at the time of any assessment under subsection 7b71 no individual item of ,,ai hardware produced by an entity of concern meets the production threshold established under subparagraph 7,c71 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 denial4 7,e7 ,in no case shall the upper limit established under this paragraph be lower than the upper limit in effect during the preceding assessment period1 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 threat4 7#b7 ,for each metric established under subsection 7a71 the ,secretary shall require a license for any export1 reexport1 transfer 7in-country71 or provide remote access to1 ,,ai hardware to any entity of concern1 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 exceed1 in the aggregate1 #e percent of the aggregate estimated amount of ,,ai hardware physically present in and intended for use within the ,united ,states4 7d7 ,authority ,to update metrics ,on and after the date that is #bd months after the date on which the first assessment under subsection 7b7 is submitted1 the ,secretary may add1 modify1 or remove the metrics established under subsection 7a71 subject to the following3 7#a7 ,the ,secretary shall provide written notice to the appropriate congressional committees not less than #ij days before any such addition1 modification1 or removal takes effect1 including a detailed justification for each proposed change and an assessment of how such change would affect the export control thresholds established under subsection 7d74 7#b7 ,no modification or removal of a metric under this subsection shall take effect if1 within the #ij-;day notice period under paragraph 7#a71 either the ,committee on ,foreign ,affairs of the ,house of ,representatives or the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate submits to the ,secretary a written objection stating that the proposed change would undermine the purposes of this ,act4 7e7 ,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 7d77#a7 on other than a presumption of denial basis shall include certification by the applicant that-- 7#a7 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 applicant1 taking into account normal lead times1 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 license2 7#b7 for the ,,ai hardware described in the license application1 the aggregate total processing performance of such hardware exported to any entity of concern does not exceed #ej percent of the aggregate total processing performance of the same hardware shipped to customers in the ,united ,states for end use in the ,united ,states2 7#c7 the items are not destined for military end use1 military-intelligence end use1 or weapons of mass destruction end use1 and that the ultimate consignee will employ know-your-customer procedures to screen and prevent unauthorized remote access by prohibited parties2 7#d7 prior to export1 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 ,states1 not under the control of any entity of concern1 and having no financial interest in any party to the transaction1 to confirm that the technical capabilities of the items are consistent with the representations in the license application2 and 7#e7 if the ultimate consignee or end user provides infrastructure-as-a-service1 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 application1 and will not provide any prohibited party with remote access to any model trained on such hardware4 #d4 ,rules of construction ,nothing in this ,act may be construed to direct the ,secretary to-- 7#a7 decontrol or reduce export control thresholds based on assessment findings2 or 7#b7 approve licenses for sales of ,,ai hardware or software4 #e4 ,definitions ,in this ,act3 7#a7 ,,ai hardware ,the term ,,ai hardware means-- 7,a7 any integrated circuit1 computer1 electronic assembly1 or other item classified under ,export ,control ,classification ,numbers #c;,a#jij1 #d;,a#jij1 or any related ,export ,control ,classification ,number designated with a 4z suffix under the ,commerce ,control ,list 7supplement number #a to part #ggd of title #ae1 ,code of ,federal ,regulations 7or a successor regulation772 and 7,b7 any other item designated by the ,secretary1 by regulation1 as ,,ai hardware for the purposes of this ,act4 7#b7 ,aggregate estimated amount of ,,ai hardware ,the term aggregate estimated amount of ,,ai hardware means the total quantity of ,,ai hardware1 as measured using the metrics established by the ,secretary under section #c7;a74 7#c7 ,aggregate estimated amount of adversary ,,ai hardware ,the term aggregate estimated amount of adversary ,,ai hardware means the aggregate estimated amount of ,,ai hardware-- 7,a7 installed across all countries of concern2 or 7,b7 accessible to any entity of concern1 including through remote access to ,,ai hardware installed outside of any country of concern4 7#d7 ,appropriate congressional committees ,the term appropriate congressional committees means-- 7,a7 the ,committee on ,foreign ,affairs of the ,house of ,representatives2 7,b7 the ,permanent ,select ,committee on ,intelligence of the ,house of ,representatives2 7,c7 the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate2 and 7,d7 the ,select ,committee on ,intelligence of the ,senate4 7#e7 ,country of concern ,the term country of concern means-- 7,a7 the ,people's ,republic of ,china1 including the ,hong ,kong and ,macau ,special ,administrative ,regions2 7,b7 the ,republic of ,cuba2 7,c7 the ,islamic ,republic of ,iran2 7,d7 the ,democratic ,people's ,republic of ,korea2 7,e7 the ,russian ,federation2 and 7,f7 any other foreign country-- 7i7 listed in the ,country ,group ,d3#e under ,supplement ,no4 #a to part #gdj of the ,export ,administration ,regulations1 as published on ,january #a1 #bjbf2 7ii7 designated by the ,secretary of ,state as a country of concern for purposes of this section2 and 7iii7 notice of such designation has been published in the ,federal ,register4 7#f7 ,director ,the term ,director means the ,director of ,national ,intelligence4 7#g7 ,entity of concern ,the term entity of concern means any entity-- 7,a7 organized under the laws of any country of concern2 7,b7 having its principal place of business in any country of concern2 7,c7 of which more than #aj percent of the ultimate beneficial ownership is held1 directly or indirectly1 by one or more persons or entities that are organized under the laws of1 have their principal place of business in1 or are nationals of any country of concern2 or 7,d7 that is owned or controlled by1 or acts on behalf of1 the government of any country of concern4 7#h7 ,indigenous production ,the term indigenous production1 with respect to ,,ai hardware-- 7,a7 means ,,ai hardware that is-- 7i7 physically fabricated within the territory of the ,people's ,republic of ,china2 and 7ii7 designed by any entity of concern2 and 7,b7 excludes ,,ai hardware that is designed by any entity of concern but fabricated outside of any country of concern for purposes of this ,act4 7#i7 ,remote access ,the term remote access means access on a purposeful1 knowing1 reckless1 or negligent basis to an item subject to the jurisdiction of the ,united ,states under this ,act by a foreign person through a network connection1 including the internet or a cloud computing service1 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 ,states4 7#aj7 ,secretary ,the term ,secretary means the ,secretary of ,commerce4