Bill Text: OR SB701 | 2011 | Regular Session | Introduced

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Bill Title: Relating to the conduct of business in Iran; declaring an emergency.

Spectrum: Slight Partisan Bill (Democrat 7-2-1)

Status: (Failed) 2011-06-30 - In committee upon adjournment. [SB701 Detail]

Download: Oregon-2011-SB701-Introduced.html

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     76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session

NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .

LC 277

                         Senate Bill 701

Sponsored by Senator BOQUIST, Representatives GREENLICK, HUNT;
  Senators DINGFELDER, GIROD, KRUSE, Representatives NOLAN,
  SCHAUFLER, J SMITH

                             SUMMARY

The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.

  Requires persons that bid on state public contracts to disclose
whether they conduct mineral-extraction or oil-related activities
related to Iran.
  Directs Oregon Investment Council and State Treasurer to divest
investment funds invested in certain companies engaged in
mineral-extraction or oil-related activities related to Iran.
Directs council or treasurer to maintain list of companies.
Specifies procedures for notice and divestment. Prohibits certain
investments. Provides exceptions.
  Declares emergency, effective on passage.

                        A BILL FOR AN ACT
Relating to the conduct of business in Iran; creating new
  provisions; amending ORS 279B.100 and 279C.365; and declaring
  an emergency.
Be It Enacted by the People of the State of Oregon:
  SECTION 1.  { + Sections 2 and 3 of this 2011 Act are added to
and made a part of ORS chapter 279B. + }
  SECTION 2.  { + As used in this section and section 3 of this
2011 Act:
  (1) 'Business operations' means engaging in commerce in any
form in Iran, including, but not limited to, acquiring,
developing, maintaining, owning, selling, possessing, leasing or
operating equipment, facilities, personnel, products, services,
personal property, real property or any other apparatus of
business or commerce.
  (2) 'Company' means any sole proprietorship, organization,
association, corporation, partnership, joint venture, limited
partnership, limited liability partnership, limited liability
company or other entity or business association, including all
wholly owned subsidiaries, majority-owned subsidiaries, parent
companies or affiliates of those entities or business
associations, that exists for the purpose of making profit.
  (3) 'Iran' means the Islamic Republic of Iran.
  (4) 'Mineral-extraction activities' means:
  (a) Exploring, extracting, processing, transporting or
wholesale selling or trading of elemental minerals or associated
metal alloys or oxides, including, but not limited to, gold,

copper, chromium, chromite, diamonds, iron, iron ore, silver,
tungsten, uranium and zinc; and
  (b) Facilitating or otherwise providing supplies or services in
support of the activities described in paragraph (a) of this
subsection.
  (5)(a) 'Oil-related activities' means:
  (A) Owning rights to oil blocks;
  (B) Exporting, extracting, producing, refining, processing,
exploring for, transporting, selling or trading of oil;
  (C) Constructing, maintaining or operating a pipeline, refinery
or other oil field infrastructure; and
  (D) Facilitating or otherwise providing supplies or services in
support of the activities described in this paragraph.
  (b) 'Oil-related activities' does not include the mere retail
sale of gasoline and related consumer products.
  (6) 'Petroleum resources' means petroleum, petroleum
by-products or natural gas.
  (7) 'Scrutinized company' means a company:
  (a)(A) That has business operations involving contracts with or
provision of supplies or services to the Government of Iran, a
company in which the Government of Iran has any direct or
indirect equity share, a consortium or project commissioned by
the Government of Iran, or a company involved in a consortium or
project commissioned by the Government of Iran; and
  (B) In which more than 10 percent of the company's revenues or
assets linked to Iran involve oil-related activities or
mineral-extraction activities, less than 75 percent of the
company's revenues or assets linked to Iran involve contracts
with or provision of oil-related or mineral-extraction products
or services to the Government of Iran or a project or consortium
created exclusively by that government; and
  (b)(A) That has failed to take substantial action; or
  (B) That has, with actual knowledge, on or after August 5,
1996, made an investment of $20 million or more, or any
combination of investments of at least $10 million each that in
the aggregate equals or exceeds $20 million in any 12-month
period, that directly or significantly contributes to the
enhancement of Iran's ability to develop the petroleum resources
of Iran.
  (8) 'Substantial action' means adopting, publicizing and
implementing a formal plan to cease engaging in business
operations as a scrutinized company within one year and to
refrain from any such new business operations. + }
  SECTION 3.  { + (1) A contracting agency in solicitation
documents for a procurement shall require a bidder or proposer to
state in the bid or proposal the extent, if any, to which the
bidder or proposer or an affiliate of the bidder or proposer is a
scrutinized company or, within two years before submitting the
bid or proposal, was a scrutinized company. The statement must
detail the nature and duration of the business, the products or
services provided or procured and the names of the bidder's or
proposer's affiliates.
  (2) A contracting agency may consider the contents of the
statement in evaluating a bid or proposal or in awarding a public
contract.
  (3) A contracting agency shall provide the statement to the
Oregon Department of Administrative Services. The department
shall post a copy of the statement on a website to which the
public has access. + }
  SECTION 4. ORS 279B.100 is amended to read:
  279B.100. (1) Any solicitation or procurement described in a
solicitation may be canceled, or any or all bids or proposals may
be rejected in whole or in part, when the cancellation or
rejection is in the best interest of the contracting agency as
determined by the contracting agency. The reasons for the
cancellation or rejection must be made part of the solicitation
file. A contracting agency is not liable to any bidder or
proposer for any loss or expense caused by or resulting from the
cancellation or rejection of a solicitation, bid, proposal or
award.
  (2) Any solicitation or procurement described in a solicitation
may be delayed or suspended when the delay or suspension is in
the best interest of the contracting agency as determined by the
contracting agency. The contracting agency shall make the reasons
for the delay or suspension part of the solicitation file. A
contracting agency is not liable to any bidder or proposer for
any loss or expense caused by or resulting from the delay or
suspension of a solicitation, bid, proposal or award.
   { +  (3) A contracting agency in solicitation documents for a
procurement shall require a bidder or proposer to include the
statement described in section 3 of this 2011 Act in a bid or
proposal and provide notice in the solicitation documents that
the contracting agency may reject a bid or proposal that does not
contain the statement. + }
  SECTION 5. ORS 279C.365 is amended to read:
  279C.365. (1) A contracting agency that prepares solicitation
documents for a public improvement contract shall, at a minimum,
include in the solicitation documents:
  (a) A designation for or description of the public improvement
project;
  (b) The office where the specifications for the project may be
reviewed;
  (c) The date that prequalification applications must be filed
under ORS 279C.430 and the class or classes of work for which
bidders must be prequalified if prequalification is a
requirement;
  (d) The date and time after which bids will not be received,
which must be at least five days after the date of the last
publication of the advertisement, and may, in the sole discretion
of the contracting agency, direct or permit bidders to submit and
the contracting agency to receive bids by electronic means;
  (e) The name and title of the person designated to receive
bids;
  (f) The date on which and the time and place at which the
contracting agency will publicly open the bids;
  (g) A statement that, if the contract is for a public works
project subject to the state prevailing rates of wage under ORS
279C.800 to 279C.870, the federal prevailing rates of wage under
the Davis-Bacon Act (40 U.S.C. 3141 et seq.) or both the state
and federal prevailing rates of wage, the contracting agency will
not receive or consider a bid unless the bid contains a statement
by the bidder that the bidder will comply with ORS 279C.838 or
279C.840 or 40 U.S.C. 3141 et seq.;
  (h) A statement that each bid must identify whether the bidder
is a resident bidder, as defined in ORS 279A.120;
  (i) A statement that the contracting agency may reject a bid
that does not comply with prescribed public contracting
procedures and requirements, including the requirement to
demonstrate the bidder's responsibility under ORS 279C.375
(3)(b), and that the contracting agency may reject for good cause
all bids after finding that doing so is in the public interest;
  (j) Information addressing whether a contractor or
subcontractor must be licensed under ORS 468A.720;   { - and - }
  (k) A statement that the contracting agency may not receive or
consider a bid for a public improvement contract unless the
bidder is licensed by the Construction Contractors Board or the
State Landscape Contractors Board  { - . - }  { + ; and
  (L) A requirement that the bidder must include the statement
described in section 3 of this 2011 Act in the bid and a
notification that the contracting agency may reject a bid that
does not contain the statement. + }

  (2) A contracting agency may provide solicitation documents by
electronic means.
  (3) A bid made to the contracting agency under ORS 279C.335 or
279C.400 must be:
  (a) In writing;
  (b) Filed with the person the contracting agency designates to
receive bids; and
  (c) Opened publicly by the contracting agency immediately after
the deadline for submitting bids.
  (4) After the contracting agency opens the bids, the
contracting agency shall make the bids available for public
inspection.
  (5) A bidder shall submit or post a surety bond, irrevocable
letter of credit issued by an insured institution as defined in
ORS 706.008, cashier's check or certified check for all bids as
bid security unless the contracting agency has exempted the
contract for which the bidder submits a bid from this requirement
under ORS 279C.390. The security may not exceed 10 percent of the
amount bid for the contract.
  (6) Subsection (5) of this section applies only to public
improvement contracts with a value, estimated by the contracting
agency, of more than $100,000 or, in the case of contracts for
highways, bridges and other transportation projects, more than
$50,000.
  SECTION 6.  { + Sections 7 and 8 of this 2011 Act are added to
and made a part of ORS 293.701 to 293.820. + }
  SECTION 7.  { + As used in this section and section 8 of this
2011 Act:
  (1) 'Active business operations' means all business operations
that are not inactive business operations.
  (2) 'Business operations' means engaging in commerce in any
form in Iran, including, but not limited to, acquiring,
developing, maintaining, owning, selling, possessing, leasing or
operating equipment, facilities, personnel, products, services,
personal property, real property or any other apparatus of
business or commerce.
  (3) 'Company' means any sole proprietorship, organization,
association, corporation, partnership, joint venture, limited
partnership, limited liability partnership, limited liability
company or other entity or business association, including all
wholly owned subsidiaries, majority-owned subsidiaries, parent
companies or affiliates of those entities or business
associations, that exists for the purpose of making profit.
  (4) 'Direct holdings' means securities of a company that are
held directly by this state, or an account or fund in which this
state owns all shares or interests.
  (5) 'Inactive business operations' means the mere continued
holding or renewal of rights to property previously operated for
the purpose of generating revenues, but not presently deployed
for that purpose.
  (6) 'Indirect holdings' means securities of a company that are
held in an account or fund, such as a mutual fund, managed by one
or more persons not employed by this state, in which this state
owns shares or interests together with other investors that are
not subject to the provisions of section 8 of this 2011 Act.
  (7) 'Iran' means the Islamic Republic of Iran.
  (8) 'Mineral-extraction activities' means:
  (a) Exploring, extracting, processing, transporting or
wholesale selling or trading of elemental minerals or associated
metal alloys or oxides, including, but not limited to, gold,
copper, chromium, chromite, diamonds, iron, iron ore, silver,
tungsten, uranium and zinc; and
  (b) Facilitating or otherwise providing supplies or services in
support of the activities described in paragraph (a) of this
subsection.
  (9)(a) 'Oil-related activities' means:
  (A) Owning rights to oil blocks;
  (B) Exporting, extracting, producing, refining, processing,
exploring for, transporting, selling or trading of oil;
  (C) Constructing, maintaining or operating a pipeline, refinery
or other oil field infrastructure; and
  (D) Facilitating or otherwise providing supplies or services in
support of the activities described in this paragraph.
  (b) 'Oil-related activities' does not include the mere retail
sale of gasoline and related consumer products.
  (10) 'Petroleum resources' means petroleum, petroleum
by-products or natural gas.
  (11) 'Private market fund' means any private equity fund,
private equity fund of funds, venture capital fund, hedge fund,
hedge fund of funds, real estate fund or other investment vehicle
that is not publicly traded.
  (12) 'Scrutinized company' means a company:
  (a)(A) That has business operations involving contracts with or
provision of supplies or services to the Government of Iran, a
company in which the Government of Iran has any direct or
indirect equity share, a consortium or project commissioned by
the Government of Iran, or a company involved in a consortium or
project commissioned by the Government of Iran; and
  (B) In which more than 10 percent of the company's revenues or
assets linked to Iran involve oil-related activities or
mineral-extraction activities, less than 75 percent of the
company's revenues or assets linked to Iran involve contracts
with or provision of oil-related or mineral-extraction products
or services to the Government of Iran or a project or consortium
created exclusively by that government; and
  (b)(A) That has failed to take substantial action; or
  (B) That has, with actual knowledge, on or after August 5,
1996, made an investment of $20 million or more, or any
combination of investments of at least $10 million each that in
the aggregate equals or exceeds $20 million in any 12-month
period, that directly or significantly contributes to the
enhancement of Iran's ability to develop the petroleum resources
of Iran.
  (13) 'Substantial action' means adopting, publicizing and
implementing a formal plan to cease engaging in business
operations as a scrutinized company within one year and to
refrain from any such new business operations. + }
  SECTION 8.  { + (1) The Oregon Investment Council and the State
Treasurer, in the State Treasurer's role as investment officer
for the council, shall make efforts to identify all scrutinized
companies in which the council or treasurer has direct or
indirect holdings of investment funds or could possibly have
direct or indirect holdings of investment funds in the future.
These efforts shall include the following:
  (a) Reviewing and relying, as appropriate in the judgment of
the council and treasurer, on publicly available information
regarding companies having business operations in Iran, including
information provided by nonprofit organizations, research firms,
international organizations and government entities;
  (b) Contacting asset managers contracted by the council or
treasurer that invest in companies having business operations in
Iran; and
  (c) Contacting other institutional investors that have divested
from or engaged with companies that have business operations in
Iran.
  (2) The council or treasurer may retain an independent research
firm to identify scrutinized companies in which the council or
treasurer has direct or indirect holdings. The council or
treasurer shall maintain a list of all scrutinized companies.
The council or treasurer shall update the scrutinized companies
list quarterly based on evolving information.

  (3) The council or treasurer shall adhere to the following
procedures for companies on the scrutinized companies list:
  (a) The council or treasurer shall immediately determine the
companies on the scrutinized companies list in which the council
or treasurer has direct or indirect holdings.
  (b) For each company identified in paragraph (a) of this
subsection that has only inactive business operations in Iran,
the council or treasurer shall send a written notice informing
the company of the provisions of this section and encouraging the
company to continue to refrain from initiating active business
operations in Iran until it is able to avoid engaging in business
operations as a scrutinized company. The council or treasurer
shall continue such correspondence semiannually.
  (c) For each company newly identified in paragraph (a) of this
subsection that has active business operations in Iran, the
council or treasurer shall send a written notice informing the
company of its scrutinized company status and that it may become
subject to divestment by the council or treasurer. The notice
must inform the company of the opportunity to clarify its
Iran-related activities and encourage the company to cease,
within 90 days, its business operations as a scrutinized company
or convert the operations to inactive business operations in
order to avoid qualifying for divestment by the council or
treasurer.
  (d) If, within 90 days after the council or treasurer's first
engagement with a company pursuant to this subsection, the
company ceases business operations as a scrutinized company, the
council or treasurer shall remove the company from the
scrutinized companies list and the provisions of this section do
not apply to the company unless it resumes business operations as
a scrutinized company. If, within 90 days after the council or
treasurer's first engagement, the company converts its active
business operations as a scrutinized company to inactive business
operations, the company is subject to all provisions relating to
inactive business operations.
  (4)(a) If, after 90 days following the council or treasurer's
first engagement with a company pursuant to subsection (3) of
this section, the company continues to have active business
operations as a scrutinized company, and only while the company
continues to have active business operations as a scrutinized
company, the council or treasurer shall sell, redeem, divest or
withdraw all publicly traded securities of the company, except as
provided in subsection (6) of this section, from the council or
treasurer's assets under management within 12 months after the
company's most recent appearance on the scrutinized companies
list.
  (b) If a company that ceased active business operations as a
scrutinized company following engagement pursuant to subsection
(3) of this section resumes active business operations as a
scrutinized company, this subsection immediately applies, and the
council or treasurer shall send a written notice to the company.
The company shall also be immediately reintroduced onto the
scrutinized companies list.
  (5) Except as provided in subsection (6) of this section, the
council or treasurer may not acquire securities of companies on
the scrutinized companies list that have active business
operations in Iran.
  (6) A company that the United States Government affirmatively
declares to be excluded from present or any future federal
sanctions regime relating to Iran is not subject to divestment or
the investment prohibition pursuant to subsections (4) and (5) of
this section.
  (7) Notwithstanding the provisions of this section, subsections
(4) and (5) of this section do not apply to indirect holdings in
a private market fund. The council or treasurer shall submit
letters to the managers of those investment funds containing
companies that engage in active business operations as
scrutinized companies requesting that they consider removing the
companies from the fund or create a similar actively managed fund
having indirect holdings devoid of the companies. If the manager
creates a similar fund, the council or treasurer shall replace
all applicable investments with investments in the similar fund
in an expedited time frame consistent with prudent investing
standards.
  (8) The council or treasurer shall publish the list of
scrutinized companies on the treasurer's website.
  (9) The treasurer shall publish an annual report on the
treasurer's website. The report shall include:
  (a) A summary of correspondence with companies engaged by the
council or treasurer under this section;
  (b) A list of all investments sold, redeemed, divested or
withdrawn in compliance with this section;
  (c) A list of investments prohibited under subsection (5) of
this section; and
  (d) A summary of correspondence with private market funds under
subsection (7) of this section.
  (10) The council or treasurer shall notify the Legislative
Assembly in writing if the council or treasurer determines that:
  (a) The United States Government has revoked all sanctions
imposed against the Government of Iran;
  (b) The Congress or President of the United States has declared
that the Government of Iran has ceased to acquire weapons of mass
destruction and has ceased to support international terrorism; or
  (c) The Congress or President of the United States, through
legislation or executive order, has declared that mandatory
divestment of the type provided for in this section interferes
with the conduct of United States foreign policy.
  (11) With respect to actions taken in compliance with this
section, including all good faith determinations regarding
companies as required by this section, the council and treasurer
are exempt from any conflicting statutory or common law
obligations, including any such obligations with respect to
choice of asset managers, investment funds or investments for the
council or treasurer's securities portfolios.
  (12)(a) Notwithstanding the provisions of this section, the
council or treasurer may cease divesting from certain scrutinized
companies pursuant to subsection (4) of this section or reinvest
in certain scrutinized companies from which it divested pursuant
to subsection (4) of this section if clear and convincing
evidence shows that the value of all assets under management by
the council or treasurer becomes equal to or less than 99.50
percent, or 50 basis points, of the hypothetical value of all
assets under management by the council or treasurer assuming no
divestment for any company had occurred under subsection (4) of
this section.
  (b) Cessation of divestment, reinvestment or any subsequent
ongoing investment authorized by this section is limited to the
minimum steps necessary to avoid the contingency set forth in
paragraph (a) of this subsection. For any cessation of
divestment, reinvestment or subsequent ongoing investment
authorized by this section, the treasurer shall provide a written
report to the council in advance of initial reinvestment, updated
semiannually thereafter as applicable, setting forth the reasons
and justification, supported by clear and convincing evidence,
for the decisions to cease divestment, reinvest or remain
invested in companies engaging in active business operations as
scrutinized companies.
  (c) This subsection does not apply to reinvestment in companies
on the grounds that they have ceased to engage in active business
operations as scrutinized companies. + }
  SECTION 9.  { + The Oregon Investment Council or State
Treasurer shall produce the first list of scrutinized companies
required by section 8 of this 2011 Act not later than 90 days
following the operative date specified in section 10 of this 2011
Act. + }
  SECTION 10.  { + (1) Sections 1 to 3 and 6 to 9 of this 2011
Act and the amendments to ORS 279B.100 and 279C.365 by sections 4
and 5 of this 2011 Act become operative January 1, 2012.
  (2) A contracting agency, the State Treasurer and the Oregon
Investment Council may take any action before the operative date
specified in subsection (1) of this section that is necessary for
the agency, council or treasurer to exercise, on and after the
operative date specified in subsection (1) of this section, all
the duties, functions and powers conferred on the agency, council
or treasurer by sections 1 to 3 and 6 to 9 of this 2011 Act and
the amendments to ORS 279B.100 and 279C.365 by sections 4 and 5
of this 2011 Act. + }
  SECTION 11.  { + This 2011 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2011 Act takes effect on
its passage. + }
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