Restore Trust in Government Act

The table of contents for chapter 131 of title 5, United States Code, is amended by adding at the end the following:

Chapter 131 of title 5, United States Code, is amended by adding at the end a new subchapter:

In this subchapter:

The term commodity —

(A) has the meaning given the term in section 1a of the Commodity Exchange Act (7 U.S.C. 1a); and

(B) does not include a precious metal (as defined in section 1027.100 of title 31, Code of Federal Regulations).

The term covered individual means any of the following:

(A) A Member of Congress, as defined in section 13101.

(B) A dependent child (as defined in section 13101) or a spouse of a Member of Congress.

(C) A trustee of a trust in which an individual described in subparagraph (A) or (B) has a beneficial interest in the principal or income of the trust as described in section 1403(b)(5) of the Internal Revenue Code of 1986.

(D) The President, or the spouse or a dependent child (as defined in section 13101) of the President.

(E) The Vice President, or the spouse or a dependent child (as defined in section 13101) of the Vice President.

The term covered investment —

(A) means an investment in a security, a commodity, a future, or any comparable economic interest acquired through synthetic means, such as the use of a derivative, including an option, warrant, or other similar means; and

(B) does not include—

(i) a widely held investment fund described in section 13104(f)(8) that is diversified and publicly traded on a national or regional stock exchange;

(ii) a United States Treasury bill, note, or bond;

(iii) a State or municipal government bill, note, or bond;

(iv) any compensation received by a spouse or a dependent child described in paragraph (2) from an employer of the spouse or dependent child;

(v) an interest in a small business concern and, in the case of an investment in a family farm or ranch that qualifies as an interest in a small business concern, a future or commodity directly related to the farming activities and products of the farm or ranch;

(vi) an interest in a limited liability company created for the sole purpose of purchasing or holding real estate that serves as the personal residences of the Member of Congress;

(vii) any share 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)); or

(viii) any share of Settlement Common Stock, as defined in section 3 of the Alaska Native Claims Settlement Act (43 U.S.C. 1602).

The term diversified, with respect to an investment fund, means such fund does not have a stated policy of concentrating its investments in any industry, business, single country other than the United States, or bonds of a single State within the United States except for the State in which the Member of Congress resides.

The term future means a financial contract obligating the buyer to purchase an asset or the seller to sell an asset, such as a physical commodity or a financial investment, at a predetermined future date and price.

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

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

The term supervising ethics office has the meaning given the term in section 13101.

Except as described in subsection (b)(1)(B) and subsections (e) through (g), no covered individual may, directly or indirectly, own or trade a covered investment.

To comply with subsection (a)—

(A) a covered individual may not purchase a covered investment; and

(B) a covered individual shall divest of any covered investment by the effective date established in paragraph (2) at fair market value.

The effective date is established as follows:

(A) 180 days for an individual who is a covered individual on the date of enactment of the Restore Trust in Government Act.

(B) 90 days within the date on which an individual becomes a covered individual if such date occurs after the date of enactment of the Restore Trust in Government Act.

For purposes of section 1043 of the Internal Revenue Code of 1986—

(A) this section shall be treated as a Federal conflict of interest statute;

(B) any covered individual described in section 13151(2)(A) shall be treated as an eligible person described in section 1043(b)(1)(A) of such Code; and

(C) any spouse or dependent child described in section 13151(2)(B) shall be treated as an eligible person described in section 1043(b)(1)(B) of such Code.

Each supervising ethics office shall issue a certificate of divestiture to each covered individual required to divest under this subchapter upon submission of proof of compliance by such individual with the requirements to divest or any extensions granted by the supervising ethics office.

Such certificate shall include an identification of each specific property eligible for the application of the certificate of divestiture program as determined by the supervising ethics office.

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 covered individual.

A spouse or dependent child of a covered individual as described in section 13151(2)(B) may trade any covered investment if such covered investment is not owned by a covered individual and if such trade is performed as a function of the primary occupation of the spouse or dependent child.

Any covered investment held in a qualified blind trust as defined in section 13104(f)(3) shall be divested in accordance with subsection (b)(1)(B) by the effective date established in subsection (b)(2).

A supervising ethics office may grant an exemption for covered investments held in a family trust only if—

(A) no covered individual—

(i) is a grantor of the family trust;

(ii) contributed any covered investment to the family trust; or

(iii) has any authority over a trustee of the family trust, including the authority to appoint, replace, or direct the actions of such a trustee; and

(B) the grantor of the family trust is or was a family member of the covered individual.

A covered individual seeking an exemption under paragraph (2) shall submit to the applicable supervising ethics office a request for the exemption, in writing, certifying that the conditions described in that paragraph are met.

In the event that a covered individual acquires a covered investment after the date of enactment of the Restore Trust in Government Act other than by purchase (such as by marriage, inheritance, divorce settlement, or other circumstance), the covered individual shall have 90 days from the date on which such investment was acquired to divest such covered investment at fair market value.

A supervising ethics office may grant a covered individual an extension of time to comply with a divestment deadline under this subchapter if a covered investment cannot be divested by such deadline due to low liquidity, vesting schedules, or contractual restrictions.

The supervising ethics office shall issue interpretive guidance on any relevant term not defined in this subchapter.

Any covered individual who violates the restrictions on trading or ownership of covered investments in section 13152 shall, at the direction of the supervising ethics office—

(A) pay a fee equal to ten percent of the value of the covered investment; and

(B) disgorge the profits of any transaction that violates the provisions of this subchapter.

A penalty imposed under paragraph (1)(B) shall be payable into the Treasury of the United States.

A Member of Congress may not pay any of the penalties under this section by using amounts from the following sources:

(1) The Members’ Representational Allowance.

(2) The Senators’ Official Personnel and Office Expense Account.

(3) Any contribution (as defined in section 301(8) of the Federal Election Campaign Act of 1971 (52 U.S.C. 30101(8))) accepted as a candidate, and any other donation received as support for activities of the individual as a holder of Federal office.

Each supervising ethics office shall publish on a publicly available website a description of—

(1) each fine assessed by the supervising ethics office pursuant to this section;

(2) the reason why each such fine was assessed; and

(3) the result of each assessment.