Providing for consideration of the bill (H.R. 1908) to prohibit stock trading and ownership by Members of Congress and their spouses and dependent children, and for other purposes.

Bill Number

H.Res. 665

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Congress

Status

Introduced

Latest Action

2025-08-29: Referred to the House Committee on Rules.

Last Updated

2026-03-17T15:18:31Z

AI-Generated Summary

Purpose

The legislation, titled the "End Congressional Stock Trading Act," aims to prevent conflicts of interest by prohibiting Members of Congress, their spouses, and dependent children from owning or trading most stocks, bonds, commodities, and other securities. It seeks to ensure that congressional decisions are not influenced by personal financial gains from investments.

Key Provisions

• Definitions: Clarifies terms such as "commodity" (goods like oil or wheat traded on markets), "dependent child" (unmarried children under 21 or financially reliant, per federal employee rules), "diversified" (investment funds that spread risks across many assets without heavy concentration), "Member of Congress" (senators and representatives), "qualified blind trust" (a managed investment where the owner has no knowledge of holdings to avoid conflicts), "security" (stocks, bonds, or similar financial instruments), "small business concern" (businesses meeting size standards under federal law), and "widely held investment fund" (mutual funds or similar with many investors).
• Divestment Requirements:
• Bans ownership or trading (except for selling to comply) of stocks, bonds, commodities, futures, hedge funds, derivatives, options, and complex investment vehicles.
• Current members and families must divest most assets within 180 days of enactment; complex private funds (e.g., hedge or venture capital) within 2 years.
• New members and families have the same timelines starting from when they assume the role.
• Inherited or received assets during service must be divested within 180 days.
• Exceptions:
• Allowed: Diversified, widely held funds without conflicts of interest; specific Alaska Native Claims Settlement stocks; U.S. Treasury bills, notes, or bonds; government employee retirement plans; non-conflicting small business interests; assets from a spouse's primary job; and holdings in qualified blind trusts.
• Spouses or dependent children can trade non-owned assets as part of the spouse's job.
• Enforcement and Penalties:
• Civil fines up to $100,000 per violation or 10% of the asset's recent value (whichever is greater), enforced by the Attorney General or Special Counsel via lawsuit (proof by "preponderance of evidence," meaning more likely than not).
• Members cannot use office funds or campaign contributions to pay fines (amends Federal Election Campaign Act).
• Tax Relief for Divestment:
• Amends the Internal Revenue Code to allow nonrecognition of capital gains tax on required divestments if proceeds are reinvested within 60 days in permitted assets (e.g., Treasuries or blind trusts).
• Requires certification from ethics committees (instead of just courts) for this relief; does not apply to later sales of reinvested assets.
• Compliance and Oversight:
• Annual written certification by each member (and spouse) of compliance, due 60 days after a congressional session starts (180 days for the first post-enactment session).
• Certifications published online by House Clerk or Senate Secretary.
• Transmitted to Treasury Secretary for potential IRS audits or investigations to verify accuracy.
• Senate and House Ethics Committees must issue guidance on undefined terms.

Significant Changes to Existing Law

• Introduces a outright ban on individual stock trading and ownership for members and families, going beyond current ethics rules that require disclosure but allow trading.
• Amends the Internal Revenue Code (Section 1043) to extend tax-deferred divestment benefits—previously limited to judges and certain executives—to Congress members for compliance purposes.
• Modifies the Federal Election Campaign Act to explicitly bar campaign funds from paying these new penalties.
• Adds new certification and public disclosure requirements, with IRS involvement for verification, enhancing enforcement beyond voluntary ethics compliance.

Potential Impacts

• On Government Agencies: Increases workload for Ethics Committees (guidance and certifications), Department of Justice/Special Counsel (enforcement actions), IRS/Treasury (audits), and congressional clerks/secretaries (publication). May lead to more transparency in Congress but could strain resources for investigations.
• On Citizens: Promotes public trust by reducing perceptions of insider trading or conflicts in policymaking; indirect benefits through potentially fairer legislation on financial matters. No direct costs or benefits to average citizens, though it may influence stock markets minimally if divestments occur en masse.
• On International Relations: Negligible impact, as it focuses on domestic congressional ethics without affecting foreign policy or trade.

Main Stakeholders Affected

• Members of Congress: Directly restricted in personal investments; must certify compliance annually and face penalties for violations.
• Spouses and Dependent Children: Subject to the same divestment and trading bans, potentially disrupting family finances.
• Ethics Committees and Oversight Bodies: House and Senate Ethics Committees (guidance issuance); Clerk of the House and Secretary of the Senate (certification handling); Attorney General, Special Counsel, IRS, and Treasury (enforcement and audits).
• Financial Institutions and Investors: May see shifts in congressional portfolios toward allowed assets like Treasuries or blind trusts, with minor market effects from required sales.

Notable Legal, Constitutional, or Political Implications

• Legal: Strengthens ethics enforcement with civil penalties and IRS audits, but relies on "preponderance of evidence" standard (easier to prove than criminal "beyond reasonable doubt"). Exceptions for blind trusts and diversified funds provide flexibility to avoid undue hardship.
• Constitutional: Could face challenges under property rights (Fifth Amendment) or free speech (First Amendment, if seen as limiting financial expression), but likely upheld as a reasonable regulation on public officials to prevent corruption, similar to existing disclosure laws (e.g., STOCK Act of 2012).
• Political: Enhances accountability and reduces insider trading risks, potentially boosting public confidence in Congress amid ongoing ethics debates. May politically pressure members with significant investments to divest quickly, influencing campaign finance indirectly by limiting fund use for penalties.

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

Sponsor

Rep. Luna, Anna Paulina [R-FL-13]

Cosponsors (1)

Rep. Crane, Elijah [R-AZ-2]

Recent Actions

• 2025-08-29: Referred to the House Committee on Rules.
• 2025-08-29: Submitted in House
• 2025-08-29: Submitted in House

Bill Versions

• Providing for consideration of the bill (H.R. 1908) to prohibit stock trading and ownership by Members of Congress and their spouses and dependent children, and for other purposes. — issued 2025-08-29 — PDF (13 pages)