A bill to authorize State and local governments to direct divestiture from, and prevent investment in, companies with investments of $20,000,000 or more in Iran's energy sector, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Iran Sanctions Enabling Act of 
2009''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) There is an increasing interest by States, local 
        governments, educational institutions, and private institutions 
        to seek to disassociate themselves from companies that directly 
        or indirectly support the efforts of the Government of Iran to 
        achieve a nuclear weapons capability.
            (2) Policy makers and fund managers may find moral, 
        prudential, or reputational reasons to divest from companies 
        that accept the business risk of operating in countries that 
        are subject to international economic sanctions or that have 
        business relationships with countries, governments, or entities 
        with which any United States company would be prohibited from 
        dealing because of economic sanctions imposed by the United 
        States.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Energy sector.--The term ``energy sector'' refers to 
        activities to develop petroleum or natural gas resources or 
        nuclear power.
            (2) Financial institution.--The term ``financial 
        institution'' has the meaning given that term in section 14(5) 
        of the Iran Sanctions Act of 1996 (Public Law 104-172; 50 
        U.S.C. 1701 note).
            (3) Iran.--The term ``Iran'' includes any agency or 
        instrumentality of Iran.
            (4) Person.--The term ``person'' means--
                    (A) a natural person, corporation, company, 
                business association, partnership, society, trust, or 
                any other nongovernmental entity, organization, or 
                group;
                    (B) any governmental entity or instrumentality of a 
                government, including a multilateral development 
                institution (as defined in section 1701(c)(3) of the 
                International Financial Institutions Act (22 U.S.C. 
                262r(c)(3))); and
                    (C) any successor, subunit, parent company, or 
                subsidiary of any entity described in subparagraph (A) 
                or (B).
            (5) State.--The term ``State'' means each of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, the United States Virgin Islands, Guam, American Samoa, 
        and the Commonwealth of the Northern Mariana Islands.
            (6) State or local government.--The term ``State or local 
        government'' includes--
                    (A) any State and any agency or instrumentality 
                thereof;
                    (B) any local government within a State, and any 
                agency or instrumentality thereof;
                    (C) any other governmental instrumentality; and
                    (D) any public institution of higher education 
                within the meaning of the Higher Education Act of 1965 
                (20 U.S.C. 1001 et seq.).

SEC. 4. AUTHORITY OF STATE AND LOCAL GOVERNMENTS TO DIVEST FROM CERTAIN 
              COMPANIES INVESTED IN IRAN'S ENERGY SECTOR.

    (a) Statement of Policy.--It is the policy of the United States to 
support the decision of State governments, local governments, and 
educational institutions to divest from, and to prohibit the investment 
of assets they control in, persons that have investments of $20,000,000 
or more in Iran's energy sector.
    (b) Authority To Divest.--Notwithstanding any other provision of 
law, a State or local government may adopt and enforce measures that 
meet the requirements of subsection (d) to divest the assets of the 
State or local government from, or prohibit investment of the assets of 
the State or local government in, any person that the State or local 
government determines, using credible information available to the 
public, engages in investment activities in Iran described in 
subsection (c).
    (c) Investment Activities in Iran Described.--A person engages in 
investment activities in Iran described in this subsection if the 
person--
            (1) has an investment of $20,000,000 or more--
                    (A) in the energy sector of Iran; or
                    (B) in a person that provides oil or liquified 
                natural gas tankers, or products used to construct or 
                maintain pipelines used to transport oil or liquified 
                natural gas, for the energy sector in Iran; or
            (2) is a financial institution that extends $20,000,000 or 
        more in credit to another person, for 45 days or more, if that 
        person will use the credit to invest in the energy sector in 
        Iran.
    (d) Requirements.--The requirements referred to in subsection (b) 
that a measure taken by a State or local government must meet are the 
following:
            (1) Notice.--The State or local government shall provide 
        written notice to each person to which the State or local 
        government, as the case may be, intends to apply the measure, 
        of such intent.
            (2) Timing.--The measure shall apply to a person not 
        earlier than the date that is 90 days after the date on which 
        the person receives the written notice required by paragraph 
        (1).
            (3) Opportunity for hearing.--The State or local government 
        shall provide each person referred to in paragraph (1) with an 
        opportunity to demonstrate to the State or local government, as 
        the case may be, that the person does not engage in investment 
        activities in Iran described in subsection (c). If the person 
        demonstrates to the State or local government that the person 
        does not engage in investment activities in Iran described in 
        subsection (c), the measure shall not apply to the person.
            (4) Sense of congress on avoiding erroneous targeting.--It 
        is the sense of Congress that a State or local government 
        should not adopt a measure under subsection (b) with respect to 
        a person unless the State or local government has made every 
        effort to avoid erroneously targeting the person and has 
        verified that the person engages in investment activities in 
        Iran described in subsection (c).
    (e) Notice to Department of Justice.--Not later than 30 days after 
adopting a measure pursuant to subsection (b), a State or local 
government shall submit to the Attorney General of the United States a 
written notice that describes the measure.
    (f) Nonpreemption.--A measure of a State or local government 
authorized under subsection (b) is not preempted by any Federal law or 
regulation.
    (g) Definitions.--In this section:
            (1) Investment.--The ``investment'' of assets, with respect 
        to a State or local government, includes--
                    (A) a commitment or contribution of assets;
                    (B) a loan or other extension of credit; and
                    (C) the entry into or renewal of a contract for 
                goods or services.
            (2) Assets.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the term ``assets'' refers to public monies and 
                includes any pension, retirement, annuity, or endowment 
                fund, or similar instrument, that is controlled 
                directly or indirectly by a State or local government.
                    (B) Exception.--The term ``assets'' does not 
                include employee benefit plans covered by title I of 
                the Employee Retirement Income Security Act of 1974 (29 
                U.S.C. 1001 et seq.).
    (h) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), this 
        section shall apply to measures adopted by a State or local 
        government before, on, or after the date of the enactment of 
        this Act.
            (2) Notice requirements.--Subsections (d) and (e) apply 
        with respect to measures adopted by a State or local government 
        on or after the date of the enactment of this Act.

SEC. 5. SAFE HARBOR FOR CHANGES OF INVESTMENT POLICIES BY ASSET 
              MANAGERS.

    Section 13(c)(1) of the Investment Company Act of 1940 (15 U.S.C. 
80a-13(c)(1)) is amended by inserting before the period the following: 
``or engage in investment activities in Iran described in section 4(c) 
of the Iran Sanctions Enabling Act of 2009''.

SEC. 6. SAFE HARBOR FOR CHANGES OF INVESTMENT POLICIES BY EMPLOYEE 
              BENEFIT PLANS.

    Section 502 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1132) is amended by adding at the end the following new 
subsection:
    ``(n) No person shall be treated as breaching any of the 
responsibilities, obligations, or duties imposed upon fiduciaries by 
this title, and no action may be brought under this section against any 
person, for divesting plan assets from, or avoiding investing plan 
assets in, persons that such person determines, using credible 
information available to the public, engage in investment activities in 
Iran described in section 4(c) of the Iran Sanctions Enabling Act of 
2009.''.

SEC. 7. SUNSET.

    The provisions of this Act shall terminate on the day that is 30 
days after the date on which the President certifies to Congress that--
            (1) the Government of Iran has ceased providing support for 
        acts of international terrorism and no longer satisfies the 
        requirements for designation as a state sponsor of terrorism 
        for purposes of--
                    (A) section 40 of the Arms Export Control Act (22 
                U.S.C. 2780);
                    (B) section 620A of the Foreign Assistance Act of 
                1961 (22 U.S.C. 2371);
                    (C) section 6(j) of the Export Administration Act 
                of 1979 (50 U.S.C. App. 2405(j)), as continued in 
                effect pursuant to the International Emergency Economic 
                Powers Act (50 U.S.C. 1701 et seq.); or
                    (D) any other provision of law relating to 
                governments that provide support for acts of 
                international terrorism; and
            (2) the Government of Iran has ceased the pursuit, 
        acquisition, and development of nuclear, biological, and 
        chemical weapons and ballistic missiles and ballistic missile 
        launch technology.

Summary: Iran Sanctions Enabling Act of 2009 - States that it is the policy of the United States to support the decision of state and local governments and educational institutions to divest from, and to prohibit the investment of assets they control in, persons that have investments of $20 million or more in Iran's energy sector. Authorizes a state or local government to adopt and enforce measures to divest its assets from, or prohibit the investment of assets they control in, such persons, including financial institutions which extend them credit to so invest. Amends the Investment Company Act of 1940 to shield any registered investment company from civil, criminal, or administrative action based upon its divesting from, or avoiding investing in, securities issued by such persons. Amends the Employee Retirement Income Security Act of 1974 (ERISA) to shield from treatment as breaching a fiduciary duty any person divesting employee benefit plan assets from, or avoiding investing plan assets in, such persons.