Bipartisan Ban on Congressional Stock Ownership Act of 2022
Bill: S.3631 | Sponsor: Sen. Warren, Elizabeth (D-MA)
Policy area: Congress

Summary:
Bipartisan Ban on Congressional Stock Ownership Act of 2022
This bill prohibits Members of Congress and their spouses from owning or trading stocks, bonds, commodities, futures, or any other form of security. Each current Member must divest within 180 days after the bill is enacted and each new Member must divest within 180 days after becoming a Member. However, Members and their spouses have 5 years to divest from specified complex investment vehicles. The bill does not apply to certain investments, such as investments in widely held investment funds that are diversified and do not present a conflict of interest and investments held in government employee retirement plans.
A Member or spouse who violates the bill may be subject to a fine of up to $50,000 for each violation. The bill permits a Member or spouse who is required to divest property under the bill to avoid recognizing gain for income tax purposes from the sale of that property to the extent that the Member or spouse purchases permitted bonds or diversified investment funds within 60 days of the divestiture.

To prohibit stock trading and ownership by Members of Congress and 
        spouses of Members of Congress, and for other purposes.

    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 ``Bipartisan Ban on Congressional 
Stock Ownership Act of 2022''.

SEC. 2. BAR ON STOCK TRADING AND OWNERSHIP BY MEMBERS OF CONGRESS AND 
              SPOUSES.

    (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) Congressional ethics committee.--The term 
        ``congressional ethics committee'' has the meaning given that 
        term in section 109 of the Ethics in Government Act of 1978 (5 
        U.S.C. App.).
            (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 109 of the Ethics in 
        Government Act of 1978 (5 U.S.C. App.).
            (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 section 102(f)(8) of the Ethics in Government Act of 1978 (5 
        U.S.C. App.).
    (b) Divestment.--
            (1) In general.--Except as provided in subsection (c), no 
        Member of Congress or spouse of a Member of Congress may 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 on the date of enactment of this Act, 
                        or the spouse of such an individual, 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 on the 
                        date of enactment of this Act, or the spouse of 
                        such an individual, 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 after the date of enactment of this 
                        Act, or who is the spouse of such an 
                        individual, 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.
                            (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 
                        after the date of enactment of this Act, or who 
                        is the spouse of such an individual, 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.
                    (C) Divestment of assets received while a member.--
                An individual serving as a Member of Congress, or the 
                spouse of such an individual, 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 or spouse 
                receives the asset.
    (c) Exceptions.--Nothing in this section shall be construed to 
prevent--
            (1) a Member of Congress or spouse 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 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 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 shall be subject to a civil penalty of not more 
than $50,000 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 Member of Congress-
                elect, but only with respect to a divestment of 
                property required by the Bipartisan Ban on 
                Congressional Stock Ownership Act of 2022, 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, in the case of Members 
                of Congress, Members of Congress-elect, and spouses of 
                Members of Congress and Members of Congress-elect'' 
                after ``judicial officers''.
            (3) 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.
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