I 118TH CONGRESS 1ST SESSION H. R. 2678 To amend chapter 131 of title 5, United States Code, to prevent Members of Congress and their spouses and dependent children from trading stocks and owning stocks, and for other purposes. IN THE HOUSE OF REPRESENTATIVES APRIL 18, 2023 Mr. KRISHNAMOORTHI (for himself, Mr. CLOUD, Ms. OCASIO-CORTEZ, and Mr. NEGUSE) introduced the following bill; which was referred to the Committee on House Administration, and in addition to the Committees on Oversight and Accountability, and the Judiciary, 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 con- cerned A BILL To amend chapter 131 of title 5, United States Code, to prevent Members of Congress and their spouses and dependent children from trading stocks and owning stocks, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Ending Trading and 4 Holdings in Congressional Stocks (ETHICS) Act’’. 5 VerDate Sep 11 2014 23:25 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2678.IH H2678 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •HR 2678 IH SEC. 2. PLACEMENT OF CERTAIN ASSETS OF MEMBERS OF 1 CONGRESS AND THEIR SPOUSES AND DE- 2 PENDENT CHILDREN IN QUALIFIED BLIND 3 TRUSTS. 4 (a) IN GENERAL.—Chapter 131 of title 5, United 5 States Code, is amended by adding at the end the fol- 6 lowing: 7 ‘‘Subchapter IV—Certain Assets of Members 8 of Congress and Their Spouses and De- 9 pendent Children 10 ‘‘§ 13161. Definitions 11 ‘‘In this title: 12 ‘‘(1) COMMODITY.—The term ‘commodity’ has 13 the meaning given the term in section 1a of the 14 Commodity Exchange Act (7 U.S.C. 1a). 15 ‘‘(2) COVERED INVESTMENT.— 16 ‘‘(A) IN GENERAL.—The term ‘covered in- 17 vestment’ means— 18 ‘‘(i) an investment in— 19 ‘‘(I) a security; 20 ‘‘(II) a commodity; or 21 ‘‘(III) a future; 22 ‘‘(ii) any economic interest com- 23 parable to an interest described in clause 24 (i) that is acquired through synthetic 25 means, such as the use of a derivative, in- 26 VerDate Sep 11 2014 23:25 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2678.IH H2678 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •HR 2678 IH cluding an option, warrant, or other, simi- 1 lar means; or 2 ‘‘(iii) any interest described in clause 3 (i) or (ii) that is held directly, or in which 4 an individual has an indirect, beneficial, or 5 economic interest, through— 6 ‘‘(I) an investment fund or hold- 7 ing company; 8 ‘‘(II) a trust (other than a quali- 9 fied blind trust); 10 ‘‘(III) an employee benefit plan; 11 or 12 ‘‘(IV) a deferred compensation 13 plan, including a carried interest or 14 other agreement tied to the perform- 15 ance of an investment, other than a 16 fixed cash payment. 17 ‘‘(B) EXCLUSIONS.—The term ‘covered in- 18 vestment’ does not include— 19 ‘‘(i) a diversified mutual fund (includ- 20 ing any holdings of such a fund); 21 ‘‘(ii) a diversified exchange-traded 22 fund (including any holdings of such a 23 fund); 24 VerDate Sep 11 2014 23:25 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2678.IH H2678 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •HR 2678 IH ‘‘(iii) a United States Treasury bill, 1 note, or bond; 2 ‘‘(iv) compensation from the primary 3 occupation of the spouse of a Member of 4 Congress, or any security that is issued or 5 paid by an operating business that is the 6 primary employer of such a spouse that is 7 issued or paid to such a spouse; 8 ‘‘(v) holding and acquiring any secu- 9 rity that is issued or paid as compensation 10 from corporate board service by the spouse 11 of a Member of Congress, including the 12 dividend reinvestment in the same security 13 received from the corporate board service 14 by the spouse of a Member of Congress; 15 ‘‘(vi) any covered investment that is 16 traded by the spouse of a Member of Con- 17 gress in the course of performing the pri- 18 mary occupation of such a spouse, pro- 19 vided the investment is not owned by a 20 covered person; 21 ‘‘(vii) any investment fund held in a 22 Federal, State, or local government em- 23 ployee retirement plan; 24 VerDate Sep 11 2014 23:25 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2678.IH H2678 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •HR 2678 IH ‘‘(viii) a tax-free State or municipal 1 bond; 2 ‘‘(ix) an interest in a small business 3 concern, if the supervising ethics office de- 4 termines that the small business concern 5 does not present a conflict of interest, and, 6 in the case of an investment in a family 7 farm or ranch that qualifies as an interest 8 in a small business concern, a future or 9 commodity directly related to the farming 10 activities and products of the farm or 11 ranch; 12 ‘‘(x) holding investment-grade cor- 13 porate bonds, provided that the corporate 14 bonds are held by an individual who is a 15 covered person on the date of enactment of 16 the Ending Trading and Holdings in Con- 17 gressional Stocks (ETHICS) Act; 18 ‘‘(xi) any share of Settlement Com- 19 mon Stock issued under section 7(g)(1)(A) 20 of the Alaska Native Claims Settlement 21 Act (43 U.S.C. 1606(g)(1)(A)); or 22 ‘‘(xii) any share of Settlement Com- 23 mon Stock, as defined in section 3 of the 24 VerDate Sep 11 2014 23:25 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2678.IH H2678 pbinns on DSKJLVW7X2PROD with $$_JOB 6 •HR 2678 IH Alaska Native Claims Settlement Act (43 1 U.S.C. 1602). 2 ‘‘(3) COVERED PERSON.—The term ‘covered 3 person’ means— 4 ‘‘(A) a Member of Congress; and 5 ‘‘(B) a spouse or dependent child of a 6 Member of Congress. 7 ‘‘(4) CUSTODY.—The term ‘custody’ has the 8 meaning given the term in section 275.206(4)–2(d) 9 of title 17, Code of Federal Regulations (as in effect 10 on the date of enactment of the Ending Trading and 11 Holdings in Congressional Stocks (ETHICS) Act or 12 a successor regulation). 13 ‘‘(5) DEPENDENT CHILD.—The term ‘depend- 14 ent child’ means, with respect to any Member of 15 Congress any individual who is— 16 ‘‘(A) under the age of 19; and 17 ‘‘(B) a dependent of the Member of Con- 18 gress within the meaning of section 152 of the 19 Internal Revenue Code of 1986. 20 ‘‘(6) DIVERSIFIED.—The term ‘diversified’, 21 with respect to a fund, trust, or plan, means that 22 the fund, trust, or plan does not have a stated policy 23 of concentrating its investments in any industry, 24 VerDate Sep 11 2014 23:25 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2678.IH H2678 pbinns on DSKJLVW7X2PROD with $$_JOB 7 •HR 2678 IH business, or single country other than the United 1 States. 2 ‘‘(7) FUTURE.—The term ‘future’ means— 3 ‘‘(A) a security future (as defined in sec- 4 tion 3(a) of the Securities Exchange Act of 5 1934 (15 U.S.C. 78c(a))); and 6 ‘‘(B) any other contract for the sale of a 7 commodity for future delivery. 8 ‘‘(8) ILLIQUID INVESTMENT.—The term ‘il- 9 liquid investment’ means an interest in a private 10 fund, as defined in section 202(a)(29) of the Invest- 11 ment Advisers Act of 1940 (15 U.S.C. 80b–2). 12 ‘‘(9) INITIAL PROPERTY.—The term ‘initial 13 property’ means an asset or financial interest trans- 14 ferred to a qualified blind trust by, or on behalf of, 15 an interested party or a relative of an interested 16 party, regardless of whether the asset or financial 17 interest is transferred to the qualified blind trust on 18 or after the date of establishment of the qualified 19 blind trust. 20 ‘‘(10) INTERESTED PARTY.—The term ‘inter- 21 ested party’ has the meaning given the term in sec- 22 tion 102(f)(3)(E). 23 ‘‘(11) MEMBER OF CONGRESS; SUPERVISING 24 ETHICS OFFICE.—The terms ‘Member of Congress’ 25 VerDate Sep 11 2014 23:25 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2678.IH H2678 pbinns on DSKJLVW7X2PROD with $$_JOB 8 •HR 2678 IH and ‘supervising ethics office’ have the meaning 1 given those terms in section 13101. 2 ‘‘(12) QUALIFIED BLIND TRUST.—The term 3 ‘qualified blind trust’ means a qualified blind trust 4 (as defined in section 13104(f)(3)) that has been ap- 5 proved in writing by the applicable supervising ethics 6 office under section 13104(f)(3)(D). 7 ‘‘(13) SECURITY.—The term ‘security’ has the 8 meaning given the term in section 3(a) of the Secu- 9 rities Exchange Act of 1934 (15 U.S.C. 78c(a)). 10 ‘‘(14) SMALL BUSINESS CONCERN.—The term 11 ‘small business concern’ has the meaning given the 12 term under section 3 of the Small Business Act (15 13 U.S.C. 632). 14 ‘‘§ 13162. Trading covered investments 15 ‘‘(a) BAN ON TRADING.—Except as provided in sub- 16 sections (b) and (c)— 17 ‘‘(1) effective on the date of enactment of the 18 Ending Trading and Holdings in Congressional 19 Stocks (ETHICS) Act, a Member of Congress shall 20 not purchase any covered investment; 21 ‘‘(2) effective on the date that is 90 days after 22 the date of enactment of the Ending Trading and 23 Holdings in Congressional Stocks (ETHICS) Act, a 24 Member shall of Congress not sell any covered in- 25 VerDate Sep 11 2014 23:25 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2678.IH H2678 pbinns on DSKJLVW7X2PROD with $$_JOB 9 •HR 2678 IH vestment, except as provided in section 203(a)(2); 1 and 2 ‘‘(3) on and after the effective date described in 3 section 203(k), a covered person that is a spouse or 4 dependent child of a Member of Congress shall not 5 purchase any covered investment or sell any covered 6 investment, except as provided in section 203(a)(2). 7 ‘‘(b) OPTIONAL DIVESTMENT WINDOW.—Notwith- 8 standing subsection (a)— 9 ‘‘(1) a Member of Congress who is sworn as a 10 Member of Congress on or before the date of enact- 11 ment of the Ending Trading and Holdings in Con- 12 gressional Stocks (ETHICS) Act may sell a covered 13 investment within 90 days of the date of enactment 14 of such Act, provided that the Member of Congress 15 may not sell any covered investment at any time out- 16 side of that period while the Member of Congress 17 serves the term for which the Member of Congress 18 was elected or is reelected or appointed as a Member 19 of Congress except as provided in section 203(a)(2); 20 and 21 ‘‘(2) a Member of Congress who is sworn as a 22 Member of Congress after the date of enactment of 23 the Ending Trading and Holdings in Congressional 24 Stocks (ETHICS) Act may sell a covered investment 25 VerDate Sep 11 2014 23:25 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2678.IH H2678 pbinns on DSKJLVW7X2PROD with $$_JOB 10 •HR 2678 IH within 90 days of commencing the term of service as 1 a Member of Congress, provided that the Member of 2 Congress may not sell any covered investment at any 3 time outside of that period while the Member of 4 Congress serves the term for which the Member of 5 Congress was elected or is reelected or appointed as 6 a Member of Congress except as provided in section 7 203(a)(2). 8 ‘‘(c) EXCEPTION.—Notwithstanding subsection (a), a 9 covered person may divest a covered investment as di- 10 rected by the relevant supervising ethics office pursuant 11 to this Act. 12 ‘‘(d) JOINT COVERED INVESTMENT.—Any covered 13 investment reported to the supervising ethics office as 14 jointly owned by a Member of Congress and the spouse 15 of the Member of Congress shall be deemed to be a covered 16 investment of the Member of Congress for purposes of this 17 section. 18 ‘‘§ 13163. Addressing owned covered investments 19 ‘‘(a) MEMBERS OF CONGRESS.— 20 ‘‘(1) CERTIFICATION.—Not later than 60 days 21 after the applicable effective date described in sub- 22 section (j), a Member of Congress shall submit to 23 the supervising ethics office a certification, which 24 VerDate Sep 11 2014 23:25 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2678.IH H2678 pbinns on DSKJLVW7X2PROD with $$_JOB 11 •HR 2678 IH the supervising ethics office shall publish online that 1 certifies that— 2 ‘‘(A) each covered investment owned by, or 3 in the custody of, the Member of Congress, or 4 a spouse or dependent child of the Member of 5 Congress, will, by the applicable deadline under 6 paragraph (2), be— 7 ‘‘(i) divested, as described in para- 8 graph (2)(B); or 9 ‘‘(ii) placed in a qualified blind trust, 10 including through the establishment of a 11 qualified blind trust for that purpose, if 12 necessary, as described in paragraph 13 (2)(A); and 14 ‘‘(B) no spouse or dependent child of the 15 Member of Congress owns, or has custody of, 16 covered investments with a cumulative amount 17 equal to more than $10,000, in accordance with 18 paragraph (6). 19 ‘‘(2) DIVESTITURE OR PLACEMENT IN QUALI- 20 FIED BLIND TRUST.— 21 ‘‘(A) REQUIREMENT.—Subject to para- 22 graphs (3) and (6) and subsection (b)(2), not 23 later than 120 days after the applicable effec- 24 tive date described in subsection (j), a Member 25 VerDate Sep 11 2014 23:25 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2678.IH H2678 pbinns on DSKJLVW7X2PROD with $$_JOB 12 •HR 2678 IH of Congress shall divest, or place in a qualified 1 blind trust (including by establishing a qualified 2 blind trust for that purpose, if necessary), each 3 covered investment owned or in the custody 4 of— 5 ‘‘(i) the Member of Congress; or 6 ‘‘(ii) a spouse or dependent child of 7 the Member of Congress. 8 ‘‘(B) DIVESTITURE.—A covered person 9 shall divest any covered investment owned by or 10 in the custody of the covered person that is not 11 placed in a qualified blind trust not later than 12 the date described in subparagraph (A), subject 13 to any extension granted under paragraph (3). 14 ‘‘(C) QUALIFIED BLIND TRUSTS.— 15 ‘‘(i) MANDATORY SALE OF INITIAL 16 PROPERTY IN QUALIFIED BLIND TRUST.— 17 ‘‘(I) IN GENERAL.—Subject to 18 clause (ii), if a covered person places, 19 or has placed before the applicable ef- 20 fective date described in subsection 21 (j), 1 or more covered investments in 22 a qualified blind trust, the trustee of 23 the qualified blind trust shall divest 24 any such covered investment not later 25 VerDate Sep 11 2014 23:25 Apr 23, 2023 Jkt 039200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H2678.IH H2678 pbinns on DSKJLVW7X2PROD with $$_JOB 13 •HR 2678 IH than the date specified in subclause 1 (II). 2 ‘‘(II) DEADLINE.—The date 3 specified in this subclause is— 4 ‘‘(aa) with respect to a cov- 5 ered investment placed in a quali- 6 fied blind trust before the appli- 7 cable effective date described in 8 subsection (j), 120 days after 9 such applic [Text truncated for display. Full text available on Congress.gov.]