II 

111TH CONGRESS 

1ST SESSION S. 1065 

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 SENATE OF THE UNITED STATES 

MAY 18, 2009 

Mr. BROWNBACK (for himself and Mr. CASEY) introduced the following bill; 

which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs 

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 Congress finds the following: 


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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 efforts of the Government of Iran to achieve a 

6 nuclear 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. DEFINITIONS. 

17 In this Act: 

18 (1) ENERGY SECTOR.—The term ‘‘energy sec19 tor’’ refers to activities to develop petroleum or nat20 ural gas resources or nuclear power. 

21 (2) FINANCIAL INSTITUTION.—The term ‘‘fi22 nancial institution’’ has the meaning given that term 

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

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


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1 (3) IRAN.—The term ‘‘Iran’’ includes any agen2 cy or instrumentality of Iran. 

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

4 (A) a natural person, corporation, com5 pany, business association, partnership, society, 

6 trust, or any other nongovernmental entity, or7 ganization, or group; 

8 (B) any governmental entity or instrumen9 tality of a government, including a multilateral 

10 development institution (as defined in section 

11 1701(c)(3) of the International Financial Insti12 tutions Act (22 U.S.C. 262r(c)(3))); and 

13 (C) any successor, subunit, parent com14 pany, or subsidiary of any entity described in 

15 subparagraph (A) or (B). 

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

17 the several States, the District of Columbia, the 

18 Commonwealth of Puerto Rico, the United States 

19 Virgin Islands, Guam, American Samoa, and the 

20 Commonwealth of the Northern Mariana Islands. 

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

22 ‘‘State or local government’’ includes— 

23 (A) any State and any agency or instru24 mentality thereof; 


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1 (B) any local government within a State, 

2 and any agency or instrumentality thereof; 

3 (C) any other governmental instrumen4 tality; and 

5 (D) any public institution of higher edu6 cation within the meaning of the Higher Edu7 cation Act of 1965 (20 U.S.C. 1001 et seq.). 

8 SEC. 4. AUTHORITY OF STATE AND LOCAL GOVERNMENTS 

9 TO DIVEST FROM CERTAIN COMPANIES IN10 VESTED IN IRAN’S ENERGY SECTOR. 

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

12 United States to support the decision of State govern13 ments, local governments, and educational institutions to 

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

15 control in, persons that have investments of $20,000,000 

16 or more in Iran’s energy sector. 

17 (b) AUTHORITY TO DIVEST.—Notwithstanding any 

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

19 adopt and enforce measures that meet the requirements 

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

21 government from, or prohibit investment of the assets of 

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

23 State or local government determines, using credible infor24 mation available to the public, engages in investment ac25 tivities in Iran described in subsection (c). 


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1 (c) INVESTMENT ACTIVITIES IN IRAN DESCRIBED.— 

2 A person engages in investment activities in Iran described 

3 in this subsection if the person— 

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

5 more— 

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

7 (B) in a person that provides oil or 

8 liquified natural gas tankers, or products used 

9 to construct or maintain pipelines used to 

10 transport oil or liquified natural gas, for the en11 ergy sector in Iran; or 

12 (2) is a financial institution that extends 

13 $20,000,000 or more in credit to another person, for 

14 45 days or more, if that person will use the credit 

15 to invest in the energy sector in Iran. 

16 (d) REQUIREMENTS.—The requirements referred to 

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

18 government must meet are the following: 

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

20 shall provide written notice to each person to which 

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

22 intends to apply the measure, of such intent. 

23 (2) TIMING.—The measure shall apply to a per24 son not earlier than the date that is 90 days after 


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1 the date on which the person receives the written no2 tice required by paragraph (1). 

3 (3) OPPORTUNITY FOR HEARING.—The State 

4 or local government shall provide each person re5 ferred to in paragraph (1) with an opportunity to 

6 demonstrate to the State or local government, as the 

7 case may be, that the person does not engage in in8 vestment activities in Iran described in subsection 

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

10 government that the person does not engage in in11 vestment activities in Iran described in subsection 

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

13 (4) SENSE OF CONGRESS ON AVOIDING ERRO14 NEOUS TARGETING.—It is the sense of Congress 

15 that a State or local government should not adopt 

16 a measure under subsection (b) with respect to a 

17 person unless the State or local government has 

18 made every effort to avoid erroneously targeting the 

19 person and has verified that the person engages in 

20 investment activities in Iran described in subsection 

21 (c). 

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

23 later than 30 days after adopting a measure pursuant to 

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


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1 to the Attorney General of the United States a written 

2 notice that describes the measure. 

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

4 government authorized under subsection (b) is not pre5 empted by any Federal law or regulation. 

6 (g) DEFINITIONS.—In this section: 

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

8 with respect to a State or local government, in9 cludes— 

10 (A) a commitment or contribution of as11 sets; 

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

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

14 for goods or services. 

15 (2) ASSETS.— 

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

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

18 public monies and includes any pension, retire19 ment, annuity, or endowment fund, or similar 

20 instrument, that is controlled directly or indi21 rectly by a State or local government. 

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

23 not include employee benefit plans covered by 

24 title I of the Employee Retirement Income Se25 curity Act of 1974 (29 U.S.C. 1001 et seq.). 


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1 (h) EFFECTIVE DATE.— 

2 (1) IN GENERAL.—Except as provided in para3 graph (2), this section shall apply to measures 

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

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

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

7 and (e) apply with respect to measures adopted by 

8 a State or local government on or after the date of 

9 the enactment of this Act. 

10 SEC. 5. SAFE HARBOR FOR CHANGES OF INVESTMENT 

11 POLICIES BY ASSET MANAGERS. 

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

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

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

15 activities in Iran described in section 4(c) of the Iran 

16 Sanctions Enabling Act of 2009’’. 

17 SEC. 6. SAFE HARBOR FOR CHANGES OF INVESTMENT 

18 POLICIES BY EMPLOYEE BENEFIT PLANS. 

19 Section 502 of the Employee Retirement Income Se20 curity Act of 1974 (29 U.S.C. 1132) is amended by adding 

21 at the end the following new subsection: 

22 ‘‘(n) No person shall be treated as breaching any of 

23 the responsibilities, obligations, or duties imposed upon fi24 duciaries by this title, and no action may be brought under 

25 this section against any person, for divesting plan assets 


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1 from, or avoiding investing plan assets in, persons that 

2 such person determines, using credible information avail3 able to the public, engage in investment activities in Iran 

4 described in section 4(c) of the Iran Sanctions Enabling 

5 Act of 2009.’’. 

6 SEC. 7. SUNSET. 

7 The provisions of this Act shall terminate on the day 

8 that is 30 days after the date on which the President cer9 tifies to Congress that— 

10 (1) the Government of Iran has ceased pro11 viding support for acts of international terrorism 

12 and no longer satisfies the requirements for designa13 tion as a state sponsor of terrorism for purposes 

14 of— 

15 (A) section 40 of the Arms Export Control 

16 Act (22 U.S.C. 2780); 

17 (B) section 620A of the Foreign Assistance 

18 Act of 1961 (22 U.S.C. 2371); 

19 (C) section 6(j) of the Export Administra20 tion Act of 1979 (50 U.S.C. App. 2405(j)), as 

21 continued in effect pursuant to the Inter22 national Emergency Economic Powers Act (50 

23 U.S.C. 1701 et seq.); or 


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1 (D) any other provision of law relating to 

2 governments that provide support for acts of 

3 international terrorism; and 

4 (2) the Government of Iran has ceased the pur5 suit, acquisition, and development of nuclear, bio6 logical, and chemical weapons and ballistic missiles 

7 and ballistic missile launch technology. 

Æ 


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