Text: H.R.6296 — 111th Congress (2009-2010)All Bill Information (Except Text)

There is one version of the bill.

Text available as:

Shown Here:
Introduced in House (09/29/2010)


111th CONGRESS
2d Session
H. R. 6296

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


IN THE HOUSE OF REPRESENTATIVES
September 29, 2010

Mr. Sherman (for himself, Mr. Royce, Mr. Klein of Florida, Mr. Deutch, Mr. Engel, Mr. Poe of Texas, Mr. Sires, Mrs. Maloney, Ms. Berkley, and Mr. Gene Green of Texas) introduced the following bill; which was referred to the Committee on Foreign Affairs, and in addition to the Committees on Ways and Means, the Judiciary, Financial Services, and Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned


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 and 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 and table of contents.

Sec. 2. Findings.

Sec. 101. Application to subsidiaries.

Sec. 102. Additional export sanctions against Iran.

Sec. 103. Temporary increase in fee for certain consular services.

Sec. 201. Elimination of certain tax incentives for oil companies investing in Iran.

Sec. 202. Expansion of sanctions under the Iran Sanctions Act of 1996.

Sec. 301. Sanctions against affiliates of the Iran Revolutionary Guard Corps.

Sec. 302. Measures against foreign persons or entities supporting the Iran Revolutionary Guard Corps.

Sec. 303. Special measures against foreign governments supporting the Iran Revolutionary Guards Corps.

Sec. 304. Definitions.

Sec. 401. Statement of policy.

Sec. 402. Reporting requirements under the Iran, North Korea, and Syria Nonproliferation Act.

Sec. 403. Conforming amendments.

Sec. 501. Rollover of gain from divesting certain qualified securities of business entities engaged in discouraged activities in Iran or Sudan.

Sec. 601. Prohibition on United States Government contracts.

Sec. 602. Authority of State and local governments to prohibit contracts.

Sec. 603. United States pension plans.

Sec. 604. Sunset.

Sec. 605. Definitions.

Sec. 701. Termination of loan disbursements to Iran from the International Bank for Reconstruction and Development.

Sec. 702. United States opposition to new country assistance strategy for Iran.

Sec. 703. Sunset.

Sec. 704. Rule of interpretation.

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).

(2) In the wake of this new United States law and United Nations Security Council Resolution 1929 on 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 non-civilian 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.

SEC. 101. Application 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 which, if committed in the United States or by a United States person, would violate Executive Order No. 12959 of May 6, 1995, Executive Order No. 13059 of August 19, 1997, section 103 of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (Public Law 111–195; 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 such violation to the same extent as if the parent company had engaged in that 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) the term “entity” means a partnership, association, trust, joint venture, corporation, or other organization;

(2) an entity is a “parent company” of another entity if it controls, directly or indirectly, that other entity and is a United States person; and

(3) the term “United States person” means any United States citizen, any alien lawfully admitted for permanent residence to the United States, any entity organized under the laws of the United States, or any person in the United States.

SEC. 102. Additional export sanctions against Iran.

Notwithstanding section 103(b)(2)(B)(iv) of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (Public Law 111–195; 22 U.S.C. 8512(b)(2)(B)(iv)) or any other provision of law, effective on the date of the enactment of this Act—

(1) licenses to export or reexport goods, services, or technology relating to civil aviation that are otherwise authorized by section 560.528 of title 31, Code of Federal Regulations, as in effect on the date of the enactment of this Act, may not be issued, and any such license issued before such date of enactment is no longer valid; and

(2) goods, services, or technology described in paragraph (1) may not be exported or reexported.

SEC. 103. Temporary increase in fee for certain consular services.

(a) Increase in fee.—Notwithstanding any other provision of law, not later than 120 days after the date of the enactment of this Act, the Secretary of State shall increase by $1.00 the fee or surcharge assessed under section 140(a) of the Foreign Relations Authorization Act, Fiscal Years 1994 and 1995 (Public Law 103–236; 8 U.S.C. 1351 note) for processing machine readable nonimmigrant visas and machine readable combined border crossing identification cards and nonimmigrant visas.

(b) Deposit of amounts.—Fees collected under the authority of subsection (a) shall be deposited in the Treasury.

(c) Duration of increase.—The fee increase authorized under subsection (a) shall terminate on the date that is one year after the date on which such fee is first collected.

SEC. 201. 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 of 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. 202. Expansion of sanctions under the Iran Sanctions Act of 1996.

(a) In general.—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.—In 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.—In 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 IRANIAN SOVEREIGN DEBT.—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) Iranian sovereign debt, including Iranian governmental bonds; or

“(B) debt of any entity owned or controlled by the Iranian Government, including bonds”.

(b) 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 subsection (a) of 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. 301. Sanctions against affiliates of the Iran 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 the Iran Revolutionary Guard Corps or is an individual serving as a representative of the Iran 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 contained in Executive Order 13382.

(c) Sanctions under Executive Order 13438.—

(1) 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—

(A) for which there is credible information indicating that the person or entity is as an agent, alias, front, instrumentality, official, or affiliate of the Iran Revolutionary Guard Corps or is an individual serving as a representative of the Iran Revolutionary Guard Corps; and

(B) for which there is credible evidence that the foreign person or foreign entity—

(i) has committed, or poses a significant risk of committing, an act or acts of violence that have the purpose or effect of—

(I) threatening the peace or stability of Iraq or the Government of Iraq; or

(II) undermining efforts to promote economic reconstruction and political reform in Iraq or to provide humanitarian assistance to the Iraqi people;

(ii) has materially assisted, sponsored, or provided financial, material, logistical, or technical support for, or goods or services in support of, such an act or acts of violence or any person whose property and interests in property are blocked pursuant to Executive Order 13438; or

(iii) is owned or controlled by, or has acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to Executive Order 13438.

(2) APPLICATION OF SANCTIONS UNDER EXECUTIVE ORDER 13438.—The President shall apply to each foreign person or foreign entity identified in the Federal Register pursuant to paragraph (1) all applicable sanctions and measures of the United States contained in Executive Order 13438 (72 Fed. Reg. 39719; relating to blocking property of certain persons who threaten stabilization efforts in Iraq).

(d) 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) or (c).

(e) Rule of construction.—Nothing in this section shall be construed to remove any sanction of the United States in force against the Iran Revolutionary Guard Corps as of the date of the enactment of this Act by reason of the fact that the Iran Revolutionary Guard Corps is an entity of the Government of Iran.

SEC. 302. Measures against foreign persons or entities supporting the Iran Revolutionary Guard Corps.

(a) Notification.—Whenever 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) provided material support to the Iran Revolutionary Guard Corps or any affiliated foreign person or foreign entity identified pursuant to section 301 (a) or (c), or

(2) conducted any commercial transaction or financial transaction with the Iran Revolutionary Guards Corps or any affiliated foreign person or foreign entity identified pursuant to section 301 (a) or (c),

the President shall submit to the appropriate congressional committees a notification that contains the name of the foreign person or foreign entity (as the case may be).

(b) Form.—The President may submit the notification required under subsection (a) in classified form.

(c) Executive Order 12938 sanctions.—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 such 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 such section.

(d) IEEPA sanctions.—The President may exercise the authorities the President has 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 offending activity 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. 303. Special measures against foreign governments supporting the Iran Revolutionary Guards Corps.

(a) Executive Order 12938 sanctions.—With respect to any foreign entity identified pursuant to section 302(a) that is a foreign government, the President shall, in addition to applying to the entity the measures described in section 302(d), apply to the entity 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 entity if the President—

(1)(A) determines that the entity has ceased the offending activity 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. 304. 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 REVOLUTIONARY GUARD CORPS.—The term “Iran Revolutionary Guard Corps” includes the Iran Revolutionary Guard Corps-Qods Force.

SEC. 401. Statement of policy.

It shall be the policy of the United States—

(1) to oppose the transfer to Iran, North Korea, and Syria of goods, services, or technology relevant to their capability to extract or mill uranium ore; and

(2) to work with like-minded countries to impose restrictions on such transfers internationally.

SEC. 402. Reporting requirements under the Iran, North Korea, and Syria Nonproliferation Act.

Section 2(a) of the Iran, North Korea, and Syria Nonproliferation Act (50 U.S.C. 1701 note) is amended—

(1) in paragraph (1), by redesignating subparagraphs (A) through (E) as clauses (i) through (v), respectively;

(2) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively;

(3) in subparagraph (B), as redesignated—

(A) by striking “paragraph (1)” and inserting “subparagraph (A)”; and

(B) by striking the period at the end and inserting “; or”;

(4) by striking all that precedes subparagraph (A), as redesignated, and inserting the following:

“(a) Reports.—The President shall, at the times specified in subsection (b), submit to the Committee on Foreign Affairs of the House of Representatives and the Committee on Foreign Relations of the Senate a report identifying every foreign person with respect to whom there is credible information indicating that person—

“(1) on or after January 1, 1999, transferred to or acquired from Iran, on or after January 1, 2005, transferred to or acquired from Syria, or on or after January 1, 2006, transferred to or acquired from North Korea—”; and

(5) by adding at the end the following new paragraph:

“(2) on or after January 1, 2009, transferred to Iran, Syria, or North Korea goods, services, or technology that could assist efforts to extract or mill uranium ore within the territory or control of Iran, North Korea, or Syria.”.

SEC. 403. Conforming amendments.

The Iran, North Korea, and Syria Nonproliferation Act (50 U.S.C. 1701 note) is further amended by striking “Committee on International Relations” each place it appears and inserting “Committee on Foreign Affairs”.

SEC. 501. Rollover of gain from divesting certain qualified securities of business entities engaged in discouraged activities in Iran or Sudan.

(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 or Sudan.

“(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 or a Sudan 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 or a Sudan 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) Definitions and special rules relating to securities and replacement property.—For purposes of 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 or a Sudan 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 or a Sudan 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 or a Sudan 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 or a Sudan 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 Sudan discouraged activities, or

“(ii) issued by the government of Sudan or Iran or any agency thereof,

shall be deemed to be a business entity engaging in Iran discouraged activities or Sudan 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 or Sudan 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 and Sudan 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 and Sudan. This policy may or may not include investments concerning the provision of food, medicine, humanitarian services in or to Iran or Sudan or investments concerning marginalized areas of Sudan (as defined in section 2 of the Sudan Accountability and Divestment Act of 2007 (121 Stat. 2518)).’.

“(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 and Sudan that are designated as state sponsors of terrorism under section 6(j) of the Export Administration Act of 1979, section 40 of the Arms Export Control Act, or section 620A of the Foreign Assistance Act of 1961.

“(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.

“(c) Definitions and rules relating to Sudan discouraged activity.—For purposes of this section, the term ‘Sudan discouraged activity’ means an investment in any business operation described in section 3(d) of the Sudan Accountability and Divestment Act of 2007 (121 Stat. 2518).

“(d) Definitions and rules relating to Iran discouraged activities.—For purposes of this section—

“(1) IRAN DISCOURAGED ACTIVITY.—The term ‘Iran discouraged activity’ means—

“(A) an investment of $20,000,000 or more—

“(i) in the energy sector of Iran; or

“(ii) in a person that provides oil or liquefied natural gas tankers, or products used to construct or maintain pipelines used to transport oil or liquefied natural gas, for the energy sector in Iran;

“(B) an extension of $20,000,000 or more in credit to another person, for 45 days or more, if that person will use the credit to invest in the energy sector in Iran;

“(C) except as provided in section 5(f) of the Iran Sanctions Act of 1996 (50 U.S.C. 1701 note), an investment of $20,000,000 or more (or any combination of investments of at least $5,000,000 each, which in the aggregate equals or exceeds $20,000,000 in any 12-month period), that directly and significantly contributed to the enhancement of Iran’s ability to develop petroleum resources of Iran;

“(D) except as provided in section 5(f) of the Iran Sanctions Act of 1996 (50 U.S.C. 1701 note), the sale, lease, or provision to Iran of any goods, services, technology, information, or support that would allow Iran to maintain or expand its domestic production of refined petroleum resources, including any assistance in refinery construction, modernization, or repair; or

“(E) except as provided in section 5(f) of the Iran Sanctions Act of 1996 (50 U.S.C. 1701 note), providing Iran with refined petroleum resources or engaging in any activity that could contribute to the enhancement of Iran’s ability to import refined petroleum resources, including—

“(i) providing ships or shipping services to deliver refined petroleum resources to Iran;

“(ii) underwriting or otherwise providing insurance or reinsurance for such activity; or

“(iii) financing or brokering such activity.

“(2) 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; or

“(C) the entry into or renewal of a contract for goods or services.

“(3) ENERGY SECTOR.—The term ‘energy sector’ refers to activities to develop petroleum or natural gas resources or nuclear power.

“(4) IRAN.—The term ‘Iran’ includes any agency or instrumentality of Iran.

“(e) Doing business with terrorists.—

“(1) IN GENERAL.—For purposes of this section—

“(A) A business entity has engaged in Iran discouraged activities if it conducts business with or makes any charitable donation to any Iranian person designated as a terrorist or to any foreign terrorist organization.

“(B) A business entity has engaged in Sudan discouraged activities if it conducts business with or makes any charitable donation to any Sudanese person designated as a terrorist or to any foreign terrorist organization.

“(2) TERRORIST.—A person is designated as a terrorist for purposes of paragraph (1) if such person is designated or otherwise individually identified in or pursuant to an Executive Order which is related to terrorism and issued under the authority of the International Emergency Economic Powers Act or section 5 of the United Nations Participation Act of 1945 for the purpose of imposing on such organization an economic or other sanction.

“(3) FOREIGN TERRORIST ORGANIZATION.—For purposes of paragraph (1), 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.

“(f) Identification of business entities engaging in Iran discouraged activities or Sudan 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 Sudan discouraged activities or Iran discouraged activities, or both.

“(2) REGULATIONS.—The Secretary shall issue regulations defining how a business entity shall not be deemed to be engaged in an Iran discouraged activity or Sudan 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) 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 or Sudan 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 Sudan 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 or a Sudan discouraged activity.

“(g) Improvement in the Actions of the Government of the Sudan.—Effective on the date when the President certifies under a section 12 of the Sudan Accountability and Divestment Act of 2007 (121 Stat. 2523), subsection (a) shall not apply to any Sudan discouraged activity after such date.

“(h) Improvement in the Actions of the Government of Iran.—

“(1) TERMINATION OF NONRECOGNITION TREATMENT.—Effective on the date when the requirements described in paragraph (2) are met, subsection (a) shall not apply to any Iran discouraged activity after such date.

“(2) REQUIREMENTS.—The requirements described in this paragraph are—

“(A) a declaration by the President which states that, in the opinion of the President, Iran is no longer engaging in efforts to develop or retain weapons of mass destruction, and has not developed and is not developing the capacity to enrich or reprocess uranium or plutonium, and

“(B) a determination by the Secretary of State that Iran should no longer be listed as a state sponsor of acts of international terrorism pursuant to section 6(j) of the Export Administration Act of 1979, section 620A of the Foreign Assistance Act of 1961, section 40 of the Arms Export Control Act, or any other provision of law.”.

(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 or Sudan.”.

(c) Effective date.—The amendments made by this section shall apply to with respect to sales of securities after the date of the enactment of this Act.

SEC. 601. Prohibition on United States Government contracts.

(a) Certification Requirement.—The head of each executive agency shall ensure that each contract with a company entered into by such executive agency for the procurement of goods or services or agreement for the use of Federal funds as part of a grant, loan, or loan guarantee, the provision of insurance or reinsurance, or the provision of technical assistance to a company, includes a clause that requires the company to certify to the contracting officer that the company does not conduct business operations in Iran described in section 605.

(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 revised pursuant to subsection (e) to implement the requirements of this section.

(2) TERMINATION.—The head of an executive agency may terminate a covered contract with a company 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) 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 120 days after the date of the enactment of this Act 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).

(d) 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 requirements of this section.

(e) Report.—Not later than one year after the date the Federal Acquisition Regulation is revised pursuant to 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. 602. Authority of State and local governments to prohibit contracts.

Notwithstanding any other provision of law, a State or local government may adopt and enforce measures to prohibit the State or local government, as the case may be, from entering into or renewing a contract for the procurement of goods or services with persons that conduct business operations in Iran described in section 605.

SEC. 603. United States pension plans.

(a) Divestiture from Iran.—The managers of United States Government pension plans or thrift savings plans, 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 applied for activities described in section 5(a) of the Iran Sanctions Act of 1996 (Public Law 104–172; 50 U.S.C. 1701 note), as amended by this Act, section 302(a) of this Act, or section 106(a) of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (Public Law 111–195; 22 U.S.C. 8515).

(b) Prohibition on future investment.—The managers of United States Government pension plans or thrift savings plans 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).

SEC. 604. Sunset.

This title shall terminate 30 days after the date on which—

(1) the President has certified to Congress that the Government of Iran has ceased providing support for acts of international terrorism and no longer satisfies the requirements for designation as a state-sponsor of terrorism for purposes of section 6(j) of the Export Administration Act of 1979, section 620A of the Foreign Assistance Act of 1961, section 40 of the Arms Export Control Act, or any other provision of law; and

(2) Iran has permanently ceased the pursuit, acquisition, and development of nuclear, biological, and chemical weapons and missiles.

SEC. 605. Definitions.

In this title:

(1) COMPANY.—The term “company” means—

(A) a sole proprietorship, organization, association, corporation, partnership, limited liability company, venture, or other entity, its subsidiary or affiliate; and

(B) includes a company owned or controlled, either directly or indirectly, by the government of a foreign country, that is established or organized under the laws of, or has its principal place of business in, such foreign country and includes United States subsidiaries of the same.

(2) AFFILIATE.—The term “affiliate” means any individual or entity that directly or indirectly controls, is controlled by, or is under common control with, the company, including without limitation direct and indirect subsidiaries of the company.

(3) ENTITY.—The term “entity” means a sole proprietorship, a partnership, limited liability corporation, association, trust, joint venture, corporation, or other organization.

(4) 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 companies through government grants or loans, or through the terms of a contract with the Federal Government, or through the Emergency Economic Stabilization Act of 2008 “Troubled Asset Relief Program” 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.

(5) BUSINESS OPERATIONS.—The term “business operations” means—

(A) carrying out any of the activities described in section 5 (a) and (b) of the Iran Sanctions Act of 1996 (Public Law 104–172; 50 U.S.C. 1701 note), as amended by this Act, that are sanctionable under such section;

(B) providing sensitive technology (as defined in section 106(c) of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (Public Law 111–195; 22 U.S.C. 8515(c)) to the Government of Iran; and

(C) carrying out any of the activities described in section 302(a) of this Act.

(6) GOVERNMENT OF IRAN.—The term “Government of Iran” includes the Government of Iran, any political subdivision, agency, or instrumentality thereof, and any person owned or controlled by, or acting for or on behalf of, the Government of Iran.

(7) PETROLEUM RESOURCES.—

(A) IN GENERAL.—The term “petroleum resources” includes petroleum, petroleum by-products, oil or liquefied natural gas, oil or liquefied natural gas tankers, and products used to construct or maintain pipelines used to transport oil or compressed or liquefied natural gas.

(B) PETROLEUM BY-PRODUCTS.—The term “petroleum by-products” means gasoline, kerosene, distillates, propane or butane gas, diesel fuel, residual fuel oil, and other goods classified in headings 2709 and 2710 of the Harmonized Tariff Schedule of the United States.

(8) SENSITIVE TECHNOLOGY.—The term “sensitive technology” means hardware, software, telecommunications equipment, or any other technology that the President determines may be used by the Government of Iran—

(A) to restrict the free flow of unbiased information in Iran; or

(B) to disrupt, monitor, or otherwise restrict speech by the people of Iran.

(9) 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.

(10) 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).

SEC. 701. Termination of loan disbursements to Iran from the International Bank for Reconstruction and Development.

(a) In general.—The President of the United States shall take all action available to seek a termination of disbursements of funds under loans made by the International Bank for Reconstruction and Development to Iran.

(b) Report to the Congress.—On the date that is 6 months after the date of the enactment of this Act, and every 6 months thereafter, the President shall submit to the Committee on Financial Services of the House of Representatives and the Committee on Foreign Relations of the Senate a report on the efforts made by the United States to terminate the loan disbursements referred to in subsection (a).

SEC. 702. United States opposition to new country assistance strategy for Iran.

(a) Statement of policy.—It is the policy of the United States to oppose a new Country Assistance Strategy for Iran.

(b) Actions To be taken if the world bank violates the policy or makes a new loan to Iran.—If, after the date of the enactment of this Act, the International Bank for Reconstruction and Development approves a Country Assistance Strategy for Iran, or approves a loan to Iran, the President of the United States shall—

(1) terminate any contribution by the United States to the International Bank for Reconstruction and Development, the International Finance Corporation, and the Multilateral Investment Guarantee Corporation for the fiscal year in which the Country Assistance Strategy or loan is approved, or (if loan disbursements to Iran for that fiscal year have been made by such institutions) for the following fiscal year;

(2) prohibit the sale of debt instruments of the International Bank for Reconstruction and Development in the United States, prohibit the purchase of any such debt instrument by any United States person; and

(3) prohibit the United States Government and any state or municipal governmental entity from purchasing any such debt instrument.

SEC. 703. Sunset.

Sections 701 and 702 shall terminate 30 days after the date on which the President has certified to Congress that—

(1) the Government of Iran has ceased providing support for acts of international terrorism and no longer satisfies the requirements for designation as a state-sponsor of terrorism for purposes of section 6(j) of the Export Administration Act of 1979, section 620A of the Foreign Assistance Act of 1961, section 40 of the Arms Export Control Act, or any other provision of law; and

(2) Iran has ceased the pursuit, acquisition, and development of nuclear, biological, and chemical weapons and ballistic missiles and ballistic missile launch technology.

SEC. 704. Rule of interpretation.

Nothing in section 701 or 702 shall be interpreted to affect United States contributions to, or the participation of the United States in, the International Development Association.