[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 143 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                 S. 143

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.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 22, 2001

Mr. Gramm (for himself, Mr. Schumer, Mr. Hagel, Mr. Enzi, Mr. Bennett, 
   Mr. Bunning, Mr. Bond, Mr. Torricelli, Mr. Allard, and Mr. Crapo) 
introduced the following bill; which was read twice and referred to the 
            Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
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. Effective date.

SEC. 2. REDUCTION IN REGISTRATION FEE RATES; ELIMINATION OF GENERAL 
              REVENUE COMPONENT.

    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.''.

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, and other 
        evidences of indebtedness)--
                    ``(A) transacted on such national securities 
                exchange;
                    ``(B) transacted by or through any member of such 
                association otherwise than on a national securities 
                exchange of securities registered on such an exchange; 
                and
                    ``(C) transacted by or through any member of such 
                association otherwise than on a national securities 
                exchange of securities that are subject to prompt last 
                sale reporting pursuant to the rules of the Commission 
                or a registered national securities association, 
                excluding any sales for which a fee is paid under 
                subparagraph (B).
            ``(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 the 
                        date of enactment of appropriations legislation 
                        setting such rate.
                    ``(B) Transaction fee cap.--For purposes of this 
                paragraph, the `transaction fee cap' shall be equal 
                to--
                            ``(i) $497,000,000 for fiscal year 2002;
                            ``(ii) $607,000,000 for fiscal year 2003;
                            ``(iii) $706,000,000 for fiscal year 2004;
                            ``(iv) $896,000,000 for fiscal year 2005;
                            ``(v) $1,094,000,000 for fiscal year 2006;
                            ``(vi) $554,000,000 for fiscal year 2007;
                            ``(vii) $580,000,000 for fiscal year 2008;
                            ``(viii) $719,000,000 for fiscal year 2009; 
                        and
                            ``(ix) $884,000,000 for fiscal year 2010 
                        and each fiscal year thereafter.
    ``(c) Limitation; Deposit of Fees.--
            ``(1) Limitation.--Except as provided in subsection (d), no 
        amount may be collected pursuant to subsection (b) for any 
        fiscal year, except to the extent provided in advance in 
        appropriation Acts.
            ``(2) Deposit of fees.--Fees 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 continue to collect fees (as 
offsetting collections) under this section 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), until such a regular appropriation is enacted.'';
            (2) in subsection (e), by striking ``subsections (b), (c), 
        and (d)'' and inserting ``subsection (b)''; and
            (3) in subsection (g), by striking ``rates'' and inserting 
        ``rate''.

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 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 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 such month; and
                    (B) such other information and documents as the 
                Commission may require, as necessary or appropriate to 
                project the aggregate amount of fees pursuant to 
                paragraph (1).
    (b) Floor for Total Fee 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 collected by the 
Commission will, during that fiscal year, fall below an amount equal to 
the floor for total fee collections, the Commission may by order, 
subject to subsection (e), increase the fee rate established under 
section 31 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 the Commission the 
fee required by section 31 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 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 collected by the 
Commission will exceed the cap on total fee collections by more than 5 
percent during any fiscal year, the Commission shall by order, subject 
to subsection (e), decrease the fee rate or suspend collection of fees 
under section 31 of the Securities Exchange Act of 1934 to the extent 
necessary to bring estimated collections to an amount equal to 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 the 
Commission the fee required by section 31 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 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 2010, 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 2011 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) Securities and Exchange Commission Employees.--
            (1) In general.--Section 4(b) of the Securities Exchange 
        Act of 1934 (15 U.S.C. 78d(b)) is amended--
                    (A) by striking paragraphs (1) and (2) and 
                inserting the following:
            ``(1) Appointment and compensation.--
                    ``(A) In general.--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 this 
                Act.
                    ``(B) Rates of pay.--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 of title 5, 
                United States Code.
                    ``(C) Comparability.--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(a) 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(a) of the Financial Institutions 
                Reform, Recovery, and Enforcement Act of 1989 (12 
                U.S.C. 1833b).''; and
                    (B) by redesignating paragraph (3) as paragraph 
                (2).
            (2) Employees represented by labor organizations.--To the 
        extent that any employee of the 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 subsection.
    (b) Reporting on Information by the Commission.--Section 1206 of 
the Financial Institutions Reform, Recovery, and Enforcement Act of 
1989 (12 U.S.C. 1833b) is amended--
            (1) by inserting ``(a) In General.--'' before ``The Federal 
        Deposit'';
            (2) by striking ``the Thrift Depositor Protection Oversight 
        Board of the Resolution Trust Corporation''; and
            (3) by adding at the end the following:
    ``(b) In establishing and adjusting schedules of compensation and 
benefits for employees of the Securities and Exchange Commission under 
applicable provisions of law, the Commission shall inform the heads of 
the agencies referred to under subsection (a) and Congress of such 
compensation and benefits and shall seek to maintain comparability with 
such agencies regarding compensation and benefits.''.
    (c) Technical Amendments.--
            (1) Section 3132(a)(1) of title 5, United States Code, is 
        amended--
                    (A) in subparagraph (C), by striking ``or'' after 
                the semicolon;
                    (B) in subparagraph (D), by inserting ``or'' after 
                the semicolon; and
                    (C) by adding at the end the following:
                    ``(E) the Securities and Exchange Commission.''.
            (2) Section 5373(a) of title 5, United States Code, is 
        amended--
                    (A) in paragraph (2), by striking ``or'' after the 
                semicolon;
                    (B) in paragraph (3), by striking the period and 
                inserting ``; or''; and
                    (C) by adding at the end the following:
            ``(4) section 4(b) of the Securities Exchange Act of 
        1934.''.

SEC. 7. 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.
                                 <all>