[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3612 Introduced in House (IH)]
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118th CONGRESS
1st Session
H. R. 3612
To amend title 5, United States Code, to prohibit investments under the
Thrift Savings Plan in certain mutual funds that make investment
decisions based primarily on environmental, social, or governance
criteria, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 23, 2023
Mr. Roy (for himself, Mr. Bishop of North Carolina, Mr. Nehls, Mr.
Babin, Mr. Donalds, Mr. Crenshaw, Mr. Perry, Mr. Good of Virginia, Mr.
Cloud, Mr. Carter of Georgia, Mr. Ogles, Mr. Rosendale, Mr. Weber of
Texas, Mr. Biggs, Mr. Self, Mr. Grothman, Mrs. Boebert, and Mr.
Brecheen) introduced the following bill; which was referred to the
Committee on Oversight and Accountability
_______________________________________________________________________
A BILL
To amend title 5, United States Code, to prohibit investments under the
Thrift Savings Plan in certain mutual funds that make investment
decisions based primarily on environmental, social, or governance
criteria, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``No ESG at TSP Act''.
SEC. 2. PROHIBITION ON CERTAIN MUTUAL FUNDS UNDER THE THRIFT SAVINGS
PLAN.
(a) Definitions.--In this section:
(1) Board; executive director.--The terms ``Board'' and
``Executive Director'' have the meanings given those terms in
section 8401 of title 5, United States Code.
(2) Covered sum.--The term ``covered sum'' means any sum of
the Thrift Savings Fund that is invested in a mutual fund,
exchange-traded fund, or other investment vehicle described in
subparagraph (E) or (F) of section 8438(b)(5) of title 5,
United States Code, as added by subsection (b).
(3) Mutual fund window.--The term ``mutual fund window''
means the mutual fund window added by the Board pursuant to the
authorization under section 8438(b)(5) of title 5, United
States Code.
(4) Participant.--The term ``participant'' has the meaning
given the term in section 8471 of title 5, United States Code.
(5) Thrift savings fund.--The term ``Thrift Savings Fund''
means the fund established under section 8437 of title 5,
United States Code.
(b) Prohibition.--
(1) In general.--Section 8438(b)(5) of title 5, United
States Code, is amended by adding at the end the following:
``(E) The Board may not offer through the mutual fund window any
mutual fund, exchange-traded fund (as defined in section 270.6c-11 of
title 17, Code of Federal Regulations, or any successor regulation), or
other investment vehicle that invests in bonds or equities and that
makes investment decisions based on ESG criteria, to the extent that
those criteria are unrelated to maximizing monetary returns for
investors.
``(F) The Board may not offer through the mutual fund window any
mutual fund, exchange-traded fund (as defined in section 270.6c-11 of
title 17, Code of Federal Regulations, or any successor regulation), or
other investment vehicle that is marketed as making investment
decisions based on ESG criteria.
``(G) In this paragraph, the term `ESG criteria' means any of the
following criteria:
``(i) Environmental criteria, including--
``(I) emissions, climate change, sustainability,
environmental justice, pollution, or conservation; or
``(II) whether a company is engaged in the
exploration, production, utilization, transportation,
sale, or manufacturing of fossil fuel-based energy.
``(ii) Social criteria, including--
``(I) diversity criteria, including--
``(aa) the sex, race, ethnicity, gender
identity, sexual orientation, or socioeconomic
status of the owners, board members, employees,
or customers of companies; or
``(bb) whether the board members,
employees, or customers described in item (aa)
are members of a labor organization (as that
term is defined in section 2 of the National
Labor Relations Act (29 U.S.C. 152)); or
``(II) whether a company is engaged in the
manufacture, transportation, or sale of firearms,
firearms accessories, or ammunition.
``(iii) Political criteria, including the perceived or
actual political affiliations, donations, or associations of
companies.
``(iv) Criteria for corporate governance standards that
differ from the applicable standards required under State and
Federal law, as in effect on the date of the enactment of this
subparagraph.''.
(2) Review and removal.--The Executive Director shall
establish a process through which, during the period beginning
on the date of enactment of this Act and ending on the
effective date described in subsection (c), members of the
Board shall--
(A) identify investment vehicles that--
(i) were added to the mutual fund window
pursuant to the rule entitled ``Mutual Fund
Window'' (87 Fed. Reg. 27917 (effective June 1,
2022)); and
(ii) would violate subparagraph (E) or (F)
of section 8438(b)(5) of title 5, United States
Code, as added by paragraph (1); and
(B) remove from the mutual fund window all
investment vehicles identified under subparagraph (A).
(3) Existing investments in impermissible mutual funds.--
(A) Notice.--Not later than 30 days after the
effective date described in subsection (c), the
Executive Director shall notify each participant of the
option to make an election under subparagraph (B).
(B) Election.--During the 90-day period beginning
on the day after the date on which the 30-day period
described in subparagraph (A) ends, a participant may
elect to have any covered sums credited to the account
of that individual in the Thrift Savings Fund
reinvested in accordance with section 8438 of title 5,
United States Code, as amended by paragraph (1).
(C) Mandatory reinvestment.--Beginning on the day
after the date on which the 90-day period described in
subparagraph (B) ends, the Board shall ensure that all
covered sums with respect to which elections have not
been made under that subparagraph are invested in the
Government Securities Investment Fund established under
section 8438(b)(1)(A) of title 5, United States Code.
(4) Enforcement.--Section 8477(e)(3) of title 5, United
States Code, is amended--
(A) in subparagraph (B)(iii), by striking ``or'' at
the end;
(B) in subparagraph (C)(ii), by striking the period
at the end and inserting ``; or''; and
(C) by adding at the end the following:
``(D) by any participant or beneficiary against the
Board--
``(i) to obtain any appropriate equitable
relief to redress a violation of subparagraph
(E) or (F) of section 8438(b)(5);
``(ii) to enjoin any act or practice which
violates subparagraph (E) or (F) of section
8438(b)(5); or
``(iii) to obtain actual or compensatory
damages to redress a violation of subparagraph
(E) or (F) of section 8438(b)(5).''.
(c) Effective Date.--The amendments made by paragraphs (1) and (4)
of subsection (b) shall take effect on the date that is 90 days after
the date of enactment of this Act.
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