Combating BDS Act of 2017
This bill allows a state or local government to adopt and enforce measures to divest its assets from, prohibit investment of its assets in, or restrict contracting with: (1) an entity that engages in a commerce- or investment-related boycott, divestment, or sanctions activity targeting Israel; or (2) an entity that owns or controls, is owned or controlled by, or is under common ownership or control with such an entity. Such measures are not preempted by federal law. A state or local government that seeks to adopt or enforce such measures shall comply with specified requirements related to notice, timing, and opportunity for comment.
In addition, the bill amends the Investment Company Act of 1940 to prohibit a person from bringing any civil, criminal, or administrative action against a registered investment company based solely upon that company's divestment from securities issued by a person that engages in a commerce- or investment-related boycott, divestment, or sanctions activity targeting Israel.
[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2856 Introduced in House (IH)]
<DOC>
115th CONGRESS
1st Session
H. R. 2856
To provide for nonpreemption of measures by State and local governments
to divest from entities that engage in commerce-related or investment-
related boycott, divestment, or sanctions activity targeting Israel,
and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 8, 2017
Mr. McHenry (for himself, Mr. Vargas, Mr. Royce of California, Mr.
Gottheimer, Mr. Emmer, Mr. Sherman, Mr. Roskam, and Mr. Schneider)
introduced the following bill; which was referred to the Committee on
Financial Services
_______________________________________________________________________
A BILL
To provide for nonpreemption of measures by State and local governments
to divest from entities that engage in commerce-related or investment-
related boycott, divestment, or sanctions activity targeting Israel,
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 2017''.
SEC. 2. NONPREEMPTION OF MEASURES BY STATE AND LOCAL GOVERNMENTS TO
DIVEST FROM ENTITIES THAT ENGAGE IN BOYCOTT, DIVESTMENT,
OR SANCTIONS ACTIVITIES TARGETING ISRAEL.
(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 (b) 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 any commerce-related or investment-related
boycott, divestment, or sanctions activity targeting Israel;
(2) a successor entity or subunit of an entity described in
paragraph (1); or
(3) an entity that owns or controls, is owned or controlled
by, or is under common ownership or control with, an entity
described in paragraph (1).
(b) 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 to each entity to which a measure under
subsection (a) is to be applied.
(2) Timing.--The measure 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.--The State or local government
shall provide an opportunity to comment in writing to each
entity to which a measure is to be applied. If the entity
demonstrates to the State or local government that the entity
has not engaged in any commerce-related or investment-related
boycott, divestment, or sanctions activity targeting Israel,
the measure shall not apply to the entity.
(4) 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 any commerce-related or
investment-related boycott, divestment, or sanctions activity
targeting Israel.
(c) 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.
(d) Nonpreemption.--A measure of a State or local government that
is consistent with subsection (a) is not preempted by any Federal law.
(e) Effective Date.--This section applies to any measure adopted by
a State or local government before, on, or after the date of the
enactment of this Act.
(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 (b).
(2) Application of notice and opportunity for comment.--A
measure described in paragraph (1) shall be subject to the
requirements of subsection (b) on and after the date that is 2
years after the date of the enactment of this Act.
(g) Definitions and Rules of Construction.--
(1) Definitions.--In this section:
(A) Assets.--
(i) In general.--Except as provided in
clause (ii), the term ``assets'' means any
pension, retirement, annuity, or endowment
fund, or similar instrument, that is controlled
by a State or local government.
(ii) 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.).
(B) Boycott, divestment, or sanctions activity
targeting israel.--The term ``boycott, divestment, or
sanctions activity targeting Israel'' means any
activity that is intended to penalize, inflict economic
harm on, or otherwise limit commercial relations with
Israel or persons doing business as described in
section 102(b)(20)(B) of the Bipartisan Congressional
Trade Priorities and Accountability Act of 2015 (19
U.S.C. 4201(b)(20)(B)).
(C) Entity.--The term ``entity'' includes--
(i) any corporation, company, business
association, partnership, or trust; and
(ii) 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))).
(D) Investment.--The term ``investment'' includes--
(i) a commitment or contribution of funds
or property;
(ii) a loan or other extension of credit;
and
(iii) the entry into or renewal of a
contract for goods or services.
(E) 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.
(F) State or local government.--The term ``State or
local government'' includes--
(i) any State and any agency or
instrumentality thereof;
(ii) any local government within a State
and any agency or instrumentality thereof; and
(iii) any other governmental
instrumentality of a State or locality.
(2) Rules of construction.--
(A) 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'').
(B) 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 Arab-Israeli conflict,
including border delineation, that can only be resolved
through direct negotiations between the parties.
(C) Scope of nonpreemption.--Nothing in this
section shall be construed as establishing a basis for
preempting or implying preemption of State measures
relating to actions to boycott, divest from, or
sanction Israel that are outside the scope of
subsection (a).
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) engage in any boycott, divestment, or
sanctions activity targeting Israel described in
section 2 of the Combating BDS Act of 2017.''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
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