Banning Insider Trading in Congress Act
Bill: H.R.6490 | Sponsor: Rep. Hartzler, Vicky (R-MO)
Policy area: Congress

Summary:
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.

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>