[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 1637 Introduced in Senate (IS)]
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118th CONGRESS
1st Session
S. 1637
To provide for nonpreemption of measures by State and local governments
to divest from entities that engage in certain boycott, divestment, or
sanctions activities targeting Israel or persons doing business in
Israel or Israeli-controlled territories, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 17, 2023
Mr. Rubio (for himself, Mr. Cassidy, Mr. Braun, Mr. Scott of Florida,
Mr. Daines, and Mr. Hagerty) introduced the following bill; which was
read twice and referred to the Committee on Banking, Housing, and Urban
Affairs
_______________________________________________________________________
A BILL
To provide for nonpreemption of measures by State and local governments
to divest from entities that engage in certain boycott, divestment, or
sanctions activities targeting Israel or persons doing business in
Israel or Israeli-controlled territories, 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 ``Combating BDS Act of 2023''.
SEC. 2. NONPREEMPTION OF MEASURES BY STATE AND LOCAL GOVERNMENTS TO
DIVEST FROM ENTITIES THAT ENGAGE IN CERTAIN BOYCOTT,
DIVESTMENT, OR SANCTIONS ACTIVITIES TARGETING ISRAEL OR
PERSONS DOING BUSINESS IN ISRAEL OR ISRAELI-CONTROLLED
TERRITORIES.
(a) State and Local Measures.--Notwithstanding any other provision
of law, a State or local government may adopt and enforce measures that
meet the requirements of subsection (c) to divest the assets of the
State or local government from, prohibit investment of the assets of
the State or local government in, or restrict contracting by the State
or local government for goods and services with--
(1) an entity that the State or local government
determines, using credible information available to the public,
knowingly engages in an activity described in subsection (b);
(2) a successor entity or subunit of an entity described in
paragraph (1); or
(3) an entity that owns or controls or is owned or
controlled by an entity described in paragraph (1).
(b) Activities Described.--An activity described in this subsection
is a commerce-related or investment-related boycott, divestment, or
sanctions activity in the course of interstate or international
commerce that is intended to penalize, inflict economic harm on, or
otherwise limit commercial relations with Israel or persons doing
business in Israel or Israeli-controlled territories for purposes of
coercing political action by, or imposing policy positions on, the
Government of Israel.
(c) Requirements.--A State or local government that seeks to adopt
or enforce a measure under subsection (a) shall meet the following
requirements:
(1) Notice.--The State or local government shall provide
written notice--
(A) in the case of a measure relating to divestment
or investment, to each entity to which the measure is
to be applied; and
(B) in the case of a measure relating to
contracting, of the restrictions imposed by the measure
to each prospective contractor before entering into a
contract.
(2) Timing.--A measure relating to divestment or investment
shall apply to an entity not earlier than the date that is 90
days after the date on which written notice is provided to the
entity under paragraph (1).
(3) Opportunity for comment.--In the case of a measure
relating to divestment or investment, the State or local
government shall provide an opportunity to comment in writing
to each entity to which the measure is to be applied. If the
entity demonstrates to the State or local government that
neither the entity nor any entity related to the entity as
described in paragraph (2) or (3) of subsection (a) has
knowingly engaged in an activity described in subsection (b),
the measure shall not apply to the entity.
(4) Disclosure in contracting measures.--The State or local
government may require, in a measure relating to contracting,
that a prospective contractor disclose whether the prospective
contractor or any entity related to the prospective contractor
as described in paragraph (2) or (3) of subsection (a)
knowingly engages in any activity described in subsection (b)
before entering into a contract.
(5) Sense of congress on avoiding erroneous targeting.--It
is the sense of Congress that a State or local government
should not adopt a measure under subsection (a) with respect to
an entity unless the State or local government has made every
effort to avoid erroneously targeting the entity and has
verified that the entity engages in an activity described in
subsection (b).
(d) Notice to Department of Justice.--
(1) In general.--Except as provided in paragraph (2), not
later than 30 days after adopting a measure described in
subsection (a), the State or local government that adopted the
measure shall submit written notice to the Attorney General
describing the measure.
(2) Existing measures.--With respect to measures described
in subsection (a) adopted before the date of the enactment of
this Act, the State or local government that adopted the
measure shall submit written notice to the Attorney General
describing the measure not later than 30 days after the date of
the enactment of this Act.
(e) Nonpreemption.--A measure of a State or local government that
is consistent with subsection (a) is not preempted by any Federal law.
(f) Prior Enacted Measures.--
(1) In general.--Notwithstanding any other provision of
this section or any other provision of law, and except as
provided in paragraph (2), a State or local government may
enforce a measure described in subsection (a) adopted by the
State or local government before the date of the enactment of
this Act without regard to the requirements of subsection (c).
(2) Application of notice and opportunity for comment.--
Enforcement of a measure described in paragraph (1) shall be
subject to the requirements of subsection (c) on and after the
date that is 2 years after the date of the enactment of this
Act.
(g) Rules of Construction.--
(1) Authority of states.--Nothing in this section shall be
construed to abridge the authority of a State to issue and
enforce rules governing the safety, soundness, and solvency of
a financial institution subject to its jurisdiction or the
business of insurance pursuant to the Act of March 9, 1945 (59
Stat. 33, chapter 20; 15 U.S.C. 1011 et seq.) (commonly known
as the ``McCarran-Ferguson Act'').
(2) Policy of the united states.--Nothing in this section
shall be construed to alter the established policy of the
United States concerning final status issues associated with
the Palestinian-Israeli conflict, including border delineation,
that can only be resolved through direct negotiations between
the parties.
(h) Definitions.--In this section:
(1) Assets.--
(A) In general.--Except as provided in subparagraph
(B), the term ``assets'' means any pension, retirement,
annuity, or endowment fund, or similar instrument, that
is controlled 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.).
(2) Entity.--The term ``entity'' includes--
(A) any corporation, company, business association,
partnership, or trust; and
(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))).
(3) Investment.--The term ``investment'' includes--
(A) a commitment or contribution of funds or
property;
(B) a loan or other extension of credit; and
(C) the entry into or renewal of a contract for
goods or services.
(4) Knowingly.--The term ``knowingly'', with respect to
conduct, a circumstance, or a result, means that a person has
actual knowledge, or should have known, of the conduct, the
circumstance, or the result.
(5) State.--The term ``State'' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, the Commonwealth of the Northern Mariana Islands,
American Samoa, Guam, the United States Virgin Islands, and any
other territory or possession of the United States.
(6) 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; and
(C) any other governmental instrumentality of a
State or locality.
SEC. 3. SAFE HARBOR FOR CHANGES OF INVESTMENT POLICIES BY ASSET
MANAGERS.
Section 13(c)(1) of the Investment Company Act of 1940 (15 U.S.C.
80a-13(c)(1)) is amended--
(1) in subparagraph (A), by striking ``; or'' and inserting
a semicolon;
(2) in subparagraph (B), by striking the period at the end
and inserting ``; or''; and
(3) by adding at the end the following:
``(C) knowingly engage in any activity described in
section 2(b) of the Combating BDS Act of 2023.''.
SEC. 4. SENSE OF CONGRESS REGARDING CERTAIN ERISA PLAN INVESTMENTS.
It is the sense of Congress that--
(1) 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
knowingly engages in any activity described in section 2(b),
if--
(A) the fiduciary makes that determination using
credible information that is available to the public;
and
(B) the fiduciary prudently determines that the
result of that divestment or avoidance of investment
would not be expected to provide the employee benefit
plan with--
(i) a lower rate of return than alternative
investments with commensurate degrees of risk;
or
(ii) a higher degree of risk than
alternative investments with commensurate rates
of return; and
(2) by divesting assets or avoiding the investment of
assets as described in paragraph (1), the fiduciary is not
breaching the responsibilities, obligations, or duties imposed
upon the fiduciary by subparagraph (A) or (B) of section
404(a)(1) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1104(a)(1)).
SEC. 5. RULE OF CONSTRUCTION.
Nothing in this Act shall be construed to infringe upon any right
protected under the First Amendment to the Constitution of the United
States.
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