I 

111TH CONGRESS 

1ST SESSION H. R. 1327 

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 

MARCH 5, 2009 

Mr. FRANK of Massachusetts (for himself, Mr. BERMAN, Mr. SHERMAN, and 

Mr. MEEKS of New York) introduced the following bill; which was referred to the Committee on Financial Services 

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 2009’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds as follows: 


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

2 local governments, educational institutions, and pri3 vate institutions to seek to disassociate themselves 

4 from companies that directly or indirectly support 

5 the Government of Iran’s efforts to achieve a nu6 clear weapons capability. 

7 (2) Policy makers and fund managers may find 

8 moral, prudential, or reputational reasons to divest 

9 from companies that accept the business risk of op10 erating in countries that are subject to international 

11 economic sanctions or that have business relation12 ships with countries, governments, or entities with 

13 which any United States company would be prohib14 ited from dealing because of economic sanctions im15 posed by the United States. 

16 SEC. 3. AUTHORITY OF STATE AND LOCAL GOVERNMENTS 

17 TO DIVEST FROM CERTAIN COMPANIES IN18 VESTED IN IRAN’S ENERGY SECTOR. 

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

20 United States to support the decision of State govern21 ments, local governments, and educational institutions to 

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

23 control in, persons that have investments of more than 

24 $20,000,000 in Iran’s energy sector. 


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1 (b) AUTHORITY TO DIVEST.—Notwithstanding any 

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

3 adopt and enforce measures that meet the requirements 

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

5 government from, or prohibit investment of the assets of 

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

7 State or local government determines, using credible infor8 mation available to the public, engages in investment ac9 tivities in Iran described in subsection (c). 

10 (c) INVESTMENT ACTIVITIES IN IRAN DESCRIBED.— 

11 A person engages in investment activities in Iran described 

12 in this subsection if the person— 

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

14 more— 

15 (A) in the energy sector of Iran; or 

16 (B) in a person that provides oil or 

17 liquified natural gas tankers, or products used 

18 to construct or maintain pipelines used to 

19 transport oil or liquified natural gas, for the en20 ergy sector in Iran; or 

21 (2) is a financial institution that extends 

22 $20,000,000 or more in credit to another person, for 

23 45 days or more, if that person will use the credit 

24 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) is not pre13 empted by any Federal law or regulation. 

14 (g) DEFINITIONS.—In this section: 

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

16 with respect to a State or local government, in17 cludes— 

18 (A) a commitment or contribution of as19 sets; 

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

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

22 for goods or services. 

23 (2) ASSETS.— 

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

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


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1 public monies and includes any pension, retire2 ment, annuity, or endowment fund, or similar 

3 instrument, that is controlled directly or indi4 rectly by a State or local government. 

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

6 not include employee benefit plans covered by 

7 title I of the Employee Retirement Income Se8 curity Act of 1974 (29 U.S.C. 1001 et seq.). 

9 (h) EFFECTIVE DATE.— 

10 (1) IN GENERAL.—Except as provided in para11 graph (2), this section shall apply to measures 

12 adopted by a State or local government before, on, 

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

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

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

16 local government on or after the date of the enact17 ment of this Act. 

18 SEC. 4. SAFE HARBOR FOR CHANGES OF INVESTMENT 

19 POLICIES BY ASSET MANAGERS. 

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

21 1940 (15 U.S.C. 80a–13(c)(1)) is amended by inserting 

22 before the period the following: ‘‘or engage in investment 

23 activities in Iran described in section 3(c) of the Iran 

24 Sanctions Enabling Act of 2009’’. 


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1 SEC. 5. SENSE OF CONGRESS REGARDING CERTAIN ERISA 

2 PLAN INVESTMENTS. 

3 It is the sense of Congress that a fiduciary of an em4 ployee benefit plan, as defined in section 3(3) of the Em5 ployee Retirement Income Security Act of 1974 (29 

6 U.S.C. 1002(3)), may divest plan assets from, or avoid 

7 investing plan assets in, any person the fiduciary deter8 mines engages in investment activities in Iran described 

9 in section 3(c) of this Act, without breaching the respon10 sibilities, obligations, or duties imposed upon the fiduciary 

11 by section 404 of the Employee Retirement Income Secu12 rity Act of 1974 (29 U.S.C. 1104), if— 

13 (1) the fiduciary makes such determination 

14 using credible information that is available to the 

15 public; and 

16 (2) such divestment or avoidance of investment 

17 is conducted in accordance with section 2509.94–1 

18 of title 29, Code of Federal Regulations (as in effect 

19 on the day before the date of the enactment of this 

20 Act). 

21 SEC. 6. DEFINITIONS. 

22 In this title: 

23 (1) ENERGY SECTOR.—The term ‘‘energy sec24 tor’’ refers to activities to develop petroleum or nat25 ural gas resources or nuclear power. 


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1 (2) FINANCIAL INSTITUTION.—The term ‘‘fi2 nancial institution’’ has the meaning given that term 

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

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

5 (3) IRAN.—The term ‘‘Iran’’ includes any agen6 cy or instrumentality of Iran. 

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

8 (A) a natural person, corporation, com9 pany, business association, partnership, society, 

10 trust, or any other nongovernmental entity, or11 ganization, or group; 

12 (B) any governmental entity or instrumen13 tality of a government, including a multilateral 

14 development institution (as defined in section 

15 1701(c)(3) of the International Financial Insti16 tutions Act (22 U.S.C. 262r(c)(3))); and 

17 (C) any successor, subunit, parent com18 pany, or subsidiary of any entity described in 

19 subparagraph (A) or (B). 

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

21 the several States, the District of Columbia, the 

22 Commonwealth of Puerto Rico, the United States 

23 Virgin Islands, Guam, American Samoa, and the 

24 Commonwealth of the Northern Mariana Islands. 


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

2 ‘‘State or local government’’ includes— 

3 (A) any State and any agency or instru4 mentality thereof; 

5 (B) any local government within a State, 

6 and any agency or instrumentality thereof; 

7 (C) any other governmental instrumen8 tality; and 

9 (D) any public institution of higher edu10 cation within the meaning of the Higher Edu11 cation Act of 1965 (20 U.S.C. 1001 et seq.). 

12 SEC. 7. SUNSET. 

13 This Act shall terminate 30 days after the date on 

14 which the President has certified to the Congress that— 

15 (1) the Government of Iran has ceased pro16 viding support for acts of international terrorism 

17 and no longer satisfies the requirements for designa18 tion as a state-sponsor of terrorism for purposes of 

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

20 1979, section 620A of the Foreign Assistance Act of 

21 1961, section 40 of the Arms Export Control Act, 

22 or any other provision of law; or 

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

24 and development of nuclear, biological, and chemical 


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1 weapons and ballistic missiles and ballistic missile 

2 launch technology. 

Æ 


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