[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2271 Placed on Calendar Senate (PCS)]






                                                       Calendar No. 458
110th CONGRESS
  1st Session
                                S. 2271

                          [Report No. 110-213]

To authorize State and local governments to divest assets in companies 
 that conduct business operations in Sudan, to prohibit United States 
   Government contracts with such companies, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 31, 2007

 Mr. Dodd, from the Committee on Banking, Housing, and Urban Affairs, 
 reported the following original bill; which was read twice and placed 
                            on the calendar

_______________________________________________________________________

                                 A BILL


 
To authorize State and local governments to divest assets in companies 
 that conduct business operations in Sudan, to prohibit United States 
   Government contracts with such companies, 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 ``Sudan Accountability and Divestment 
Act of 2007''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committee on Banking, Housing, and Urban 
                Affairs, the Committee on Foreign Relations, and the 
                Select Committee on Intelligence of the Senate; and
                    (B) the Committee on Financial Services, the 
                Committee on Foreign Affairs, and the Permanent Select 
                Committee on Intelligence of the House of 
                Representatives.
            (2) Business operations.--The term ``business operations'' 
        means engaging in commerce in any form in Sudan, including by 
        acquiring, developing, maintaining, owning, selling, 
        possessing, leasing, or operating equipment, facilities, 
        personnel, products, services, personal property, real 
        property, or any other apparatus of business or commerce.
            (3) Executive agency.--The term ``executive agency'' has 
        the meaning given the term in section 4 of the Office of 
        Federal Procurement Policy Act (41 U.S.C. 403).
            (4) Government of sudan.--The term ``Government of 
        Sudan''--
                    (A) means the government in Khartoum, Sudan, which 
                is led by the National Congress Party (formerly known 
                as the National Islamic Front) or any successor 
                government formed on or after October 13, 2006 
                (including the coalition National Unity Government 
                agreed upon in the Comprehensive Peace Agreement for 
                Sudan); and
                    (B) does not include the regional government of 
                southern Sudan.
            (5) Marginalized populations of sudan.--The term 
        ``marginalized populations of Sudan'' refers to--
                    (A) adversely affected groups in regions authorized 
                to receive assistance under section 8(c) of the Darfur 
                Peace and Accountability Act (Public Law 109-344; 50 
                U.S.C. 1701 note); and
                    (B) marginalized areas in Northern Sudan described 
                in section 4(9) of such Act.
            (6) Military equipment.--The term ``military equipment'' 
        means--
                    (A) weapons, arms, military supplies, and equipment 
                that readily may be used for military purposes, 
                including radar systems or military-grade transport 
                vehicles; or
                    (B) supplies or services sold or provided directly 
                or indirectly to any force actively participating in 
                armed conflict in Sudan.
            (7) Mineral extraction activities.--The term ``mineral 
        extraction activities'' means exploring, extracting, 
        processing, transporting, or wholesale selling or trading of 
        elemental minerals or associated metal alloys or oxides (ore), 
        including gold, copper, chromium, chromite, diamonds, iron, 
        iron ore, silver, tungsten, uranium, and zinc.
            (8) Oil-related activities.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the term ``oil-related activities'' means--
                            (i) exporting, extracting, producing, 
                        refining, processing, exploring for, 
                        transporting, selling, or trading oil; and
                            (ii) constructing, maintaining, or 
                        operating a pipeline, refinery, or other 
                        oilfield infrastructure.
                    (B) Exclusions.--A person shall not be considered 
                to be involved in an oil-related activity if--
                            (i) the person is involved in the retail 
                        sale of gasoline or related consumer products 
                        in Sudan but is not involved in any other 
                        activity described in subparagraph (A); or
                            (ii) the person is involved in leasing, or 
                        owns, rights to an oil block in Sudan but is 
                        not involved in any other activity described in 
                        subparagraph (A).
            (9) Person.--The term ``person'' means--
                    (A) a natural person, corporation, company, 
                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 (22 U.S.C. 
                262r(c)(3))); and
                    (C) any successor, subunit, or subsidiary of any 
                entity described in subparagraph (A) or (B).
            (10) Power production activities.--The term ``power 
        production activities'' means any business operation that 
        involves a project commissioned by the National Electricity 
        Corporation of Sudan or other similar entity of the Government 
        of Sudan whose purpose is to facilitate power generation and 
        delivery, including establishing power-generating plants or 
        hydroelectric dams, selling or installing components for the 
        project, or providing service contracts related to the 
        installation or maintenance of the project.
            (11) State.--The term ``State'' means each of the several 
        States, 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.
            (12) State or local government.--The term ``State or local 
        government'' includes--
                    (A) any State and any agency or instrumentality 
                thereof;
                    (B) any local government within a State, and any 
                agency or instrumentality thereof;
                    (C) any other governmental instrumentality; and
                    (D) any public institution of higher education 
                within the meaning of the Higher Education Act of 1965 
                (20 U.S.C. 1001 et seq.).
            (13) Significant humanitarian efforts.--The term 
        ``significant humanitarian efforts'' means--
                    (A) efforts--
                            (i) undertaken in conjunction with an 
                        international development or humanitarian 
                        organization, the regional government of 
                        southern Sudan, or a nonprofit entity;
                            (ii) that are substantial in relationship 
                        to the size and scope of the business 
                        operations with respect to Sudan; and
                            (iii) that benefit 1 or more marginalized 
                        populations of Sudan; or
                    (B) materially improving conditions for the 
                marginalized population in Darfur.

SEC. 3. AUTHORITY OF STATE AND LOCAL GOVERNMENTS TO DIVEST FROM CERTAIN 
              COMPANIES DIRECTLY INVESTED IN CERTAIN SUDANESE SECTORS.

    (a) Sense of Congress.--It is the sense of Congress that the United 
States Government should support the decision of any State or local 
government to divest from, or to prohibit the investment of assets of 
the State or local government in, a person that the State or local 
government determines poses a financial or reputational risk.
    (b) Authority To Divest.--Notwithstanding any other provision of 
law, a State or local government may adopt and enforce measures that 
meet the requirements of subsection (e) to divest the assets of the 
State or local government from, or prohibit investment of the assets of 
the State or local government in, persons that the State or local 
government determines, using credible information available to the 
public, are conducting or have direct investments in business 
operations described in subsection (d).
    (c) Notice to Department of Justice.--Not later than 30 days after 
adopting a measure pursuant to subsection (b), a State or local 
government shall submit written notice to the Attorney General 
describing the measure.
    (d) Business Operations Described.--
            (1) In general.--Business operations described in this 
        subsection are business operations in Sudan that include power 
        production activities, mineral extraction activities, oil-
        related activities, or the production of military equipment.
            (2) Exceptions.--Business operations described in this 
        subsection do not include business operations that the person 
        conducting the business operations can demonstrate--
                    (A) are conducted under contract directly and 
                exclusively with the regional government of southern 
                Sudan;
                    (B) are conducted under a license from the Office 
                of Foreign Assets Control, or are expressly exempted 
                under Federal law from the requirement to be conducted 
                under such a license;
                    (C) consist of providing goods or services to 
                marginalized populations of Sudan;
                    (D) consist of providing goods or services to an 
                internationally recognized peacekeeping force or 
                humanitarian organization;
                    (E) consist of providing goods or services that are 
                used only to promote health or education;
                    (F) are conducted by a person that has also 
                undertaken significant humanitarian efforts; or
                    (G) have been voluntarily suspended.
    (e) Requirements.--Any measure taken by a State or local government 
under subsection (b) shall meet the following requirements:
            (1) Notice.--The State or local government shall provide 
        written notice and an opportunity to comment in writing to each 
        person to whom a measure is to be applied.
            (2) Timing.--The measure shall apply to a person not 
        earlier than the date that is 90 days after the date on which 
        written notice is provided to the person under paragraph (1).
    (f) Definitions.--In this section:
            (1) Investment.--The ``investment'' of assets, with respect 
        to a State or local government, includes--
                    (A) a commitment or contribution of assets;
                    (B) a loan or other extension of credit of assets; 
                and
                    (C) the entry into or renewal of a contract for 
                goods or services.
            (2) Assets.--
                    (A) In general.--Except as provided in subparagraph 
                (B), 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.
                    (B) Exception.--The term ``assets'' does not 
                include employee benefit plans covered by title I of 
                the Employee Retirement Income Security Act of 1974 (29 
                U.S.C. 1001 et seq.).
    (g) Nonpreemption.--A measure of a State or local government 
authorized under subsection (b) is not preempted by any Federal law or 
regulation.
    (h) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), this 
        section applies to measures adopted by a State or local 
        government before, on, or after the date of the enactment of 
        this Act.
            (2) Notice requirements.--Subsections (c) and (e) apply to 
        measures adopted by a State or local government on or after the 
        date of the enactment of this Act.

SEC. 4. SAFE HARBOR FOR CHANGES OF INVESTMENT POLICIES BY ASSET 
              MANAGERS.

    (a) In General.--Section 13 of the Investment Company Act of 1940 
(15 U.S.C. 80a-13) is amended by adding at the end the following:
    ``(c) Limitation on Actions.--
            ``(1) In general.--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 any employee, officer, director, or investment 
        adviser thereof, based solely upon the investment company 
        divesting from, or avoiding investing in, securities issued by 
        persons that the investment company determines, using credible 
        information that is available to the public, conduct or have 
        direct investments in business operations in Sudan described in 
        section 3(d) of the Sudan Accountability and Divestment Act of 
        2007.
            ``(2) Applicability.--
                    ``(A) Actions for breaches of fiduciary duties.--
                Paragraph (1) does not prevent a person from bringing 
                an action based on a breach of a fiduciary duty owed to 
                that person with respect to a divestment or non-
                investment decision, other than as described in 
                paragraph (1).
                    ``(B) Disclosures.--Paragraph (1) shall not apply 
                to a registered investment company, or any employee, 
                officer, director, or investment adviser thereof, 
                unless the investment company makes disclosures in 
                accordance with regulations prescribed by the 
                Commission.
            ``(3) Person defined.--For purposes of this subsection the 
        term `person' includes the Federal Government and any State or 
        political subdivision of a State.''.
    (b) SEC Regulations.--Not later than 120 days after the date of the 
enactment of this Act, the Securities and Exchange Commission shall 
prescribe regulations, in the public interest and for the protection of 
investors, to require disclosure by each registered investment company 
that divests itself of securities in accordance with section 13(c) of 
the Investment Company Act of 1940. Such rules shall require the 
disclosure to be included in the next periodic report filed with the 
Commission under section 30 of such Act (15 U.S.C. 80a-29) following 
such divestiture.

SEC. 5. SENSE OF CONGRESS REGARDING CERTAIN ERISA PLAN INVESTMENTS.

    It is the sense of Congress that a fiduciary of an employee benefit 
plan, as defined in section 3(3) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1002(3)), may divest plan assets from, 
or avoid investing plan assets in, any person the fiduciary determines 
is conducting or has direct investments in business operations in Sudan 
described in section 3(d) of this Act, without breaching the 
responsibilities, obligations, or duties imposed upon the fiduciary by 
section 404 of the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1104), if--
            (1) the fiduciary makes such determination using credible 
        information that is available to the public; and
            (2) such divestment or avoidance of investment is conducted 
        in accordance with section 2509.94-1 of title 29, Code of 
        Federal Regulations (as in effect on the day before the date of 
        the enactment of this Act).

SEC. 6. PROHIBITION ON UNITED STATES GOVERNMENT CONTRACTS.

    (a) Certification Requirement.--The head of each executive agency 
shall ensure that each contract entered into by such executive agency 
for the procurement of goods or services includes a clause that 
requires the contractor to certify to the contracting officer that the 
contractor does not conduct business operations in Sudan described in 
section 3(d).
    (b) Remedies.--
            (1) In general.--The head of an executive agency may impose 
        remedies as provided in this subsection if the head of the 
        executive agency determines that the contractor has submitted a 
        false certification under subsection (a) after the date the 
        Federal Acquisition Regulation is amended under subsection (e) 
        to implement the requirements of this section.
            (2) Termination.--The head of an executive agency may 
        terminate a covered contract upon the determination of a false 
        certification under paragraph (1).
            (3) Suspension and debarment.--The head of an executive 
        agency may debar or suspend a contractor from eligibility for 
        Federal contracts upon the determination of a false 
        certification under paragraph (1). The debarment period may not 
        exceed 3 years.
            (4) Inclusion on list of parties excluded from federal 
        procurement and nonprocurement programs.--The Administrator of 
        General Services shall include on the List of Parties Excluded 
        from Federal Procurement and Nonprocurement Programs maintained 
        by the Administrator under part 9 of the Federal Acquisition 
        Regulation issued under section 25 of the Office of Federal 
        Procurement Policy Act (41 U.S.C. 421) each contractor that is 
        debarred, suspended, proposed for debarment or suspension, or 
        declared ineligible by the head of an executive agency on the 
        basis of a determination of a false certification under 
        paragraph (1).
            (5) Rule of construction.--This section shall not be 
        construed to limit the use of other remedies available to the 
        head of an executive agency or any other official of the 
        Federal Government on the basis of a determination of a false 
        certification under paragraph (1).
    (c) Exception for Procurement of Certain Products.--The 
certification requirement under subsection (a) does not apply to 
contracts for the procurement of eligible products (as that term is 
defined in section 308(4) of the Trade Agreements Act of 1979 (19 
U.S.C. 2518(4)) of any foreign country or instrumentality designated 
under section 301(b)(1) of such Act (19 U.S.C. 2511(b)(1)).
    (d) Waiver.--
            (1) In general.--The President may waive the requirement of 
        subsection (a) on a case-by-case basis if the President 
        determines and certifies in writing to the appropriate 
        congressional committees that it is in the national interest to 
        do so.
            (2) Reporting requirement.--Not later than April 15, 2008, 
        and semi-annually thereafter, the Administrator for Federal 
        Procurement Policy shall submit to the appropriate 
        congressional committees a report on waivers granted under 
        paragraph (1).
    (e) Implementation Through the Federal Acquisition Regulation.--Not 
later than 120 days after the date of the enactment of this Act, the 
Federal Acquisition Regulatory Council shall amend the Federal 
Acquisition Regulation issued pursuant to section 25 of the Office of 
Federal Procurement Policy Act (41 U.S.C. 421) to provide for the 
implementation of the requirements of this section.
    (f) Report.--Not later than one year after the date the Federal 
Acquisition Regulation is amended under subsection (e) to implement the 
requirements of this section, the Administrator of General Services, 
with the assistance of other executive agencies, shall submit to the 
Office of Management and Budget and the appropriate congressional 
committees a report on the actions taken under this section.

SEC. 7. SENSE OF CONGRESS ON EFFORTS BY OTHER COUNTRIES.

    It is the sense of Congress that the governments of all other 
countries should adopt measures, similar to those contained in this 
Act, to publicize the activities of all persons that, through their 
financial dealings, knowingly or unknowingly enable the Government of 
Sudan to continue to oppress and commit genocide against people in the 
Darfur region and other regions of Sudan, and to authorize divestment 
from, and the avoidance of further investment in, such persons.

SEC. 8. SENSE OF CONGRESS ON PEACEKEEPING EFFORTS IN SUDAN.

    It is the sense of Congress that the President should--
            (1) continue to work with other members of the 
        international community, including the Permanent Members of the 
        United Nations Security Council, the African Union, the 
        European Union, the Arab League, and the Government of Sudan to 
        facilitate the urgent deployment of a peacekeeping force to 
        Sudan; and
            (2) bring before the United Nations Security Council, and 
        call for a vote on, a resolution requiring meaningful 
        multilateral sanctions against the Government of Sudan in 
        response to its acts of genocide against the people of Darfur 
        and its continued refusal to allow the implementation of a 
        peacekeeping force in Sudan.

SEC. 9. SENSE OF CONGRESS ON THE INTERNATIONAL OBLIGATIONS OF THE 
              UNITED STATES.

    It is the sense of Congress that nothing in this Act--
            (1) conflicts with the international obligations or 
        commitments of the United States; or
            (2) affects article VI, clause 2, of the Constitution of 
        the United States.

SEC. 10. REPORTS ON SANCTIONS IN SUPPORT OF PEACE IN DARFUR.

    (a) In General.--The Secretary of State and the Secretary of the 
Treasury shall submit to the appropriate congressional committees a 
report assessing the effectiveness of sanctions imposed with respect to 
Sudan at the time the Secretary of State and the Secretary of the 
Treasury submits reports required under--
            (1) the Sudan Peace Act (Public Law 107-245; 50 U.S.C. 1701 
        note);
            (2) the Comprehensive Peace in Sudan Act of 2004 (Public 
        Law 108-497; 50 U.S.C. 1701 note); and
            (3) the Darfur Peace and Accountability Act of 2006 (Public 
        Law 109-344; 50 U.S.C. 1701 note).
    (b) Additional Report by the Secretary of the Treasury.--The 
Secretary of the Treasury shall submit to the appropriate congressional 
committees a report assessing the effectiveness of sanctions imposed 
with respect to Sudan under the International Emergency Economic Powers 
Act (50 U.S.C. 1701 et seq.) at the time the President submits the 
reports required by section 204(c) of such Act (50 U.S.C. 1703(c)) with 
respect to Executive Order 13,067 (50 U.S.C. 1701 note; relating to 
blocking property of persons in connection with the conflict in Sudan's 
region of Darfur).
    (c) Contents.--The reports required by subsections (a) and (b) 
shall include--
            (1) a description of each sanction imposed under a law or 
        executive order described in subsection (a) or (b);
            (2) the name of the person subject to the sanction, if any; 
        and
            (3) whether or not the person subject to the sanction is 
        also subject to sanctions imposed by the United Nations.

SEC. 11. REPEAL OF REPORTING REQUIREMENT.

    Section 6305 of the U.S. Troop Readiness, Veterans' Care, Katrina 
Recovery, and Iraq Accountability Appropriations Act, 2007 (Public Law 
110-28; 121 Stat. 172) is repealed.

SEC. 12. TERMINATION.

    The provisions of sections 3, 4, 5, 6, and 10 shall terminate 30 
days after the date on which the President has certified to Congress 
that the Government of Sudan has honored its commitments to--
            (1) abide by United Nations Security Council Resolution 
        1769 (2007);
            (2) cease attacks on civilians;
            (3) demobilize and demilitarize the Janjaweed and 
        associated militias;
            (4) grant free and unfettered access for delivery of 
        humanitarian assistance; and
            (5) allow for the safe and voluntary return of refugees and 
        internally displaced persons.
                                                       Calendar No. 458

110th CONGRESS

  1st Session

                                S. 2271

                          [Report No. 110-213]

_______________________________________________________________________

                                 A BILL

To authorize State and local governments to divest assets in companies 
 that conduct business operations in Sudan, to prohibit United States 
   Government contracts with such companies, and for other purposes.

_______________________________________________________________________

                            October 31, 2007

                 Read twice and placed on the calendar