II 

117TH CONGRESS 

1ST SESSION S. 2119 

To provide for nonpreemption of measures by State and local governments 

to divest from entities that engage in certain boycott, divestment, or 

sanctions activities targeting Israel or persons doing business in Israel 

or Israeli-controlled territories, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 17, 2021 

Mr. RUBIO (for himself and Mr. MANCHIN) 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 certain boycott, divestment, or sanctions activities targeting Israel or persons doing business in Israel or 

Israeli-controlled territories, 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 2021’’. 


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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 OR PERSONS DOING 

6 BUSINESS IN ISRAEL OR ISRAELI-CON7 TROLLED TERRITORIES. 

8 (a) STATE AND LOCAL MEASURES.—Notwith9 standing any other provision of law, a State or local gov10 ernment may adopt and enforce measures that meet the 

11 requirements of subsection (c) to divest the assets of the 

12 State or local government from, prohibit investment of the 

13 assets of the State or local government in, or restrict con14 tracting by the State or local government for goods and 

15 services with— 

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

17 determines, using credible information available to 

18 the public, knowingly engages in an activity de19 scribed in subsection (b); 

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

21 described in paragraph (1); or 

22 (3) an entity that owns or controls or is owned 

23 or controlled by an entity described in paragraph 

24 (1). 

25 (b) ACTIVITIES DESCRIBED.—An activity described 

26 in this subsection is a commerce-related or investment-reVerDate Sep 11 2014 16:36 Jun 25, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2119.IS S2119

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1 lated boycott, divestment, or sanctions activity in the 

2 course of interstate or international commerce that is in3 tended to penalize, inflict economic harm on, or otherwise 

4 limit commercial relations with Israel or persons doing 

5 business in Israel or Israeli-controlled territories for pur6 poses of coercing political action by, or imposing policy 

7 positions on, the Government of Israel. 

8 (c) REQUIREMENTS.—A State or local government 

9 that seeks to adopt or enforce a measure under subsection 

10 (a) shall meet the following requirements: 

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

12 shall provide written notice— 

13 (A) in the case of a measure relating to di14 vestment or investment, to each entity to which 

15 the measure is to be applied; and 

16 (B) in the case of a measure relating to 

17 contracting, of the restrictions imposed by the 

18 measure to each prospective contractor before 

19 entering into a contract. 

20 (2) TIMING.—A measure relating to divestment 

21 or investment shall apply to an entity not earlier 

22 than the date that is 90 days after the date on 

23 which written notice is provided to the entity under 

24 paragraph (1). 


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1 (3) OPPORTUNITY FOR COMMENT.—In the case 

2 of a measure relating to divestment or investment, 

3 the State or local government shall provide an op4 portunity to comment in writing to each entity to 

5 which the measure is to be applied. If the entity 

6 demonstrates to the State or local government that 

7 neither the entity nor any entity related to the entity 

8 as described in paragraph (2) or (3) of subsection 

9 (a) has knowingly engaged in an activity described 

10 in subsection (b), the measure shall not apply to the 

11 entity. 

12 (4) DISCLOSURE IN CONTRACTING MEAS13 URES.—The State or local government may require, 

14 in a measure relating to contracting, that a prospec15 tive contractor disclose whether the prospective con16 tractor or any entity related to the prospective con17 tractor as described in paragraph (2) or (3) of sub18 section (a) knowingly engages in any activity de19 scribed in subsection (b) before entering into a con20 tract. 

21 (5) SENSE OF CONGRESS ON AVOIDING ERRO22 NEOUS TARGETING.—It is the sense of Congress 

23 that a State or local government should not adopt 

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

25 entity unless the State or local government has 


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1 made every effort to avoid erroneously targeting the 

2 entity and has verified that the entity engages in an 

3 activity described in subsection (b). 

4 (d) NOTICE TO DEPARTMENT OF JUSTICE.— 

5 (1) IN GENERAL.—Except as provided in para6 graph (2), not later than 30 days after adopting a 

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

8 local government that adopted the measure shall 

9 submit written notice to the Attorney General de10 scribing the measure. 

11 (2) EXISTING MEASURES.—With respect to 

12 measures described in subsection (a) adopted before 

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

14 local government that adopted the measure shall 

15 submit written notice to the Attorney General de16 scribing the measure not later than 30 days after 

17 the date of the enactment of this Act. 

18 (e) NONPREEMPTION.—A measure of a State or local 

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

20 preempted by any Federal law. 

21 (f) PRIOR ENACTED MEASURES.— 

22 (1) IN GENERAL.—Notwithstanding any other 

23 provision of this section or any other provision of 

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

25 State or local government may enforce a measure 


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

2 local government before the date of the enactment of 

3 this Act without regard to the requirements of sub4 section (c). 

5 (2) APPLICATION OF NOTICE AND OPPOR6 TUNITY FOR COMMENT.—Enforcement of a measure 

7 described in paragraph (1) shall be subject to the re8 quirements of subsection (c) on and after the date 

9 that is 2 years after the date of the enactment of 

10 this Act. 

11 (g) RULES OF CONSTRUCTION.— 

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

13 section shall be construed to abridge the authority of 

14 a State to issue and enforce rules governing the 

15 safety, soundness, and solvency of a financial insti16 tution subject to its jurisdiction or the business of 

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

18 Stat. 33, chapter 20; 15 U.S.C. 1011 et seq.) (com19 monly known as the ‘‘McCarran-Ferguson Act’’). 

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

21 in this section shall be construed to alter the estab22 lished policy of the United States concerning final 

23 status issues associated with the Palestinian-Israeli 

24 conflict, including border delineation, that can only 


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1 be resolved through direct negotiations between the 

2 parties. 

3 (h) DEFINITIONS.—In this section: 

4 (1) ASSETS.— 

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

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

7 any pension, retirement, annuity, or endowment 

8 fund, or similar instrument, that is controlled 

9 by a State or local government. 

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

11 not include employee benefit plans covered by 

12 title I of the Employee Retirement Income Se13 curity Act of 1974 (29 U.S.C. 1001 et seq.). 

14 (2) ENTITY.—The term ‘‘entity’’ includes— 

15 (A) any corporation, company, business as16 sociation, partnership, or trust; and 

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))). 

22 (3) INVESTMENT.—The term ‘‘investment’’ in23 cludes— 

24 (A) a commitment or contribution of funds 

25 or property; 


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

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

3 for goods or services. 

4 (4) KNOWINGLY.—The term ‘‘knowingly’’, with 

5 respect to conduct, a circumstance, or a result, 

6 means that a person has actual knowledge, or should 

7 have known, of the conduct, the circumstance, or the 

8 result. 

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

10 the several States, the District of Columbia, the 

11 Commonwealth of Puerto Rico, the Commonwealth 

12 of the Northern Mariana Islands, American Samoa, 

13 Guam, the United States Virgin Islands, and any 

14 other territory or possession of the United States. 

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

16 ‘‘State or local government’’ includes— 

17 (A) any State and any agency or instru18 mentality thereof; 

19 (B) any local government within a State 

20 and any agency or instrumentality thereof; and 

21 (C) any other governmental instrumen22 tality of a State or locality. 


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1 SEC. 3. SAFE HARBOR FOR CHANGES OF INVESTMENT 

2 POLICIES BY ASSET MANAGERS. 

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

4 1940 (15 U.S.C. 80a–13(c)(1)) is amended— 

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

6 inserting a semicolon; 

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

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

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

10 ‘‘(C) knowingly engage in any activity de11 scribed in section 2(b) of the Combating BDS 

12 Act of 2021.’’. 

13 SEC. 4. SENSE OF CONGRESS REGARDING CERTAIN ERISA 

14 PLAN INVESTMENTS. 

15 It is the sense of Congress that— 

16 (1) a fiduciary of an employee benefit plan, as 

17 defined in section 3(3) of the Employee Retirement 

18 Income Security Act of 1974 (29 U.S.C. 1002(3)), 

19 may divest plan assets from, or avoid investing plan 

20 assets in, any person the fiduciary determines know21 ingly engages in any activity described in section 

22 2(b), if— 

23 (A) the fiduciary makes that determination 

24 using credible information that is available to 

25 the public; and 


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1 (B) the fiduciary prudently determines 

2 that the result of that divestment or avoidance 

3 of investment would not be expected to provide 

4 the employee benefit plan with— 

5 (i) a lower rate of return than alter6 native investments with commensurate de7 grees of risk; or 

8 (ii) a higher degree of risk than alter9 native investments with commensurate 

10 rates of return; and 

11 (2) by divesting assets or avoiding the invest12 ment of assets as described in paragraph (1), the fi13 duciary is not breaching the responsibilities, obliga14 tions, or duties imposed upon the fiduciary by sub15 paragraph (A) or (B) of section 404(a)(1) of the 

16 Employee Retirement Income Security Act of 1974 

17 (29 U.S.C. 1104(a)(1)). 

18 SEC. 5. RULE OF CONSTRUCTION. 

19 Nothing in this Act shall be construed to infringe 

20 upon any right protected under the First Amendment to 

21 the Constitution of the United States. 

Æ 


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