I 
111TH CONGRESS 
2D SESSION 
H. R. 6296 
To enhance United States diplomatic efforts with respect to Iran by imposing 
additional economic sanctions against Iran, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 29, 2010 
Mr. SHERMAN (for himself, Mr. ROYCE, Mr. KLEIN of Florida, Mr. DEUTCH, 
Mr. ENGEL, Mr. POE of Texas, Mr. SIRES, Mrs. MALONEY, Ms. BERK-
LEY, and Mr. GENE GREEN of Texas) introduced the following bill; which 
was referred to the Committee on Foreign Affairs, and in addition to the 
Committees on Ways and Means, the Judiciary, Financial Services, and 
Oversight and Government Reform, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions 
as fall within the jurisdiction of the committee concerned 
A BILL 
To enhance United States diplomatic efforts with respect 
to Iran by imposing additional economic sanctions 
against Iran, 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 AND TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Stop Iran’s Nuclear Weapons Program Act of 2010’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
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Sec. 1. Short title and table of contents. 
Sec. 2. Findings. 
TITLE I—ADDITIONAL BILATERAL SANCTIONS AGAINST IRAN 
Sec. 101. Application to subsidiaries. 
Sec. 102. Additional export sanctions against Iran. 
Sec. 103. Temporary increase in fee for certain consular services. 
TITLE II—ADDITIONAL MEASURES 
Sec. 201. Elimination of certain tax incentives for oil companies investing in 
Iran. 
Sec. 202. Expansion of sanctions under the Iran Sanctions Act of 1996. 
TITLE III—APPLICATION OF SANCTIONS AGAINST AFFILIATES OF 
THE IRAN REVOLUTIONARY GUARD CORPS 
Sec. 301. Sanctions against affiliates of the Iran Revolutionary Guard Corps. 
Sec. 302. Measures against foreign persons or entities supporting the Iran Rev-
olutionary Guard Corps. 
Sec. 303. Special measures against foreign governments supporting the Iran 
Revolutionary Guards Corps. 
Sec. 304. Definitions. 
TITLE IV—OPPOSITION OF TRANSFER TO IRAN, NORTH KOREA, 
AND SYRIA OF GOODS, SERVICES, OR TECHNOLOGY RELEVANT 
TO THEIR CAPABILITY TO EXTRACT OR MILL URANIUM ORE 
Sec. 401. Statement of policy. 
Sec. 402. Reporting requirements under the Iran, North Korea, and Syria Non-
proliferation Act. 
Sec. 403. Conforming amendments. 
TITLE V—ROLLOVER OF GAIN FROM DIVESTING CERTAIN QUALI-
FIED SECURITIES OF BUSINESS ENTITIES ENGAGED IN DIS-
COURAGED ACTIVITIES IN IRAN OR SUDAN 
Sec. 501. Rollover of gain from divesting certain qualified securities of business 
entities engaged in discouraged activities in Iran or Sudan. 
TITLE VI—PROHIBITION ON UNITED STATES GOVERNMENT CON-
TRACTS AND INVESTMENT FOR COMPANIES CONDUCTING 
BUSINESS IN IRAN 
Sec. 601. Prohibition on United States Government contracts. 
Sec. 602. Authority of State and local governments to prohibit contracts. 
Sec. 603. United States pension plans. 
Sec. 604. Sunset. 
Sec. 605. Definitions. 
TITLE VII—TERMINATION OF LOAN DISBURSEMENTS TO IRAN 
FROM THE INTERNATIONAL BANK FOR RECONSTRUCTION AND 
DEVELOPMENT 
Sec. 701. Termination of loan disbursements to Iran from the International 
Bank for Reconstruction and Development. 
Sec. 702. United States opposition to new country assistance strategy for Iran. 
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Sec. 703. Sunset. 
Sec. 704. Rule of interpretation. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) On July 1, 2010, President Obama signed 
into law the Comprehensive Iran Sanctions, Ac-
countability, and Divestment Act of 2010 (Public 
Law 111–195). 
(2) In the wake of this new United States law 
and United Nations Security Council Resolution 
1929 on Iran, the European Union, Japan, South 
Korea, Australia, and other friends and allies of the 
United States also imposed significant economic 
sanctions on Iran. 
(3) The latest report by the Director General of 
the International Atomic Energy Agency to its 
Board of Directors, issued on September 6, 2010, 
notes that Iran has continued its record of insuffi-
cient cooperation with the agency, has continued to 
fail to answer questions posed by the agency regard-
ing potential non-civilian nuclear activities by Iran, 
and has failed to suspend sensitive nuclear activities, 
as required by successive United Nations Security 
Council resolutions. 
(4) While the United States and several like- 
minded countries have worked individually and in 
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concert to increase the diplomatic and economic iso-
lation of Iran to convince the Government of Iran to 
abandon sensitive nuclear activities, the United 
States and like-minded countries must do more in 
the coming months to achieve that goal. 
TITLE 
I—ADDITIONAL 
BILAT-
ERAL 
SANCTIONS 
AGAINST 
IRAN 
SEC. 101. APPLICATION TO SUBSIDIARIES. 
(a) IN GENERAL.—Except as provided in subsection 
(b), in any case in which an entity engages in an act out-
side the United States which, if committed in the United 
States or by a United States person, would violate Execu-
tive Order No. 12959 of May 6, 1995, Executive Order 
No. 13059 of August 19, 1997, section 103 of the Com-
prehensive Iran Sanctions, Accountability, and Divestment 
Act of 2010 (Public Law 111–195; 22 U.S.C. 8512), or 
any other prohibition on transactions with respect to Iran 
that is imposed under the International Emergency Eco-
nomic Powers Act (50 U.S.C. 1701 et seq.), the parent 
company of that entity shall be subject to the penalties 
for such violation to the same extent as if the parent com-
pany had engaged in that act. 
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(b) EXCEPTION.—Subsection (a) shall not apply to 
any act carried out under a contract or other obligation 
of any entity if— 
(1) the contract or obligation existed on the 
date of the enactment of this Act, unless such con-
tract or obligation is extended in time in any man-
ner or expanded to cover additional activities beyond 
the terms of the contract or other obligation as it ex-
isted on the date of the enactment of this Act; or 
(2) the parent company acquired that entity not 
knowing, and not having reason to know, that such 
contract or other obligation existed, unless such con-
tract or other obligation is extended in time in any 
manner or expanded to cover additional activities be-
yond the terms of such contract or other obligation 
as it existed at the time of such acquisition. 
(c) CONSTRUCTION.—Nothing in this section shall be 
construed as prohibiting the issuance of regulations, or-
ders, directives, or licenses under the Executive orders de-
scribed in subsection (a) or as being inconsistent with the 
authorities under the International Emergency Economic 
Powers Act. 
(d) DEFINITIONS.—In this section— 
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(1) the term ‘‘entity’’ means a partnership, as-
sociation, trust, joint venture, corporation, or other 
organization; 
(2) an entity is a ‘‘parent company’’ of another 
entity if it controls, directly or indirectly, that other 
entity and is a United States person; and 
(3) the term ‘‘United States person’’ means any 
United States citizen, any alien lawfully admitted for 
permanent residence to the United States, any entity 
organized under the laws of the United States, or 
any person in the United States. 
SEC. 102. ADDITIONAL EXPORT SANCTIONS AGAINST IRAN. 
Notwithstanding section 103(b)(2)(B)(iv) of the 
Comprehensive Iran Sanctions, Accountability, and Di-
vestment Act of 2010 (Public Law 111–195; 22 U.S.C. 
8512(b)(2)(B)(iv)) or any other provision of law, effective 
on the date of the enactment of this Act— 
(1) licenses to export or reexport goods, serv-
ices, or technology relating to civil aviation that are 
otherwise authorized by section 560.528 of title 31, 
Code of Federal Regulations, as in effect on the date 
of the enactment of this Act, may not be issued, and 
any such license issued before such date of enact-
ment is no longer valid; and 
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(2) goods, services, or technology described in 
paragraph (1) may not be exported or reexported. 
SEC. 103. TEMPORARY INCREASE IN FEE FOR CERTAIN 
CONSULAR SERVICES. 
(a) INCREASE IN FEE.—Notwithstanding any other 
provision of law, not later than 120 days after the date 
of the enactment of this Act, the Secretary of State shall 
increase by $1.00 the fee or surcharge assessed under sec-
tion 140(a) of the Foreign Relations Authorization Act, 
Fiscal Years 1994 and 1995 (Public Law 103–236; 8 
U.S.C. 1351 note) for processing machine readable non-
immigrant visas and machine readable combined border 
crossing identification cards and nonimmigrant visas. 
(b) DEPOSIT OF AMOUNTS.—Fees collected under the 
authority of subsection (a) shall be deposited in the Treas-
ury. 
(c) DURATION OF INCREASE.—The fee increase au-
thorized under subsection (a) shall terminate on the date 
that is one year after the date on which such fee is first 
collected. 
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TITLE II—ADDITIONAL 
MEASURES 
SEC. 201. ELIMINATION OF CERTAIN TAX INCENTIVES FOR 
OIL COMPANIES INVESTING IN IRAN. 
(a) IN GENERAL.—Subsection (h) of section 167 of 
the Internal Revenue Code of 1986 (relating to amortiza-
tion of geological and geophysical expenditures) is amend-
ed by adding at the end the following new paragraph: 
‘‘(6) DENIAL WHEN IRAN SANCTIONS IN EF-
FECT.— 
‘‘(A) IN GENERAL.—If sanctions are im-
posed under section 5(a) of the Iran Sanctions 
Act of 1996 (relating to sanctions with respect 
to the development of petroleum resources of 
Iran) on any member of an expanded affiliated 
group the common parent of which is a foreign 
corporation, paragraph (1) shall not apply to 
any expense paid or incurred by any such mem-
ber in any period during which the sanctions 
are in effect. 
‘‘(B) EXPANDED
AFFILIATED
GROUP.— 
For purposes of subparagraph (A), the term 
‘expanded affiliated group’ means an affiliated 
group as defined in section 1504(a), deter-
mined— 
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‘‘(i) by substituting ‘more than 50 
percent’ for ‘at least 80 percent’ each place 
it appears, and 
‘‘(ii) without regard to paragraphs 
(2), (3), and (4) of section 1504(b).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to expenses paid or incurred on 
or after January 1, 2010. 
SEC. 202. EXPANSION OF SANCTIONS UNDER THE IRAN 
SANCTIONS ACT OF 1996. 
(a) IN GENERAL.—Section 5(a) of the Iran Sanctions 
Act of 1996 (Public Law 104–172; 50 U.S.C. 1701 note) 
is amended— 
(1) in the heading, by inserting at the end be-
fore the period the following: ‘‘, ETC’’; and 
(2) by adding at the end the following new 
paragraphs: 
‘‘(4) OTHER
ACTIONS
RELATING
TO
PETRO-
LEUM RESOURCES OF IRAN.— 
‘‘(A) IN GENERAL.—Except as provided in 
subsection (f), the President shall impose 3 or 
more of the sanctions described in section 6(a) 
with respect to a person if the President deter-
mines that the person knowingly, on or after 
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the date of the enactment of the Stop Iran’s 
Nuclear Weapons Program Act of 2010— 
‘‘(i) enters into a long-term agreement 
to purchase petroleum resources from Iran; 
‘‘(ii) enters into an agreement to pro-
vide payment for future delivery of petro-
leum resources from Iran; or 
‘‘(iii) enters into an agreement with 
the National Iranian Oil Company, any of 
its affiliates, or any entity owned or con-
trolled by the Government of Iran to pro-
vide for the development of petroleum re-
sources wherever located. 
‘‘(B) DEFINITIONS.— 
‘‘(i) 
LONG-TERM
AGREEMENT.—In 
subparagraph (A)(i), the term ‘long-term 
agreement’ means a contract or other 
agreement that provides for delivery of pe-
troleum resources beginning more than 1 
year after the date of entry into the con-
tract or agreement (as the case may be). 
‘‘(ii) FUTURE
DELIVERY.—In sub-
paragraph (A)(ii), the term ‘future deliv-
ery’ means delivery that occurs more than 
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180 days after payment is effected under 
the agreement. 
‘‘(5) PURCHASE, SUBSCRIPTION TO, OR FACILI-
TATION OF THE ISSUANCE OF IRANIAN SOVEREIGN 
DEBT.—Except as provided in subsection (f), the 
President shall impose 3 or more of the sanctions 
described in section 6(a) with respect to a person if 
the President determines that the person knowingly, 
on or after the date of the enactment of the Stop 
Iran’s Nuclear Weapons Program Act of 2010, pur-
chases, subscribes to, or facilitates the issuance of— 
‘‘(A) Iranian sovereign debt, including Ira-
nian governmental bonds; or 
‘‘(B) debt of any entity owned or con-
trolled by the Iranian Government, including 
bonds’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall— 
(1) take effect on the date of the enactment of 
this Act; and 
(2) apply with respect to an investment or ac-
tivity described in subsection (a) of section 5 of the 
Iran Sanctions Act of 1996, as amended by this sec-
tion, that is commenced on or after such date of en-
actment. 
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TITLE 
III—APPLICATION 
OF 
SANCTIONS AGAINST AFFILI-
ATES OF THE IRAN REVOLU-
TIONARY GUARD CORPS 
SEC. 301. SANCTIONS AGAINST AFFILIATES OF THE IRAN 
REVOLUTIONARY GUARD CORPS. 
(a) PUBLICATION OF NAMES OF AFFILIATES IN FED-
ERAL REGISTER.—Not later than 90 days after the date 
of the enactment of this Act, and as appropriate there-
after, the President shall publish in the Federal Register 
the name of each foreign person or foreign entity for which 
there is credible information indicating that the person or 
entity is as an agent, alias, front, instrumentality, official, 
or affiliate of the Iran Revolutionary Guard Corps or is 
an individual serving as a representative of the Iran Revo-
lutionary Guard Corps. 
(b) APPLICATION OF EXISTING SANCTIONS AGAINST 
IRAN
TO AFFILIATES.—The President shall designate 
each foreign person or foreign entity identified in the Fed-
eral Register pursuant to subsection (a) for inclusion in 
the Annex to Executive Order 13382 (70 Fed. Reg. 
38567; relating to blocking property of weapons of mass 
destruction proliferators and their supporters) and shall 
apply to each such foreign person or foreign entity all ap-
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plicable sanctions of the United States contained in Exec-
utive Order 13382. 
(c) SANCTIONS UNDER EXECUTIVE ORDER 13438.— 
(1) PUBLICATION OF NAMES OF AFFILIATES IN 
FEDERAL REGISTER.—Not later than 90 days after 
the date of the enactment of this Act, and as appro-
priate thereafter, the President shall publish in the 
Federal Register the name of each foreign person or 
foreign entity— 
(A) for which there is credible information 
indicating that the person or entity is as an 
agent, alias, front, instrumentality, official, or 
affiliate of the Iran Revolutionary Guard Corps 
or is an individual serving as a representative 
of the Iran Revolutionary Guard Corps; and 
(B) for which there is credible evidence 
that the foreign person or foreign entity— 
(i) has committed, or poses a signifi-
cant risk of committing, an act or acts of 
violence that have the purpose or effect 
of— 
(I) threatening the peace or sta-
bility of Iraq or the Government of 
Iraq; or 
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(II) undermining efforts to pro-
mote economic reconstruction and po-
litical reform in Iraq or to provide hu-
manitarian assistance to the Iraqi 
people; 
(ii) has materially assisted, sponsored, 
or provided financial, material, logistical, 
or technical support for, or goods or serv-
ices in support of, such an act or acts of 
violence or any person whose property and 
interests in property are blocked pursuant 
to Executive Order 13438; or 
(iii) is owned or controlled by, or has 
acted or purported to act for or on behalf 
of, directly or indirectly, any person whose 
property and interests in property are 
blocked pursuant to Executive Order 
13438. 
(2) APPLICATION OF SANCTIONS UNDER EXEC-
UTIVE ORDER 13438.—The President shall apply to 
each foreign person or foreign entity identified in the 
Federal Register pursuant to paragraph (1) all ap-
plicable sanctions and measures of the United States 
contained in Executive Order 13438 (72 Fed. Reg. 
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39719; relating to blocking property of certain per-
sons who threaten stabilization efforts in Iraq). 
(d) EXCLUSION FROM UNITED STATES.—The Sec-
retary of State shall deny a visa to, and the Secretary of 
Homeland Security shall exclude from the United States, 
any alien who, on or after the date of the enactment of 
this Act, is a foreign person identified in the Federal Reg-
ister pursuant to subsection (a) or (c). 
(e) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to remove any sanction of the 
United States in force against the Iran Revolutionary 
Guard Corps as of the date of the enactment of this Act 
by reason of the fact that the Iran Revolutionary Guard 
Corps is an entity of the Government of Iran. 
SEC. 302. MEASURES AGAINST FOREIGN PERSONS OR ENTI-
TIES 
SUPPORTING 
THE 
IRAN 
REVOLU-
TIONARY GUARD CORPS. 
(a) NOTIFICATION.—Whenever the President deter-
mines that there is credible information indicating that a 
foreign person or foreign entity, on or after the date of 
the enactment of this Act, knowingly— 
(1) provided material support to the Iran Revo-
lutionary Guard Corps or any affiliated foreign per-
son or foreign entity identified pursuant to section 
301 (a) or (c), or 
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(2) conducted any commercial transaction or fi-
nancial transaction with the Iran Revolutionary 
Guards Corps or any affiliated foreign person or for-
eign entity identified pursuant to section 301 (a) or 
(c), 
the President shall submit to the appropriate congres-
sional committees a notification that contains the name 
of the foreign person or foreign entity (as the case may 
be). 
(b) FORM.—The President may submit the notifica-
tion required under subsection (a) in classified form. 
(c) EXECUTIVE ORDER 12938 SANCTIONS.—Not 
later than 60 days after the date on which the President 
provides notice to the appropriate congressional commit-
tees pursuant to subsection (a), the President shall apply 
to each foreign person or foreign entity identified in such 
notice, for such time as the President may determine, the 
measures set forth in section 4 of Executive Order 12938 
(59 Fed. Reg. 59099; relating to proliferation of weapons 
of mass destruction) and shall terminate such measures 
in accordance with the provisions of such section. 
(d) IEEPA SANCTIONS.—The President may exer-
cise the authorities the President has under section 203(a) 
of the International Emergency Economic Powers Act (50 
U.S.C. 1702(a)) to impose additional sanctions on each 
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foreign person or foreign entity identified pursuant to sub-
section (a) of this section, for such time as the President 
may determine, without regard to section 202 of that Act. 
(e) WAIVER.—The President may waive the applica-
tion of any measure described in subsection (c) with re-
spect to a foreign person or foreign entity if the Presi-
dent— 
(1)(A) determines that the person or entity has 
ceased the offending activity and has taken meas-
ures to prevent its recurrence; or 
(B) determines that it is vital to the national 
security interests of the United States to do so; and 
(2) submits to the appropriate congressional 
committees a report that contains the reasons for 
the determination. 
SEC. 303. SPECIAL MEASURES AGAINST FOREIGN GOVERN-
MENTS SUPPORTING THE IRAN REVOLU-
TIONARY GUARDS CORPS. 
(a) EXECUTIVE ORDER 12938 SANCTIONS.—With 
respect to any foreign entity identified pursuant to section 
302(a) that is a foreign government, the President shall, 
in addition to applying to the entity the measures de-
scribed in section 302(d), apply to the entity the measures 
set forth in section 5(b) of Executive Order 12938. 
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(b) WAIVER.—The President may waive the applica-
tion of any measure described in subsection (a) with re-
spect to a foreign entity if the President— 
(1)(A) determines that the entity has ceased 
the offending activity and has taken measures to 
prevent its recurrence; or 
(B) determines that it is vital to the national 
security interests of the United States to do so; and 
(2) submits to the appropriate congressional 
committees a report that contains the reasons for 
the determination. 
SEC. 304. DEFINITIONS. 
In this title: 
(1) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘‘appropriate congressional com-
mittees’’ means the Committee on Foreign Affairs of 
the House of Representatives and the Committee on 
Foreign Relations of the Senate. 
(2) FOREIGN PERSON.—The term ‘‘foreign per-
son’’ has the meaning given the term in section 14 
of the Iran Sanctions Act of 1996. 
(3) IRAN REVOLUTIONARY GUARD CORPS.—The 
term ‘‘Iran Revolutionary Guard Corps’’ includes the 
Iran Revolutionary Guard Corps-Qods Force. 
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TITLE 
IV—OPPOSITION 
OF 
TRANSFER TO IRAN, NORTH 
KOREA, 
AND 
SYRIA 
OF 
GOODS, SERVICES, OR TECH-
NOLOGY RELEVANT TO THEIR 
CAPABILITY TO EXTRACT OR 
MILL URANIUM ORE 
SEC. 401. STATEMENT OF POLICY. 
It shall be the policy of the United States— 
(1) to oppose the transfer to Iran, North 
Korea, and Syria of goods, services, or technology 
relevant to their capability to extract or mill ura-
nium ore; and 
(2) to work with like-minded countries to im-
pose restrictions on such transfers internationally. 
SEC. 402. REPORTING REQUIREMENTS UNDER THE IRAN, 
NORTH KOREA, AND SYRIA NONPROLIFERA-
TION ACT. 
Section 2(a) of the Iran, North Korea, and Syria 
Nonproliferation Act (50 U.S.C. 1701 note) is amended— 
(1) in paragraph (1), by redesignating subpara-
graphs (A) through (E) as clauses (i) through (v), 
respectively; 
(2) by redesignating paragraphs (1) and (2) as 
subparagraphs (A) and (B), respectively; 
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(3) in subparagraph (B), as redesignated— 
(A) by striking ‘‘paragraph (1)’’ and in-
serting ‘‘subparagraph (A)’’; and 
(B) by striking the period at the end and 
inserting ‘‘; or’’; 
(4) by striking all that precedes subparagraph 
(A), as redesignated, and inserting the following: 
‘‘(a) REPORTS.—The President shall, at the times 
specified in subsection (b), submit to the Committee on 
Foreign Affairs of the House of Representatives and the 
Committee on Foreign Relations of the Senate a report 
identifying every foreign person with respect to whom 
there is credible information indicating that person— 
‘‘(1) on or after January 1, 1999, transferred 
to or acquired from Iran, on or after January 1, 
2005, transferred to or acquired from Syria, or on 
or after January 1, 2006, transferred to or acquired 
from North Korea—’’; and 
(5) by adding at the end the following new 
paragraph: 
‘‘(2) on or after January 1, 2009, transferred 
to Iran, Syria, or North Korea goods, services, or 
technology that could assist efforts to extract or mill 
uranium ore within the territory or control of Iran, 
North Korea, or Syria.’’. 
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SEC. 403. CONFORMING AMENDMENTS. 
The Iran, North Korea, and Syria Nonproliferation 
Act (50 U.S.C. 1701 note) is further amended by striking 
‘‘Committee on International Relations’’ each place it ap-
pears and inserting ‘‘Committee on Foreign Affairs’’. 
TITLE V—ROLLOVER OF GAIN 
FROM 
DIVESTING 
CERTAIN 
QUALIFIED 
SECURITIES 
OF 
BUSINESS 
ENTITIES 
EN-
GAGED IN DISCOURAGED AC-
TIVITIES IN IRAN OR SUDAN 
SEC. 501. ROLLOVER OF GAIN FROM DIVESTING CERTAIN 
QUALIFIED SECURITIES OF BUSINESS ENTI-
TIES ENGAGED IN DISCOURAGED ACTIVITIES 
IN IRAN OR SUDAN. 
(a) IN GENERAL.—Part III of subchapter O of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
common nontaxable exchanges) is amended by adding at 
the end the following new section: 
‘‘SEC. 1046. ROLLOVER OF GAIN FROM DIVESTING CERTAIN 
QUALIFIED SECURITIES OF BUSINESS ENTI-
TIES ENGAGED IN DISCOURAGED ACTIVITIES 
IN IRAN OR SUDAN. 
‘‘(a) NONRECOGNITION OF GAIN.— 
‘‘(1) IN GENERAL.—In the case of any sale of 
any qualified security held by a taxpayer with re-
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spect to which such taxpayer elects the application 
of this section, in any business entity that is en-
gaged in an Iran discouraged activity or a Sudan 
discouraged activity, gain from such sale shall be 
recognized only to the extent that the amount real-
ized on such sale exceeds— 
‘‘(A) the cost of any qualified replacement 
property purchased by the taxpayer during the 
30-day period beginning on the date of such 
sale, reduced by 
‘‘(B) any portion of such cost previously 
taken into account under this section. 
‘‘(2) 
EXCEPTION
FOR
ORDINARY
INCOME 
GAIN.—This section shall not apply to any gain 
which is treated as ordinary income for purposes of 
this title. 
‘‘(3) EXCEPTION WHERE TAXPAYER OWNS CON-
TROLLING INTEREST IN THE BUSINESS ENTITY.— 
‘‘(A) IN
GENERAL.—Paragraph (1) shall 
not apply to any sale if, immediately before 
such sale, the taxpayer owns a controlling inter-
est in the business entity that is engaged in an 
Iran discouraged activity or a Sudan discour-
aged activity. 
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‘‘(B) CONTROLLING INTEREST.—For pur-
poses of subparagraph (A), the term ‘control-
ling interest’ means direct or indirect ownership 
of at least 50 percent of the total voting power 
and value of all classes of stock of a corpora-
tion. For purposes of the preceding sentence, 
the rules of paragraphs (1) and (5) of section 
267(c) shall apply. 
‘‘(C) AGGREGATION RULE.—For purposes 
of this paragraph, all members of the same con-
trolled group of corporations (within the mean-
ing of section 267(f)) and all persons under 
common control (within the meaning of section 
52(b) but determined by treating an interest of 
more than 50 percent as a controlling interest) 
shall be treated as 1 person. 
‘‘(b) DEFINITIONS AND SPECIAL RULES RELATING 
TO SECURITIES
AND REPLACEMENT PROPERTY.—For 
purposes of this section— 
‘‘(1) QUALIFIED SECURITY.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
security’ means any security held by a taxpayer 
in any business entity that is engaged in an 
Iran discouraged activity or a Sudan discour-
aged activity. 
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‘‘(B) EXCEPTION.—Such term shall not in-
clude any security purchased or otherwise ac-
quired after the date of the enactment of this 
section which, at the time of such purchase or 
acquisition, was issued by a business entity 
then engaged in an Iran discouraged activity or 
a Sudan discouraged activity. 
‘‘(C) SECURITY DEFINED.—The term ‘se-
curity’ has the meaning given such term by sec-
tion 165(g)(2). 
‘‘(2) QUALIFIED REPLACEMENT PROPERTY.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
replacement property’ means any security of a 
business entity that, on the date of purchase by 
the taxpayer— 
‘‘(i) is not engaged in an Iran discour-
aged activity or a Sudan discouraged activ-
ity on such date, 
‘‘(ii) is not a member of an expanded 
affiliated group, any member of which is 
engaged in an Iran discouraged activity or 
a Sudan discouraged activity on such date, 
and 
‘‘(iii) meets the requirements of sub-
paragraph (B). 
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‘‘(B) REPLACEMENT PROPERTY.—Property 
meets the requirements of this paragraph if, 
with respect to the sale of any security— 
‘‘(i) except as provided in clause (ii), 
in the case that the security is a share of 
stock in a corporation, the replacement 
property is a share of stock in a corpora-
tion, 
‘‘(ii) in the case that the security is a 
share of stock of a regulated investment 
company, real estate investment trust, 
hedge fund, investment partnership, or 
similar business entity, the replacement 
property is a share of stock in a regulated 
investment company, real estate invest-
ment trust, hedge fund, investment part-
nership, or similar business entity, 
‘‘(iii) in the case that the security is 
a right to subscribe for, or to receive, a 
share of stock in a corporation, the re-
placement property is a right to subscribe 
for, or to receive, a share of stock in a cor-
poration, and 
‘‘(iv) in the case that the security is 
a bond, debenture, note, or certificate, or 
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other evidence of indebtedness issued by a 
corporation, with interest coupons or in 
registered form, the replacement property 
is a bond, debenture, note, or certificate, 
or other evidence of indebtedness issued by 
a corporation, with interest coupons or in 
registered form. 
‘‘(C) DEEMED INVESTMENT IF INVESTING 
IN
ENTITIES
ENGAGED
IN
DISCOURAGED
AC-
TIVITIES.—Any regulated investment company, 
real estate investment trust, hedge fund, invest-
ment partnership, or similar business entity, 
which invests in the securities— 
‘‘(i) issued by a business entity deter-
mined to be engaging in Iran discouraged 
activities or Sudan discouraged activities, 
or 
‘‘(ii) issued by the government of 
Sudan or Iran or any agency thereof, 
shall be deemed to be a business entity engag-
ing in Iran discouraged activities or Sudan dis-
couraged activities. 
‘‘(D) BUSINESS
DECLARATION
OF
POL-
ICY.— 
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‘‘(i) IN
GENERAL.—Notwithstanding 
any other provision of this section, in the 
case of a business entity described in 
clause (iii), a security in such business en-
tity shall not be treated as qualified re-
placement property unless the business en-
tity has made the following declaration: ‘It 
is our policy not to make investments in 
business entities which engage in Iran dis-
couraged activities or Sudan discouraged 
activities as defined in section 1046 of the 
Internal Revenue Code of 1986, and to use 
due diligence to avoid making such invest-
ments. It is our policy to divest on or be-
fore December 31, 2010, from business en-
tities engaged in Iran discouraged activi-
ties and Sudan discouraged activities.’. 
‘‘(ii) NOT QUALIFIED SECURITY.—If a 
business entity described in clause (iii) has 
made the declaration specified in clause (i), 
then from the time of such declaration an 
interest in such business entity shall not be 
treated as a qualified security. 
‘‘(iii) 
BUSINESS
ENTITY
DE-
SCRIBED.—A business entity described in 
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this clause is a regulated investment com-
pany, real estate investment trust, hedge 
fund, investment partnership, or similar 
business entity. 
‘‘(E) EXPANDED
AFFILIATED
GROUP.— 
The term ‘expanded affiliated group’ means an 
affiliated group as defined in section 1504(a), 
determined— 
‘‘(i) by substituting ‘more than 50 
percent’ for ‘at least 80 percent’ each place 
it appears, and 
‘‘(ii) without regard to paragraphs (2) 
and (4) of section 1504(b). 
‘‘(F) BASIS ADJUSTMENTS.—If gain from 
any sale is not recognized by reason of sub-
section (a), such gain shall be applied to reduce 
(in the order acquired) the basis for deter-
mining gain or loss of any qualified replacement 
property which is purchased by the taxpayer 
during the 30-day period described in sub-
section (a). 
‘‘(G) HOLDING PERIOD.—For purposes of 
determining the period for which the taxpayer 
has held qualified replacement property the ac-
quisition of which resulted in the nonrecognition 
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under subsection (a) of any part of the gain re-
alized on the sale of a qualified security, there 
shall be included the period for which such 
qualified security had been held by the tax-
payer. 
‘‘(3) SPECIAL RULE FOR SECURITIES OF CER-
TAIN ENTITIES.— 
‘‘(A) IN GENERAL.—For any business enti-
ty described in subparagraph (C), a security in 
such business entity shall be treated as quali-
fied replacement property if the business entity 
has made the following declaration: ‘It is our 
policy not to make investments in any person 
having an investment in, or carrying on a trade 
or business (within the meaning of section 162) 
in or with, Iran and Sudan. This policy may or 
may not include investments concerning the 
provision of food, medicine, humanitarian serv-
ices in or to Iran or Sudan or investments con-
cerning marginalized areas of Sudan (as de-
fined in section 2 of the Sudan Accountability 
and Divestment Act of 2007 (121 Stat. 
2518)).’. 
‘‘(B) NOT
QUALIFIED
SECURITY.—If a 
business entity described in subparagraph (C) 
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has made the declaration specified in subpara-
graph (A), then from the time of such declara-
tion an interest in such business entity shall not 
be treated as a qualified security. 
‘‘(C) BUSINESS
ENTITY
DESCRIBED.—A 
business entity described in this subparagraph 
is a regulated investment company, real estate 
investment trust, hedge fund, investment part-
nership, or similar business entity. 
‘‘(D) CERTAIN BUSINESS ENTITIES AS RE-
PLACEMENT PROPERTY.—A business entity de-
scribed in subparagraph (C) making the dec-
laration described in subparagraph (A) may 
qualify as replacement property if it has adopt-
ed restrictions on investment in persons that in-
vest in or carrying on a trade or business (with-
in the meaning of section 162) in or with coun-
tries other than Iran and Sudan that are des-
ignated as state sponsors of terrorism under 
section 6(j) of the Export Administration Act of 
1979, section 40 of the Arms Export Control 
Act, or section 620A of the Foreign Assistance 
Act of 1961. 
‘‘(4) BUSINESS
ENTITY.—The term ‘business 
entity’ means any corporation, limited liability part-
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nership, limited liability company, or any other busi-
ness entity conducting business activities in which 
the taxpayer has purchased or can purchase securi-
ties. 
‘‘(c) DEFINITIONS AND RULES RELATING TO SUDAN 
DISCOURAGED ACTIVITY.—For purposes of this section, 
the term ‘Sudan discouraged activity’ means an invest-
ment in any business operation described in section 3(d) 
of the Sudan Accountability and Divestment Act of 2007 
(121 Stat. 2518). 
‘‘(d) DEFINITIONS AND RULES RELATING TO IRAN 
DISCOURAGED ACTIVITIES.—For purposes of this sec-
tion— 
‘‘(1) IRAN DISCOURAGED ACTIVITY.—The term 
‘Iran discouraged activity’ means— 
‘‘(A) an investment of $20,000,000 or 
more— 
‘‘(i) in the energy sector of Iran; or 
‘‘(ii) in a person that provides oil or 
liquefied natural gas tankers, or products 
used to construct or maintain pipelines 
used to transport oil or liquefied natural 
gas, for the energy sector in Iran; 
‘‘(B) an extension of $20,000,000 or more 
in credit to another person, for 45 days or 
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more, if that person will use the credit to invest 
in the energy sector in Iran; 
‘‘(C) except as provided in section 5(f) of 
the Iran Sanctions Act of 1996 (50 U.S.C. 
1701 note), an investment of $20,000,000 or 
more (or any combination of investments of at 
least $5,000,000 each, which in the aggregate 
equals or exceeds $20,000,000 in any 12-month 
period), that directly and significantly contrib-
uted to the enhancement of Iran’s ability to de-
velop petroleum resources of Iran; 
‘‘(D) except as provided in section 5(f) of 
the Iran Sanctions Act of 1996 (50 U.S.C. 
1701 note), the sale, lease, or provision to Iran 
of any goods, services, technology, information, 
or support that would allow Iran to maintain or 
expand its domestic production of refined petro-
leum resources, including any assistance in re-
finery construction, modernization, or repair; or 
‘‘(E) except as provided in section 5(f) of 
the Iran Sanctions Act of 1996 (50 U.S.C. 
1701 note), providing Iran with refined petro-
leum resources or engaging in any activity that 
could contribute to the enhancement of Iran’s 
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ability to import refined petroleum resources, 
including— 
‘‘(i) providing ships or shipping serv-
ices to deliver refined petroleum resources 
to Iran; 
‘‘(ii) underwriting or otherwise pro-
viding insurance or reinsurance for such 
activity; or 
‘‘(iii) financing or brokering such ac-
tivity. 
‘‘(2) 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 con-
tract for goods or services. 
‘‘(3) ENERGY SECTOR.—The term ‘energy sec-
tor’ refers to activities to develop petroleum or nat-
ural gas resources or nuclear power. 
‘‘(4) IRAN.—The term ‘Iran’ includes any agen-
cy or instrumentality of Iran. 
‘‘(e) DOING BUSINESS WITH TERRORISTS.— 
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‘‘(1) IN GENERAL.—For purposes of this sec-
tion— 
‘‘(A) A business entity has engaged in Iran 
discouraged activities if it conducts business 
with or makes any charitable donation to any 
Iranian person designated as a terrorist or to 
any foreign terrorist organization. 
‘‘(B) A business entity has engaged in 
Sudan discouraged activities if it conducts busi-
ness with or makes any charitable donation to 
any Sudanese person designated as a terrorist 
or to any foreign terrorist organization. 
‘‘(2) TERRORIST.—A person is designated as a 
terrorist for purposes of paragraph (1) if such per-
son is designated or otherwise individually identified 
in or pursuant to an Executive Order which is re-
lated to terrorism and issued under the authority of 
the International Emergency Economic Powers Act 
or section 5 of the United Nations Participation Act 
of 1945 for the purpose of imposing on such organi-
zation an economic or other sanction. 
‘‘(3) FOREIGN
TERRORIST
ORGANIZATION.— 
For purposes of paragraph (1), the term ‘foreign 
terrorist organization’ means an organization des-
ignated under section 219 of the Immigration and 
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Nationality Act (8 U.S.C. 1189) as a foreign ter-
rorist organization. 
‘‘(f) IDENTIFICATION OF BUSINESS ENTITIES EN-
GAGING IN IRAN DISCOURAGED ACTIVITIES OR SUDAN 
DISCOURAGED ACTIVITIES.— 
‘‘(1) PUBLICATION OF LIST.—For purposes of 
this section, the Secretary shall publish and update 
at least every six months a list of business entities 
engaging in any Sudan discouraged activities or Iran 
discouraged activities, or both. 
‘‘(2) REGULATIONS.—The Secretary shall issue 
regulations defining how a business entity shall not 
be deemed to be engaged in an Iran discouraged ac-
tivity or Sudan discouraged activity, if— 
‘‘(A) with regard to activities on the date 
this section becomes effective, the business enti-
ty limits its activity to continuing existing con-
tracts, without extension or expansion (except 
that an investment (as defined in section 14 of 
the Iran Sanctions Act of 1996) that would 
subject a business entity to sanctions under sec-
tion 5 of the Iran Sanctions Act of 1996 shall 
be considered an Iran discouraged activity, not-
withstanding contracts entered into prior to the 
effective date of this section), and 
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‘‘(B) with regard to any Iran discouraged 
activity or Sudan discouraged activity carried 
on under contracts entered into or expanded 
after the effective date of this section, the con-
tract was entered into at a time when the busi-
ness entity did not own or control the sub-
sidiary business entity, and after acquiring such 
ownership or control the business entity has not 
extended or expanded or renewed such contract. 
‘‘(3) TAXPAYER SELF-HELP.—Until such time 
as the Secretary publishes a list of those engaging 
in Iran discouraged activities or Sudan discouraged 
activities or if the Secretary fails to update that list 
as required in paragraph (1), the taxpayer may de-
termine, using credible, publicly available informa-
tion, which business entities engage in an Iran dis-
couraged activity or a Sudan discouraged activity. 
‘‘(g) IMPROVEMENT IN THE ACTIONS OF THE GOV-
ERNMENT OF THE SUDAN.—Effective on the date when 
the President certifies under a section 12 of the Sudan 
Accountability and Divestment Act of 2007 (121 Stat. 
2523), subsection (a) shall not apply to any Sudan dis-
couraged activity after such date. 
‘‘(h) IMPROVEMENT IN THE ACTIONS OF THE GOV-
ERNMENT OF IRAN.— 
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‘‘(1) 
TERMINATION
OF
NONRECOGNITION 
TREATMENT.—Effective on the date when the re-
quirements described in paragraph (2) are met, sub-
section (a) shall not apply to any Iran discouraged 
activity after such date. 
‘‘(2) REQUIREMENTS.—The requirements de-
scribed in this paragraph are— 
‘‘(A) a declaration by the President which 
states that, in the opinion of the President, 
Iran is no longer engaging in efforts to develop 
or retain weapons of mass destruction, and has 
not developed and is not developing the capacity 
to enrich or reprocess uranium or plutonium, 
and 
‘‘(B) a determination by the Secretary of 
State that Iran should no longer be listed as a 
state sponsor of acts of international terrorism 
pursuant to section 6(j) of the Export Adminis-
tration Act of 1979, section 620A of the For-
eign Assistance Act of 1961, section 40 of the 
Arms Export Control Act, or any other provi-
sion of law.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for part III of subchapter O of chapter 1 of such Code 
is amended by adding at the end the following new item: 
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