I 
115TH CONGRESS 
1ST SESSION H. R. 2856 
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 activity targeting Israel, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 8, 2017 
Mr. MCHENRY (for himself, Mr. VARGAS, Mr. ROYCE of California, Mr. 
GOTTHEIMER, Mr. EMMER, Mr. SHERMAN, Mr. ROSKAM, and Mr. 
SCHNEIDER) introduced the following bill; which was referred to the 
Committee on Financial Services 
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, divest-
ment, or sanctions activity targeting Israel, and for other 
purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Combating BDS Act 
of 2017’’. 
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SEC. 2. NONPREEMPTION OF MEASURES BY STATE AND 
LOCAL GOVERNMENTS TO DIVEST FROM EN-
TITIES THAT ENGAGE IN BOYCOTT, DIVEST-
MENT, 
OR 
SANCTIONS 
ACTIVITIES 
TAR-
GETING ISRAEL. 
(a) STATE
AND
LOCAL
MEASURES.—Notwith-
standing any other provision of law, a State or local gov-
ernment may adopt and enforce measures that meet the 
requirements of subsection (b) to divest the assets of the 
State or local government from, prohibit investment of the 
assets of the State or local government in, or restrict con-
tracting by the State or local government for goods and 
services with— 
(1) an entity that the State or local government 
determines, using credible information available to 
the public, knowingly engages in any commerce-re-
lated or investment-related boycott, divestment, or 
sanctions activity targeting Israel; 
(2) a successor entity or subunit of an entity 
described in paragraph (1); or 
(3) an entity that owns or controls, is owned or 
controlled by, or is under common ownership or con-
trol with, an entity described in paragraph (1). 
(b) REQUIREMENTS.—A State or local government 
that seeks to adopt or enforce a measure under subsection 
(a) shall meet the following requirements: 
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(1) NOTICE.—The State or local government 
shall provide written notice to each entity to which 
a measure under subsection (a) is to be applied. 
(2) TIMING.—The measure shall apply to an 
entity not earlier than the date that is 90 days after 
the date on which written notice is provided to the 
entity under paragraph (1). 
(3) OPPORTUNITY FOR COMMENT.—The State 
or local government shall provide an opportunity to 
comment in writing to each entity to which a meas-
ure is to be applied. If the entity demonstrates to 
the State or local government that the entity has not 
engaged in any commerce-related or investment-re-
lated boycott, divestment, or sanctions activity tar-
geting Israel, the measure shall not apply to the en-
tity. 
(4) SENSE OF CONGRESS ON AVOIDING ERRO-
NEOUS
TARGETING.—It is the sense of Congress 
that a State or local government should not adopt 
a measure under subsection (a) with respect to an 
entity unless the State or local government has 
made every effort to avoid erroneously targeting the 
entity and has verified that the entity engages in 
any commerce-related or investment-related boycott, 
divestment, or sanctions activity targeting Israel. 
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described in subsection (a) adopted by the State or 
local government before the date of the enactment of 
this Act without regard to the requirements of sub-
section (b). 
(2) APPLICATION
OF
NOTICE
AND
OPPOR-
TUNITY
FOR
COMMENT.—A measure described in 
paragraph (1) shall be subject to the requirements 
of subsection (b) on and after the date that is 2 
years after the date of the enactment of this Act. 
(g) DEFINITIONS AND RULES OF CONSTRUCTION.— 
(1) DEFINITIONS.—In this section: 
(A) ASSETS.— 
(i) IN GENERAL.—Except as provided 
in clause (ii), the term ‘‘assets’’ means any 
pension, retirement, annuity, or endow-
ment fund, or similar instrument, that is 
controlled by a State or local government. 
(ii) EXCEPTION.—The term ‘‘assets’’ 
does not include employee benefit plans 
covered by title I of the Employee Retire-
ment Income Security Act of 1974 (29 
U.S.C. 1001 et seq.). 
(B) BOYCOTT, DIVESTMENT, OR
SANC-
TIONS ACTIVITY TARGETING ISRAEL.—The term 
‘‘boycott, divestment, or sanctions activity tar-
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geting Israel’’ means any activity that is in-
tended to penalize, inflict economic harm on, or 
otherwise limit commercial relations with Israel 
or persons doing business as described in sec-
tion 102(b)(20)(B) of the Bipartisan Congres-
sional Trade Priorities and Accountability Act 
of 2015 (19 U.S.C. 4201(b)(20)(B)). 
(C) ENTITY.—The term ‘‘entity’’ in-
cludes— 
(i) any corporation, company, business 
association, partnership, or trust; and 
(ii) any governmental entity or instru-
mentality of a government, including a 
multilateral development institution (as de-
fined in section 1701(c)(3) of the Inter-
national Financial Institutions Act (22 
U.S.C. 262r(c)(3))). 
(D) INVESTMENT.—The term ‘‘invest-
ment’’ includes— 
(i) a commitment or contribution of 
funds or property; 
(ii) a loan or other extension of credit; 
and 
(iii) the entry into or renewal of a 
contract for goods or services. 
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(E) STATE.—The term ‘‘State’’ means 
each of the several States, the District of Co-
lumbia, the Commonwealth of Puerto Rico, the 
Commonwealth of the Northern Mariana Is-
lands, American Samoa, Guam, the United 
States Virgin Islands, and any other territory 
or possession of the United States. 
(F) STATE OR LOCAL GOVERNMENT.—The 
term ‘‘State or local government’’ includes— 
(i) any State and any agency or in-
strumentality thereof; 
(ii) any local government within a 
State and any agency or instrumentality 
thereof; and 
(iii) any other governmental instru-
mentality of a State or locality. 
(2) RULES OF CONSTRUCTION.— 
(A) AUTHORITY OF STATES.—Nothing in 
this section shall be construed to abridge the 
authority of a State to issue and enforce rules 
governing the safety, soundness, and solvency of 
a financial institution subject to its jurisdiction 
or the business of insurance pursuant to the 
Act of March 9, 1945 (59 Stat. 33, chapter 20; 
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15 U.S.C. 1011 et seq.) (commonly known as 
the ‘‘McCarran-Ferguson Act’’). 
(B) POLICY
OF
THE
UNITED
STATES.— 
Nothing in this section shall be construed to 
alter the established policy of the United States 
concerning final status issues associated with 
the Arab-Israeli conflict, including border delin-
eation, that can only be resolved through direct 
negotiations between the parties. 
(C) SCOPE OF NONPREEMPTION.—Nothing 
in this section shall be construed as establishing 
a basis for preempting or implying preemption 
of State measures relating to actions to boycott, 
divest from, or sanction Israel that are outside 
the scope of subsection (a). 
SEC. 3. 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— 
(1) in subparagraph (A), by striking ‘‘; or’’ and 
inserting a semicolon; 
(2) in subparagraph (B), by striking the period 
at the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
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‘‘(C) engage in any boycott, divestment, or 
sanctions activity targeting Israel described in 
section 2 of the Combating BDS Act of 2017.’’. 
Æ 
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