IIB 

111TH CONGRESS 

1ST SESSION H. R. 1327 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 15, 2009 

Received; read twice and referred to the Committee on Banking, Housing, and 

Urban Affairs 

AN ACT 

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, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Iran Sanctions Ena3 bling Act of 2009’’. 

4 SEC. 2. FINDINGS. 

5 The Congress finds as follows: 

6 (1) There is an increasing interest by States, 

7 local governments, educational institutions, and pri8 vate institutions to seek to disassociate themselves 

9 from companies that directly or indirectly support 

10 the Government of Iran’s efforts to achieve a nu11 clear weapons capability. 

12 (2) Policy makers and fund managers may find 

13 moral, prudential, or reputational reasons to divest 

14 from companies that accept the business risk of op15 erating in countries that are subject to international 

16 economic sanctions or that have business relation17 ships with countries, governments, or entities with 

18 which any United States company would be prohib19 ited from dealing because of economic sanctions im20 posed by the United States. 

21 SEC. 3. AUTHORITY OF STATE AND LOCAL GOVERNMENTS 

22 TO DIVEST FROM CERTAIN COMPANIES IN23 VESTED IN IRAN’S ENERGY SECTOR. 

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

25 United States to support the decision of State govern26 ments, local governments, and educational institutions to 


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1 divest from, and to prohibit the investment of assets they 

2 control in, persons that have investments of more than 

3 $20,000,000 in Iran’s energy sector. 

4 (b) AUTHORITY TO DIVEST.—Notwithstanding any 

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

6 adopt and enforce measures that meet the requirements 

7 of subsection (d) to divest the assets of the State or local 

8 government from, or prohibit investment of the assets of 

9 the State or local government in, any person that the 

10 State or local government determines, using credible infor11 mation available to the public, engages in investment ac12 tivities in Iran described in subsection (c). 

13 (c) INVESTMENT ACTIVITIES IN IRAN DESCRIBED.— 

14 A person engages in investment activities in Iran described 

15 in this subsection if the person— 

16 (1) has an investment of $20,000,000 or more 

17 in the energy sector of Iran; 

18 (2) provides oil or liquified natural gas tankers, 

19 or products used to construct or maintain pipelines 

20 used to transport oil or liquified natural gas, for the 

21 energy sector in Iran; or 

22 (3) is a financial institution that extends 

23 $20,000,000 or more in credit to another person, for 

24 45 days or more, if that person will use the credit 

25 to invest in the energy sector in Iran. 


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1 (d) REQUIREMENTS.—The requirements referred to 

2 in subsection (b) that a measure taken by a State or local 

3 government must meet are the following: 

4 (1) NOTICE.—The State or local government 

5 shall provide written notice to each person to whom 

6 the State or local government, as the case may be, 

7 intends to apply the measure, of such intent. 

8 (2) TIMING.—The measure shall apply to a per9 son not earlier than the date that is 90 days after 

10 the date on which the person receives the written no11 tice required by paragraph (1). 

12 (3) OPPORTUNITY FOR HEARING.—The State 

13 or local government shall provide each person re14 ferred to in paragraph (1) with an opportunity to 

15 demonstrate to the State or local government, as the 

16 case may be, that the person does not engage in in17 vestment activities in Iran described in subsection 

18 (c). If the person demonstrates to the State or local 

19 government that the person does not engage in in20 vestment activities in Iran described in subsection 

21 (c), the measure shall not apply to the person. 

22 (4) SENSE OF THE CONGRESS ON AVOIDING ER23 RONEOUS TARGETING.—It is the sense of the Con24 gress that a State or local government should not 

25 adopt a measure under subsection (b) with respect 


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1 to a person unless the State or local government has 

2 made every effort to avoid erroneously targeting the 

3 person and has verified that the person engages in 

4 investment activities in Iran described in subsection 

5 (c). 

6 (e) NOTICE TO DEPARTMENT OF JUSTICE.—Not 

7 later than 30 days after adopting a measure pursuant to 

8 subsection (b), a State or local government shall submit 

9 to the Attorney General of the United States a written 

10 notice which describes the measure. 

11 (f) NONPREEMPTION.—A measure of a State or local 

12 government authorized under subsection (b), or described 

13 in subsection (i), is not preempted by any Federal law or 

14 regulation. 

15 (g) DEFINITIONS.—In this section: 

16 (1) INVESTMENT.—The ‘‘investment’’ of assets, 

17 with respect to a State or local government, in18 cludes— 

19 (A) a commitment or contribution of as20 sets; 

21 (B) a loan or other extension of credit; or 

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

23 for goods or services. 

24 (2) ASSETS.— 


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

2 subparagraph (B), the term ‘‘assets’’ refers to 

3 public monies and includes any pension, retire4 ment, annuity, or endowment fund, or similar 

5 instrument, that is controlled directly or indi6 rectly by a State or local government. 

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

8 not include employee benefit plans covered by 

9 title I of the Employee Retirement Income Se10 curity Act of 1974 (29 U.S.C. 1001 et seq.). 

11 (h) EFFECTIVE DATE.— 

12 (1) IN GENERAL.—Except as provided in para13 graph (2) of this subsection and subsection (i), this 

14 section shall apply to measures adopted by a State 

15 or local government on or after the date of the en16 actment of this Act. 

17 (2) NOTICE REQUIREMENTS.—Subsections (d) 

18 and (e) apply to measures adopted by a State or 

19 local government on or after the date of the enact20 ment of this Act. 

21 (i) AUTHORIZATION FOR PRIOR ENACTED MEAS22 URES.—Notwithstanding any other provision of law, a 

23 State or local government may enforce a measure (without 

24 regard to the requirements of subsection (d)) adopted by 

25 the State or local government before the date of the enactVerDate Nov 24 2008 23:29 Oct 15, 2009 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1327.RFS H1327

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1 ment of this Act that provides for the divestiture of assets 

2 of the State or local government from, or prohibits the 

3 investment of the assets of the State or local government 

4 in, any person that the State or local government deter5 mines, using credible information available to the public, 

6 engages in investment or business activities in Iran (deter7 mined without regard to subsection (c)) identified in the 

8 measure. 

9 SEC. 4. SAFE HARBOR FOR CHANGES OF INVESTMENT 

10 POLICIES BY ASSET MANAGERS. 

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

12 1940 (15 U.S.C. 80a–13(c)(1)) is amended to read as fol13 lows: 

14 ‘‘(1) IN GENERAL.—Solely for purposes of this 

15 subsection, and notwithstanding any other provision 

16 of Federal or State law, no person may bring any 

17 civil, criminal, or administrative action against any 

18 registered investment company, or any employee, of19 ficer, director, or investment adviser thereof, based 

20 solely upon the investment company divesting from, 

21 or avoiding investing in, securities issued by persons 

22 that the investment company determines, using cred23 ible information that is available to the public, con24 duct or have direct investments in business oper25 ations in Sudan described in section 3(d) of the 


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1 Sudan Accountability and Divestment Act of 2007 

2 or engage in investment activities in Iran described 

3 in section 3(c) of the Iran Sanctions Enabling Act 

4 of 2009. Nothing in this paragraph shall be con5 strued to create, imply, diminish, change, or affect 

6 in any way the existence of a private cause of action 

7 under any other provision of this Act.’’. 

8 SEC. 5. SAFE HARBOR FOR CHANGES OF INVESTMENT 

9 POLICIES BY EMPLOYEE BENEFIT PLANS. 

10 Section 404 of the Employee Retirement Income Se11 curity Act of 1974 (29 U.S.C. 1104) is amended by adding 

12 at the end the following new subsection: 

13 ‘‘(e) No person shall be treated as breaching any of 

14 the responsibilities, obligations, or duties imposed upon fi15 duciaries by this title for divesting plan assets from, or 

16 avoiding investing plan assets in, persons that are deter17 mined by such person, using credible information that is 

18 available to the public, to be engaged in investment activi19 ties in Iran described in section 3(c) of the Iran Sanctions 

20 Enabling Act of 2009. Any divestiture of plan assets from, 

21 or avoidance of investing plan assets in, persons that are 

22 so determined to be engaged in such investment activities 

23 shall be treated as in accordance with this title and the 

24 documents and instruments governing the plan.’’. 


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1 SEC. 6. DEFINITIONS. 

2 In this title: 

3 (1) ENERGY SECTOR.—The term ‘‘energy sec4 tor’’ refers to activities to develop petroleum or nat5 ural gas resources or nuclear power. 

6 (2) FINANCIAL INSTITUTION.—The term ‘‘fi7 nancial institution’’ has the meaning given that term 

8 in section 14(5) of the Iran Sanctions Act of 1996 

9 (Public Law 104–172; 50 U.S.C. 1701 note). 

10 (3) IRAN.—The term ‘‘Iran’’ includes any agen11 cy or instrumentality of Iran. 

12 (4) PERSON.—The term ‘‘person’’ means— 

13 (A) a natural person, corporation, com14 pany, business association, partnership, society, 

15 trust, or any other nongovernmental entity, or16 ganization, or group; 

17 (B) any governmental entity or instrumen18 tality of a government, including a multilateral 

19 development institution (as defined in section 

20 1701(c)(3) of the International Financial Insti21 tutions Act (22 U.S.C. 262r(c)(3))); and 

22 (C) any successor, subunit, parent com23 pany, or subsidiary of, or company under com24 mon ownership or control with, any entity de25 scribed in subparagraph (A) or (B). 


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

2 the several States, the District of Columbia, the 

3 Commonwealth of Puerto Rico, the United States 

4 Virgin Islands, Guam, American Samoa, and the 

5 Commonwealth of the Northern Mariana Islands. 

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

7 ‘‘State or local government’’ includes— 

8 (A) any State and any agency or instru9 mentality thereof; 

10 (B) any local government within a State, 

11 and any agency or instrumentality thereof; 

12 (C) any other governmental instrumen13 tality; and 

14 (D) any public institution of higher edu15 cation within the meaning of the Higher Edu16 cation Act of 1965 (20 U.S.C. 1001 et seq.). 

17 SEC. 7. SUNSET. 

18 This Act shall terminate 30 days after the date on 

19 which the President has certified to the Congress that— 

20 (1) the Government of Iran has ceased pro21 viding support for acts of international terrorism 

22 and no longer satisfies the requirements for designa23 tion as a state-sponsor of terrorism for purposes of 

24 section 6(j) of the Export Administration Act of 

25 1979, section 620A of the Foreign Assistance Act of 


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1 1961, section 40 of the Arms Export Control Act, 

2 or any other provision of law; or 

3 (2) Iran has ceased the pursuit, acquisition, 

4 and development of nuclear, biological, and chemical 

5 weapons and ballistic missiles and ballistic missile 

6 launch technology. 

Passed the House of Representatives October 14, 

2009. 

Attest: LORRAINE C. MILLER, 

Clerk. 


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