I 

114TH CONGRESS 

2D SESSION H. R. 4514 

To authorize State and local governments to divest from entities that engage 

in commerce or investment-related boycott, divestment, or sanctions activities targeting Israel, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 10, 2016 

Mr. DOLD (for himself and Mr. VARGAS) introduced the following bill; which 

was referred to the Committee on Financial Services 

A BILL 

To authorize State and local governments to divest from 

entities that engage in commerce or investment-related 

boycott, divestment, or sanctions activities targeting 

Israel, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Combating BDS Act 

5 of 2016’’. 


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1 SEC. 2. AUTHORITY OF STATE AND LOCAL GOVERNMENTS 

2 TO DIVEST FROM ENTITIES THAT ENGAGE IN 

3 COMMERCE OR INVESTMENT-RELATED BOY4 COTTS, DIVESTMENTS, OR SANCTIONS AC5 TIVITIES TARGETING ISRAEL. 

6 (a) AUTHORITY TO DIVEST.—Notwithstanding any 

7 other provision of law, a State or local government may 

8 adopt and enforce measures that meet the notice require9 ment of subsection (b) to divest the assets of the State 

10 or local government from, or prohibit investment of the 

11 assets of the State or local government in— 

12 (1) an entity that the State or local government 

13 determines, using credible information available to 

14 the public, engages in a commerce or investment-re15 lated boycott, divestment, or sanctions activity tar16 geting Israel; 

17 (2) a successor entity or subunit of an entity 

18 described in paragraph (1); or 

19 (3) an entity that owns or controls, is owned or 

20 controlled by, or is under common ownership or con21 trol with, an entity described in paragraph (1). 

22 (b) NOTICE REQUIREMENT.— 

23 (1) IN GENERAL.—A State or local government 

24 shall provide written notice to each entity to which 

25 a measure taken by the State or local government 

26 under subsection (a) is to be applied. 


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1 (2) RULE OF CONSTRUCTION.—Nothing in 

2 paragraph (1) shall be construed to prohibit a State 

3 or local government from taking additional steps to 

4 provide due process with respect to each entity de5 scribed in paragraph (1) for purposes of carrying 

6 out this section. 

7 (c) NONPREEMPTION.—A measure of a State or local 

8 government authorized under subsection (a) is not pre9 empted by any Federal law or regulation. 

10 (d) EFFECTIVE DATE.—This section applies to meas11 ures adopted by a State or local government before, on, 

12 or after the date of the enactment of this Act. 

13 (e) RULE OF CONSTRUCTION.—Nothing in this sec14 tion shall be construed to abridge the authority of a State 

15 to issue and enforce rules governing the safety, soundness, 

16 and solvency of a financial institution subject to its juris17 diction or the business of insurance pursuant to the Act 

18 of March 9, 1945 (59 Stat. 33, chapter 20; 15 U.S.C. 

19 1011 et seq.) (commonly known as the ‘‘McCarran-Fer20 guson Act’’). 

21 (f) DEFINITIONS.—In this section: 

22 (1) ASSETS.— 

23 (A) IN GENERAL.—Except as provided in 

24 subparagraph (B), the term ‘‘assets’’ means 

25 any pension, retirement, annuity, or endowment 


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1 fund, or similar instrument, that is controlled 

2 by a State or local government. 

3 (B) EXCEPTION.—The term ‘‘assets’’ does 

4 not include employee benefit plans covered by 

5 title I of the Employee Retirement Income Se6 curity Act of 1974 (29 U.S.C. 1001 et seq.). 

7 (2) BOYCOTT, DIVESTMENT, OR SANCTIONS AC8 TIVITY TARGETING ISRAEL.—The term ‘‘boycott, di9 vestment, or sanctions activity targeting Israel’’ 

10 means any activity that is intended to penalize, in11 flict economic harm on, or otherwise limit commer12 cial relations with Israel or persons doing business 

13 in Israel or in Israeli-controlled territories, for pur14 poses of coercing political action by, or imposing pol15 icy positions on, the Government of Israel. 

16 (3) ENTITY.—The term ‘‘entity’’ includes— 

17 (A) any corporation, company, business as18 sociation, partnership, or trust; and 

19 (B) any governmental entity, or instrumen20 tality of a government, including a multilateral 

21 development institution (as defined in section 

22 1701(c)(3) of the International Financial Insti23 tutions Act (22 U.S.C. 262r(c)(3))). 

24 (4) INVESTMENT.—The term ‘‘investment’’ in25 cludes— 


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1 (A) a commitment or contribution of funds 

2 or property; 

3 (B) a loan or other extension of credit; and 

4 (C) the entry into or renewal of a contract 

5 for goods or services. 

6 (5) STATE.—The term ‘‘State’’ means each of 

7 the several States, the District of Columbia, the 

8 Commonwealth of Puerto Rico, the Commonwealth 

9 of the Northern Mariana Islands, American Samoa, 

10 Guam, the United States Virgin Islands, and any 

11 other territory or possession of the United States. 

12 (6) STATE OR LOCAL GOVERNMENT.—The term 

13 ‘‘State or local government’’ includes— 

14 (A) any State and any agency or instru15 mentality thereof; 

16 (B) any local government within a State, 

17 and any agency or instrumentality thereof; and 

18 (C) any other governmental instrumen19 tality of a State or locality. 

20 SEC. 3. SAFE HARBOR FOR CHANGES OF INVESTMENT 

21 POLICIES BY ASSET MANAGERS. 

22 Section 13(c)(1) of the Investment Company Act of 

23 1940 (15 U.S.C. 80a–13(c)(1)) is amended— 

24 (1) in subparagraph (A), by striking ‘‘; or’’ and 

25 inserting a semicolon; 


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1 (2) in subparagraph (B), by striking the period 

2 at the end and inserting ‘‘; or’’; and 

3 (3) by adding at the end the following: 

4 ‘‘(C) engage in boycott, divestment, or 

5 sanctions activity targeting Israel described in 

6 section 2 of the Combating BDS Act of 2016.’’. 

Æ 


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