Sell Your Stocks or Step Down Act

This Act may be cited as the “Sell Your Stocks or Step Down Act”.

(a) Restrictions.— Chapter 131 of title 5, United States Code, is amended by inserting at the end the following subchapter:

In this subchapter:

“(1) Commodity.— The term commodity has the meaning given the term in section 1a of the Commodity Exchange Act (7 U.S.C. 1a).

(2) Covered executive branch official.— The term covered executive branch official means any of the following:

(A) The head of an executive agency, the United States Postal Service, or the Postal Regulatory Commission.

(B) An officer or employee of the executive branch who occupies a position classified above GS–15 of the General Schedule, or, in the case of a position not under the General Schedule, for which the rate of basic pay is equal to or greater than 120 percent of the minimum rate of basic pay payable for GS–15 of the General Schedule.

(C) An employee in the Senior Executive Service, as defined in section 3132(a), or an employee in a comparable senior executive, senior professional, or senior-level personnel system established for positions in the intelligence community, the foreign service, or elsewhere in the executive branch.

(D) A chief of staff to the head of an executive agency, or a chief of staff or deputy chief of staff to the President or Vice President.

(E) A special Government employee as defined in section 202 of title 18.

(3) Covered individual.— The term covered individual means any of the following:

(A) The President and the Vice President of the United States.

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

(C) An officer or employee of the Congress as defined in section 13101.

(D) A covered executive branch official.

(E) A covered judicial official.

(F) A dependent child as defined in section 13101 or spouse of an individual described in subparagraph (A), (B), (C), or (D).

(4) Covered investment.— The term covered investment—

(A) means an investment in a security, a commodity, a future, a digital asset, an event contract, 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 the spouse or dependent child of a covered individual from their employer;

(v) an interest in a small business concern;

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

(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).

(5) Covered judicial official.— The term covered judicial official means—

(A) a justice or judge of the United States as defined in section 451 of title 28;

(B) a judge of the United States Court of Federal Claims;

(C) a bankruptcy judge appointed under section 152 of title 28; and

(D) a magistrate judge appointed under section 631 of title 28.

(6) Digital asset.— The term digital asset has the meaning given the term in section 6045(g)(3)(D) of the Internal Revenue Code of 1986.

(7) Diversified.— 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 covered individual resides.

(8) Event contract.— The term “event contract” means an agreement, contract, transaction, or swap in an excluded commodity described in section 1a(19)(iv) of the Commodity Exchange Act that are based upon the occurrence, extent of an occurrence, or contingency (other than a change in the price, rate, value, or levels of a commodity described in section 1a(2)(i)), by a designated contract market or swap execution facility (as such terms are defined in the Commodity Exchange Act).

(9) Future.— 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.

(10) Security.— 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)).

(11) 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).

(12) Supervising ethics office.— The term supervising ethics office has the meaning given the term in section 13101.

(a) Conduct during Federal service.— Except as provided in subsection (d), no covered individual may, directly or indirectly, own or trade a covered investment.

(b) Compliance.—

(1) Requirement.— To comply with subsection (a), a covered individual—

(A) may not purchase a covered investment; and

(B) shall, not later than the effective date established in paragraph (2), divest of any covered investment at fair market value, subject to subsection (c).

(2) Effective date.— The effective date is established as follows:

(A) Thirty days after the date of enactment of the Sell Your Stocks or Step Down Act, for an individual who is a covered individual on such date of enactment.

(B) Thirty days after the date on which an individual becomes a covered individual, if such date occurs after the date of enactment of the Sell Your Stocks or Step Down Act.

(c) Taxation of divestitures.— Notwithstanding any other provision of law, section 1043 of the Internal Revenue Code of 1986 shall not apply to any disposition of property made pursuant to this subchapter.

(d) Occupational exception.— A spouse or dependent child of a covered individual described in section 13151(3)(A), (B), (C), (D), or (E) may trade any covered investment if such covered investment is not owned by such covered individual and if such trade is performed as a function of the primary occupation of the spouse or dependent child.

(e) Assets acquired in special circumstances.— In the event that a covered individual acquires a covered investment after the date of enactment of the Sell Your Stocks or Step Down Act other than by purchase, the covered individual shall have 30 days from the date on which such investment was acquired to divest such covered investment at fair market value, subject to subsection (c).

(f) Interpretative guidance.— The supervising ethics office shall issue interpretive guidance on any relevant term not defined in this subchapter.

(a) Failure To divest.—

(1) Daily penalty.— Any covered individual who fails to divest of a covered investment by the applicable deadline under section 13152 shall pay, for each day of noncompliance, beginning the day after such deadline and ending on the date the covered individual comes into compliance, a fee equal to 10 percent of the fair market value, as of such day, of the portfolio of covered investments owned by such covered individual that remain in violation of section 13152(a).

(2) Accrual and limit.— The fee under paragraph (1) shall accrue for each day of continued noncompliance, except that the total of such fee may not exceed 50 percent of such fair market value.

(b) Trading violations.— Any covered individual who purchases or trades a covered investment in violation of section 13152(a) shall, at the direction of the supervising ethics office—

(1) pay a fee equal to—

(A) the value of the covered investment involved in such purchase or trade, plus

(B) $10,000; and

(2) disgorge to the supervising ethics office the profits of any transaction that violates the provisions of this subchapter.

(c) Use of funds.— A penalty or disgorgement imposed under this section shall be deposited into the general fund of the Treasury for the sole purpose of deficit reduction.

(d) Payment restrictions.—

(1) In general.— A covered individual may not pay any penalty under this section using appropriated funds or any other official resources of the United States.

(2) Members of Congress.— A Member of Congress as defined in section 13101 may not pay any of the penalties under this section by using amounts from the following sources:

(A) With respect to a Representative in Congress, a Delegate to Congress, or the Resident Commissioner from Puerto Rico, the Members’ Representational Allowance.

(B) With respect to a United States Senator, the Member’s Official Personnel and Office Expense Account.

(C) 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.

(e) Enforcement authority.—

(1) In general.— A supervising ethics office is authorized to determine, assess, and collect any fee imposed under subsection (b) against a covered individual subject to its jurisdiction, and such determination shall constitute final agency action.

(2) Investigative authority.— In carrying out this section, a supervising ethics office may—

(A) require a covered individual to submit records sufficient to verify compliance with section 13152, including brokerage statements, trust instruments and accountings, and transaction confirmations;

(B) issue administrative subpoenas to financial institutions, brokers, dealers, and trustees for records relevant to a determination under this section; and

(C) refer a suspected violation of this subchapter to the appropriate Inspector General or to the Attorney General for further investigation.

(3) Collection.—

(A) Administrative offset.— A supervising ethics office may collect a fee assessed under subsection (b) by administrative offset, in accordance with section 3716 of title 31, against any salary, pension, or other amount payable by the United States to the covered individual.

(B) Referral for civil action.— If a covered individual fails to pay a fee assessed under such subsection not later than 60 days after the date of assessment, the supervising ethics office shall refer the matter to the Attorney General, who may bring a civil action in an appropriate district court of the United States to recover the unpaid amount, together with interest and the costs of the action.

(f) Publication.— 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.”.

(b) Clerical amendment.— The table of contents for chapter 131 of title 5, United States Code, is amended by adding at the end the following: