[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2347 Reported in House (RH)]






                                                 Union Calendar No. 179
110th CONGRESS
  1st Session
                                H. R. 2347

                      [Report No. 110-277, Part I]

 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, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 16, 2007

 Mr. Frank of Massachusetts (for himself, Mr. Lantos, Mr. Sherman, Mr. 
 Shays, Mr. Lynch, Mr. Ackerman, Mr. Klein of Florida, and Mr. Wexler) 
 introduced the following bill; which was referred to the Committee on 
Financial Services, and in addition to the Committees on Education and 
     Labor and Oversight and Government Reform, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
  of such provisions as fall within the jurisdiction of the committee 
                               concerned

                             July 30, 2007

 Additional sponsors: Mr. Marshall, Mr. Baca, Mr. Capuano, Mr. Berman, 
Ms. Ros-Lehtinen, Mr. Gutierrez, Ms. Berkley, Mr. Hodes, Mr. Honda, Ms. 
   Wasserman Schultz, Mr. Pallone, Mr. Hastings of Florida, Mr. Van 
 Hollen, Mr. Culberson, Mr. Fossella, Mr. Tim Murphy of Pennsylvania, 
    Mr. Rangel, Mr. Gerlach, Mr. Burton of Indiana, Mrs. Drake, Mr. 
 McHenry, Mr. Cantor, Mr. Platts, Mr. Renzi, Mr. Barrow, Mr. Franks of 
  Arizona, Mr. Perlmutter, Mr. McNerney, Mr. Engel, Mr. Michaud, Mr. 
    Patrick J. Murphy of Pennsylvania, Ms. Harman, Mr. Ramstad, Mr. 
Bartlett of Maryland, Mr. Knollenberg, Ms. Lee, and Mr. Garrett of New 
                                 Jersey

                             July 30, 2007

  Reported from the Committee on Financial Services with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

                             July 30, 2007

 Committees on Education and Labor and Oversight and Government Reform 
discharged; committed to the Committee of the Whole House on the State 
                 of the Union and ordered to be printed
[For text of introduced bill, see copy of bill as introduced on May 16, 
                                 2007]

_______________________________________________________________________

                                 A BILL


 
 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, 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 U.S. CAPITAL MARKETS.

    (a) List of Persons Investing in Iran Energy Sector.--
            (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 shall 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, and each person that is an international 
        financial institution that, as of the date of the publication, 
        has any investment in the energy sector in Iran. 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 his 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 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 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 a designee of the President, determines that 
        the person no longer has an investment of more than $20,000,000 
        in the energy sector in Iran.
    (b) Publication on Website.--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.
    (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 most recent 
                list published under section 3(a)(1), as modified under 
                section 3(a)(4); and
                    (B) persons having an investment in, or carrying on 
                a trade or business (within the meaning of section 162 
                of the Internal Revenue Code of 1986) in or with, Iran.
            (2) Applicability.--This subsection applies to measures 
        adopted by a State or local government before, on, or after the 
        date of the enactment of this Act.
            (3) 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 by a State or local government.
                    (C) Assets of a state or local government.--The 
                term ``assets of the State or local government'' refers 
                to assets that the State or local government controls.
            (4) Additional definition.--For purposes of paragraph 
        (1)(B), the term ``investment'' means the acquisition of 
        property or assets for the production of revenue.
    (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 except to the extent that a person is unable to comply with 
both the measure and the 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 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. SENSE OF THE CONGRESS REGARDING THRIFT SAVINGS PLAN.

    It is the sense of the Congress that the Federal Retirement Thrift 
Investment Board should initiate efforts to provide a terror-free 
international investment option among the funds of the Thrift Savings 
Fund that would invest in stocks in which the International Stock Index 
Investment Fund may invest under section 8438(b)(4) of title 5, United 
States Code, other than the stock of companies that do business in any 
country the government of which the Secretary of State has determined, 
for purposes of section 6(j) of the Export Administration Act of 1979 
(as continued in effect pursuant to the International Emergency 
Economic Powers Act), section 40 of the Arms Export Control Act, 
section 620A of the Foreign Assistance Act of 1961, or other provision 
of law, is a government that has repeatedly provided support for acts 
of international terrorism.

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.
            (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 an international financial 
                institution; 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 or Puerto Rico, the 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; and
                            (iii) 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.
            (6) International financial institution.--The term 
        ``international financial institution'' means the International 
        Bank for Reconstruction and Development, the International 
        Monetary Fund, and the United Nations.

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.
                                                 Union Calendar No. 179

110th CONGRESS

  1st Session

                               H. R. 2347

                      [Report No. 110-277, Part I]

_______________________________________________________________________

                                 A BILL

 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, and for other purposes.

_______________________________________________________________________

                             July 30, 2007

  Reported from the Committee on Financial Services with an amendment

                             July 30, 2007

Committed to the Committee of the Whole House on the State of the Union 
                       and ordered to be printed