[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2347 Referred in Senate (RFS)]

  1st Session
                                H. R. 2347


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             August 1, 2007

                                Received

                             August 3, 2007

   Read twice and referred to the Committee on Banking, Housing, and 
                             Urban Affairs

_______________________________________________________________________

                                 AN ACT


 
 To authorize State and local governments to direct divestiture from, 
and prevent investment in, companies with investments of $20,000,000 or 
     more in Iran's energy sector, companies that sell arms to the 
Government of Iran, and financial institutions that extend $20,000,000 
 or more in credit to the Government of Iran for 45 days or more, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Iran Sanctions Enabling Act of 
2007''.

SEC. 2. FINDINGS.

    The Congress finds as follows:
            (1) The Convention on the Prevention and Punishment of the 
        Crime of Genocide, completed at Paris, December 9, 1948 
        (commonly referred to as the ``Genocide Convention'') defines 
        genocide as, among other things, the act of killing members of 
        a national, ethnic, racial, or religious group with the intent 
        to destroy, in whole or in part, the targeted group. In 
        addition, the Genocide Convention also prohibits conspiracy to 
        commit genocide, as well as ``direct and public incitement to 
        commit genocide''.
            (2) 133 member states of the United Nations have ratified 
        the Genocide Convention and thereby pledged to prosecute 
        individuals who violate the Genocide Convention's prohibition 
        on incitement to commit genocide, as well as those individuals 
        who commit genocide directly.
            (3) On October 27, 2005, at the World Without Zionism 
        Conference in Tehran, Iran, the President of Iran, Mahmoud 
        Ahmadinejad, called for Israel to be ``wiped off the map,'' 
        described Israel as ``a disgraceful blot [on] the face of the 
        Islamic world,'' and declared that ``[a]nybody who recognizes 
        Israel will burn in the fire of the Islamic nation's fury.'' 
        President Ahmadinejad has subsequently made similar types of 
        comments, and the Government of Iran has displayed inflammatory 
        symbols that express similar intent.
            (4) On December 23, 2006, the United Nations Security 
        Council unanimously approved Resolution 1737, which bans the 
        supply of nuclear technology and equipment to Iran and freezes 
        the assets of certain organizations and individuals involved in 
        Iran's nuclear program, until Iran suspends its enrichment of 
        uranium, as verified by the International Atomic Energy Agency.
            (5) Following Iran's failure to comply with Resolution 
        1737, on March 24, 2007, the United Nations Security Council 
        unanimously approved Resolution 1747, to tighten sanctions on 
        Iran, imposing a ban on arms sales and expanding the freeze on 
        assets, in response to the country's uranium-enrichment 
        activities.
            (6) There are now signs of domestic discontent within Iran, 
        and targeted financial and economic measures could produce 
        further political pressure within Iran. According to the 
        Economist Intelligence Unit, the nuclear crisis ``is imposing a 
        heavy opportunity cost on Iran's economic development, slowing 
        down investment in the oil, gas, and petrochemical sectors, as 
        well as in critical infrastructure projects, including 
        electricity''.
            (7) Targeted financial measures represent one of the 
        strongest non-military tools available to convince Tehran that 
        it can no longer afford to engage in dangerous, destabilizing 
        activities such as its nuclear weapons program and its support 
        for terrorism.
            (8) Foreign persons that have invested in Iran's energy 
        sector, despite Iran's support of international terrorism and 
        its nuclear program, have provided additional financial means 
        for Iran's activities in these areas, and many United States 
        persons have unknowingly invested in those same foreign 
        persons.
            (9) There is an increasing interest by States, local 
        governments, educational institutions, and private institutions 
        to seek to disassociate themselves from companies that directly 
        or indirectly support the Government of Iran's efforts to 
        achieve a nuclear weapons capability.
            (10) Policy makers and fund managers may find moral, 
        prudential, or reputational reasons to divest from companies 
        that accept the business risk of operating in countries that 
        are subject to international economic sanctions or that have 
        business relationships with countries, governments, or entities 
        with which any United States company would be prohibited from 
        dealing because of economic sanctions imposed by the United 
        States.

SEC. 3. TRANSPARENCY IN CAPITAL MARKETS.

    (a) List of Persons Investing in Iran Energy Sector or Selling arms 
to the Government of Iran.--
            (1) Publication of list.--Not later than 6 months after the 
        date of the enactment of this Act and every 6 months 
        thereafter, the President or a designee of the President shall, 
        using only publicly available (including proprietary) 
        information, ensure publication in the Federal Register of a 
        list of each person, whether within or outside of the United 
        States, that, as of the date of the publication, has an 
        investment of more than $20,000,000 in the energy sector in 
        Iran, sells arms to the Government of Iran, or is a financial 
        institution that extends $20,000,000 or more in credit to the 
        Government of Iran for 45 days or more. To the extent 
        practicable, the list shall include a description of the 
        investment made by each such person, including the dollar 
        value, intended purpose, and status of the investment, as of 
        the date of the publication.
            (2) Prior notice to persons.--The President or a designee 
        of the President shall, at least 30 days before the list is 
        published under paragraph (1), notify each person that the 
        President or the designee, as the case may be, intends to 
        include on the list.
            (3) Delay in including persons on the list.--After 
        notifying a person under paragraph (2), the President or a 
        designee of the President may delay including that person on 
        the list for up to 60 days if the President or the designee 
        determines and certifies to the Congress that the person has 
        taken specific and effective actions to terminate the 
        involvement of the person in the activities that resulted in 
        the notification under paragraph (2).
            (4) Removal of persons from the list.--The President or a 
        designee of the President may remove a person from the list 
        before the next publication of the list under paragraph (1) if 
        the President or the designee determines that the person does 
        not have an investment of more than $20,000,000 in the energy 
        sector in Iran, does not sell arms to the Government of Iran, 
        and is not a financial institution that extends $20,000,000 or 
        more in credit to the Government of Iran for 45 days or more.
    (b) Publication on Website.--The President or a designee of the 
President shall ensure that the list is published on an appropriate 
government website, updating the list as necessary to take into account 
any person removed from the list under subsection (a)(4).
    (c) Definition.--In this section, the term ``investment'' has the 
meaning given that term in section 14(9) of the Iran Sanctions Act (50 
U.S.C. 1701 App.).

SEC. 4. AUTHORITY OF STATE AND LOCAL GOVERNMENTS TO DIVEST FROM CERTAIN 
              COMPANIES INVESTED IN IRAN'S ENERGY SECTOR.

    (a) Statement of Policy.--It is the policy of the United States to 
support the decision of State governments, local governments, and 
educational institutions to 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, persons that sell arms to the 
Government of Iran, and financial institutions that extend $20,000,000 
or more in credit to the Government of Iran for 45 days or more.
    (b) Authority to Divest.--
            (1) In general.--Notwithstanding any other provision of 
        law, a State or local government may adopt and enforce measures 
        to divest the assets of the State or local government from, or 
        prohibit investment of the assets of the State or local 
        government in--
                    (A) persons that are included on the list most 
                recently published under section 3(a)(1), as modified 
                under section 3(a)(4);
                    (B) persons that sell arms to the Government of 
                Iran;
                    (C) financial institutions that extend $20,000,000 
                or more in credit to the Government of Iran for 45 days 
                or more; and
                    (D) persons that are included on any list of 
                entities with investments in Iran, entities doing 
                business in Iran, or entities doing business with the 
                Government of Iran, which is issued pursuant to a law 
                that--
                            (i) authorizes a State or local government 
                        to divest from, or prohibits a State or local 
                        government from investing assets in, the 
                        persons; and
                            (ii) is enacted by a State or local 
                        government on or before the first publication 
                        of a list under section 3.
            (2) Definitions.--In this subsection:
                    (A) Investment.--The ``investment'' of assets 
                includes--
                            (i) a commitment or contribution of assets; 
                        and
                            (ii) a loan or other extension of credit of 
                        assets.
                    (B) Assets.--The term ``assets'' refers to public 
                monies and includes any pension, retirement, annuity, 
                or endowment fund, or similar instrument, that is 
                controlled, directly or indirectly, by a State or local 
                government.
    (c) Preemption.--A measure of a State or local government that is 
authorized by subsection (b) is not preempted by any Federal law or 
regulation.

SEC. 5. SAFE HARBOR FOR CHANGES OF INVESTMENT POLICIES BY MUTUAL FUNDS.

    Section 13 of the Investment Company Act of 1940 (15 U.S.C. 80a-13) 
is amended by adding at the end the following new subsection:
    ``(c) Safe Harbor for Changes in Investment Policies.--
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 person providing services to such 
registered investment company (including its investment adviser), or 
any employee, officer, or director thereof, based solely upon the 
investment company divesting from, or avoiding investing in, securities 
issued by companies that are included on the most recent list published 
under section 3(a)(1) of the Iran Sanctions Enabling Act of 2007, as 
modified under section 3(b) of that Act. For purposes of this 
subsection the term `person' shall include the Federal government, and 
any State or political subdivision of a State.''.

SEC. 6. SAFE HARBOR FOR CHANGES OF INVESTMENT POLICIES BY EMPLOYEE 
              BENEFIT PLANS.

    Section 502 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1132) is amended by adding at the end the following new 
subsection:
    ``(n) No person shall be treated as breaching any of the 
responsibilities, obligations, or duties imposed upon fiduciaries by 
this title, and no action may be brought under this section against any 
person, for divesting plan assets from, or avoiding investing plan 
assets in, persons that are included on the most recent list published 
under section 3(a)(1) of the Iran Sanctions Enabling Act, as modified 
under section 3(a)(4) of such Act.''.

SEC. 7. RULE OF INTERPRETATION.

    Nothing in this Act shall be interpreted to limit the authority of 
any person to divest, or avoid investment in, any asset, or to adopt or 
enforce any measure to do so.

SEC. 8. DEFINITIONS.

    In this Act:
            (1) Iran.--the term ``Iran'' includes any agency or 
        instrumentality of Iran.
            (2) Energy sector.--The term ``energy sector'' refers to 
        activities to develop petroleum or natural gas resources, or 
        nuclear power.
            (3) Person.--The term ``person'' means--
                    (A) a natural person as well as a corporation, 
                business association, partnership, society, trust, any 
                other nongovernmental entity, organization, or group;
                    (B) any governmental entity or instrumentality of a 
                government, including a multilateral development 
                institution (as defined in section 1701(c)(3) of the 
                International Financial Institutions Act); and
                    (C) any successor, subunit, or subsidiary of any 
                entity described in subparagraph (A) or (B).
            (4) State.--The term ``State'' includes 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.
            (5) State or local government.--
                    (A) In general.--The term ``State or local 
                government'' includes--
                            (i) any State and any agency or 
                        instrumentality thereof;
                            (ii) any local government within a State, 
                        and any agency or instrumentality thereof;
                            (iii) any other governmental 
                        instrumentality; and
                            (iv) any public institution of higher 
                        education.
                    (B) Public institution of higher education.--The 
                term ``public institution of higher education'' means a 
                public institution of higher education within the 
                meaning of the Higher Education Act of 1965.

SEC. 9. SUNSET.

    This Act shall terminate 30 days after the date on which the 
President has certified to Congress that--
            (1) the Government of Iran has ceased providing support for 
        acts of international terrorism and no longer satisfies the 
        requirements for designation 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 1961, 
        section 40 of the Arms Export Control Act, or any other 
        provision of law; and
            (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 July 31, 2007.

            Attest:

                                            LORRAINE C. MILLER,

                                                                 Clerk.