IB 

Union Calendar No. 179 

110TH CONGRESS 

1ST SESSION H. R. 2347 

[Report No. 110–277, Part I] 

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. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 16, 2007 

Mr. FRANK of Massachusetts (for himself, Mr. LANTOS, Mr. SHERMAN, Mr. 

SHAYS, Mr. LYNCH, Mr. ACKERMAN, Mr. KLEIN of Florida, and Mr. 

WEXLER) introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committees on Education and Labor and Oversight and Government Reform, 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 

JULY 30, 2007 

Additional sponsors: Mr. MARSHALL, Mr. BACA, Mr. CAPUANO, Mr. BERMAN, 

Ms. ROS-LEHTINEN, Mr. GUTIERREZ, Ms. BERKLEY, Mr. HODES, Mr. 

HONDA, Ms. WASSERMAN SCHULTZ, Mr. PALLONE, Mr. HASTINGS of 

Florida, Mr. VAN HOLLEN, Mr. CULBERSON, Mr. FOSSELLA, Mr. TIM

MURPHY of Pennsylvania, Mr. RANGEL, Mr. GERLACH, Mr. BURTON of 

Indiana, Mrs. DRAKE, Mr. MCHENRY, Mr. CANTOR, Mr. PLATTS, Mr. 

RENZI, Mr. BARROW, Mr. FRANKS of Arizona, Mr. PERLMUTTER, Mr. 

MCNERNEY, Mr. ENGEL, Mr. MICHAUD, Mr. PATRICK J. MURPHY of 

Pennsylvania, Ms. HARMAN, Mr. RAMSTAD, Mr. BARTLETT of Maryland, 

Mr. KNOLLENBERG, Ms. LEE, and Mr. GARRETT of New Jersey 

JULY 30, 2007 

Reported from the Committee on Financial Services with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

JULY 30, 2007 

Committees on Education and Labor and Oversight and Government Reform 


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discharged; committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

[For text of introduced bill, see copy of bill as introduced on May 16, 2007] 

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. 

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 ‘‘Iran Sanctions Ena5 bling Act of 2007’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds as follows: 

8 (1) The Convention on the Prevention and Pun9 ishment of the Crime of Genocide, completed at Paris, 

10 December 9, 1948 (commonly referred to as the 

11 ‘‘Genocide Convention’’) defines genocide as, among 

12 other things, the act of killing members of a national, 

13 ethnic, racial, or religious group with the intent to 

14 destroy, in whole or in part, the targeted group. In 

15 addition, the Genocide Convention also prohibits con16 spiracy to commit genocide, as well as ‘‘direct and 

17 public incitement to commit genocide’’. 


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1 (2) 133 member states of the United Nations 

2 have ratified the Genocide Convention and thereby 

3 pledged to prosecute individuals who violate the Geno4 cide Convention’s prohibition on incitement to com5 mit genocide, as well as those individuals who commit 

6 genocide directly. 

7 (3) On October 27, 2005, at the World Without 

8 Zionism Conference in Tehran, Iran, the President of 

9 Iran, Mahmoud Ahmadinejad, called for Israel to be 

10 ‘‘wiped off the map,’’ described Israel as ‘‘a disgrace11 ful blot [on] the face of the Islamic world,’’ and de12 clared that ‘‘[a]nybody who recognizes Israel will 

13 burn in the fire of the Islamic nation’s fury.’’ Presi14 dent Ahmadinejad has subsequently made similar 

15 types of comments, and the Government of Iran has 

16 displayed inflammatory symbols that express similar 

17 intent. 

18 (4) On December 23, 2006, the United Nations 

19 Security Council unanimously approved Resolution 

20 1737, which bans the supply of nuclear technology 

21 and equipment to Iran and freezes the assets of cer22 tain organizations and individuals involved in Iran’s 

23 nuclear program, until Iran suspends its enrichment 

24 of uranium, as verified by the International Atomic 

25 Energy Agency. 


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1 (5) Following Iran’s failure to comply with Res2 olution 1737, on March 24, 2007, the United Nations 

3 Security Council unanimously approved Resolution 

4 1747, to tighten sanctions on Iran, imposing a ban 

5 on arms sales and expanding the freeze on assets, in 

6 response to the country’s uranium-enrichment activi7 ties. 

8 (6) There are now signs of domestic discontent 

9 within Iran, and targeted financial and economic 

10 measures could produce further political pressure 

11 within Iran. According to the Economist Intelligence 

12 Unit, the nuclear crisis ‘‘is imposing a heavy oppor13 tunity cost on Iran’s economic development, slowing 

14 down investment in the oil, gas, and petrochemical 

15 sectors, as well as in critical infrastructure projects, 

16 including electricity’’. 

17 (7) Targeted financial measures represent one of 

18 the strongest non-military tools available to convince 

19 Tehran that it can no longer afford to engage in dan20 gerous, destabilizing activities such as its nuclear 

21 weapons program and its support for terrorism. 

22 (8) Foreign persons that have invested in Iran’s 

23 energy sector, despite Iran’s support of international 

24 terrorism and its nuclear program, have provided ad25 ditional financial means for Iran’s activities in these 


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1 areas, and many United States persons have unknow2 ingly invested in those same foreign persons. 

3 (9) There is an increasing interest by States, 

4 local governments, educational institutions, and pri5 vate institutions to seek to disassociate themselves 

6 from companies that directly or indirectly support the 

7 Government of Iran’s efforts to achieve a nuclear 

8 weapons capability. 

9 (10) Policy makers and fund managers may find 

10 moral, prudential, or reputational reasons to divest 

11 from companies that accept the business risk of oper12 ating in countries that are subject to international 

13 economic sanctions or that have business relationships 

14 with countries, governments, or entities with which 

15 any United States company would be prohibited from 

16 dealing because of economic sanctions imposed by the 

17 United States. 

18 SEC. 3. TRANSPARENCY IN U.S. CAPITAL MARKETS. 

19 (a) LIST OF PERSONS INVESTING IN IRAN ENERGY

20 SECTOR.— 

21 (1) PUBLICATION OF LIST.—Not later than 6 

22 months after the date of the enactment of this Act and 

23 every 6 months thereafter, the President shall ensure 

24 publication in the Federal Register of a list of each 

25 person, whether within or outside of the United 


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1 States, that, as of the date of the publication, has an 

2 investment of more than $20,000,000 in the energy 

3 sector in Iran, and each person that is an inter4 national financial institution that, as of the date of 

5 the publication, has any investment in the energy sec6 tor in Iran. The list shall include a description of the 

7 investment made by each such person, including the 

8 dollar value, intended purpose, and status of the in9 vestment, as of the date of the publication. 

10 (2) PRIOR NOTICE TO PERSONS.—The President 

11 or a designee of the President shall, at least 30 days 

12 before the list is published under paragraph (1), no13 tify each person that the President or his designee, as 

14 the case may be, intends to include on the list. 

15 (3) DELAY IN INCLUDING PERSONS ON THE

16 LIST.—After notifying a person under paragraph (2), 

17 the the President or a designee of the President may 

18 delay including that person on the list for up to 60 

19 days if the President or designee determines and cer20 tifies to the Congress that the person has taken spe21 cific and effective actions to terminate the involve22 ment of the person in the activities that resulted in 

23 the notification under paragraph (2). 

24 (4) REMOVAL OF PERSONS FROM THE LIST.— 

25 The President or a designee of the President may reVerDate Aug 31 2005 23:50 Jul 30, 2007 Jkt 059200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6203 E:\BILLS\H2347.RH H2347

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1 move a person from the list before the next publica2 tion of the list under paragraph (1) if the President 

3 or a designee of the President, determines that the 

4 person no longer has an investment of more than 

5 $20,000,000 in the energy sector in Iran. 

6 (b) PUBLICATION ON WEBSITE.—The President shall 

7 ensure that the list is published on an appropriate govern8 ment website, updating the list as necessary to take into 

9 account any person removed from the list under subsection 

10 (a)(4). 

11 (c) DEFINITION.—In this section, the term ‘‘invest12 ment’’ has the meaning given that term in section 14(9) 

13 of the Iran Sanctions Act (50 U.S.C. 1701 App.). 

14 SEC. 4. AUTHORITY OF STATE AND LOCAL GOVERNMENTS 

15 TO DIVEST FROM CERTAIN COMPANIES IN16 VESTED IN IRAN’S ENERGY SECTOR. 

17 (a) STATEMENT OF POLICY.—It is the policy of the 

18 United States to support the decision of State governments, 

19 local governments, and educational institutions to divest 

20 from, and to prohibit the investment of assets they control 

21 in, persons that have investments of more than $20,000,000 

22 in Iran’s energy sector. 

23 (b) AUTHORITY TO DIVEST.— 

24 (1) IN GENERAL.—Notwithstanding any other 

25 provision of law, a State or local government may 


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1 adopt and enforce measures to divest the assets of the 

2 State or local government from, or prohibit invest3 ment of the assets of the State or local government 

4 in— 

5 (A) persons that are included on the most 

6 recent list published under section 3(a)(1), as 

7 modified under section 3(a)(4); and 

8 (B) persons having an investment in, or 

9 carrying on a trade or business (within the 

10 meaning of section 162 of the Internal Revenue 

11 Code of 1986) in or with, Iran. 

12 (2) APPLICABILITY.—This subsection applies to 

13 measures adopted by a State or local government be14 fore, on, or after the date of the enactment of this Act. 

15 (3) DEFINITIONS.—In this subsection: 

16 (A) INVESTMENT.—The ‘‘investment’’ of as17 sets includes— 

18 (i) a commitment or contribution of 

19 assets; and 

20 (ii) a loan or other extension of credit 

21 of assets. 

22 (B) ASSETS.—The term ‘‘assets’’ refers to 

23 public monies and includes any pension, retire24 ment, annuity, or endowment fund, or similar 


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1 instrument, that is controlled by a State or local 

2 government. 

3 (C) ASSETS OF A STATE OR LOCAL GOVERN4 MENT.—The term ‘‘assets of the State or local 

5 government’’ refers to assets that the State or 

6 local government controls. 

7 (4) ADDITIONAL DEFINITION.—For purposes of 

8 paragraph (1)(B), the term ‘‘investment’’ means the 

9 acquisition of property or assets for the production of 

10 revenue. 

11 (c) PREEMPTION.—A measure of a State or local gov12 ernment that is authorized by subsection (b) is not pre13 empted by any Federal law or regulation except to the ex14 tent that a person is unable to comply with both the meas15 ure and the Federal law or regulation. 

16 SEC. 5. SAFE HARBOR FOR CHANGES OF INVESTMENT POLI17 CIES BY MUTUAL FUNDS. 

18 Section 13 of the Investment Company Act of 1940 (15 

19 U.S.C. 80a–13) is amended by adding at the end the fol20 lowing new subsection: 

21 ‘‘(c) SAFE HARBOR FOR CHANGES IN INVESTMENT

22 POLICIES.—Notwithstanding any other provision of Fed23 eral or State law, no person may bring any civil, criminal, 

24 or administrative action against any registered investment 

25 company or person providing services to such registered inVerDate Aug 31 2005 23:50 Jul 30, 2007 Jkt 059200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6203 E:\BILLS\H2347.RH H2347

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1 vestment company (including its investment adviser), or 

2 any employee, officer, or director thereof, based upon the 

3 investment company divesting from, or avoiding investing 

4 in, securities issued by companies that are included on the 

5 most recent list published under section 3(a)(1) of the Iran 

6 Sanctions Enabling Act of 2007, as modified under section 

7 3(b) of that Act. For purposes of this subsection the term 

8 ‘person’ shall include the Federal government, and any 

9 State or political subdivision of a State.’’. 

10 SEC. 6. SAFE HARBOR FOR CHANGES OF INVESTMENT POLI11 CIES BY EMPLOYEE BENEFIT PLANS. 

12 Section 502 of the Employee Retirement Income Secu13 rity Act of 1974 (29 U.S.C. 1132) is amended by adding 

14 at the end the following new subsection: 

15 ‘‘(n) No person shall be treated as breaching any of 

16 the responsibilities, obligations, or duties imposed upon fi17 duciaries by this title, and no action may be brought under 

18 this section against any person, for divesting plan assets 

19 from, or avoiding investing plan assets in, persons that are 

20 included on the most recent list published under section 

21 3(a)(1) of the Iran Sanctions Enabling Act, as modified 

22 under section 3(a)(4) of such Act.’’. 


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1 SEC. 7. SENSE OF THE CONGRESS REGARDING THRIFT SAV2 INGS PLAN. 

3 It is the sense of the Congress that the Federal Retire4 ment Thrift Investment Board should initiate efforts to pro5 vide a terror-free international investment option among 

6 the funds of the Thrift Savings Fund that would invest in 

7 stocks in which the International Stock Index Investment 

8 Fund may invest under section 8438(b)(4) of title 5, United 

9 States Code, other than the stock of companies that do busi10 ness in any country the government of which the Secretary 

11 of State has determined, for purposes of section 6(j) of the 

12 Export Administration Act of 1979 (as continued in effect 

13 pursuant to the International Emergency Economic Powers 

14 Act), section 40 of the Arms Export Control Act, section 

15 620A of the Foreign Assistance Act of 1961, or other provi16 sion of law, is a government that has repeatedly provided 

17 support for acts of international terrorism. 

18 SEC. 8. DEFINITIONS. 

19 In this Act: 

20 (1) IRAN.—The term ‘‘Iran’’ includes any agency 

21 or instrumentality of Iran. 

22 (2) ENERGY SECTOR.—The term ‘‘energy sector’’ 

23 refers to activities to develop petroleum or natural gas 

24 resources. 

25 (3) PERSON.—The term ‘‘person’’ means— 


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1 (A) a natural person as well as a corpora2 tion, business association, partnership, society, 

3 trust, any other nongovernmental entity, organi4 zation, or group; 

5 (B) any governmental entity or instrumen6 tality of a government, including an inter7 national financial institution; and 

8 (C) any successor, subunit, or subsidiary of 

9 any entity described in subparagraph (A) or (B). 

10 (4) STATE.—The term ‘‘State’’ includes the Dis11 trict of Columbia, the Commonwealth or Puerto Rico, 

12 the Virgin Islands, Guam, American Samoa, and the 

13 Commonwealth of the Northern Mariana Islands. 

14 (5) STATE OR LOCAL GOVERNMENT.— 

15 (A) IN GENERAL.—The term ‘‘State or local 

16 government’’ includes— 

17 (i) any State and any agency or in18 strumentality thereof; 

19 (ii) any local government within a 

20 State, and any agency or instrumentality 

21 thereof; and 

22 (iii) any public institution of higher 

23 education. 

24 (B) PUBLIC INSTITUTION OF HIGHER EDU25 CATION.—The term ‘‘public institution of higher 


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1 education’’ means a public institution of higher 

2 education within the meaning of the Higher 

3 Education Act of 1965. 

4 (6) INTERNATIONAL FINANCIAL INSTITUTION.— 

5 The term ‘‘international financial institution’’ means 

6 the International Bank for Reconstruction and Devel7 opment, the International Monetary Fund, and the 

8 United Nations. 

9 SEC. 9. SUNSET. 

10 This Act shall terminate 30 days after the date on 

11 which the President has certified to Congress that— 

12 (1) the Government of Iran has ceased providing 

13 support for acts of international terrorism and no 

14 longer satisfies the requirements for designation as a 

15 state-sponsor of terrorism for purposes of section 6(j) 

16 of the Export Administration Act of 1979, section 

17 620A of the Foreign Assistance Act of 1961, section 

18 40 of the Arms Export Control Act, or any other pro19 vision of law; and 

20 (2) Iran has ceased the pursuit, acquisition, and 

21 development of nuclear, biological, and chemical 

22 weapons and ballistic missiles and ballistic missile 

23 launch technology. 


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Union Calendar No. 179 

110TH CONGRESS 

1ST SESSION H. R. 2347 

[Report No. 110

–277, Part I] 

A BILL 

To authorize State and local governments to direct 

in Iran’s energy sector, and for other purposes. panies with investments of $20,000,000 or more divestiture from, and prevent investment in, comJULY 30, 2007 

Reported from the Committee on Financial Services with 

J

an amendment 

ULY 30, 2007 

Committed to the Committee of the Whole House on the 

State of the Union and ordered to be printed 


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