[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 4008 Introduced in Senate (IS)]

111th CONGRESS
  2d Session
                                S. 4008

  To enhance United States diplomatic efforts with respect to Iran by 
  imposing additional economic sanctions against Iran, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            December 3, 2010

 Mr. Casey (for himself and Mr. Brown of Massachusetts) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL


 
  To enhance United States diplomatic efforts with respect to Iran by 
  imposing additional economic sanctions against Iran, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Stop Iran's 
Nuclear Weapons Program Act of 2010''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
           TITLE I--ADDITIONAL SANCTIONS WITH RESPECT TO IRAN

Sec. 101. Expansion of sanctions under the Iran Sanctions Act of 1996.
Sec. 102. Application of sanctions to subsidiaries.
Sec. 103. Elimination of certain tax incentives for oil companies 
                            investing in Iran.
Sec. 104. Inadmissibility of certain aliens who engage in certain 
                            activities with respect to Iran.
    TITLE II--APPLICATION OF SANCTIONS AGAINST AFFILIATES OF IRAN'S 
                       REVOLUTIONARY GUARD CORPS

Sec. 201. Definitions.
Sec. 202. Sanctions on affiliates of Iran's Revolutionary Guard Corps.
Sec. 203. Measures against foreign persons or entities supporting 
                            Iran's Revolutionary Guard Corps and its 
                            agents and affiliates.
Sec. 204. Special measures against foreign governments supporting 
                            Iran's Revolutionary Guard Corps.
Sec. 205. Sunset.
TITLE III--ROLLOVER OF GAIN FROM DIVESTING CERTAIN QUALIFIED SECURITIES 
     OF BUSINESS ENTITIES ENGAGED IN DISCOURAGED ACTIVITIES IN IRAN

Sec. 301. Rollover of gain from divesting certain qualified securities 
                            of business entities engaged in discouraged 
                            activities in Iran.
    TITLE IV--PROHIBITION ON UNITED STATES GOVERNMENT CONTRACTS AND 
          INVESTMENT FOR COMPANIES CONDUCTING BUSINESS IN IRAN

Sec. 401. Definitions.
Sec. 402. Expansion of prohibition on United States Government 
                            contracts for persons that conduct business 
                            operations in Iran.
Sec. 403. Prohibition on provision of Federal grants, loans, or other 
                            assistance to persons that conduct business 
                            operations in Iran.
Sec. 404. Report on expansion of prohibition on United States 
                            Government contracts for, and prohibition 
                            on provision of Federal grants, loans, and 
                            other assistance to, persons that conduct 
                            business operations in Iran.
Sec. 405. Divestiture from Iran by United States Government retirement 
                            systems.
Sec. 406. Sunset.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) On July 1, 2010, President Obama signed into law the 
        Comprehensive Iran Sanctions, Accountability, and Divestment 
        Act of 2010 (Public Law 111-195; 124 Stat. 1312).
            (2) In the wake of this new United States law and United 
        Nations Security Council Resolution 1929 (2010) with respect to 
        Iran, the European Union, Japan, South Korea, Australia, and 
        other friends and allies of the United States also imposed 
        significant economic sanctions on Iran.
            (3) The latest report by the Director General of the 
        International Atomic Energy Agency to its Board of Directors, 
        issued on September 6, 2010, notes that Iran has continued its 
        record of insufficient cooperation with the agency, has 
        continued to fail to answer questions posed by the agency 
        regarding potential noncivilian nuclear activities by Iran, and 
        has failed to suspend sensitive nuclear activities, as required 
        by successive United Nations Security Council resolutions.
            (4) While the United States and several like-minded 
        countries have worked individually and in concert to increase 
        the diplomatic and economic isolation of Iran to convince the 
        Government of Iran to abandon sensitive nuclear activities, the 
        United States and like-minded countries must do more in the 
        coming months to achieve that goal.

           TITLE I--ADDITIONAL SANCTIONS WITH RESPECT TO IRAN

SEC. 101. EXPANSION OF SANCTIONS UNDER THE IRAN SANCTIONS ACT OF 1996.

    (a) Sanctions With Respect to Purchasing Petroleum Resources or 
Sovereign Debt of Iran.--Section 5(a) of the Iran Sanctions Act of 1996 
(Public Law 104-172; 50 U.S.C. 1701 note) is amended--
            (1) in the heading, by inserting at the end before the 
        period the following: ``, etc''; and
            (2) by adding at the end the following new paragraphs:
            ``(4) Other actions relating to petroleum resources of 
        iran.--
                    ``(A) In general.--Except as provided in subsection 
                (f), the President shall impose 3 or more of the 
                sanctions described in section 6(a) with respect to a 
                person if the President determines that the person 
                knowingly, on or after the date of the enactment of the 
                Stop Iran's Nuclear Weapons Program Act of 2010--
                            ``(i) enters into a long-term agreement to 
                        purchase petroleum resources from Iran;
                            ``(ii) enters into an agreement to provide 
                        payment for future delivery of petroleum 
                        resources from Iran; or
                            ``(iii) enters into an agreement with the 
                        National Iranian Oil Company, any of its 
                        affiliates, or any entity owned or controlled 
                        by the Government of Iran, to provide for the 
                        development of petroleum resources wherever 
                        located.
                    ``(B) Definitions.--
                            ``(i) Long-term agreement.--For purposes of 
                        subparagraph (A)(i), the term `long-term 
                        agreement' means a contract or other agreement 
                        that provides for delivery of petroleum 
                        resources beginning more than 1 year after the 
                        date of entry into the contract or agreement 
                        (as the case may be).
                            ``(ii) Future delivery.--For purposes of 
                        subparagraph (A)(ii), the term `future 
                        delivery' means delivery that occurs more than 
                        180 days after payment is effected under the 
                        agreement.
            ``(5) Purchase, subscription to, or facilitation of the 
        issuance of sovereign debt of the government of iran.--Except 
        as provided in subsection (f), the President shall impose 3 or 
        more of the sanctions described in section 6(a) with respect to 
        a person if the President determines that the person knowingly, 
        on or after the date of the enactment of the Stop Iran's 
        Nuclear Weapons Program Act of 2010, purchases, subscribes to, 
        or facilitates the issuance of--
                    ``(A) sovereign debt of the Government of Iran, 
                including government bonds; or
                    ``(B) debt of any entity owned or controlled by the 
                Government of Iran, including bonds.''.
    (b) Sanctions With Respect to Facilitating Extraction or Milling of 
Uranium Ore in Iran.--Section 5(b)(1) of the Iran Sanctions Act of 1996 
(Public Law 104-172; 50 U.S.C. 1701 note) is amended--
            (1) by redesignating subparagraphs (A) and (B) as clauses 
        (i) and (ii), respectively;
            (2) by striking ``the President determines that a person 
        has, on or after'' and inserting the following: ``the President 
        determines that a person has--
                    ``(A) on or after''; and
            (3) in subparagraph (A)(ii), as redesignated, by striking 
        the period and inserting ``; or''; and
            (4) by adding at the end the following:
                    ``(B) on or after the date of the enactment of the 
                Stop Iran's Nuclear Weapons Program Act of 2010, 
                exported, transferred, or otherwise provided to Iran 
                any goods, services, technology, or other items knowing 
                that the provision of such goods, services, technology, 
                or other items would materially contribute to efforts 
                to extract or mill uranium ore within the territory or 
                control of Iran.''.
    (c) Effective Date.--The amendments made by this section shall--
            (1) take effect on the date of the enactment of this Act; 
        and
            (2) apply with respect to an investment or activity 
        described in section 5 of the Iran Sanctions Act of 1996, as 
        amended by this section, that is commenced on or after such 
        date of enactment.

SEC. 102. APPLICATION OF SANCTIONS TO SUBSIDIARIES.

    (a) In General.--Except as provided in subsection (b), in any case 
in which an entity engages in an act outside the United States that, if 
committed in the United States or by a United States person, would 
violate Executive Order 12959 (50 U.S.C. 1701 note) or Executive Order 
13059 (50 U.S.C. 1701 note) (or any successor thereto), section 103 of 
the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 
2010 (22 U.S.C. 8512), or any other prohibition on transactions with 
respect to Iran that is imposed under the International Emergency 
Economic Powers Act (50 U.S.C. 1701 et seq.), the parent company of 
that entity shall be subject to the penalties for the act to the same 
extent as if the parent company had engaged in the act.
    (b) Exception.--Subsection (a) shall not apply to any act carried 
out under a contract or other obligation of any entity if--
            (1) the contract or obligation existed on the date of the 
        enactment of this Act, unless such contract or obligation is 
        extended in time in any manner or expanded to cover additional 
        activities beyond the terms of the contract or other obligation 
        as it existed on the date of the enactment of this Act; or
            (2) the parent company acquired that entity not knowing, 
        and not having reason to know, that such contract or other 
        obligation existed, unless such contract or other obligation is 
        extended in time in any manner or expanded to cover additional 
        activities beyond the terms of such contract or other 
        obligation as it existed at the time of such acquisition.
    (c) Construction.--Nothing in this section shall be construed as 
prohibiting the issuance of regulations, orders, directives, or 
licenses under the Executive orders described in subsection (a) or as 
being inconsistent with the authorities under the International 
Emergency Economic Powers Act.
    (d) Definitions.--In this section:
            (1) Entity.--The term ``entity'' means a partnership, 
        association, trust, joint venture, corporation, or other 
        organization.
            (2) Parent company.--An entity is a ``parent company'' of 
        another entity if it controls, directly or indirectly, that 
        other entity and is a United States person.
            (3) United states person.--The term ``United States 
        person'' means a United States citizen, an alien lawfully 
        admitted for permanent residence to the United States, an 
        entity organized under the laws of the United States, or a 
        person in the United States.

SEC. 103. ELIMINATION OF CERTAIN TAX INCENTIVES FOR OIL COMPANIES 
              INVESTING IN IRAN.

    (a) In General.--Subsection (h) of section 167 of the Internal 
Revenue Code of 1986 (relating to amortization of geological and 
geophysical expenditures) is amended by adding at the end the following 
new paragraph:
            ``(6) Denial when iran sanctions in effect.--
                    ``(A) In general.--If sanctions are imposed under 
                section 5(a) of the Iran Sanctions Act of 1996 
                (relating to sanctions with respect to the development 
                of petroleum resources in Iran and the production of 
                refined petroleum products in, and the exportation of 
                refined petroleum products to, Iran) on any member of 
                an expanded affiliated group the common parent of which 
                is a foreign corporation, paragraph (1) shall not apply 
                to any expense paid or incurred by any such member in 
                any period during which the sanctions are in effect.
                    ``(B) Expanded affiliated group.--For purposes of 
                subparagraph (A), the term `expanded affiliated group' 
                means an affiliated group as defined in section 
                1504(a), determined--
                            ``(i) by substituting `more than 50 
                        percent' for `at least 80 percent' each place 
                        it appears, and
                            ``(ii) without regard to paragraphs (2), 
                        (3), and (4) of section 1504(b).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to expenses paid or incurred on or after January 1, 2010.

SEC. 104. INADMISSIBILITY OF CERTAIN ALIENS WHO ENGAGE IN CERTAIN 
              ACTIVITIES WITH RESPECT TO IRAN.

    (a) In General.--Section 212(a)(3) of the Immigration and 
Nationality Act (8 U.S.C. 1182(a)(3)) is amended by adding at the end 
the following:
                    ``(H) Individuals who engage in certain activities 
                with respect to iran.--
                            ``(i) In general.--Subject to clause (iii), 
                        any alien described in clause (ii) is 
                        inadmissible.
                            ``(ii) Aliens described.--An alien 
                        described in this clause is an alien that the 
                        Secretary of State determines--
                                    ``(I) engages in--
                                            ``(aa) an activity for 
                                        which sanctions may be imposed 
                                        pursuant to section 5 of the 
                                        Iran Sanctions Act of 1996 
                                        (Public Law 104-172; 50 U.S.C. 
                                        1701 note);
                                            ``(bb) an activity--

                                                    ``(AA) relating to 
                                                the proliferation by 
                                                Iran of weapons of mass 
                                                destruction or the 
                                                means of delivery of 
                                                such weapons; and

                                                    ``(BB) for which 
                                                sanctions may be 
                                                imposed pursuant to 
                                                Executive Order 13382 
                                                (70 Fed. Reg. 38567) 
                                                (or any successor 
                                                thereto);

                                            ``(cc) an activity--

                                                    ``(AA) relating to 
                                                support for 
                                                international terrorism 
                                                by the Government of 
                                                Iran; and

                                                    ``(BB) for which 
                                                sanctions may be 
                                                imposed pursuant to 
                                                Executive Order 13224 
                                                (66 Fed. Reg. 49079) 
                                                (or any successor 
                                                thereto); or

                                            ``(dd) any other activity 
                                        with respect to Iran for which 
                                        sanctions may be imposed 
                                        pursuant to any other provision 
                                        of law;
                                    ``(II) is the chief executive 
                                officer, president, or other individual 
                                in charge of overall management of, a 
                                member of the board of directors of, or 
                                a shareholder with a controlling 
                                interest in, an entity that engages in 
                                an activity described in subclause (I); 
                                or
                                    ``(III) is a spouse or minor child 
                                of--
                                            ``(aa) an alien who engages 
                                        in an activity described in 
                                        subclause (I); or
                                            ``(bb) the chief executive 
                                        officer, president, or other 
                                        individual in charge of overall 
                                        management of, a member of the 
                                        board of directors of, or a 
                                        shareholder with a controlling 
                                        interest in, an entity that 
                                        engages in an activity 
                                        described in subclause (I).
                            ``(iii) Notice; waiver with respect to 
                        certain entities.--
                                    ``(I) Notice.--The Secretary of 
                                State may notify an alien the Secretary 
                                determines may be inadmissible under 
                                this subparagraph--
                                            ``(aa) that the alien may 
                                        be inadmissible; and
                                            ``(bb) of the reason for 
                                        the inadmissibility of the 
                                        alien.
                                    ``(II) Waiver.--The President may 
                                waive the application of this 
                                subparagraph and admit an alien to the 
                                United States if--
                                            ``(aa) the alien is 
                                        described in subclause (II) or 
                                        (III)(bb) of clause (ii);
                                            ``(bb) the entity that 
                                        engaged in the activity that 
                                        would otherwise result in the 
                                        inadmissibility of the alien 
                                        under this subparagraph is no 
                                        longer engaging the activity or 
                                        has taken significant steps 
                                        toward stopping the activity; 
                                        and
                                            ``(cc) the President has 
                                        received reliable assurances 
                                        that the entity will not 
                                        knowingly engage in an activity 
                                        described in clause (ii)(I) 
                                        again.''.
    (b) Regulations.--Section 428 of the Homeland Security Act of 2002 
(6 U.S.C. 236) is amended by adding at the end the following:
    ``(j) Regulations With Respect to Inadmissibility of Aliens Who 
Engage in Certain Transactions With Iran.--Not later than 180 days 
after the date of the enactment of this subsection, the Secretary shall 
issue regulations and guidelines for interpreting and enforcing the 
prohibition under subparagraph (H) of section 212(a)(3) of the 
Immigration and Nationality Act (8 U.S.C. 1182(a)(3)) on the 
admissibility of aliens who engage in certain sanctionable activities 
with respect to Iran.''.

    TITLE II--APPLICATION OF SANCTIONS AGAINST AFFILIATES OF IRAN'S 
                       REVOLUTIONARY GUARD CORPS

SEC. 201. DEFINITIONS.

    In this title:
            (1) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means the Committee on 
        Foreign Affairs of the House of Representatives and the 
        Committee on Foreign Relations of the Senate.
            (2) Foreign person.--The term ``foreign person'' has the 
        meaning given the term in section 14 of the Iran Sanctions Act 
        of 1996.
            (3) Iran's revolutionary guard corps.--The term ``Iran's 
        Revolutionary Guard Corps'' includes Iran's Revolutionary Guard 
        Corps-Qods Force.

SEC. 202. SANCTIONS ON AFFILIATES OF IRAN'S REVOLUTIONARY GUARD CORPS.

    (a) Publication of Names of Affiliates in Federal Register.--Not 
later than 90 days after the date of the enactment of this Act, and as 
appropriate thereafter, the President shall publish in the Federal 
Register the name of each foreign person or foreign entity for which 
there is credible information indicating that the person or entity is 
as an agent, alias, front, instrumentality, official, or affiliate of 
Iran's Revolutionary Guard Corps or is an individual serving as a 
representative of Iran's Revolutionary Guard Corps.
    (b) Application of Existing Sanctions Against Iran to Affiliates.--
The President shall designate each foreign person or foreign entity 
identified in the Federal Register pursuant to subsection (a) for 
inclusion in the Annex to Executive Order 13382 (70 Fed. Reg. 38567; 
relating to blocking property of weapons of mass destruction 
proliferators and their supporters) and shall apply to each such 
foreign person or foreign entity all applicable sanctions of the United 
States pursuant to Executive Order 13382.
    (c) Exclusion From United States.--The Secretary of State shall 
deny a visa to, and the Secretary of Homeland Security shall exclude 
from the United States, any alien who, on or after the date of the 
enactment of this Act, is a foreign person identified in the Federal 
Register pursuant to subsection (a).
    (d) Rule of Construction.--Nothing in this section shall be 
construed to remove any sanction of the United States in force against 
Iran's Revolutionary Guard Corps as of the date of the enactment of 
this Act by reason of the fact that Iran's Revolutionary Guard Corps is 
an entity of the Government of Iran.

SEC. 203. MEASURES AGAINST FOREIGN PERSONS OR ENTITIES SUPPORTING 
              IRAN'S REVOLUTIONARY GUARD CORPS AND ITS AGENTS AND 
              AFFILIATES.

    (a) Identification and Notification.--The President shall notify 
the appropriate congressional committees in any case in which the 
President determines that there is credible information indicating that 
a foreign person or foreign entity, on or after the date of the 
enactment of this Act, knowingly--
            (1) provides material support to Iran's Revolutionary Guard 
        Corps or any person or entity identified pursuant to section 
        202(a) as an agent, alias, front, instrumentality, official, or 
        affiliate of Iran's Revolutionary Guard Corps or an individual 
        serving as a representative of Iran's Revolutionary Guard 
        Corps; or
            (2) conducts any commercial transaction or financial 
        transaction with Iran's Revolutionary Guard Corps or any such 
        person or entity.
    (b) Form.--The President may submit the notification required under 
subsection (a) in classified form.
    (c) Sanctions Under Executive Order 12938.--Not later than 60 days 
after the date on which the President provides notice to the 
appropriate congressional committees pursuant to subsection (a), the 
President shall apply to each foreign person or foreign entity 
identified in the notice, for such time as the President may determine, 
the measures set forth in section 4 of Executive Order 12938 (59 Fed. 
Reg. 59099; relating to proliferation of weapons of mass destruction) 
and shall terminate such measures in accordance with the provisions of 
that section.
    (d) IEEPA Sanctions.--The President may exercise the authorities 
provided under section 203(a) of the International Emergency Economic 
Powers Act (50 U.S.C. 1702(a)) to impose additional sanctions on each 
foreign person or foreign entity identified pursuant to subsection (a) 
of this section, for such time as the President may determine, without 
regard to section 202 of that Act.
    (e) Waiver.--The President may waive the application of any measure 
described in subsection (c) with respect to a foreign person or foreign 
entity if the President--
            (1)(A) determines that the person or entity has ceased the 
        activity that resulted in the notification under subsection (a) 
        with respect to the person or entity (as the case may be) and 
        has taken measures to prevent its recurrence; or
            (B) determines that it is vital to the national security 
        interests of the United States to do so; and
            (2) submits to the appropriate congressional committees a 
        report that contains the reasons for the determination.

SEC. 204. SPECIAL MEASURES AGAINST FOREIGN GOVERNMENTS SUPPORTING 
              IRAN'S REVOLUTIONARY GUARD CORPS.

    (a) Executive Order 12938 Sanctions.--With respect to any foreign 
entity identified pursuant to section 203(a) that is a foreign 
government, the President shall, in addition to applying to the entity 
the measures described in section 203(d), apply to that government the 
measures set forth in section 5(b) of Executive Order 12938.
    (b) Waiver.--The President may waive the application of any measure 
described in subsection (a) with respect to a foreign government if the 
President--
            (1)(A) determines that the entity has ceased the activity 
        that resulted in the identification of the government pursuant 
        to section 203(a) and has taken measures to prevent its 
        recurrence; or
            (B) determines that it is vital to the national security 
        interests of the United States to do so; and
            (2) submits to the appropriate congressional committees a 
        report that contains the reasons for the determination.

SEC. 205. SUNSET.

    This title shall terminate on the date that is 30 days after the 
date on which the President makes the certification described in 
section 401(a) of the Comprehensive Iran Sanctions, Accountability, and 
Divestment Act of 2010 (22 U.S.C. 8551(a)).

TITLE III--ROLLOVER OF GAIN FROM DIVESTING CERTAIN QUALIFIED SECURITIES 
     OF BUSINESS ENTITIES ENGAGED IN DISCOURAGED ACTIVITIES IN IRAN

SEC. 301. ROLLOVER OF GAIN FROM DIVESTING CERTAIN QUALIFIED SECURITIES 
              OF BUSINESS ENTITIES ENGAGED IN DISCOURAGED ACTIVITIES IN 
              IRAN.

    (a) In General.--Part III of subchapter O of chapter 1 of the 
Internal Revenue Code of 1986 (relating to common nontaxable exchanges) 
is amended by adding at the end the following new section:

``SEC. 1046. ROLLOVER OF GAIN FROM DIVESTING CERTAIN QUALIFIED 
              SECURITIES OF BUSINESS ENTITIES ENGAGED IN DISCOURAGED 
              ACTIVITIES IN IRAN.

    ``(a) Nonrecognition of Gain.--
            ``(1) In general.--In the case of any sale of any qualified 
        security held by a taxpayer with respect to which such taxpayer 
        elects the application of this section, in any business entity 
        that is engaged in an Iran discouraged activity, gain from such 
        sale shall be recognized only to the extent that the amount 
        realized on such sale exceeds--
                    ``(A) the cost of any qualified replacement 
                property purchased by the taxpayer during the 30-day 
                period beginning on the date of such sale, reduced by
                    ``(B) any portion of such cost previously taken 
                into account under this section.
            ``(2) Exception for ordinary income gain.--This section 
        shall not apply to any gain which is treated as ordinary income 
        for purposes of this title.
            ``(3) Exception where taxpayer owns controlling interest in 
        the business entity.--
                    ``(A) In general.--Paragraph (1) shall not apply to 
                any sale if, immediately before such sale, the taxpayer 
                owns a controlling interest in the business entity that 
                is engaged in an Iran discouraged activity.
                    ``(B) Controlling interest.--For purposes of 
                subparagraph (A), the term `controlling interest' means 
                direct or indirect ownership of at least 50 percent of 
                the total voting power and value of all classes of 
                stock of a corporation. For purposes of the preceding 
                sentence, the rules of paragraphs (1) and (5) of 
                section 267(c) shall apply.
                    ``(C) Aggregation rule.--For purposes of this 
                paragraph, all members of the same controlled group of 
                corporations (within the meaning of section 267(f)) and 
                all persons under common control (within the meaning of 
                section 52(b) but determined by treating an interest of 
                more than 50 percent as a controlling interest) shall 
                be treated as 1 person.
    ``(b) Identification of Business Entities Engaging in Iran 
Discouraged Activities.--
            ``(1) Publication of list.--For purposes of this section, 
        the Secretary shall publish and update at least every six 
        months a list of business entities engaging in any Iran 
        discouraged activities.
            ``(2) Regulations.--The Secretary shall issue regulations 
        defining how a business entity shall not be deemed to be 
        engaged in an Iran discouraged activity, if--
                    ``(A) with regard to activities on the date this 
                section becomes effective, the business entity limits 
                its activity to continuing existing contracts, without 
                extension or expansion (except that an investment (as 
                defined in section 14 of the Iran Sanctions Act of 1996 
                (Public Law 104-172; 50 U.S.C. 1701 note)) that would 
                subject a business entity to sanctions under section 5 
                of the Iran Sanctions Act of 1996 shall be considered 
                an Iran discouraged activity, notwithstanding contracts 
                entered into prior to the effective date of this 
                section), and
                    ``(B) with regard to any Iran discouraged activity 
                carried on under contracts entered into or expanded 
                after the effective date of this section, the contract 
                was entered into at a time when the business entity did 
                not own or control the subsidiary business entity, and 
                after acquiring such ownership or control the business 
                entity has not extended or expanded or renewed such 
                contract.
            ``(3) Taxpayer self-help.--Until such time as the Secretary 
        publishes a list of those engaging in Iran discouraged 
        activities or if the Secretary fails to update that list as 
        required in paragraph (1), the taxpayer may determine, using 
        credible, publicly available information, which business 
        entities engage in an Iran discouraged activity.
    ``(c) Definitions Relating to Discouraged Activities.--
            ``(1) Foreign terrorist organization.--The term `foreign 
        terrorist organization' means an organization designated under 
        section 219 of the Immigration and Nationality Act (8 U.S.C. 
        1189) as a foreign terrorist organization.
            ``(2) Iran discouraged activity.--The term `Iran 
        discouraged activity' means--
                    ``(A) engaging in an investment activity described 
                in section 202(c) of the Comprehensive Iran Sanctions, 
                Accountability, and Divestment Act of 2010 (22 U.S.C. 
                8532(c));
                    ``(B) engaging in an activity described in section 
                5(a) of the Iran Sanctions Act of 1996 (Public Law 104-
                172; 50 U.S.C. 1701 note); or
                    ``(C) conducting business with or making any 
                charitable donation to any Iranian person designated as 
                a terrorist or to any foreign terrorist organization.
            ``(3) Terrorist.--The term `terrorist' means a person 
        designated or otherwise individually identified in or pursuant 
        to an executive order that is related to terrorism and issued 
        under the authority of the International Emergency Economic 
        Powers Act (50 U.S.C. 1701 et seq.) or section 5 of the United 
        Nations Participation Act of 1945 (22 U.S.C. 287c) for the 
        purpose of imposing on such organization an economic or other 
        sanction.
    ``(d) Definitions and Special Rules Relating to Securities and 
Replacement Property.--In this section:
            ``(1) Qualified security.--
                    ``(A) In general.--The term `qualified security' 
                means any security held by a taxpayer in any business 
                entity that is engaged in an Iran discouraged activity.
                    ``(B) Exception.--Such term shall not include any 
                security purchased or otherwise acquired after the date 
                of the enactment of this section which, at the time of 
                such purchase or acquisition, was issued by a business 
                entity then engaged in an Iran discouraged activity.
                    ``(C) Security defined.--The term `security' has 
                the meaning given such term by section 165(g)(2).
            ``(2) Qualified replacement property.--
                    ``(A) In general.--The term `qualified replacement 
                property' means any security of a business entity that, 
                on the date of purchase by the taxpayer--
                            ``(i) is not engaged in an Iran discouraged 
                        activity on such date,
                            ``(ii) is not a member of an expanded 
                        affiliated group, any member of which is 
                        engaged in an Iran discouraged activity on such 
                        date, and
                            ``(iii) meets the requirements of 
                        subparagraph (B).
                    ``(B) Replacement property.--Property meets the 
                requirements of this paragraph if, with respect to the 
                sale of any security--
                            ``(i) except as provided in clause (ii), in 
                        the case that the security is a share of stock 
                        in a corporation, the replacement property is a 
                        share of stock in a corporation,
                            ``(ii) in the case that the security is a 
                        share of stock of a regulated investment 
                        company, real estate investment trust, hedge 
                        fund, investment partnership, or similar 
                        business entity, the replacement property is a 
                        share of stock in a regulated investment 
                        company, real estate investment trust, hedge 
                        fund, investment partnership, or similar 
                        business entity,
                            ``(iii) in the case that the security is a 
                        right to subscribe for, or to receive, a share 
                        of stock in a corporation, the replacement 
                        property is a right to subscribe for, or to 
                        receive, a share of stock in a corporation, and
                            ``(iv) in the case that the security is a 
                        bond, debenture, note, or certificate, or other 
                        evidence of indebtedness issued by a 
                        corporation, with interest coupons or in 
                        registered form, the replacement property is a 
                        bond, debenture, note, or certificate, or other 
                        evidence of indebtedness issued by a 
                        corporation, with interest coupons or in 
                        registered form.
                    ``(C) Deemed investment if investing in entities 
                engaged in discouraged activities.--Any regulated 
                investment company, real estate investment trust, hedge 
                fund, investment partnership, or similar business 
                entity, which invests in the securities--
                            ``(i) issued by a business entity 
                        determined to be engaging in Iran discouraged 
                        activities, or
                            ``(ii) issued by the Government of Iran or 
                        any agency thereof,
                shall be deemed to be a business entity engaging in 
                Iran discouraged activities.
                    ``(D) Business declaration of policy.--
                            ``(i) In general.--Notwithstanding any 
                        other provision of this section, in the case of 
                        a business entity described in clause (iii), a 
                        security in such business entity shall not be 
                        treated as qualified replacement property 
                        unless the business entity has made the 
                        following declaration: `It is our policy not to 
                        make investments in business entities which 
                        engage in Iran discouraged activities as 
                        defined in section 1046 of the Internal Revenue 
                        Code of 1986, and to use due diligence to avoid 
                        making such investments. It is our policy to 
                        divest on or before December 31, 2010, from 
                        business entities engaged in Iran discouraged 
                        activities.'.
                            ``(ii) Not qualified security.--If a 
                        business entity described in clause (iii) has 
                        made the declaration specified in clause (i), 
                        then from the time of such declaration an 
                        interest in such business entity shall not be 
                        treated as a qualified security.
                            ``(iii) Business entity described.--A 
                        business entity described in this clause is a 
                        regulated investment company, real estate 
                        investment trust, hedge fund, investment 
                        partnership, or similar business entity.
                    ``(E) Expanded affiliated group.--The term 
                `expanded affiliated group' means an affiliated group 
                as defined in section 1504(a), determined--
                            ``(i) by substituting `more than 50 
                        percent' for `at least 80 percent' each place 
                        it appears, and
                            ``(ii) without regard to paragraphs (2) and 
                        (4) of section 1504(b).
                    ``(F) Basis adjustments.--If gain from any sale is 
                not recognized by reason of subsection (a), such gain 
                shall be applied to reduce (in the order acquired) the 
                basis for determining gain or loss of any qualified 
                replacement property which is purchased by the taxpayer 
                during the 30-day period described in subsection (a).
                    ``(G) Holding period.--For purposes of determining 
                the period for which the taxpayer has held qualified 
                replacement property the acquisition of which resulted 
                in the nonrecognition under subsection (a) of any part 
                of the gain realized on the sale of a qualified 
                security, there shall be included the period for which 
                such qualified security had been held by the taxpayer.
            ``(3) Special rule for securities of certain entities.--
                    ``(A) In general.--For any business entity 
                described in subparagraph (C), a security in such 
                business entity shall be treated as qualified 
                replacement property if the business entity has made 
                the following declaration: `It is our policy not to 
                make investments in any person having an investment in, 
                or carrying on a trade or business (within the meaning 
                of section 162) in or with, Iran. This policy may or 
                may not include investments concerning the provision of 
                food, medicine, humanitarian services in or to Iran.'.
                    ``(B) Not qualified security.--If a business entity 
                described in subparagraph (C) has made the declaration 
                specified in subparagraph (A), then from the time of 
                such declaration an interest in such business entity 
                shall not be treated as a qualified security.
                    ``(C) Business entity described.--A business entity 
                described in this subparagraph is a regulated 
                investment company, real estate investment trust, hedge 
                fund, investment partnership, or similar business 
                entity.
                    ``(D) Certain business entities as replacement 
                property.--A business entity described in subparagraph 
                (C) making the declaration described in subparagraph 
                (A) may qualify as replacement property if it has 
                adopted restrictions on investment in persons that 
                invest in or carrying on a trade or business (within 
                the meaning of section 162) in or with countries other 
                than Iran that have been determined by the Secretary of 
                State to have repeatedly provided support for acts of 
                international terrorism pursuant to--
                            ``(i) section 6(j)(1)(A) of the Export 
                        Administration Act of 1979 (50 U.S.C. App. 
                        2405(j)(1)(A)) (as in effect pursuant to the 
                        International Emergency Economic Powers Act (50 
                        U.S.C. 1701 et seq.)) (or any successor 
                        thereto);
                            ``(ii) section 40(d) of the Arms Export 
                        Control Act (22 U.S.C. 2780(d)); or
                            ``(iii) section 620A(a) of the Foreign 
                        Assistance Act of 1961 (22 U.S.C. 2371(a)).
            ``(4) Business entity.--The term `business entity' means 
        any corporation, limited liability partnership, limited 
        liability company, or any other business entity conducting 
        business activities in which the taxpayer has purchased or can 
        purchase securities.
    ``(e) Termination.--Subsection (a) shall not apply with respect to 
any Iran discouraged activity on or after the date on which the 
President makes the certification described in section 401(a) of the 
Comprehensive Iran Sanctions, Accountability, and Divestment Act of 
2010 (22 U.S.C. 8551(a)).''.
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter O of chapter 1 of such Code is amended by adding at the end 
the following new item:

``Sec. 1046. Rollover of gain from divesting certain qualified 
                            securities of business entities engaged in 
                            discouraged activities in Iran.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to sales of securities after the date of the 
enactment of this Act.

    TITLE IV--PROHIBITION ON UNITED STATES GOVERNMENT CONTRACTS AND 
          INVESTMENT FOR COMPANIES CONDUCTING BUSINESS IN IRAN

SEC. 401. DEFINITIONS.

    In this title:
            (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) 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).
            (3) Federal funds.--The term ``Federal funds'' means a sum 
        of money or other resources derived from United States 
        taxpayers, which the United States Government may provide to 
        persons through government grants or loans, or through the 
        terms of a contract with the Federal Government, or through the 
        Troubled Asset Relief Program established under title I of 
        division A of the Emergency Economic Stabilization Act of 2008 
        (12 U.S.C. 5201 et seq.), or other similar and related 
        transaction vehicles, including a grant, loan, or loan 
        guarantee, the provision of insurance or reinsurance, or the 
        provision of technical assistance.

SEC. 402. EXPANSION OF PROHIBITION ON UNITED STATES GOVERNMENT 
              CONTRACTS FOR PERSONS THAT CONDUCT BUSINESS OPERATIONS IN 
              IRAN.

    (a) In General.--Section 6(b) of the Iran Sanctions Act of 1996 
(Public Law 104-172; 50 U.S.C. 1701 note) is amended--
            (1) in paragraph (1), by striking ``does not engage in any 
        activity for which sanctions may be imposed under section 5.'' 
        and inserting the following: ``does not--
                    ``(A) engage in any activity for which sanctions 
                may be imposed under section 5;
                    ``(B) export sensitive technology (as defined in 
                paragraph (6)) to Iran; or
                    ``(C) engage in any activity described in section 
                203(a) of the Stop Iran's Nuclear Weapons Program Act 
                of 2010.'';
            (2) in paragraph (5)--
                    (A) by striking ``The President may'' and inserting 
                the following:
                    ``(A) In general.--The President may''; and
                    (B) by adding at the end the following:
                    ``(B) Reporting requirement.--Not later than 120 
                days after the date of the enactment of the Stop Iran's 
                Nuclear Weapons Program Act of 2010, and every 180 days 
                thereafter, the Administrator for Federal Procurement 
                Policy shall submit to the appropriate congressional 
                committees a report on waivers granted under 
                subparagraph (A).''; and
            (3) by striking paragraph (6) and inserting the following:
            ``(6) Definitions.--In this subsection:
                    ``(A) Executive agency.--The term `executive 
                agency' has the meaning given that term in section 4 of 
                the Office of Federal Procurement Policy Act (41 U.S.C. 
                403).
                    ``(B) Sensitive technology.--
                            ``(i) In general.--The term `sensitive 
                        technology' means hardware, software, 
                        telecommunications equipment, or any other 
                        technology, that the President determines is to 
                        be used specifically--
                                    ``(I) to restrict the free flow of 
                                unbiased information in Iran; or
                                    ``(II) to disrupt, monitor, or 
                                otherwise restrict speech of the people 
                                of Iran.
                            ``(ii) Exception.--The term `sensitive 
                        technology' does not include information or 
                        informational materials the exportation of 
                        which the President does not have the authority 
                        to regulate or prohibit pursuant to section 
                        203(b)(3) of the International Emergency 
                        Economic Powers Act (50 U.S.C. 1702(b)(3)).''.
    (b) Implementation Through the Federal Acquisition Regulation.--Not 
later than 120 days after the date of the enactment of this Act, the 
Federal Acquisition Regulation issued pursuant to section 25 of the 
Office of Federal Procurement Policy Act (41 U.S.C. 421) shall be 
revised to provide for the implementation of the amendments made by 
subsection (a).
    (c) Conforming Amendments.--
            (1) Section 106 of the Comprehensive Iran Sanctions, 
        Accountability, and Divestment Act of 2010 (22 U.S.C. 8515) is 
        amended to read as follows:

``SEC. 106. GOVERNMENT ACCOUNTABILITY OFFICE REPORT ON EFFECT OF 
              PROHIBITION ON GOVERNMENT PROCUREMENT FROM PERSONS THAT 
              EXPORT SENSITIVE TECHNOLOGY TO IRAN.

    ``Not later than 1 year after the date of the enactment of this 
Act, the Comptroller General of the United States shall submit to the 
appropriate congressional committees, the Committee on Armed Services 
of the Senate, and the Committee on Armed Services of the House of 
Representatives, a report assessing the extent to which executive 
agencies would have entered into or renewed contracts for the 
procurement of goods or services with persons that export sensitive 
technology to Iran if the prohibition under section 6(b)(1)(B) of the 
Iran Sanctions Act of 1996 (Public Law 104-172; 50 U.S.C. 1701 note) 
were not in effect.''.
            (2) The table of contents for the Comprehensive Iran 
        Sanctions, Accountability, and Divestment Act of 2010 is 
        amended by striking the item relating to section 106 and 
        inserting the following:

``Sec. 106. Government Accountability Office report on effect of 
                            prohibition on government procurement from 
                            persons that export sensitive technology to 
                            Iran.''.

SEC. 403. PROHIBITION ON PROVISION OF FEDERAL GRANTS, LOANS, OR OTHER 
              ASSISTANCE TO PERSONS THAT CONDUCT BUSINESS OPERATIONS IN 
              IRAN.

    (a) In General.--Notwithstanding any other provision of law, the 
head of each executive agency shall require any person seeking Federal 
funds in the form of a grant, loan, or loan guarantee, insurance or 
reinsurance, or technical assistance from the agency to certify that 
the person does not--
            (1) engage in any activity for which sanctions may be 
        imposed under section 5 of the Iran Sanctions Act of 1996 
        (Public Law 104-172; 50 U.S.C. 1701 note);
            (2) export sensitive technology (as defined in section 
        6(b)(6) of the Iran Sanctions Act of 1996) to Iran; or
            (3) engage in any activity described in section 203(a) of 
        this Act.
    (b) Waiver.--The President may waive the requirement under 
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 of the United States to do so.

SEC. 404. REPORT ON EXPANSION OF PROHIBITION ON UNITED STATES 
              GOVERNMENT CONTRACTS FOR, AND PROHIBITION ON PROVISION OF 
              FEDERAL GRANTS, LOANS, AND OTHER ASSISTANCE TO, PERSONS 
              THAT CONDUCT BUSINESS OPERATIONS IN IRAN.

    Not later than one year after the date on which the Federal 
Acquisition Regulation is revised pursuant to section 402(b) to provide 
for the implementation of the amendments made by section 402(a), the 
Administrator of General Services, in consultation with the heads of 
other executive agencies, shall submit to the Office of Management and 
Budget and the appropriate congressional committees a report on the 
actions taken pursuant to such amendments and section 403.

SEC. 405. DIVESTITURE FROM IRAN BY UNITED STATES GOVERNMENT RETIREMENT 
              SYSTEMS.

    (a) Divestiture From Iran.--The managers of each Government 
retirement system (including any thrift savings plan) shall take, to 
the extent consistent with the legal and fiduciary duties otherwise 
imposed on them, immediate steps to divest all investments in any 
entity with respect to which sanctions are imposed for activities 
described in section 5(a) of the Iran Sanctions Act of 1996 (Public Law 
104-172; 50 U.S.C. 1701 note), section 6(b)(1)(B) of the Iran Sanctions 
Act of 1996, as amended by section 402 of this Act, or section 203(a) 
of this Act.
    (b) Prohibition on Future Investment.--The managers of each 
Government retirement system (including any thrift savings plan) shall 
ensure that there is no future investment in any entity described in 
subsection (a) for the duration of the period of time during which the 
entity is sanctioned under the applicable provision of law described in 
subsection (a).
    (c) Government Retirement System Defined.--In this section, the 
term ``Government retirement system'' means a retirement system 
established by law for employees of the Government of the United 
States.

SEC. 406. SUNSET.

    The provisions of this title (other than the amendments made by 
section 402) shall terminate on the date that is 30 days after the date 
on which the President makes the certification described in section 
401(a) of the Comprehensive Iran Sanctions, Accountability, and 
Divestment Act of 2010 (22 U.S.C. 8551(a)).
                                 <all>