H.R. 7357

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7357 Introduced in House (IH)]

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119th CONGRESS
2d Session
H. R. 7357

To amend title 5, United States Code, to address the responsibilities 
of fiduciaries with respect to the Thrift Savings Fund, and for other 
purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

February 4, 2026

Mr. Fine (for himself, Mr. Harrigan, and Mr. Moran) introduced the 
following bill; which was referred to the Committee on Oversight and 
Government Reform

_______________________________________________________________________

A BILL

To amend title 5, United States Code, to address the responsibilities 
of fiduciaries with respect to the Thrift Savings Fund, 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 ``TSP Fiduciary Security Act of 
2026''.

SEC. 2. FINDINGS.

Congress finds the following:
(1) The Federal Retirement Thrift Investment Board has a 
fiduciary duty to manage the Thrift Savings Fund in the best 
interest of the beneficiaries of the Fund.
(2) The principal beneficiaries of the Thrift Savings Fund 
are the civil servants of the United States, and members of the 
uniformed services, who are tasked with defending the national 
security of the United States.
(3) The duty of the Federal Retirement Thrift Investment 
Board to manage the Thrift Savings Fund in the best interests 
of the beneficiaries of the Fund includes a duty not to harm 
the national security of the United States.

SEC. 3. FIDUCIARY RESPONSIBILITIES WITH RESPECT TO THRIFT SAVINGS FUND.

Section 8477 of title 5, United States Code, is amended--
(1) in subsection (b)(1)--
(A) in subparagraph (B), by striking ``; and'' and 
inserting a semicolon;
(B) in subparagraph (C), by striking the period at 
the end and inserting ``; and''; and
(C) by adding at the end the following:
``(D) to the maximum extent practicable, by preventing the 
investments of the Thrift Savings Fund (or portions thereof), 
and the exercise of voting rights associated with any such 
investments, from harming the national security of the United 
States.''; and
(2) in subsection (e), by adding at the end the following:
``(9)(A) Notwithstanding any other provision of this subsection, no 
fiduciary shall be personally liable for any monetary damages, or be 
assessed any civil penalty, under this subsection with respect to a 
breach of the requirement under subsection (b)(1)(D).
``(B) Subparagraph (A) shall cease to have effect beginning on 
January 1, 2027.''.

SEC. 4. REVIEW OF THRIFT SAVINGS FUND FOR COMPLIANCE WITH FIDUCIARY 
DUTIES.

(a) In General.--Section 8477(f) of title 5, United States Code, is 
amended--
(1) by inserting ``(1)'' after ``(f)''; and
(2) by adding at the end the following:
``(2)(A) Not later than 1 year after the date of enactment of this 
paragraph, the Secretary of Labor, in consultation with the Secretary 
of Defense, the Attorney General, the Secretary of Homeland Security, 
and the Secretary of the Treasury, shall prescribe regulations to carry 
out subsection (b)(1)(D) with respect to each of the following:
``(i) The investments of the Thrift Savings Fund, which 
shall include the establishment of standards by which 
compliance with subsection (b)(1)(D) with respect to the 
investments of the Thrift Savings Fund (or portions thereof) 
shall be determined.
``(ii) The exercise of voting rights associated with the 
investments of the Thrift Savings Fund (or portions thereof).
``(B) The regulations prescribed under subparagraph (A)(ii) shall 
include--
``(i) the establishment of a process by which the exercise 
of voting rights described in subparagraph (A)(ii) shall be 
reviewed by the Secretary of Labor, in consultation with the 
Secretary of Defense, the Attorney General, the Secretary of 
Homeland Security, and the Secretary of the Treasury, for 
compliance with subsection (b)(1)(D) with respect to the 
exercise of those rights; and
``(ii) the establishment of standards by which compliance 
with subsection (b)(1)(D) with respect to the exercise of 
voting rights described in subparagraph (A)(ii) shall be 
determined, including the factors contributing to a 
determination that a covered vote would not comply with 
subsection (b)(1)(D).
``(C) For the purposes of any regulation prescribed under 
subparagraph (A), the Secretary of Labor shall presume that--
``(i) an investment of the Thrift Savings Fund (or portions 
thereof) does not comply with subsection (b)(1)(D) if the 
investment invests in--
``(I) an entity included on--
``(aa) the list of Communist Chinese 
military companies maintained under section 
1237(b) of the Strom Thurmond National Defense 
Authorization Act for Fiscal Year 1999 (50 
U.S.C. 1701 note); or
``(bb) the entity list maintained by the 
Bureau of Industry and Security of the 
Department of Commerce and set forth in 
Supplement No. 4 to part 744 of title 15, Code 
of Federal Regulations; or
``(II) a parent, subsidiary, or affiliate of, or an 
entity controlled by, an entity described in subclause 
(I); and
``(ii) an exercise of voting rights associated with any 
investments of the Thrift Savings Fund (or portions thereof) 
does not comply with subsection (b)(1)(D) if that exercise of 
voting rights is a covered vote with respect to a proposal that 
would--
``(I) approve or ratify a transaction, including a 
transaction described in subparagraph (D)(ii)(I), that 
would cause, or would reasonably be expected to cause, 
an entity to which the covered vote applies to--
``(aa) breach any contract with the Federal 
Government to which the entity is a party, and 
under which the consideration provided to the 
entity over the course of the entire contract 
is more than $10,000,000, if the entity has 
otherwise complied with all applicable laws and 
regulations in fulfilling the responsibilities 
of the entity with respect to the contract;
``(bb) significantly reduce the production 
of, or the capital expenditure or research and 
development expenditure with respect to, any--
``(AA) industrial resources, 
critical technology items, or materials 
that are essential to the national 
defense (as those terms are defined in 
section 702 of the Defense Production 
Act of 1950 (50 U.S.C. 4552)); or
``(BB) emerging and foundational 
technology identified by the President 
under section 1758 of the Export 
Controls Act of 2018 (50 U.S.C. 4817); 
or
``(cc) outsource or substantially sell, 
whether to any affiliated entity or joint 
venture, or by contract, to any entity located 
in a covered country, any--
``(AA) industrial resources, 
critical technology items, or materials 
that are essential to the national 
defense (as those terms are defined in 
section 702 of the Defense Production 
Act of 1950 (50 U.S.C. 4552)); or
``(BB) emerging and foundational 
technology identified by the President 
under section 1758 of the Export 
Controls Act of 2018 (50 U.S.C. 4817); 
or
``(II) elect to the board of directors of any 
entity an individual who--
``(aa) is a director, officer, employee, or 
affiliate of any entity described in clause 
(i)(I);
``(bb) at any time during the 5-year period 
preceding the date on which that election 
occurs, was as described in item (aa); or
``(cc) a reasonable investor would believe 
supports any proposal described in subclause 
(I).
``(D) In this paragraph--
``(i) the term `covered country' means--
``(I) the People's Republic of China, the Russian 
Federation, North Korea, Iran, Syria, Sudan, Venezuela, 
or Cuba;
``(II) any country, the government of which the 
Secretary of State determines has repeatedly provided 
support for acts of international terrorism pursuant 
to--
``(aa) section 1754(c)(1)(A) of the Export 
Control Reform Act of 2018 (50 U.S.C. 
4813(c)(1)(A));
``(bb) section 620A of the Foreign 
Assistance Act of 1961 (22 U.S.C. 2371);
``(cc) section 40 of the Arms Export 
Control Act (22 U.S.C. 2780); or
``(dd) any other provision of law; or
``(III) any other country that the Secretary of 
Labor, in consultation with the Secretary of Defense, 
the Attorney General, the Secretary of Homeland 
Security, and the Secretary of the Treasury, designates 
as posing an undue or unnecessary risk to the national 
security of the United States; and
``(ii) the term `covered vote' means a vote in favor of (or 
an abstention with respect to) a proposal to--
``(I) approve or ratify a transaction involving an 
entity, including--
``(aa) any sale of, or other disposition of 
(whether in a single or a series of 
transactions) assets or capital stock; and
``(bb) any merger, consolidation, joint 
venture, partnership, spin-off, reverse spin-
off, dissolution, restructuring, 
recapitalization, liquidation, or any other 
business combination or strategic transaction; 
or
``(II) elect an individual to the board of 
directors of the entity that is the subject of the 
proposal.''.
(b) Review of Exercise of Voting Rights; Report to Congress.--
Section 8438 of title 5, United States Code, is amended--
(1) in subsection (f)--
(A) by inserting ``(1)'' after ``(f)''; and
(B) by adding at the end the following:
``(2) For the purposes of paragraph (1), a review of the exercise 
of voting rights for compliance with section 8477(b)(1)(D), including 
under the regulations prescribed under section 8477(f)(2), shall not be 
considered to be the exercise of voting rights associated with the 
ownership of securities by the Thrift Savings Fund.''; and
(2) by adding at the end the following:
``(i) Not later than 2 years after the date of enactment of this 
subsection, and annually thereafter, the Secretary of Labor shall 
submit to the Committee on Homeland Security and Governmental Affairs 
of the Senate and the Committee on Oversight and Government Reform of 
the House of Representatives a report regarding--
``(1) for the year covered by the report, the investments 
of the Thrift Savings Fund (or portions thereof), and the 
exercise of voting rights associated with any such investments, 
that have been reviewed for compliance with section 
8477(b)(1)(D); and
``(2) the outcome with respect to enforcement of each 
review conducted under paragraph (1) and a justification for 
that outcome.''.

SEC. 5. PROHIBITION ON INVESTMENT OF THRIFT SAVINGS FUND SUMS IN 
ENTITIES BASED IN THE PEOPLE'S REPUBLIC OF CHINA THROUGH 
THE TSP MUTUAL FUND WINDOW.

Section 8438(b)(5) of title 5, United States Code, is amended by 
adding at the end the following:
``(E) A mutual fund accessible through a mutual fund window 
authorized under this paragraph may not include an investment in any 
security of--
``(i) an entity based in the People's Republic of China; or
``(ii) any subsidiary that is owned or operated by an 
entity described in clause (i).''.
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