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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1327 Referred in Senate (RFS)]

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.

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

SECTION 1. SHORT TITLE.

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

SEC. 2. FINDINGS.

    The Congress finds as follows:
            (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 Government of Iran's efforts 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. 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 more than 
$20,000,000 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 in the energy 
        sector of Iran;
            (2) 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
            (3) 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 whom 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 the congress on avoiding erroneous 
        targeting.--It is the sense of the 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 which describes the measure.
    (f) Nonpreemption.--A measure of a State or local government 
authorized under subsection (b), or described in subsection (i), 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; or
                    (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) of 
        this subsection and subsection (i), this section shall apply to 
        measures adopted by a State or local government on or after the 
        date of the enactment of this Act.
            (2) Notice requirements.--Subsections (d) and (e) apply to 
        measures adopted by a State or local government on or after the 
        date of the enactment of this Act.
    (i) Authorization for Prior Enacted Measures.--Notwithstanding any 
other provision of law, a State or local government may enforce a 
measure (without regard to the requirements of subsection (d)) adopted 
by the State or local government before the date of the enactment of 
this Act that provides for the divestiture of assets of the State or 
local government from, or prohibits the 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 or business activities in Iran 
(determined without regard to subsection (c)) identified in the 
measure.

SEC. 4. 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 to read as follows:
            ``(1) In general.--Solely for purposes of this subsection, 
        and notwithstanding any other provision of Federal or State 
        law, no person may bring any civil, criminal, or administrative 
        action against any registered investment company, or any 
        employee, officer, director, or investment adviser thereof, 
        based solely upon the investment company divesting from, or 
        avoiding investing in, securities issued by persons that the 
        investment company determines, using credible information that 
        is available to the public, conduct or have direct investments 
        in business operations in Sudan described in section 3(d) of 
        the Sudan Accountability and Divestment Act of 2007 or engage 
        in investment activities in Iran described in section 3(c) of 
        the Iran Sanctions Enabling Act of 2009. Nothing in this 
        paragraph shall be construed to create, imply, diminish, 
        change, or affect in any way the existence of a private cause 
        of action under any other provision of this Act.''.

SEC. 5. SAFE HARBOR FOR CHANGES OF INVESTMENT POLICIES BY EMPLOYEE 
              BENEFIT PLANS.

    Section 404 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1104) is amended by adding at the end the following new 
subsection:
    ``(e) No person shall be treated as breaching any of the 
responsibilities, obligations, or duties imposed upon fiduciaries by 
this title for divesting plan assets from, or avoiding investing plan 
assets in, persons that are determined by such person, using credible 
information that is available to the public, to be engaged in 
investment activities in Iran described in section 3(c) of the Iran 
Sanctions Enabling Act of 2009. Any divestiture of plan assets from, or 
avoidance of investing plan assets in, persons that are so determined 
to be engaged in such investment activities shall be treated as in 
accordance with this title and the documents and instruments governing 
the plan.''.

SEC. 6. DEFINITIONS.

    In this title:
            (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, or company under common ownership or 
                control with, 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. 7. SUNSET.

    This Act shall terminate 30 days after the date on which the 
President has certified to the 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 section 6(j) of the Export Administration Act 
        of 1979, section 620A of the Foreign Assistance Act of 1961, 
        section 40 of the Arms Export Control Act, or any other 
        provision of law; or
            (2) Iran has ceased the pursuit, acquisition, and 
        development of nuclear, biological, and chemical weapons and 
        ballistic missiles and ballistic missile launch technology.

            Passed the House of Representatives October 14, 2009.

            Attest:

                                            LORRAINE C. MILLER,

                                                                 Clerk.
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