2023 California Code › Public Contract Code - PCC › DIVISION 2 - GENERAL PROVISIONS › PART 1 - ADMINISTRATIVE PROVISIONS › CHAPTER 2.7 - Iran Contracting Act of 2010 › Section 2201.

2201. The Legislature hereby finds and declares all of the following:
(a) In imposing United States sanctions on Iran, Congress and the President have determined that the illicit nuclear activities of the Government of Iran, combined with its development of unconventional weapons and ballistic missiles, and its support of international terrorism, represent a serious threat to the security of the United States, Israel, and other United States allies in Europe, the Middle East, and around the world.
(b) On September 9, 2009, it was reported that American intelligence agencies have concluded that Iran has already created enough nuclear fuel to develop a nuclear weapon, and United States Ambassador to the International Atomic Energy Agency Glyn Davies declared that Iran had achieved “possible breakout capacity.”
(c) On September 21, 2009, Iran sent a letter to the International Atomic Energy Agency acknowledging that it is considering a previously undeclared “new pilot fuel enrichment plan.”
(d) On Sept. 25, 2009, President Barack H. Obama, joined by Prime Minister Gordon Brown of Britain and President Nicolas Sarkozy of France, stated that the secret plant “represents a direct challenge to the basic foundation of the nonproliferation regime” and “deepens a growing concern that Iran is refusing to live up to those international responsibilities, including specifically revealing all nuclear-related activities. As the international community knows, this is not the first time that Iran has concealed information about its nuclear program.”
(e) The International Atomic Energy Agency has repeatedly called attention to Iran’s unlawful nuclear activities, and, as a result, the United Nations Security Council has adopted a range of sanctions designed to encourage the Government of Iran to cease those activities and comply with its obligations under the Treaty on the Non-Proliferation of Nuclear Weapons (commonly known as the “Nuclear Non-Proliferation Treaty”).
(f) On July 1, 2010, President Barack Obama signed into law H.R. 2194, the “Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010” (Public Law 111-195), which expressly authorizes states and local governments to prevent investment in, including prohibiting entry into or renewing contracts with, companies operating in Iran’s energy sector with investments that have the result of directly or indirectly supporting the efforts of the Government of Iran to achieve nuclear weapons capability.
(g) On October 7, 2008, then-Senator Obama stated, “Iran right now imports gasoline, even though it’s an oil producer, because its oil infrastructure has broken down. If we can prevent them from importing the gasoline that they need and the refined petroleum products, that starts changing their cost-benefit analysis. That starts putting the squeeze on them.”
(h) The serious and urgent nature of the threat from Iran demands that states, local governments, educational institutions, and private institutions work together with the federal government and American allies to do everything possible diplomatically, politically, and economically to prevent Iran from acquiring a nuclear weapons capability.
(i) There are moral and reputational reasons for this state and local governments to not engage in business with foreign companies that have business activities benefiting foreign states, such as Iran, that commit egregious violations of human rights, proliferate nuclear weapons capabilities, and support terrorism.
(j) It is the responsibility of the state to decide how, where, and by whom its financial resources should be invested. It also is the prerogative of the state to not invest in, or do business with, companies whose investments with Iran place those companies at risk from the impact of economic sanctions imposed upon the Government of Iran for sponsoring terrorism, committing egregious violations of human rights, and engaging in illicit nuclear weapons development.
(k) The human rights situation in Iran has steadily deteriorated in 2009, as punctuated by transparently fraudulent elections and the brutal repression and murder, arbitrary arrests, and show trials of peaceful dissidents.
(l) During the postelection protests in June 2009, the Iranian government imposed widespread and unjustifiable restrictions on telecommunications services, denying the citizens of Iran their rights and liberties to free speech.
(m) On October 14, 2007, Governor Arnold Schwarzenegger stated his intention to support “efforts to further prevent terrorism” when signing Assembly Bill 221, which prohibits the state’s pension funds from investing in companies with active business in Iran.
(n) This state currently honors contracts with foreign companies that may be at financial risk due to business ties with foreign states, such as Iran, that are involved in the proliferation of weapons of mass destruction, commit human rights violations, and support terrorism.
(o) The concerns of the State of California regarding Iran are strictly the result of the actions of the Government of Iran.
(p) The people of the State of California declare all of the following:
(1) We have feelings of friendship for the people of Iran.
(2) We regret that developments in recent decades have created impediments to that friendship.
(3) We hold the people of Iran, their culture, and their ancient and rich history in the highest esteem.
(q) In order to effectively address the need for the governments of this state to respond to the policies of Iran in a uniform fashion, prohibiting contracts with persons engaged in investment activities in the energy sector of Iran must be accomplished on a statewide basis, and, therefore, the subject is a matter of statewide concern rather than a municipal affair.
(r) It is the intent of the Legislature to implement the authority granted under Section 202 of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (Public Law 111-195).
(Added by Stats. 2010, Ch. 573, Sec. 1. (AB 1650) Effective January 1, 2011. Conditionally inoperative as prescribed by Stats. 2010, Ch. 573, Sec. 2.)