II 

115TH CONGRESS 

1ST SESSION S. 170 

To provide for nonpreemption of measures by State and local governments 

to divest from entities that engage in commerce-related or investmentrelated boycott, divestment, or sanctions activities targeting Israel, and 

for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 17, 2017 

Mr. RUBIO (for himself, Mr. MANCHIN, Mr. CRAPO, Mr. NELSON, Mr. CORNYN, Mr. CARDIN, Mr. GRAHAM, Mr. MENENDEZ, Mr. HATCH, Mr. 

WYDEN, Mr. COTTON, Mr. BLUMENTHAL, Mr. PORTMAN, Mr. PETERS, 

Mr. CRUZ, Ms. STABENOW, Ms. MURKOWSKI, Mr. BENNET, and Mr. 

BLUNT) introduced the following bill; which was read twice and referred 

to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To provide for nonpreemption of measures by State and 

local governments to divest from entities that engage 

in commerce-related 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 2017’’. 


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1 SEC. 2. NONPREEMPTION OF MEASURES BY STATE AND 

2 LOCAL GOVERNMENTS TO DIVEST FROM EN3 TITIES THAT ENGAGE IN CERTAIN BOYCOTT, 

4 DIVESTMENT, OR SANCTIONS ACTIVITIES 

5 TARGETING ISRAEL. 

6 (a) STATE AND LOCAL MEASURES.—Notwith7 standing any other provision of law, a State or local gov8 ernment may adopt and enforce measures that meet the 

9 requirements of subsection (b) to divest the assets of the 

10 State or local government from, prohibit investment of the 

11 assets of the State or local government in, or restrict con12 tracting by the State or local government for goods and 

13 services with— 

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

15 determines, using credible information available to 

16 the public, knowingly engages in a commerce-related 

17 or investment-related boycott, divestment, or sanc18 tions activity targeting Israel; 

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

20 described in paragraph (1); or 

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

22 controlled by, or is under common ownership or con23 trol with, an entity described in paragraph (1). 

24 (b) REQUIREMENTS.—A State or local government 

25 that seeks to adopt or enforce a measure under subsection 

26 (a) shall meet the following requirements: 


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

2 shall provide written notice to each entity to which 

3 a measure under subsection (a) is to be applied. 

4 (2) TIMING.—The measure shall apply to an 

5 entity not earlier than the date that is 90 days after 

6 the date on which written notice is provided to the 

7 entity under paragraph (1). 

8 (3) OPPORTUNITY FOR COMMENT.—The State 

9 or local government shall provide an opportunity to 

10 comment in writing to each entity to which a meas11 ure is to be applied. If the entity demonstrates to 

12 the State or local government that the entity has not 

13 engaged in a commerce-related or investment-related 

14 boycott, divestment, or sanctions activity targeting 

15 Israel, the measure shall not apply to the entity. 

16 (4) SENSE OF CONGRESS ON AVOIDING ERRO17 NEOUS TARGETING.—It is the sense of Congress 

18 that a State or local government should not adopt 

19 a measure under subsection (a) with respect to an 

20 entity unless the State or local government has 

21 made every effort to avoid erroneously targeting the 

22 entity and has verified that the entity engages in a 

23 commerce-related or investment-related boycott, di24 vestment, or sanctions activity targeting Israel. 

25 (c) NOTICE TO DEPARTMENT OF JUSTICE.— 


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1 (1) IN GENERAL.—Except as provided in para2 graph (2), not later than 30 days after adopting a 

3 measure described in subsection (a), the State or 

4 local government that adopted the measure shall 

5 submit written notice to the Attorney General de6 scribing the measure. 

7 (2) EXISTING MEASURES.—With respect to 

8 measures described in subsection (a) adopted before 

9 the date of the enactment of this Act, the State or 

10 local government that adopted the measure shall 

11 submit written notice to the Attorney General de12 scribing the measure not later than 30 days after 

13 the date of the enactment of this Act. 

14 (d) NONPREEMPTION.—A measure of a State or local 

15 government that is consistent with subsection (a) is not 

16 preempted by any Federal law. 

17 (e) EFFECTIVE DATE.—This section applies to any 

18 measure adopted by a State or local government before, 

19 on, or after the date of the enactment of this Act. 

20 (f) PRIOR ENACTED MEASURES.— 

21 (1) IN GENERAL.—Notwithstanding any other 

22 provision of this section or any other provision of 

23 law, and except as provided in paragraph (2), a 

24 State or local government may enforce a measure 

25 described in subsection (a) adopted by the State or 


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1 local government before the date of the enactment of 

2 this Act without regard to the requirements of sub3 section (b). 

4 (2) APPLICATION OF NOTICE AND OPPOR5 TUNITY FOR COMMENT.—A measure described in 

6 paragraph (1) shall be subject to the requirements 

7 of subsection (b) on and after the date that is 2 

8 years after the date of the enactment of this Act. 

9 (g) RULES OF CONSTRUCTION.— 

10 (1) AUTHORITY OF STATES.—Nothing in this 

11 section shall be construed to abridge the authority of 

12 a State to issue and enforce rules governing the 

13 safety, soundness, and solvency of a financial insti14 tution subject to its jurisdiction or the business of 

15 insurance pursuant to the Act of March 9, 1945 (59 

16 Stat. 33, chapter 20; 15 U.S.C. 1011 et seq.) (com17 monly known as the ‘‘McCarran-Ferguson Act’’). 

18 (2) POLICY OF THE UNITED STATES.—Nothing 

19 in this section shall be construed to alter the estab20 lished policy of the United States concerning final 

21 status issues associated with the Arab-Israeli con22 flict, including border delineation, that can only be 

23 resolved through direct negotiations between the 

24 parties. 


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1 (3) SCOPE OF NONPREEMPTION.—Nothing in 

2 this section shall be construed as establishing a basis 

3 for preempting or implying preemption of State 

4 measures relating to boycott, divestment, or sanc5 tions activity targeting Israel that are outside the 

6 scope of subsection (a). 

7 (h) DEFINITIONS.—In this section: 

8 (1) ASSETS.— 

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

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

11 any pension, retirement, annuity, or endowment 

12 fund, or similar instrument, that is controlled 

13 by a State or local government. 

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

15 not include employee benefit plans covered by 

16 title I of the Employee Retirement Income Se17 curity Act of 1974 (29 U.S.C. 1001 et seq.). 

18 (2) BOYCOTT, DIVESTMENT, OR SANCTIONS AC19 TIVITY TARGETING ISRAEL.—The term ‘‘boycott, di20 vestment, or sanctions activity targeting Israel’’ 

21 means any activity that is intended to penalize, in22 flict economic harm on, or otherwise limit commer23 cial relations with Israel or persons doing business 

24 in Israel or in Israeli-controlled territories for purVerDate Sep 11 2014 03:54 Jan 28, 2017 Jkt 069200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S170.IS S170

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1 poses of coercing political action by, or imposing pol2 icy positions on, the Government of Israel. 

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

4 (A) any corporation, company, business as5 sociation, partnership, or trust; and 

6 (B) any governmental entity or instrumen7 tality of a government, including a multilateral 

8 development institution (as defined in section 

9 1701(c)(3) of the International Financial Insti10 tutions Act (22 U.S.C. 262r(c)(3))). 

11 (4) INVESTMENT.—The term ‘‘investment’’ in12 cludes— 

13 (A) a commitment or contribution of funds 

14 or property; 

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

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

17 for goods or services. 

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

19 the several States, the District of Columbia, the 

20 Commonwealth of Puerto Rico, the Commonwealth 

21 of the Northern Mariana Islands, American Samoa, 

22 Guam, the United States Virgin Islands, and any 

23 other territory or possession of the United States. 

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

25 ‘‘State or local government’’ includes— 


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1 (A) any State and any agency or instru2 mentality thereof; 

3 (B) any local government within a State 

4 and any agency or instrumentality thereof; and 

5 (C) any other governmental instrumen6 tality of a State or locality. 

7 SEC. 3. SAFE HARBOR FOR CHANGES OF INVESTMENT 

8 POLICIES BY ASSET MANAGERS. 

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

10 1940 (15 U.S.C. 80a–13(c)(1)) is amended— 

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

12 inserting a semicolon; 

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

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

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

16 ‘‘(C) engage in any boycott, divestment, or 

17 sanctions activity targeting Israel described in 

18 section 2 of the Combating BDS Act of 2017.’’. 

Æ 


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