Bar on stock trading and ownership by Members of Congress and their spouses and dependent children

(a)

Definitions

In this section:(1)

Commodity

The term commodity has the meaning given that term in section 1a of the Commodity Exchange Act (7 U.S.C. 1a).(2)

Dependent child

The term dependent child has the meaning given that term in section 13101 of title 5, United States Code. (3)

Diversified

The term diversified, with respect to an investment fund, means that the investment fund does not have a stated policy of overly concentrating its investments. (4)

Member of Congress

The term Member of Congress has the meaning given that term in section 13101 of title 5, United States Code.(5)

Security

The term security has the meaning given that term in section 3(a) of Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).(6)

Small business concern

The term small business concern has the meaning given that term under section 3 of the Small Business Act (15 U.S.C. 632).(7)

Widely held investment fund

The term widely held investment fund means a widely held investment fund described in 13104(f)(8) of title 5, United States Code.(b)

Divestment

(1)

In general

A Member of Congress or a spouse or dependent child of a Member of Congress may not own an interest in or trade (except as a divestment) any stock, bond, commodity, future, or other form of security, including an interest in a hedge fund, a derivative, option, or other complex investment vehicle.(2)

Implementation

(A)

Current Members

(i)

In general

Except as provided in clause (ii), an individual who is a Member of Congress or a spouse or dependent child of a Member of Congress on the date of enactment of this Act shall complete the divestment of any asset described in paragraph (1) by not later than 180 days after the date of enactment of this Act.(ii)

Certain assets

For an asset described in paragraph (1) that is an interest in a hedge fund, venture capital fund, or other privately held complex investment vehicle, an individual who is a Member of Congress or a spouse or dependent child of a Member of Congress on the date of enactment of this Act shall complete the divestment of the asset by not later than 5 years after the date of enactment of this Act.(B)

New Members

(i)

In general

Except as provided in clause (ii), an individual who becomes a Member of Congress or a spouse or dependent child of a Member of Congress after the date of enactment of this Act shall complete the divestment of any asset described in paragraph (1) by not later than 90 days after the date on which the individual becomes a Member of Congress or a spouse or dependent child of a Member of Congress.(ii)

Certain assets

For an asset described in paragraph (1) that is an interest in a hedge fund, venture capital fund, or other privately held complex investment vehicle, an individual who becomes a Member of Congress or a spouse or dependent child of a Member of Congress after the date of enactment of this Act shall complete the divestment of the asset by not later than 5 years after the date on which the individual becomes a Member of Congress or a spouse or dependent child of a Member of Congress. (C)

Divestment of assets received while a Member

An individual serving as a Member of Congress or a spouse or dependent child of an individual serving as a Member of Congress who receives any asset described in paragraph (1) during the period of such service, such as from an inheritance, shall complete the divestment of the asset by not later than 180 days after the date on which the individual receives the asset. (c)

Exceptions

Nothing in this section shall be construed to prevent— (1)a Member of Congress or a spouse or dependent child of a Member of Congress from owning or trading—(A)a widely held investment fund, if the widely held investment fund— (i)does not present a conflict of interest; and(ii)is diversified; (B)shares of Settlement Common Stock issued under section 7(g)(1)(A) of the Alaska Native Claims Settlement Act (43 U.S.C. 1606(g)(1)(A)); (C)shares of Settlement Common Stock, as defined in section 3 of the Alaska Native Claims Settlement Act (43 U.S.C. 1602); (D)a United States Treasury bill, note, or bond;(E)an investment fund held in a Federal, State, or local government employee retirement plan; (F)an interest in a small business concern, if the small business concern does not present a conflict of interest; or(G)any asset described in subsection (b)(1) received as compensation from the primary occupation of the spouse; or(2)a spouse or dependent child of a Member of Congress from trading any asset described in subsection (b)(1) that is not owned by the spouse or Member of Congress in the course of performing the primary occupation of the spouse. (d)

Civil fines

The Attorney General or the Special Counsel may bring a civil action in the appropriate United States district court against any Member of Congress or spouse or dependent child of a Member of Congress who engages in conduct constituting a violation of this section and, upon proof of such conduct by a preponderance of the evidence, such Member of Congress or spouse or dependent child of such Member of Congress shall be subject to a civil penalty of not more than $100,000 for each violation. The imposition of a civil penalty under this subsection does not preclude any other criminal or civil statutory, common law, or administrative remedy, which is available by law to the United States or any other person.(e)

Nonrecognition of gain

(1)

In general

Paragraph (1) of section 1043(b) of the Internal Revenue Code of 1986 is amended—(A)by striking and at the end of subparagraph (A);(B)by redesignating subparagraph (B) as subparagraph (C);(C)by inserting after subparagraph (A) the following new subparagraph:

(B)any Member of Congress or any spouse or dependent child of a Member of Congress, but only with respect to a divestment of property required by the End Congressional Stock Trading Act and only if, not later than 60 days after the divestment of such property, the individual uses the proceeds of the divestment to obtain property which the individual is authorized to own or trade under section 2(c)(1) of such Act, and

; and

(D)by striking subparagraph (A) in subparagraph (C), as so redesignated, and inserting subparagraph (A) or (B), whichever is applicable.(2)

Certificate of divestiture

Subparagraph (B) of section 1043(b)(2) of such Code is amended—(A)by striking or by and inserting by; and(B)by inserting , or by the applicable congressional ethics committee, as defined in section 13101 of title 5, United States Code, in the case of Members of Congress and spouses and dependent children of Members of Congress, after judicial officers.(3)

No effect on subsequent sale of property

Nothing in the amendments made by this subsection shall be construed to provide for the nonrecognition of gain with respect to the sale of property obtained by a Member of Congress or any spouse or dependent child of a Member of Congress with the proceeds of a divestment required by this Act, as described in section 1043(b)(1)(B) of the Internal Revenue Code of 1986 (as added by this subsection).(4)

Effective date

The amendments made by this subsection shall apply to sales of property after the date of the enactment of this Act.(f)

Interpretive guidance

The Select Committee on Ethics of the Senate and the Committee on Ethics of the House of Representatives shall issue interpretive guidance regarding relevant terms not defined in this Act or elsewhere in statute.