American Sovereign Wealth Fund Exploration Act

Bill Number

H.R. 3116

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Finance and Financial Sector

Status

Introduced

Latest Action

2025-04-30: Referred to the House Committee on Financial Services.

Last Updated

2025-05-21T12:06:19Z

AI-Generated Summary

Purpose of the Legislation

The "American Sovereign Wealth Fund Exploration Act" (H.R. 3116) aims to create a temporary commission to investigate the idea of establishing a national sovereign wealth fund (SWF) owned and managed by the United States. An SWF is a state-owned investment fund that manages national savings for long-term goals like economic stability or public benefits. The commission would study its feasibility and provide recommendations to Congress, without directly creating the fund.

Key Provisions

• Establishment and Timeline: The Chair of the Federal Reserve must form the "Commission on Exploring the Creation of a Sovereign Wealth Fund of the United States" within 90 days of the bill's enactment. The commission will operate for up to 2 years.
• Membership: The 25-member commission includes:
• 6 from the Federal Reserve (appointed by its Chair).
• 3 from the Department of the Treasury (appointed by the Secretary).
• 3 from the Securities and Exchange Commission (SEC; appointed by its Chair; the SEC regulates securities markets to protect investors).
• 2 from the Department of Commerce (appointed by the Secretary).
• 1 from the Office of the United States Trade Representative (appointed by the Trade Representative).
• 10 experts from academia or fields like economics, monetary policy (government control of money supply), fiscal policy (government spending and taxes), and SWFs (appointed by the Federal Reserve Chair).
• Operations:
• Members serve 2-year terms, renewable; vacancies filled within 30 days.
• Meets at least quarterly; majority quorum required; can form subcommittees.
• Members elect a Chairperson, with a replacement selected within 30 days if vacant.
• Investigation Scope: The commission must examine:
• Feasibility of an SWF, including revenue sources (e.g., natural resources, taxes, tariffs, foreign reserves, borrowing, surpluses, private/foreign contributions).
• Fund composition (e.g., stocks, bonds, real estate, private equity, strategic assets) and investment limits.
• Uses of funds (e.g., government programs, dividends to citizens, debt reduction, infrastructure, social spending, economic stabilization).
• Management based on the "Santiago Principles" (international guidelines for SWF governance, emphasizing transparency, independence, and ethics), covering structure, oversight, accountability, investment decisions, and handling losses.
• Projected outcomes like profitability and economic scenarios.
• Broader implications for U.S. fiscal balance, currency values, stock markets, wealth inequality, growth, inflation, housing, financial stability, politics, trade, corruption, and national security.
• Solicit input from interested parties and evaluate related proposals.
• Powers and Resources:
• Hold hearings, gather evidence, and detail federal employees or hire experts/consultants.
• Enter contracts, use postal services, get administrative support from General Services Administration, and hire staff (paid up to Executive Schedule Level V, a high federal pay grade).
• Members receive travel expenses at federal employee rates.
• Reporting: Within 2 years of its first meeting, submit a public report to the President, relevant agencies, and congressional committees, including findings, legislative recommendations, and any minority views.

Significant Changes to Existing Law

This bill introduces a new commission, which does not exist under current U.S. law. The U.S. lacks a national SWF (unlike countries like Norway or China), so it creates a framework for studying one without altering existing financial laws directly. If recommendations lead to future legislation, it could change rules on federal investments, budgeting, and agency roles, but the bill itself makes no immediate changes.

Potential Impacts

• On Government Agencies: Involves coordination among the Federal Reserve, Treasury, SEC, Commerce, and Trade Representative for appointments and support; could burden them with staffing and resources during the study. A future SWF might shift investment responsibilities to these agencies or create new oversight mechanisms.
• On Citizens: No direct immediate effects, but study outcomes could influence economic policies affecting taxes, social programs, housing affordability, inequality, and national debt. If an SWF is created, it might fund public benefits or stabilize the economy, potentially benefiting or burdening taxpayers.
• On International Relations: The study could explore foreign investments or contributions, impacting trade, currency exchange rates, and relations with countries hosting SWFs. Adopting Santiago Principles would align U.S. practices with global standards, possibly reducing tensions over perceived unfair investments, but it might raise concerns about U.S. protectionism or national security in global markets.

Main Stakeholders Affected

• Federal Agencies and Officials: Federal Reserve, Treasury, SEC, Commerce Department, and U.S. Trade Representative (provide members and support).
• Experts and Academia: Economists and policy specialists (serve as members and provide input).
• Congress and the President: Receive the report and decide on future actions.
• Broader Public and Economy: Citizens, businesses, investors, and international partners (affected by potential economic implications like market stability or trade policies).
• Interested Parties: Groups concerned with finance, trade, or national security (consulted during the investigation).

Notable Legal, Constitutional, or Political Implications

• Legal: Emphasizes adherence to international Santiago Principles for ethical, transparent SWF management, which could set precedents for federal investment rules. Allows flexible hiring and contracting, bypassing some standard federal hiring laws (e.g., competitive service under Title 5 of U.S. Code) to expedite operations.
• Constitutional: Relies on Congress's powers over finance, commerce, and national economy (under Article I), but a future SWF might raise questions about separation of powers if it involves independent investment decisions versus political control.
• Political: The commission's focus on political independence and anti-corruption could spark debates on government intervention in markets versus free enterprise. Recommendations might fuel partisan discussions on fiscal responsibility, wealth distribution, or national security, especially regarding foreign funding sources or investments.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. McGarvey, Morgan [D-KY-3]

Recent Actions

• 2025-04-30: Referred to the House Committee on Financial Services.
• 2025-04-30: Introduced in House
• 2025-04-30: Introduced in House

Bill Versions

• American Sovereign Wealth Fund Exploration Act — issued 2025-04-30 — PDF (11 pages)