IIB 
111TH CONGRESS 
1ST SESSION H. R. 1327 
IN THE SENATE OF THE UNITED STATES 
OCTOBER 15, 2009 
Received; read twice and referred to the Committee on Banking, Housing, and 
Urban Affairs 
AN ACT 
To authorize State and local governments to direct divesti-
ture from, and prevent investment in, companies with 
investments of $20,000,000 or more in Iran’s energy 
sector, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Iran Sanctions Ena-
bling Act of 2009’’. 
SEC. 2. FINDINGS. 
The Congress finds as follows: 
(1) There is an increasing interest by States, 
local governments, educational institutions, and pri-
vate institutions to seek to disassociate themselves 
from companies that directly or indirectly support 
the Government of Iran’s efforts to achieve a nu-
clear weapons capability. 
(2) Policy makers and fund managers may find 
moral, prudential, or reputational reasons to divest 
from companies that accept the business risk of op-
erating in countries that are subject to international 
economic sanctions or that have business relation-
ships with countries, governments, or entities with 
which any United States company would be prohib-
ited from dealing because of economic sanctions im-
posed by the United States. 
SEC. 3. AUTHORITY OF STATE AND LOCAL GOVERNMENTS 
TO DIVEST FROM CERTAIN COMPANIES IN-
VESTED IN IRAN’S ENERGY SECTOR. 
(a) STATEMENT OF POLICY.—It is the policy of the 
United States to support the decision of State govern-
ments, local governments, and educational institutions to 
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divest from, and to prohibit the investment of assets they 
control in, persons that have investments of more than 
$20,000,000 in Iran’s energy sector. 
(b) AUTHORITY TO DIVEST.—Notwithstanding any 
other provision of law, a State or local government may 
adopt and enforce measures that meet the requirements 
of subsection (d) to divest the assets of the State or local 
government from, or prohibit investment of the assets of 
the State or local government in, any person that the 
State or local government determines, using credible infor-
mation available to the public, engages in investment ac-
tivities in Iran described in subsection (c). 
(c) INVESTMENT ACTIVITIES IN IRAN DESCRIBED.— 
A person engages in investment activities in Iran described 
in this subsection if the person— 
(1) has an investment of $20,000,000 or more 
in the energy sector of Iran; 
(2) provides oil or liquified natural gas tankers, 
or products used to construct or maintain pipelines 
used to transport oil or liquified natural gas, for the 
energy sector in Iran; or 
(3) is a financial institution that extends 
$20,000,000 or more in credit to another person, for 
45 days or more, if that person will use the credit 
to invest in the energy sector in Iran. 
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(d) REQUIREMENTS.—The requirements referred to 
in subsection (b) that a measure taken by a State or local 
government must meet are the following: 
(1) NOTICE.—The State or local government 
shall provide written notice to each person to whom 
the State or local government, as the case may be, 
intends to apply the measure, of such intent. 
(2) TIMING.—The measure shall apply to a per-
son not earlier than the date that is 90 days after 
the date on which the person receives the written no-
tice required by paragraph (1). 
(3) OPPORTUNITY FOR HEARING.—The State 
or local government shall provide each person re-
ferred to in paragraph (1) with an opportunity to 
demonstrate to the State or local government, as the 
case may be, that the person does not engage in in-
vestment activities in Iran described in subsection 
(c). If the person demonstrates to the State or local 
government that the person does not engage in in-
vestment activities in Iran described in subsection 
(c), the measure shall not apply to the person. 
(4) SENSE OF THE CONGRESS ON AVOIDING ER-
RONEOUS TARGETING.—It is the sense of the Con-
gress that a State or local government should not 
adopt a measure under subsection (b) with respect 
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to a person unless the State or local government has 
made every effort to avoid erroneously targeting the 
person and has verified that the person engages in 
investment activities in Iran described in subsection 
(c). 
(e) NOTICE
TO DEPARTMENT
OF JUSTICE.—Not 
later than 30 days after adopting a measure pursuant to 
subsection (b), a State or local government shall submit 
to the Attorney General of the United States a written 
notice which describes the measure. 
(f) NONPREEMPTION.—A measure of a State or local 
government authorized under subsection (b), or described 
in subsection (i), is not preempted by any Federal law or 
regulation. 
(g) DEFINITIONS.—In this section: 
(1) INVESTMENT.—The ‘‘investment’’ of assets, 
with respect to a State or local government, in-
cludes— 
(A) a commitment or contribution of as-
sets; 
(B) a loan or other extension of credit; or 
(C) the entry into or renewal of a contract 
for goods or services. 
(2) ASSETS.— 
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(A) IN GENERAL.—Except as provided in 
subparagraph (B), the term ‘‘assets’’ refers to 
public monies and includes any pension, retire-
ment, annuity, or endowment fund, or similar 
instrument, that is controlled directly or indi-
rectly by a State or local government. 
(B) EXCEPTION.—The term ‘‘assets’’ does 
not include employee benefit plans covered by 
title I of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1001 et seq.). 
(h) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2) of this subsection and subsection (i), this 
section shall apply to measures adopted by a State 
or local government on or after the date of the en-
actment of this Act. 
(2) NOTICE REQUIREMENTS.—Subsections (d) 
and (e) apply to measures adopted by a State or 
local government on or after the date of the enact-
ment of this Act. 
(i) AUTHORIZATION
FOR PRIOR ENACTED MEAS-
URES.—Notwithstanding any other provision of law, a 
State or local government may enforce a measure (without 
regard to the requirements of subsection (d)) adopted by 
the State or local government before the date of the enact-
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ment of this Act that provides for the divestiture of assets 
of the State or local government from, or prohibits the 
investment of the assets of the State or local government 
in, any person that the State or local government deter-
mines, using credible information available to the public, 
engages in investment or business activities in Iran (deter-
mined without regard to subsection (c)) identified in the 
measure. 
SEC. 4. 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 to read as fol-
lows: 
‘‘(1) IN GENERAL.—Solely for purposes of this 
subsection, and notwithstanding any other provision 
of Federal or State law, no person may bring any 
civil, criminal, or administrative action against any 
registered investment company, or any employee, of-
ficer, director, or investment adviser thereof, based 
solely upon the investment company divesting from, 
or avoiding investing in, securities issued by persons 
that the investment company determines, using cred-
ible information that is available to the public, con-
duct or have direct investments in business oper-
ations in Sudan described in section 3(d) of the 
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Sudan Accountability and Divestment Act of 2007 
or engage in investment activities in Iran described 
in section 3(c) of the Iran Sanctions Enabling Act 
of 2009. Nothing in this paragraph shall be con-
strued to create, imply, diminish, change, or affect 
in any way the existence of a private cause of action 
under any other provision of this Act.’’. 
SEC. 5. SAFE HARBOR FOR CHANGES OF INVESTMENT 
POLICIES BY EMPLOYEE BENEFIT PLANS. 
Section 404 of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1104) is amended by adding 
at the end the following new subsection: 
‘‘(e) No person shall be treated as breaching any of 
the responsibilities, obligations, or duties imposed upon fi-
duciaries by this title for divesting plan assets from, or 
avoiding investing plan assets in, persons that are deter-
mined by such person, using credible information that is 
available to the public, to be engaged in investment activi-
ties in Iran described in section 3(c) of the Iran Sanctions 
Enabling Act of 2009. Any divestiture of plan assets from, 
or avoidance of investing plan assets in, persons that are 
so determined to be engaged in such investment activities 
shall be treated as in accordance with this title and the 
documents and instruments governing the plan.’’. 
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SEC. 6. DEFINITIONS. 
In this title: 
(1) ENERGY SECTOR.—The term ‘‘energy sec-
tor’’ refers to activities to develop petroleum or nat-
ural gas resources or nuclear power. 
(2) FINANCIAL
INSTITUTION.—The term ‘‘fi-
nancial institution’’ has the meaning given that term 
in section 14(5) of the Iran Sanctions Act of 1996 
(Public Law 104–172; 50 U.S.C. 1701 note). 
(3) IRAN.—The term ‘‘Iran’’ includes any agen-
cy or instrumentality of Iran. 
(4) PERSON.—The term ‘‘person’’ means— 
(A) a natural person, corporation, com-
pany, business association, partnership, society, 
trust, or any other nongovernmental entity, or-
ganization, or group; 
(B) any governmental entity or instrumen-
tality of a government, including a multilateral 
development institution (as defined in section 
1701(c)(3) of the International Financial Insti-
tutions Act (22 U.S.C. 262r(c)(3))); and 
(C) any successor, subunit, parent com-
pany, or subsidiary of, or company under com-
mon ownership or control with, any entity de-
scribed in subparagraph (A) or (B). 
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(5) STATE.—The term ‘‘State’’ means each of 
the several States, the District of Columbia, the 
Commonwealth of Puerto Rico, the United States 
Virgin Islands, Guam, American Samoa, and the 
Commonwealth of the Northern Mariana Islands. 
(6) STATE OR LOCAL GOVERNMENT.—The term 
‘‘State or local government’’ includes— 
(A) any State and any agency or instru-
mentality thereof; 
(B) any local government within a State, 
and any agency or instrumentality thereof; 
(C) any other governmental instrumen-
tality; and 
(D) any public institution of higher edu-
cation within the meaning of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1001 et seq.). 
SEC. 7. SUNSET. 
This Act shall terminate 30 days after the date on 
which the President has certified to the Congress that— 
(1) the Government of Iran has ceased pro-
viding support for acts of international terrorism 
and no longer satisfies the requirements for designa-
tion as a state-sponsor of terrorism for purposes of 
section 6(j) of the Export Administration Act of 
1979, section 620A of the Foreign Assistance Act of 
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1961, section 40 of the Arms Export Control Act, 
or any other provision of law; or 
(2) Iran has ceased the pursuit, acquisition, 
and development of nuclear, biological, and chemical 
weapons and ballistic missiles and ballistic missile 
launch technology. 
Passed the House of Representatives October 14, 
2009. 
Attest: 
LORRAINE C. MILLER, 
Clerk. 
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