Read the full stored bill text
Senate
File
557
-
Introduced
SENATE
FILE
557
BY
WAHLS
,
ZIMMER
,
BLAKE
,
TOWNSEND
,
TRONE
GARRIOTT
,
and
WEINER
A
BILL
FOR
An
Act
relating
to
transactions
involving
covered
financial
1
instruments
by
members
of
the
general
assembly,
legislative
2
staff,
and
their
immediate
family,
based
on
nonpublic
3
information,
and
providing
penalties.
4
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
5
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Section
1.
NEW
SECTION
.
68B.40
Definitions.
1
For
purposes
of
this
subchapter:
2
1.
a.
“Covered
financial
instrument”
means
any
of
the
3
following:
4
(1)
An
investment
in
a
security
or
security
future
as
each
5
is
defined
in
section
3(a)
of
the
federal
Securities
Exchange
6
Act
of
1934.
7
(2)
A
commodity
as
defined
in
section
1a
of
the
federal
8
Commodity
Exchange
Act.
9
(3)
Any
economic
interest
comparable
to
an
instrument
10
described
in
subparagraph
(1)
or
(2)
acquired
through
synthetic
11
means,
such
as
the
use
of
a
derivate,
including
an
option,
12
warrant,
or
other
similar
means.
13
b.
“Covered
financial
instrument”
does
not
mean
any
of
the
14
following:
15
(1)
A
diversified
mutual
fund.
16
(2)
A
diversified
exchange-traded
fund.
17
(3)
A
United
States
treasury
bill,
note,
or
bond.
18
2.
“Ethics
committee”
means
the
senate
ethics
committee
or
19
house
ethics
committee,
as
applicable.
20
3.
“Immediate
family”
means
a
spouse
or
child.
21
Sec.
2.
NEW
SECTION
.
68B.41
Transactions
involving
covered
22
financial
instruments
prohibited
——
exception.
23
1.
A
member
of
the
general
assembly,
a
legislative
staff
24
person,
and
the
immediate
family
of
either
shall
not
directly
25
or
indirectly
buy,
sell,
or
otherwise
engage
in
a
transaction
26
involving
a
covered
financial
instrument
if
the
transaction
27
is
based
on
information
derived
from
the
member’s
position
or
28
official
duties,
that
has
not
been
made
publicly
available,
and
29
that
could
reasonably
be
expected
to
affect
the
market
value
of
30
the
covered
financial
instrument.
31
2.
A
transaction
involving
a
covered
financial
instrument
32
held
by
a
member
of
the
general
assembly,
a
legislative
staff
33
person,
or
the
immediate
family
of
either
does
not
violate
34
subsection
1
if
the
person
can
demonstrate
the
transaction
was
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based
solely
on
publicly
available
information
and
that
no
1
conflict
of
interest
exists.
2
Sec.
3.
NEW
SECTION
.
68B.42
Reporting
requirements
——
3
transactions
involving
covered
financial
instruments.
4
1.
A
member
of
the
general
assembly
shall
report
any
5
transaction
involving
a
covered
financial
instrument
made
by
6
the
member
or
the
member’s
immediate
family
to
the
board
within
7
thirty
days
after
the
transaction
is
completed.
8
2.
The
report
shall
be
in
writing,
and
may
be
submitted
9
electronically.
10
3.
The
report
must
include
all
of
the
following:
11
a.
The
date
of
the
transaction.
12
b.
The
type
of
covered
financial
instrument
involved.
13
c.
The
number
and
value
of
covered
financial
instruments
14
involved
in
the
transaction.
15
d.
The
name
of
the
entity
that
facilitated
the
transaction.
16
e.
A
description
of
any
relevant
legislative
matters,
17
government
policies,
or
actions
that
may
have
been
the
basis
18
for
the
transaction.
19
Sec.
4.
NEW
SECTION
.
68B.43
Public
disclosure
of
20
transactions.
21
The
board
shall
post
reports
filed
under
section
68B.42
on
22
the
board’s
internet
site.
The
reports
shall
be
available
to
23
the
public
and
accessible
without
undue
burden.
The
board’s
24
internet
site
must
present
filed
reports
in
a
searchable
25
format.
26
Sec.
5.
NEW
SECTION
.
68B.44
Enforcement
and
oversight.
27
1.
The
board
shall
investigate
alleged
violations
and
28
may
refer
cases
of
suspected
violations
to
other
appropriate
29
authorities
for
further
investigation
and
action.
30
2.
The
board
shall
submit
an
annual
report
to
the
general
31
assembly
including
information
regarding
the
effectiveness
32
of
this
subchapter,
the
number
of
transactions
reported,
33
any
penalties
imposed,
and
any
recommendations
for
further
34
legislative
action.
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Sec.
6.
NEW
SECTION
.
68B.45
Penalties.
1
1.
A
violation
of
this
subchapter
is
a
class
“C”
felony.
2
2.
A
member
of
the
general
assembly,
a
legislative
staff
3
person,
and
the
immediate
family
of
either,
as
applicable,
4
shall
disgorge
to
the
department
of
revenue
any
profit
from
a
5
transaction
or
holding
involving
a
covered
financial
instrument
6
that
violates
this
subchapter
for
deposit
in
the
general
fund.
7
3.
A
loss
from
a
transaction
or
holding
involving
a
covered
8
financial
instrument
that
violates
this
subchapter
shall
not
9
be
deducted
from
the
amount
of
income
tax
the
member
of
the
10
general
assembly,
a
legislative
staff
person,
or
the
immediate
11
family
of
either
owes
to
this
state.
12
4.
If
a
member
of
the
general
assembly,
a
legislative
staff
13
person,
or
the
immediate
family
of
either
holds
or
conducts
a
14
transaction
that
violates
this
subchapter,
the
ethics
committee
15
may
hold
a
hearing
and
the
member
or
legislative
staff
person
16
may
be
subject
to
additional
punishment
under
the
applicable
17
code
of
ethics.
18
5.
A
penalty
imposed
under
this
section
does
not
prohibit
19
a
federal
authority
from
imposing
additional
penalties,
if
20
applicable.
21
Sec.
7.
Section
422.7,
Code
2025,
is
amended
by
adding
the
22
following
new
subsection:
23
NEW
SUBSECTION
.
45.
Add,
to
the
extent
excluded,
the
24
ordinary
or
capital
loss
realized
by
the
taxpayer
in
a
25
transaction
that
violates
section
68B.41,
subsection
1.
26
Sec.
8.
CODE
EDITOR
DIRECTIVE.
The
Code
editor
shall
27
designate
sections
68B.40
through
68B.45,
as
enacted
in
this
28
Act,
as
a
new
subchapter
in
chapter
68B.
29
EXPLANATION
30
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
31
the
explanation’s
substance
by
the
members
of
the
general
assembly.
32
This
bill
relates
to
trading
transactions
involving
covered
33
financial
instruments
by
members
of
the
general
assembly,
34
legislative
staff
persons,
and
the
immediate
family
of
either
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based
on
nonpublic
information.
1
The
bill
prohibits
a
member
of
the
general
assembly,
a
2
legislative
staff
person,
and
the
immediate
family
of
either
3
from
directly
or
indirectly
buying,
selling,
or
otherwise
4
engaging
in
a
transaction
involving
a
covered
financial
5
instrument
if
the
transaction
is
based
on
information
derived
6
from
the
member’s
position
or
official
duties,
that
has
not
7
been
made
publicly
available,
and
that
could
reasonably
be
8
expected
to
affect
the
market
value
of
the
covered
financial
9
instrument,
subject
to
limited
exceptions.
10
Current
law
requires
members
of,
and
candidates
for,
11
the
general
assembly
to
file
personal
financial
disclosure
12
statements
with
the
member’s
chamber.
The
bill
requires
13
members
of
the
general
assembly
to
report
transactions
14
involving
covered
financial
instruments
to
the
Iowa
ethics
and
15
campaign
disclosure
board
(board).
The
board
must
disclose
the
16
reports
to
the
public
on
the
board’s
internet
site.
17
The
board
is
required
to
investigate
alleged
violations
of
18
the
bill
and
may
refer
cases
of
suspected
violations
to
other
19
appropriate
authorities
for
further
investigation
and
action.
20
The
board
must
submit
an
annual
report
to
the
general
assembly
21
including
information
regarding
the
effectiveness
of
the
bill,
22
the
number
of
transactions
reported,
any
penalties
imposed,
and
23
any
recommendations
for
further
legislative
action.
24
A
violation
of
the
bill
is
a
class
“C”
felony.
A
class
25
“C”
felony
is
punishable
by
confinement
for
no
more
than
10
26
years
and
a
fine
of
at
least
$1,370
but
not
more
than
$13,660.
27
In
addition,
a
person
who
violates
the
bill
is
subject
to
28
financial
penalties,
including
disgorgement
of
any
profits
29
resulting
from
a
prohibited
transaction,
tax
liability
relating
30
to
prohibited
transactions,
and
a
member
or
legislative
staff
31
person
may
face
disciplinary
action
by
the
applicable
ethics
32
committee.
The
bill
does
not
prohibit
a
federal
authority
from
33
imposing
additional
penalties,
if
applicable.
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