[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 143 Engrossed in Senate (ES)]
107th CONGRESS
1st Session
S. 143
_______________________________________________________________________
AN ACT
To amend the Securities Act of 1933 and the Securities Exchange Act of
1934, to reduce securities fees in excess of those required to fund the
operations of the Securities and Exchange Commission, to adjust
compensation provisions for employees of the Commission, 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; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Competitive Market
Supervision Act of 2001''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Reduction in registration fee rates; elimination of general
revenue component.
Sec. 3. Reduction in merger and tender fee rates; reclassification as
offsetting collections.
Sec. 4. Reduction in transaction fees; elimination of general revenue
component.
Sec. 5. Adjustments to fee rates.
Sec. 6. Comparability provisions.
Sec. 7. Study of the effect of fee reductions.
Sec. 8. Effective date.
SEC. 2. REDUCTION IN REGISTRATION FEE RATES; ELIMINATION OF GENERAL
REVENUE COMPONENT.
(a) Securities Act of 1933.--Section 6(b) of the Securities Act of
1933 (15 U.S.C. 77f(b)) is amended--
(1) by striking paragraph (2) and inserting the following:
``(2) Fee payment required.--At the time of filing a
registration statement, the applicant shall pay to the
Commission a fee that shall be equal to the amount determined
under the rate established by paragraph (3). The Commission
shall publish in the Federal Register notices of the fee rate
applicable under this section for each fiscal year.'';
(2) by striking paragraph (3);
(3) by redesignating paragraphs (4) and (5) as paragraphs
(3) and (4), respectively;
(4) in paragraph (3), as redesignated--
(A) by striking subparagraph (A) and inserting the
following:
``(A) In general.--Except as provided in
subparagraphs (B) and (C), the rate determined under
this paragraph is a rate equal to the following amount
per $1,000,000 of the maximum aggregate price at which
the securities are proposed to be offered:
``(i) $67 for each of fiscal years 2002
through 2006.
``(ii) $33 for fiscal year 2007 and each
fiscal year thereafter.''; and
(B) in subparagraph (B), by striking ``this
paragraph (4)'' and inserting ``this paragraph''; and
(5) by striking paragraph (4), as redesignated, and
inserting the following:
``(4) Pro rata application of rate.--The rate required by
this subsection shall be applied pro rata to amounts and
balances equal to or less than $1,000,000.''.
(b) Trust Indenture Act of 1939.--Section 307(b) of the Trust
Indenture Act of 1939 (15 U.S.C. 77ggg(b)) is amended by striking ``,
but, in the case of'' and all that follows through the end of the
subsection and inserting a period.
SEC. 3. REDUCTION IN MERGER AND TENDER FEE RATES; RECLASSIFICATION AS
OFFSETTING COLLECTIONS.
(a) Section 13.--Section 13(e)(3) of the Securities Exchange Act of
1934 (15 U.S.C. 78m(e)(3)) is amended to read as follows:
``(3) Fees.--
``(A) In general.--At the time of the filing of any
statement that the Commission may require by rule
pursuant to paragraph (1), the person making the filing
shall pay to the Commission a fee equal to--
``(i) $67 for each $1,000,000 of the value
of the securities proposed to be purchased, for
each of fiscal years 2002 through 2006; and
``(ii) $33 for each $1,000,000 of the value
of securities proposed to be purchased, for
fiscal year 2007 and each fiscal year
thereafter.
``(B) Reduction.--The fee required by this
paragraph shall be reduced with respect to securities
in an amount equal to any fee paid with respect to any
securities issued in connection with the proposed
transaction under section 6(b) of the Securities Act of
1933, or the fee paid under that section shall be
reduced in an amount equal to the fee paid to the
Commission in connection with such transaction under
this paragraph.
``(C) Limitation; deposit of fees.--
``(i) Limitation.--Except as provided in
subparagraph (D), no amounts shall be collected
pursuant to this paragraph for any fiscal year,
except to the extent provided in advance in
appropriations Acts.
``(ii) Deposit of fees.--Fees collected
during any fiscal year pursuant to this
paragraph shall be deposited and credited as
offsetting collections in accordance with
appropriations Acts.
``(D) Lapse of appropriations.--If, on the first
day of a fiscal year, a regular appropriation to the
Commission has not been enacted for that fiscal year,
the Commission shall continue to collect fees (as
offsetting collections) under this paragraph at the
rate in effect during the preceding fiscal year, until
such a regular appropriation is enacted.
``(E) Pro rata application of rate.--The rate
required by this paragraph shall be applied pro rata to
amounts and balances equal to or less than
$1,000,000.''.
(b) Section 14.--
(1) Preliminary proxy solicitations.--Section 14(g)(1) of
the Securities Exchange Act of 1934 (15 U.S.C. 78n(g)(1)) is
amended--
(A) in subparagraph (A), by striking ``Commission
the following fees'' and all that follows through the
end of the subparagraph and inserting ``Commission--
``(i) for preliminary proxy solicitation
material involving an acquisition, merger, or
consolidation, if there is a proposed payment
of each or transfer of securities or property
to shareholders, a fee equal to--
``(I) $67 for each $1,000,000 of
such proposed payment, or of the value
of such securities or other property
proposed to be transferred, for each of
fiscal years 2002 through 2006; and
``(II) $33 for each $1,000,000 of
such proposed payment, or of the value
of such securities or other property
proposed to be transferred, for fiscal
year 2007 and each fiscal year
thereafter; and
``(ii) for preliminary proxy solicitation
material involving a proposed sale or other
disposition of substantially all of the assets
of a company, a fee equal to--
``(I) $67 for each $1,000,000 of
the cash or of the value of any
securities or other property proposed
to be received upon such sale or
disposition, for each of fiscal years
2002 through 2006; and
``(II) $33 for each $1,000,000 of
the cash or of the value of any
securities or other property proposed
to be received upon such sale or
disposition, for fiscal year 2007 and
each fiscal year thereafter.'';
(B) in subparagraph (B), by inserting
``Reduction.--'' before ``The fee''; and
(C) by adding at the end the following:
``(C) Limitation; deposit of fees.--
``(i) Limitation.--Except as provided in
subparagraph (D), no amounts shall be collected
pursuant to this paragraph for any fiscal year,
except to the extent provided in advance in
appropriations Acts.
``(ii) Deposit of fees.--Fees collected
during any fiscal year pursuant to this
paragraph shall be deposited and credited as
offsetting collections in accordance with
appropriations Acts.
``(D) Lapse of appropriations.--If, on the first
day of a fiscal year, a regular appropriation to the
Commission has not been enacted for that fiscal year,
the Commission shall continue to collect fees (as
offsetting collections) under this paragraph at the
rate in effect during the preceding fiscal year, until
such a regular appropriation is enacted.
``(E) Pro rata application of rate.--The rate
required by this paragraph shall be applied pro rata to
amounts and balances equal to or less than
$1,000,000.''.
(2) Other filings.--Section 14(g)(3) of the Securities
Exchange Act of 1934 (15 U.S.C. 78n(g)(3)) is amended--
(A) by striking ``At the time'' and inserting the
following: ``Other filings.--
``(A) Fee rate.--At the time'';
(B) by striking ``the Commission a fee of'' and all
that follows through ``The fee'' and inserting the
following: ``the Commission a fee equal to--
``(i) $67 for each $1,000,000 of the
aggregate amount of cash or of the value of
securities or other property proposed to be
offered, for each of fiscal years 2002 through
2006; and
``(ii) $33 for each $1,000,000 of the
aggregate amount of cash or of the value of
securities or other property proposed to be
offered, for fiscal year 2007 and each fiscal
year thereafter.
``(B) Reduction.--The fee required under
subparagraph (A)''; and
(C) by adding at the end the following:
``(C) Limitation; deposit of fees.--
``(i) Limitation.--Except as provided in
subparagraph (D), no amounts shall be collected
pursuant to this paragraph for any fiscal year,
except to the extent provided in advance in
appropriations Acts.
``(ii) Deposit of fees.--Fees collected
during any fiscal year pursuant to this
paragraph shall be deposited and credited as
offsetting collections in accordance with
appropriations Acts.
``(D) Lapse of appropriations.--If, on the first
day of a fiscal year, a regular appropriation to the
Commission has not been enacted for that fiscal year,
the Commission shall continue to collect fees (as
offsetting collections) under this paragraph at the
rate in effect during the preceding fiscal year, until
such a regular appropriation is enacted.
``(E) Pro rata application of rate.--The rate
required by this paragraph shall be applied pro rata to
amounts and balances equal to or less than
$1,000,000.''.
SEC. 4. REDUCTION IN TRANSACTION FEES; ELIMINATION OF GENERAL REVENUE
COMPONENT.
Section 31 of the Securities Exchange Act of 1934 (15 U.S.C. 78ee)
is amended--
(1) by striking subsections (b) through (d) and inserting
the following:
``(b) Transaction Fees.--
``(1) In general.--Each national securities exchange and
national securities association shall pay to the Commission a
fee at a rate equal to the transaction offsetting collection
rate described in paragraph (2) of the aggregate dollar amount
of sales of securities (other than bonds, debentures, other
evidences of indebtedness, and security futures products)--
``(A) transacted on such national securities
exchange; and
``(B) transacted by or through any member of such
association otherwise than on a national securities
exchange of securities that are--
``(i) registered on such an exchange; or
``(ii) subject to prompt last sale
reporting pursuant to the rules of the
Commission or a registered national securities
association.
``(2) Fee rate.--
``(A) Transaction offsetting collection rate.--For
purposes of this subsection, the `transaction
offsetting collection rate' for a fiscal year--
``(i) is the uniform rate required to reach
the transaction fee cap for that fiscal year;
and
``(ii) shall become effective on the later
of the beginning of that fiscal year or 30 days
after the date of enactment of appropriations
legislation setting such rate.
``(B) Transaction fee cap.--Subject to subparagraph
(C), for purposes of this paragraph, the `transaction
fee cap' shall be equal to--
``(i) $915,000,000 for fiscal year 2002;
``(ii) $1,115,000,000 for fiscal year 2003;
``(iii) $1,340,000,000 for fiscal year
2004;
``(iv) $1,665,000,000 for fiscal year 2005;
``(v) $2,010,000,000 for fiscal year 2006;
``(vi) $1,015,000,000 for fiscal year 2007;
``(vii) $1,035,000,000 for fiscal year
2008;
``(viii) $1,225,000,000 for fiscal year
2009;
``(ix) $1,430,000,000 for fiscal year 2010;
and
``(x) $1,665,000,000 for fiscal year 2011
and each fiscal year thereafter.
``(C) Reduction.--The amounts specified in clauses
(i) through (x) of subparagraph (B) shall be reduced by
the amount of assessments estimated to be collected by
the Commission for the subject fiscal year pursuant to
subsection (e).
``(c) Limitation; Deposit of Fees and Assessments.--
``(1) Limitation.--Except as provided in subsection (d), no
amount may be collected pursuant to subsection (b) or (e) for
any fiscal year, except to the extent provided in advance in
appropriations Acts.
``(2) Deposit of fees and assessments.--Fees and
assessments collected during any fiscal year pursuant to this
section shall be deposited and credited as offsetting
collections in accordance with appropriations Acts.
``(d) Lapse of Appropriations.--If, on the first day of a fiscal
year, a regular appropriation to the Commission has not been enacted
for that fiscal year, the Commission shall, until such a regular
appropriation is enacted--
``(1) continue to collect fees (as offsetting collections)
under subsection (b) at the rate in effect during the preceding
fiscal year (prior to adjustments, if any, under subsections
(b) and (c) of section 5 of the Competitive Market Supervision
Act of 2001); and
``(2) continue to collect assessments (as offsetting
collections) under subsection (e) at the assessment rate in
effect during the preceding fiscal year.'';
(2) in subsection (e), by striking ``Assessments
collected'' and all that follows through the period; and
(3) in subsection (f), by striking ``(f)'' and all that
follows through ``paid--'' and inserting the following:
``(f) Dates for Payment of Fees and Assessments.--The fees and
assessments required by subsections (b) and (e) shall be paid--''.
SEC. 5. ADJUSTMENTS TO FEE RATES.
(a) Estimates of Collections.--
(1) Fee projections.--The Securities and Exchange
Commission (hereafter in this Act referred to as the
``Commission'') shall, 1 month after submission of its initial
report under subsection (e)(1) and on a monthly basis
thereafter, project the aggregate amount of fees and
assessments from all sources likely to be collected by the
Commission during the current fiscal year.
(2) Submission of information.--Each national securities
exchange and national securities association shall file with
the Commission, not later than 10 days after the end of each
month--
(A) an estimate of the fee and the assessment
required to be paid pursuant to section 31 of the
Securities Exchange Act of 1934 by such national
securities exchange or national securities association
for transactions and sales occurring during that month;
and
(B) such other information and documents as the
Commission may require, as necessary or appropriate to
project the aggregate amount of fees and assessments
pursuant to paragraph (1).
(b) Floor for Total Fee and Assessment Collections.--If, at any
time after the end of the first half of the fiscal year, the Commission
projects under subsection (a) that the aggregate amount of fees and
assessments collected by the Commission will, during that fiscal year,
fall below an amount equal to the floor for total fee and assessment
collections, the Commission may, by order, subject to subsection (e) of
this section, increase the fee rate established under section 31(b)(2)
of the Securities Exchange Act of 1934, to the extent necessary to
bring estimated collections to an amount equal to the floor for total
fee collections. Such increase shall apply only to transactions and
sales occurring on or after the effective date specified in such order
through August 31 of that fiscal year. Such increase shall not affect
the obligation of each national securities exchange and national
securities association to pay to the Commission the fee required by
section 31(b) of the Securities Exchange Act of 1934, at the fee rate
in effect prior to the effective date of such order for transactions
and sales occurring prior to the effective date of such order. In
exercising its authority under this subsection, the Commission shall
not be required to comply with the provisions of section 553 of title
5, United States Code.
(c) Cap on Total Fee and Assessment Collections.--If, at any time
after the end of the first half of the fiscal year, the Commission
projects under subsection (a) that the aggregate amount of fees and
assessments collected by the Commission will exceed the cap on total
fee and assessment collections by more than 10 percent during any
fiscal year, the Commission shall, by order, subject to subsection (e),
decrease the fee rate established under paragraph (2) of section 31(b)
of the Securities Exchange Act of 1934, or suspend collection of fees
under that section 31(b), to the extent necessary to bring estimated
collections to an amount that is not more than 110 percent of the cap
on total fee collections. Such decrease or suspension shall apply only
to transactions and sales occurring on or after the effective date
specified in such order through August 31 of that fiscal year. Such
decrease or suspension shall not affect the obligation of each national
securities exchange and national securities association to pay to the
Commission the fee required by section 31(b) of the Securities Exchange
Act of 1934, at the fee rate in effect prior to the effective date of
such order for transactions and sales occurring prior to the effective
date of such order. In exercising its authority under this subsection,
the Commission shall not be required to comply with the provisions of
section 553 of title 5, United States Code.
(d) Definitions.--For purposes of this section--
(1) the term ``floor for total fee and assessment
collections'' means the greater of--
(A) the total amount appropriated to the Commission
for fiscal year 2002 (adjusted annually, based on the
annual percentage change, if any, in the Consumer Price
Index for all urban consumers, as published by the
Department of Labor); or
(B) the amount authorized for the Commission
pursuant to section 35 of the Securities Exchange Act
of 1934 (15 U.S.C. 78kk), if applicable; and
(2) the term ``cap on total fee collections'' means--
(A) for fiscal years 2002 through 2011, the
baseline amount for aggregate offsetting collections
for such fiscal year under section 6(b) of the
Securities Act of 1933 and section 31 of the Securities
Exchange Act of 1934, as projected for such fiscal year
by the Congressional Budget Office pursuant to section
257 of the Balanced Budget and Emergency Deficit
Control Act of 1985 in its most recently published
report of its baseline projection before the date of
enactment of this Act; and
(B) for fiscal years 2012 and thereafter, the
amount authorized for the Commission pursuant to
section 35 of the Securities Exchange Act of 1934 (15
U.S.C. 78kk).
(e) Reports to Congress; Judicial Review; Notice.--
(1) Initial report.--Not later than 90 days after the date
of enactment of this Act, the Commission shall report to the
Committee on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of
Representatives to explain the methodology used by the
Commission to make projections under subsection (a). Not later
than 30 days after the beginning of each fiscal year, the
Commission may report to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives on revisions to the
methodology used by the Commission to make projections under
subsection (a) for such fiscal year and subsequent fiscal
years.
(2) Judicial review; reports of intent to act.--The
determinations made and the actions taken by the Commission
under this subsection shall not be subject to judicial review.
Not later than 45 days before taking action under subsection
(b) or (c), the Commission shall report to the Committee on
Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives
on its intent to take such action.
(3) Notice.--Not later than 30 days before taking action
under subsection (b) or (c), the Commission shall notify each
national securities exchange and national securities
association of its intent to take such action.
SEC. 6. COMPARABILITY PROVISIONS.
(a) Commission Demonstration Project.--Subpart C of part III of
title 5, United States Code, is amended by adding at the end the
following:
``CHAPTER 48--AGENCY PERSONNEL DEMONSTRATION PROJECT
``Sec.
``4801. Nonapplicability of chapter 47.
``4802. Securities and Exchange Commission.
``Sec. 4801. Nonapplicability of chapter 47.
``Chapter 47 shall not apply to this chapter.
``Sec. 4802. Securities and Exchange Commission
``(a) In this section, the term `Commission' means the Securities
and Exchange Commission.
``(b) The Commission may appoint and fix the compensation of such
officers, attorneys, economists, examiners, and other employees as may
be necessary for carrying out its functions under the securities laws
as defined under section 3 of the Securities Exchange Act of 1934 (15
U.S.C. 78c).
``(c) Rates of basic pay for all employees of the Commission may be
set and adjusted by the Commission without regard to the provisions of
chapter 51 or subchapter III of chapter 53.
``(d) The Commission may provide additional compensation and
benefits to employees of the Commission if the same type of
compensation or benefits are then being provided by any agency referred
to under section 1206 of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 (12 U.S.C. 1833b) or, if not then being
provided, could be provided by such an agency under applicable
provisions of law, rule, or regulation. In setting and adjusting the
total amount of compensation and benefits for employees, the Commission
shall consult with, and seek to maintain comparability with, the
agencies referred to under section 1206 of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833b).
``(e) The Commission shall consult with the Office of Personnel
Management in the implementation of this section.
``(f) This section shall be administered consistent with merit
system principles.''.
(b) Employees Represented by Labor Organizations.--To the extent
that any employee of the Securities and Exchange Commission is
represented by a labor organization with exclusive recognition in
accordance with chapter 71 of title 5, United States Code, no reduction
in base pay of such employee shall be made by reason of enactment of
this section (including the amendments made by this section).
(c) Implementation Plan and Report.--
(1) Implementation plan.--
(A) In general.--The Securities and Exchange
Commission shall develop a plan to implement section
4802 of title 5, United States Code, as added by this
section.
(B) Inclusion in annual performance plan and
report.--The Securities and Exchange Commission shall
include--
(i) the plan developed under this paragraph
in the annual program performance plan
submitted under section 1115 of title 31,
United States Code; and
(ii) the effects of implementing the plan
developed under this paragraph in the annual
program performance report submitted under
section 1116 of title 31, United States Code.
(2) Implementation report.--
(A) In general.--Before implementing the plan
developed under paragraph (1), the Securities and
Exchange Commission shall submit a report to the
Committee on Governmental Affairs and the Committee on
Banking, Housing, and Urban Affairs of the Senate, the
Committee on Government Reform and the Committee on
Financial Services of the House of Representatives, and
the Office of Personnel Management on the details of
the plan.
(B) Content.--The report under this paragraph shall
include--
(i) evidence and supporting documentation
justifying the plan; and
(ii) budgeting projections on costs and
benefits resulting from the plan.
(d) Technical and Conforming Amendments.--
(1) Amendments to title 5, united states code.--
(A) The table of chapters for part III of title 5,
United States Code, is amended by adding at the end of
subpart C the following:
``48. Agency Personnel Demonstration Project............... 4801.''.
(B) Section 3132(a)(1) of title 5, United States
Code, is amended--
(i) in subparagraph (C), by striking ``or''
after the semicolon;
(ii) in subparagraph (D), by inserting
``or'' after the semicolon; and
(iii) by adding at the end the following:
``(E) the Securities and Exchange Commission;''.
(C) Section 5373(a) of title 5, United States Code,
is amended--
(i) in paragraph (2), by striking ``or''
after the semicolon;
(ii) in paragraph (3), by striking the
period and inserting ``; or''; and
(iii) by adding at the end the following:
``(4) section 4802.''.
(2) Amendment to securities and exchange act of 1934.--
Section 4(b) of the Securities Exchange Act of 1934 (15 U.S.C.
78d(b)) is amended by striking paragraphs (1) and (2) and
inserting the following:
``(1) Appointment and compensation.--The Commission shall
appoint and compensate officers, attorneys, economists,
examiners, and other employees in accordance with section 4802
of title 5, United States Code.
``(2) Reporting of information.--In establishing and
adjusting schedules of compensation and benefits for officers,
attorneys, economists, examiners, and other employees of the
Commission under applicable provisions of law, the Commission
shall inform the heads of the agencies referred to under
section 1206 of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 (12 U.S.C. 1833b) and Congress of
such compensation and benefits and shall seek to maintain
comparability with such agencies regarding compensation and
benefits.''.
(3) Amendment to firrea of 1989.--Section 1206 of the
Financial Institutions Reform, Recovery, and Enforcement Act of
1989 (12 U.S.C. 1833b) is amended by striking ``the Thrift
Depositor Protection Oversight Board of the Resolution Trust
Corporation''.
SEC. 7. STUDY OF THE EFFECT OF FEE REDUCTIONS.
(a) Study.--The Office of Economic Analysis of the Securities and
Exchange Commission (hereinafter referred to as the ``Office'') shall
conduct a study of the extent to which the benefits of reductions in
fees effected as a result of this Act are passed on to investors.
(b) Factors for Consideration.--In conducting the study under
subsection (a), the Office shall--
(1) consider all of the various elements of the securities
industry directly and indirectly benefitting from the fee
reductions, including purchasers and sellers of securities,
members of national securities exchanges, issuers, broker-
dealers, underwriters, participants in investment companies,
retirement programs, and others;
(2) evaluate the impact on different types of investors,
such as individual equity holders, individual investment
company shareholders, businesses, and other types of investors;
(3) include in the interpretation of the term ``investor''
shareholders of entities subject to the fee reductions; and
(4) consider the economic benefits to investors flowing
from the fee reductions to include such factors as market
efficiency, expansion of investment opportunities, and enhanced
liquidity and capital formation.
(c) Report to Congress.--Not later than 2 years after the date of
enactment of this Act, the Securities and Exchange Commission shall
submit to the Congress the report prepared by the Office on the results
of the study conducted under subsection (a).
SEC. 8. EFFECTIVE DATE.
(a) In General.--Subject to subsection (b), this Act and the
amendments made by this Act shall become effective on October 1, 2001.
(b) Exceptions.--The authorities provided by section 13(e)(3)(D),
section 14(g)(1)(D), section 14(g)(3)(D), and section 31(d) of the
Securities Exchange Act of 1934, as so designated by this Act, shall
not apply until October 1, 2002.
Passed the Senate March 22, 2001.
Attest:
Secretary.
107th CONGRESS
1st Session
S. 143
_______________________________________________________________________
AN ACT
To amend the Securities Act of 1933 and the Securities Exchange Act of
1934, to reduce securities fees in excess of those required to fund the
operations of the Securities and Exchange Commission, to adjust
compensation provisions for employees of the Commission, and for other
purposes.
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