Banning Insider Trading in Congress Act
This bill prohibits a Member of Congress or spouse of a Member from holding, purchasing, or selling certain investments. Any profit made in violation of the prohibition must be disgorged to the Treasury and may subject the Member to a civil fine. A loss from a transaction or holding involving a covered financial instrument that is conducted in violation of this bill may not be deducted from the amount of income tax owed by the applicable Member or spouse.
The bill also requires each Member to submit an annual certification of compliance and requires the Government Accountability Office to conduct a compliance audit.
The prohibition does not apply to assets held in a qualified blind trust or to a sale by a Member or spouse within 180 days after the bill is enacted or within 180 days after the Member commences service, for any Member who commences service after the bill is enacted.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6490 Introduced in House (IH)]
<DOC>
117th CONGRESS
2d Session
H. R. 6490
To amend the Ethics in Government Act of 1978 to prohibit transactions
involving certain financial instruments by Members of Congress.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 25, 2022
Mrs. Hartzler introduced the following bill; which was referred to the
Committee on House Administration, and in addition to the Committee on
Ways and Means, 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 amend the Ethics in Government Act of 1978 to prohibit transactions
involving certain financial instruments by Members of Congress.
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 ``Banning Insider Trading in Congress
Act''.
SEC. 2. BANNING INSIDER TRADING IN CONGRESS.
(a) In General.--The Ethics in Government Act of 1978 (5 U.S.C.
App.) is amended by inserting after title I the following:
``TITLE II--BANNING INSIDER TRADING IN CONGRESS
``SEC. 201. DEFINITIONS.
``In this title:
``(1) Covered financial instrument.--
``(A) In general.--The term `covered financial
instrument' means--
``(i) any investment in--
``(I) a security (as defined in
section 3(a) of Securities Exchange Act
of 1934 (15 U.S.C. 78c(a)));
``(II) a security future (as
defined in that section); or
``(III) a commodity (as defined in
section 1a of the Commodity Exchange
Act (7 U.S.C. 1a)); and
``(ii) any economic interest comparable to
an interest described in clause (i) that is
acquired through synthetic means, such as the
use of a derivative, including an option,
warrant, or other similar means.
``(B) Exclusions.--The term `covered financial
instrument' does not include--
``(i) a diversified mutual fund;
``(ii) a diversified exchange-traded fund;
``(iii) a United States Treasury bill,
note, or bond; or
``(iv) compensation from the primary
occupation of a spouse or dependent of a Member
of Congress.
``(2) Member of congress.--The term `Member of Congress'
has the meaning given the term in section 109.
``(3) Qualified blind trust.--The term `qualified blind
trust' has the meaning given the term in section 102(f)(3).
``(4) Supervising ethics committee.--The term `supervising
ethics committee' means, as applicable--
``(A) the Select Committee on Ethics of the Senate;
and
``(B) the Committee on Ethics of the House of
Representatives.
``SEC. 202. PROHIBITION ON CERTAIN TRANSACTIONS AND HOLDINGS INVOLVING
COVERED FINANCIAL INSTRUMENTS.
``(a) Prohibition.--Except as provided in subsection (b), a Member
of Congress, or any spouse of a Member of Congress, may not, during the
term of service of the Member of Congress, hold, purchase, or sell any
covered financial instrument.
``(b) Exceptions.--The prohibition under subsection (a) shall not
apply to--
``(1) a sale by a Member of Congress, or a spouse of a
Member of Congress, that is completed by the date that is--
``(A) for a Member of Congress serving on the date
of enactment of the Banning Insider Trading in Congress
Act, 180 days after that date of enactment; and
``(B) for any Member of Congress who commences
service as a Member of Congress after the date of
enactment of the Banning Insider Trading in Congress
Act, 180 days after the first date of the initial term
of service; or
``(2) a covered financial instrument held in a qualified
blind trust operated on behalf of, or for the benefit of, the
Member of Congress or spouse of the Member of Congress.
``(c) Penalties.--
``(1) Disgorgement.--A Member of Congress shall disgorge to
the Treasury of the United States any profit from a transaction
or holding involving a covered financial instrument that is
conducted in violation of this section.
``(2) Income tax.--A loss from a transaction or holding
involving a covered financial instrument that is conducted in
violation of this section may not be deducted from the amount
of income tax owed by the applicable Member of Congress or
spouse of a Member of Congress.
``(3) Fines.--A Member of Congress who holds or conducts a
transaction involving, or whose spouse holds or conducts a
transaction involving, a covered financial instrument in
violation of this section may be subject to a civil fine
assessed by the supervising ethics committee under section 204.
``SEC. 203. CERTIFICATION OF COMPLIANCE.
``(a) In General.--Not less frequently than annually, each Member
of Congress shall submit to the applicable supervising ethics committee
a written certification that the Member of Congress has achieved
compliance with the requirements of this title.
``(b) Publication.--The supervising ethics committees shall publish
each certification submitted under subsection (a) on a publicly
available website.
``SEC. 204. AUTHORITY OF SUPERVISING ETHICS COMMITTEES.
``(a) In General.--The supervising ethics committees may implement
and enforce the requirements of this title, including by--
``(1) issuing--
``(A) for Members of Congress--
``(i) rules governing that implementation;
and
``(ii) 1 or more reasonable extensions to
achieve compliance with this title, if the
supervising ethics committee determines that a
Member of Congress is making a good faith
effort to divest any covered financial
instruments; and
``(B) guidance relating to covered financial
instruments;
``(2) publishing on the Internet certifications submitted
by Members of Congress under section 203(a); and
``(3) assessing civil fines against any Member of Congress
who is in violation of this title, subject to subsection (b).
``(b) Requirements for Civil Fines.--
``(1) In general.--Before imposing a fine pursuant to this
section, a supervising ethics committee shall provide to the
applicable Member of Congress--
``(A) a written notice describing each covered
financial instrument transaction for which a fine will
be assessed; and
``(B) an opportunity, with respect to each such
covered financial instrument transaction--
``(i) for a hearing; and
``(ii) to achieve compliance with the
requirements of this title.
``(2) Publication.--Each supervising ethics committee shall
publish on a publicly available website a description of--
``(A) each fine assessed by the supervising ethics
committee pursuant to this section;
``(B) the reasons why each such fine was assessed;
and
``(C) the result of each assessment, including any
hearing under paragraph (1)(B)(i) relating to the
assessment.
``(3) Appeal.--A Member of Congress may appeal the
assessment of a fine under this section to a vote on the floor
of the Senate or the House of Representatives, as applicable,
as a privileged motion.
``SEC. 205. AUDIT BY GOVERNMENT ACCOUNTABILITY OFFICE.
``Not later than 2 years after the date of enactment of the Banning
Insider Trading in Congress Act, the Comptroller General of the United
States shall--
``(1) conduct an audit of the compliance by Members of
Congress with the requirements of this title; and
``(2) submit to the supervising ethics committees a report
describing the results of the audit conducted under paragraph
(1).''.
(b) Conforming Amendments.--
(1) Section 109 of the Ethics in Government Act of 1978 (5
U.S.C. App.) is amended--
(A) in the matter preceding paragraph (1), by
striking ``For the purposes of this title, the term--''
and inserting ``In this title:'';
(B) in paragraph (1), by striking ``means'' and all
that follows through ``Representatives;'' and inserting
the following: ``means, as applicable--
``(A) the Select Committee on Ethics of the Senate;
and
``(B) the Committee on Ethics of the House of
Representatives.'';
(C) in each of paragraphs (2) through (17), by
striking the semicolon at the end of the paragraph and
inserting a period;
(D) in paragraph (18)--
(i) in subparagraph (B), by striking
``Standards of Official Conduct'' and inserting
``Ethics''; and
(ii) in subparagraph (D), by striking ``;
and'' at the end and inserting a period;
(E) in each of paragraphs (1) through (19)--
(i) by inserting ``The term'' after the
paragraph designation; and
(ii) by inserting a paragraph heading, the
text of which is comprised of the term defined
in that paragraph; and
(F) by redesignating paragraphs (8) and (9) as
paragraphs (9) and (8), respectively, and moving the
paragraphs so as to appear in numerical order.
(2) Section 101(f) of the Ethics in Government Act of 1978
(5 U.S.C. App.) is amended--
(A) in paragraph (9), by striking ``as defined
under section 109(12)'';
(B) in paragraph (10), by striking ``as defined
under section 109(13)'';
(C) in paragraph (11), by striking ``as defined
under section 109(10)''; and
(D) in paragraph (12), by striking ``as defined
under section 109(8)''.
(3) Section 103 of the Ethics in Government Act of 1978 (5
U.S.C. App.) is amended--
(A) in subsection (j)(1), by striking ``Standards
of Official Conduct'' and inserting ``Ethics''; and
(B) in subsection (l)--
(i) in paragraph (9), by striking ``, as
defined under section 109(12)''; and
(ii) in paragraph (10), by striking ``, as
defined under section 109(13)''.
(4) Section 105(b)(3)(A) of the Ethics in Government Act of
1978 (5 U.S.C. App.) is amended by striking ``described in
section 109(8) or 109(10) of this Act'' and inserting ``who is
a judicial employee or judicial officer''.
(5) Section 111(2) of the Ethics in Government Act of 1978
(5 U.S.C. App.) is amended by striking ``Standards of Official
Conduct'' and inserting ``Ethics''.
(6) Section 402 of the Ethics in Government Act of 1978 (5
U.S.C. App.) is amended--
(A) in subsection (b), by striking ``title II of''
each place it appears; and
(B) in subsection (f)(2)(B)--
(i) by striking ``Subject to clause (iv) of
this subparagraph, before'' each place it
appears and inserting ``Before''; and
(ii) by striking clause (iv).
(7) Section 503(1)(A) of the Ethics in Government Act of
1978 (5 U.S.C. App.) is amended by striking ``Standards of
Official Conduct'' and inserting ``Ethics''.
(8) Section 3(4)(D) of the Lobbying Disclosure Act of 1995
(2 U.S.C. 1602(4)(D)) is amended by striking ``legislative
branch employee serving in a position described under section
109(13) of the Ethics in Government Act of 1978 (5 U.S.C.
App.)'' and inserting ``officer or employee of the Congress (as
defined in section 109 of the Ethics in Government Act of 1978
(5 U.S.C. App.))''.
(9) Section 21A of the Securities Exchange Act of 1934 (15
U.S.C. 78u-1) is amended--
(A) in subsection (g)(2)(B)(ii), by striking
``section 109(11) of the Ethics in Government Act of
1978 (5 U.S.C. App. 109(11))'' and inserting ``section
109 of the Ethics in Government Act of 1978 (5 U.S.C.
App.)''; and
(B) in subsection (h)(2)--
(i) in subparagraph (B), by striking
``section 109(8) of the Ethics in Government
Act of 1978 (5 U.S.C. App. 109(8))'' and
inserting ``section 109 of the Ethics in
Government Act of 1978 (5 U.S.C. App.)''; and
(ii) in subparagraph (C), by striking
``under section 109(10) of the Ethics in
Government Act of 1978 (5 U.S.C. App.
109(10))'' and inserting ``in section 109 of
the Ethics in Government Act of 1978 (5 U.S.C.
App.)''.
<all>
Introduced in House
Introduced in House
Referred to the Committee on House Administration, and in addition to the Committee on Ways and Means, 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.
Referred to the Committee on House Administration, and in addition to the Committee on Ways and Means, 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.
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