No Defense Contracts for Terror Profiteers Act of 2016

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``No Defense Contracts for Terror 
Profiteers Act of 2016''.

SEC. 2. LIMITATION ON USE OF FUNDS AVAILABLE TO THE DEPARTMENT OF 
              DEFENSE FOR FISCAL YEAR 2017 TO PROCURE, OR ENTER INTO 
              ANY CONTRACT FOR THE PROCUREMENT OF, ANY GOODS OR 
              SERVICES FROM PERSONS THAT PROVIDE MATERIAL SUPPORT TO 
              CERTAIN IRANIAN PERSONS.

    (a) Limitation.--No funds available to the Department of Defense 
for fiscal year 2017 may be used to procure, or enter into any contract 
for the procurement of, any goods or services from any person that 
provides material support to, including engaging in a significant 
transaction or transactions with, a covered Iranian person during such 
fiscal year.
    (b) Certification.--The Federal Acquisition Regulation shall be 
revised to require a certification from each person that is a 
prospective contractor that such person does not engage in any of the 
conduct described in subsection (a). Such revision shall apply with 
respect to contracts in an amount greater than the simplified 
acquisition threshold (as defined in section 134 of title 41, United 
States Code) for which solicitations are issued on or after the date 
that is 90 days after the date of the enactment of this Act.
    (c) Waiver.--The Secretary of Defense, in consultation with the 
Secretary of State and the Secretary of the Treasury, may, on a case-
by-case basis, waive the limitation in subsection (a) with respect to a 
person if the Secretary of Defense, in consultation with the Secretary 
of State and the Secretary of the Treasury--
            (1) determines that the waiver is important to the national 
        security interest of the United States; and
            (2) submits to the appropriate committees of Congress a 
        notification of, and detailed justification for, the waiver not 
        less than 30 days before the date on which the waiver is to 
        take effect.
    (d) Definitions.--In this section:
            (1) Appropriate committees of congress.--The term 
        ``appropriate committees of Congress'' means--
                    (A) the Committee on Armed Services and the 
                Committee on Foreign Relations of the Senate; and
                    (B) the Committee on Armed Services and the 
                Committee on Foreign Affairs of the House of 
                Representatives.
            (2) Covered iranian person.--The term ``covered Iranian 
        person'' means an Iranian person that--
                    (A) is included on the list of specially designated 
                nationals and blocked persons maintained by the Office 
                of Foreign Assets Control of the Department of the 
                Treasury and the property and interests in property of 
                which are blocked pursuant to the International 
                Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) 
                for acting on behalf of or at the direction of, or 
                being owned or controlled by, the Government of Iran;
                    (B) is included on the list of persons identified 
                as blocked solely pursuant to Executive Order 13599; or
                    (C) in the case of an Iranian person described in 
                paragraph (3)(B)--
                            (i) is owned, directly or indirectly, by--
                                    (I) Iran's Revolutionary Guard 
                                Corps, or any agent or affiliate 
                                thereof; or
                                    (II) one or more other Iranian 
                                persons that are included on the list 
                                of specially designated nationals and 
                                blocked persons as described in 
                                subparagraph (A) if such Iranian 
                                persons collectively own a 25 percent 
                                or greater interest in the Iranian 
                                person; or
                            (ii) is controlled, managed, or directed, 
                        directly or indirectly, by Iran's Revolutionary 
                        Guard Corps, or any agent or affiliate thereof, 
                        or by one or more other Iranian persons 
                        described in clause (i)(II).
            (3) Iranian person.--The term ``Iranian person'' means--
                    (A) an individual who is a national of Iran; or
                    (B) an entity that is organized under the laws of 
                Iran or otherwise subject to the jurisdiction of the 
                Government of Iran.
            (4) Person.--The term ``person'' has the meaning given such 
        term in section 560.305 of title 31, Code of Federal 
        Regulations, as such section 560.305 was in effect on April 22, 
        2016.
            (5) Significant transaction or transactions.--The term 
        ``significant transaction or transactions'' shall be 
        determined, for purposes of this section, in accordance with 
        section 561.404 of title 31, Code of Federal Regulations, as 
        such section 561.404 was in effect on January 1, 2016.

Summary: No Defense Contracts for Terror Profiteers Act of 2016 This bill prohibits funds available to the Department of Defense (DOD) for FY2017 from being used to procure, or enter into a contract to procure, goods or services from any person that provides material support to a covered Iranian person during such fiscal year.   A &quot;covered Iranian person&quot; includes an Iranian person that is: (1) included on the list of designated nationals and blocked persons maintained by the Office of Foreign Assets Control of the Department of the Treasury for acting on behalf of, or being owned or controlled by, the government of Iran; or (2) owned or controlled by Iran's Revolutionary Guard Corps. The bill requires the Federal Acquisition Regulation to be revised to require a person with a prospective contract of more than $100,000 to certify that the person does not engage in prohibited conduct with a covered Iranian person. DOD may, on a case-by-case basis, waive such prohibition for national security reasons but must provide Congress with notice before the waiver takes effect.