End Congressional Stock Trading Act

“1. Short title

“This Act may be cited as the “End Congressional Stock Trading Act”.

“2. 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) Qualified blind trust—The term qualified blind trust has the meaning given that term in section 13104(f)(3) of title 5, United States Code.

“(6) 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)).

“(7) 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).

“(8) 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 2 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 180 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 2 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;

“(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; or

“(3) a Member of Congress or a spouse or dependent child of a Member of Congress from holding any stock, bond, commodity, future, or other form of security in a qualified blind trust operated on behalf of, or for the benefit of, the Member or the spouse or dependent child of the Member.

“(d) Civil fines

“(1) In general—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 or 10 percent of the most recent combined value of each stock, bond, commodity, future, or other form of security involved (whichever is greater). 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.

“(2) Prohibiting use of office funds—A Member of Congress may not use funds made available from the Members’ Representational Allowance (in the case of a Representative in, or Delegate or Resident Commissioner to, the Congress) or the Senators’ Official Personnel and Office Expense Account (in the case of a Senator) to pay a penalty imposed under paragraph (1).

“(3) Prohibiting use of campaign funds—Section 313(b) of the Federal Election Campaign Act of 1971 (52 U.S.C. 30114(b)) is amended by adding at the end the following new paragraph:

“(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:

“(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.

“3. Annual certification of compliance

“(a) Certification

“(1) In general—Except as provided in paragraph (2), not later than 60 days after the beginning of any session of Congress, each Member of Congress shall submit to the applicable official a written certification that the Member and the Member’s spouse are in compliance with the requirements of this Act.

“(2) Special rule for first session after enactment—In the case of the first session of Congress which begins after the date of the enactment of this Act, paragraph (1) shall apply as if the reference to “60 days” was a reference to “180 days”.

“(b) Publication—The applicable official shall publish the certifications submitted to the applicable official under paragraph (1) on a publicly available website.

“(c) Use of certifications for audits by Internal Revenue Service—Upon receiving a certification under subsection (a), the applicable official shall transmit the certification to the Secretary of the Treasury, who shall carry out such actions, including audits and investigations, as the Secretary determines appropriate to ensure the accuracy of the certification.

“(d) Applicable official defined—In this section, the term applicable official means—

“(1) the Clerk of the House of Representatives (in the case of a Representative in, or Delegate or Resident Commissioner to, the Congress or the spouse of a Representative in, or Delegate or Resident Commissioner to, the Congress); or

“(2) the Secretary of the Senate (in the case of a Senator and the spouse of a Senator).”