[Congressional Record Volume 142, Number 84 (Monday, June 10, 1996)]
[Senate]
[Pages S6013-S6017]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. FAIRCLOTH:
  S. 1853. A bill to amend title 18, United States Code, to clarify the 
Federal jurisdiction over offenses relating to damage to religious 
property; to the Committee on the Judiciary.


                the church arson prevention act of 1996

  Mr. FAIRCLOTH. Mr. President, over the weekend in my home State of 
North Carolina, a small black church--the Matthew Murkland Presbyterian 
Church was destroyed by fire.
  This is truly a terrible act. I cannot think of a more despicable act 
than to burn any church. Nevertheless, this is the 30th such fire for a 
black church in the last 18 months. In fact, there are reports of 
another occurring last night.
  At this time, we do not know if this is a nationwide effort by some 
hate group, or the acts of crazed individuals. I would suspect that 
some of this has been organized, and that some of these are copycat 
crimes.
  Whatever the motivation, the legislation I am introducing would 
clarify that to burn any church is a Federal crime. Further, this 
lowers the threshold of damage necessary to make it a Federal crime 
from $10,000 in damages to $5,000 in damages.
  This makes certain that those that are doing this on an organized 
basis across the Nation will surely be brought to justice for the 
crimes they are committing.
  This is the same bill that Congressmen Hyde and Conyers have 
introduced in the House of Representatives.
  The President has announced his support for this legislation. It is 
my hope that the Congress can act on this bill soon and send it to the 
President.
                                 ______

      By Mr. ASHCROFT (for Mr. Dole (for himself, Mr. Hatch, Mr. Lott, 
        Mr. Ashcroft, Mr. Grassley,  and Mr. Inhofe)):
  S. 1854. A bill to amend Federal criminal law with respect to the 
prosecution of violent and repeat juvenile offenders and controlled 
substances, and for other purposes; to the Committee on the Judiciary.


      THE VIOLENT AND REPEAT JUVENILE OFFENDER REFORM ACT OF 1996

  Mr. ASHCROFT. Mr. President, it seems like the latest 
incomprehensible tragedy is only the next newspaper away. Today we have 
an epidemic of juvenile crime. It means that frequently students are 
unable to focus on their lessons as they seek to enhance their capacity 
to be of service to themselves, their family, and fellow man as they 
are in school. They are diverted and distracted because they have 
concerns about their own safety. They fear they might be robbed or 
raped. It is not a question of someone throwing spit balls. As a matter 
of fact, an 8-year-old girl from St. Louis wrote me that crime is real. 
It has to do with weapons. It has to do with people losing their lives. 
Young children are afraid. Citizens are afraid to leave their homes 
because they fear the senseless, mindless attack of predatory 
youngsters who have become a major threat to the personal security and 
integrity of individuals in our culture.
  We rejoice in the fact there has been some drop in overall crime 
rates. Frankly, crime rates had nowhere else to go, in general, but 
down. But they are coming down, and I am pleased by it. But I think it 
is important we not be deluded, we not be fooled. The fact that, 
overall, crime rates are coming down should not mask something which 
should alert us and should literally prompt us into significant 
response, and that is that, while, overall, crime rates are going down, 
juvenile crime rates have been skyrocketing. So those components of the 
crime rate which would signal what we can expect in the future are 
telling us to beware, to be alert, to brace ourselves, because between 
1988 and 1992, juvenile arrests for violent crime increased by 47 
percent while adult violent crime arrests increased only by 19 percent. 
So we had a 2.5-to-1 higher increase, higher explosion in growth in 
juvenile crime.
  Juvenile murders increased by 26 percent, forcible rapes by 41 
percent, juvenile robberies by 39 percent, aggravated assaults by 27 
percent--an exploding,

[[Page S6014]]

growing, expanding threat to the safety and security and integrity of 
the population. Frequently, because we are talking about juveniles, we 
are finding these individuals are being sent back into classrooms. 
Teachers do not know what these individuals have done because juvenile 
records are most frequently sealed. Other students are not aware of the 
specific conduct, though they frequently know someone has been in 
trouble. So you get a tremendous wave of insecurity in the classroom.
  I think most of us understand, when we work on legislation here, we 
need a secure environment. We invest substantially in a secure 
environment here. Yet, when we are preparing the next generation to 
literally lead America, we have students in our public schools, and 
teachers, who are having constantly to look over their shoulders, 
unaware, not knowing, not confident, distressed, discomfited by the 
fact that we have frequently sent these folks right back into our 
schools. And our schools are unaware.
  I talked to a teacher who indicated she knew there were several 
people in her classroom who were being housed in a residential juvenile 
detention facility, sent into the school, some of them even having 
these electronic shackles, the bracelets they have to wear around their 
ankle that allows the law enforcement community to monitor their 
whereabouts. But these students would refuse to tell the teacher the 
kinds of crimes or offenses which they have been convicted of, so a 
teacher in the classroom looks at the student and the student says: You 
know I have been convicted of a crime but I am not going to tell you 
whether I raped someone or murdered someone or assaulted someone. You 
just cannot know that.
  I submit to you that is not a healthy environment. But it is not just 
the school environment for which we must be concerned. It is the 
environment in which we maintain our homes. It is the streets of 
America, which we must literally reclaim.
  I believe the Dole-Hatch bill, which I have just sent to the desk, is 
a much needed effort to curtail these astronomical growth numbers and 
to fulfill the first duty of government. We have gotten awfully 
expansive of government. We teach people how to raise flowers. We 
address a wide variety of issues--research. But the first, the 
fundamental duty of government, the reason for which government was 
initially convened, is to provide for the safety and security and the 
integrity, the dignity of individual human beings, so we can be free 
from assault, so we can have the potential of reaching the level of 
achievement for which God created us and for which God placed in us 
this potential.

  I believe we have to return to that fundamental. The Dole-Hatch bill 
is a bill which is designed to address violent juvenile criminal 
activity. It is designed to sweep away the sort of idea that it is 
something we can ignore or simply patch over. We have to address it 
constructively. It will remedy misguided Federal efforts to excuse 
juvenile behavior because people are just juveniles. It will begin to 
provide a basis for accountability.
  I have to say I understand there are a number of juveniles who will 
not become career criminals. We do not want them to. We would not make 
that any more likely with this bill. But I think, for very serious 
juvenile offenders, we have to send a serious signal to them about the 
nature of their activity.
  President Clinton yesterday warned of a potential wave of juvenile 
crime in the next 5 years. The truth of the matter is, it is not a 
wave, it is an explosion. The President recommended a so-called gentle 
combination of laws and prevention programs to deflect this onslaught 
of violent teens.
  I have to say I believe a gentle combination will not get the job 
done. I think we have to begin to treat criminals as criminals. For 
those individuals who commit rape, armed robbery, murder, armed 
assault, major drug offenses, we cannot have any more gentle 
approaches. We have to say you are going to have to stand for trial as 
an adult.
  The Federal Government's response, and President Clinton's response, 
his solution, is always to offer more money for social programs such as 
delinquency prevention, treatment, recreation. I have held hearings 
around my State. I know the Senator from Iowa has held hearings around 
his State. We have talked to juvenile officials, those who deal with 
the juveniles. We have talked to sheriffs. We have talked to 
prosecutors. We have heard them tell us how juvenile individuals who 
are involved in criminal acts are simply playing the system. They 
sometimes look forward to a juvenile detention facility. They know they 
can hide behind their status as juveniles, that they do not have to be 
really answerable for their activities.
  The administration has not been active in prosecuting those who have 
offended the Federal laws. There have only been 233 convictions in the 
Clinton administration of juveniles as adults. I think for the major 
categories of criminal activity when juveniles are committing crimes 
which, if committed by adults, would be felonies, we need a serious 
approach.
  One of the things that stunned me about the testimony of Prof. John 
DiIulio from Princeton, one of the leading criminologists in America, 
is his report that when he interviews inmates of major prisons, their 
main worry is about the young prisoners who are going to be sent in. 
They are so hardened as criminals and have been allowed to be so 
indiscriminate in their violence before they finally get thrown into 
jail that the old-time criminals are scared stiff. They are afraid of 
what is happening.
  Those on the inside, the old-time, long-time criminal element in our 
Nation's prison systems, are fearful because they see what we have done 
by turning our heads to activity, so long as it is conducted by a 
juvenile, and allowing individuals to harden their approach to the 
safety and security and integrity of other individuals, and they are 
afraid. America needs to respond, and it needs to respond dramatically.
  The Dole-Hatch bill, also cosponsored by Senator Lott and myself and, 
I am pleased to say, Senator Grassley is to be added as an original 
cosponsor of the bill, is a measure which would begin to focus the 
energy and resources of the Federal Government on this part of crime, 
which is exploding, this part of crime which is growing at an 
incredible rate: juvenile crime; violent repeat juvenile criminal 
behavior.
  The estimated total amount of Federal appropriations used for at-risk 
and delinquent youth was more than $4 billion last year. Of these 
billions sent to the States, a very few million were to be used for 
investigation, prosecution, and detention. It is time we looked 
carefully at how we can assist States and how we can carry our share of 
the load in the Federal Government as it relates to actually 
prosecuting those individuals who are guilty of committing acts which, 
if committed as adults, would be clearly and simply felonies.
  They threaten the lives of people, they undermine the security of 
their property, they destabilize and disrupt our educational process. 
It is something which we cannot tolerate, it is something with which we 
cannot be coddling, it is something with which we must be forthwith. We 
can do much more, and the Dole-Hatch bill is an enormous step in the 
right direction.
  Let me briefly give you some of the things that are important about 
the Dole-Hatch bill which I believe make it a very promising way to 
address this most serious problem.
  One of the difficulties in the area of juvenile laws is the fact that 
juvenile records frequently have been sealed. Proceedings of juveniles 
are closed proceedings. Records are not available. Teachers who have to 
deal with these individuals in schools do not know what they have on 
their hands.
  I talked to the sheriff--and I am sure my colleague from Iowa, 
Senator Grassley, has talked to local officials--but I talked to the 
sheriff in Moniteau County, MO. The biggest town in Moniteau County is 
California, MO. People say they are going to California in central 
Missouri. People do not think you are going to the west coast, they 
think you are going to California, MO. It is not a big town.
  I asked what his No. 1 crime problem was, and he said it was 
juveniles coming in from out of State trying to set up a drug operation 
in Moniteau County and he could not call the States from which these 
juveniles came and get their records, because there was a

[[Page S6015]]

big blanket of security, security for the criminal but not for the 
society, a blanket of nondisclosure over juvenile records. I think it 
is high time that when people commit felonious acts, when they are 
criminals, that we have an understanding of what they have done and 
then when they move on to another jurisdiction, we have to be able to 
find out what their history is.

  I talked to a judge not too long ago. He said he was sentencing an 
18-year-old for murder. He thought it was the individual's first 
offense. Inadvertently did he discover the individual was originally 
from the west coast and had a juvenile record that included other 
murders. I do not think it is fair to expect a judicial system to 
operate in relation to repeat offenders, repeat violent predators and 
to allow those repeat violent predators to have the presumption that 
they are first offenders when they have a rap sheet as long as from 
here to Chicago.
  The truth is, if those people do criminal acts, those acts ought to 
be made available to law enforcement officials, judges, schoolteachers 
and school officials, not only because we will know how to take steps 
to protect the other students and the school environment--that would be 
enough of a reason--but we can do our best to change the way people 
operate, we can do our best to help them redirect their lives if they 
are not allowed to hide under a shield of juvenile laws that keep their 
records from being known.
  A significant part of the Dole-Hatch proposal is that such records 
can be maintained and developed at Federal expense if such records are 
made available to law enforcement and school authorities, including 
those outside the State. The juvenile community in America is very 
mobile. The Bloods and the Crips are no longer focused on the seaboards 
of this country. I am sure they are in Oklahoma City, like they are in 
Kansas City and some, from time to time, are found in smaller cities of 
Missouri and across the United States of America.
  It is fundamentally important that we not provide this blanket of 
security for criminal activity; that we expose to the light of day the 
acts of individuals whose conduct threatens the very security and 
integrity and dignity of the American public and also threatens 
substantially our ability to operate our public schools. I, for one, am 
loath to see us fail to protect our public education system.
  Second, this measure provides States will get 50 percent more in 
funding if they prosecute as adults juveniles 14 or older who commit 
murder, rape, armed robbery, aggravated assault, and distribution of 
controlled substances. The funding will be substantially greater to 
States who decide to get serious.
  I do not think it is unfair at all for the Federal Government to say 
we are not interested in providing resources just for social programs. 
If we are really worried about the threat to the integrity, to the 
security, to the safety of our citizenry, then for States who are 
really serious about protecting them, we will provide more funding. 
States who are serious enough to provide real prosecutions will get 
additional funding.
  The bill establishes an Office of Juvenile Accountability to assist 
the States in the prosecution of offenders and in combating youth 
violence. To get funding, States would have to make reasonable efforts 
to ensure by 2002 that juvenile proceedings will be open to the public, 
that juvenile records will be made available to schools and law 
enforcement agencies, and that fingerprint records will be kept for all 
juvenile offenders.
  The idea that we have repeat, serious predatory criminals who are not 
fingerprinted because they are juveniles and we do not have the 
capacity to follow their activities and to monitor what they are doing 
is an idea whose time has passed. It is time for us to understand that 
it is not spitballs in the hall and it is not just truancy. We have 
major criminal activity, and we should respond to it as such.
  Reform of the Federal juvenile justice system would be included here. 
It would hold juveniles 13 or older accountable as adults for the 
commission of violent crimes, such as murder and robbery, drug 
trafficking, or if they have been adjudicated delinquent on three 
previous offenses which, if the activity had been committed by an 
adult, would have been felonies.
  What we are really talking about here is focusing our attention on 
those juveniles who have been extremely disruptive and violent and who 
have decided that they can game or take advantage of the system, and, 
when they take advantage of the system, to hide under it as juveniles. 
We have to say there is no hiding place down here. We simply have to 
say very clearly, ``If you're going to make a conscious decision to be 
involved in criminal activity, then you'll be treated as a criminal, 
not as a juvenile.''

  Note what we do not do here. We do not say that everyone's first 
encounter with the law, if it is for some kind of activity which is not 
serious, automatically puts them into the adult criminal system. Ninety 
percent of all the juveniles that encounter our system encounter it 
once. They have learned their lesson.
  This system does not do anything to deal with those individuals 
unless they have committed murder, rape, armed robbery, armed assault, 
or major drug trafficking crimes. And you are pretty sure that is not a 
first encounter of someone with the system. So for the individuals in 
our juvenile justice system for whom the system has worked, this system 
does not affect them. But it begins to say, for those in the 10 percent 
that are involved in the serious, repeat, predatory, violent crimes of 
rape, armed robbery, armed assault, murder, major drug trafficking, 
those individuals are to be treated as criminals because they are 
involved in criminal activity.
  It is my judgment that it is beyond time for us to recognize that the 
times have changed, that criminal activity and juvenile delinquency is 
not what it once was. It is a new category of offense. It demands a new 
category of response.
  The same responses that have worked in the past will not work in the 
future, not unless we are willing to accept the tidal wave, this 
explosion of countercultural crime. It is against the culture which 
says crime is going down overall. It is countercultural because it is 
going up dramatically.
  We owe it to every man, woman, and child in America to do what we can 
to protect their integrity for their personal safety, the safety and 
security of their property as well as their persons. We owe it to every 
schoolteacher. We owe it to every schoolchild. We owe it to individuals 
who are trying to prepare themselves for a future in these United 
States of America so they can build these United States of America 
rather than tear down these United States of America. We owe them 
schools that are safe enough in which to learn.
  The Dole-Hatch bill, which addresses the core problem of violent, 
hard-core, repeat juvenile offenders, will do exactly that. It focuses 
the resources on investigation and prosecution. It does not focus the 
resources where we have had $4 billion spent previously, coinciding 
with the explosion of juvenile crime in the culture. It does not deny 
that effort that is being made to try to provide the right 
reinforcements and support for individuals who want to stay straight, 
but it says that effort can no longer characterize solely what we are 
doing.
  We must be willing to get involved in investigation, prosecution, 
detention, and punishment for individuals involved in predatory crimes 
which deprive us of our security, of our integrity and our safety. And 
we must treat those who choose to be criminals as criminals in order to 
address this serious problem.
  So I am pleased to have this opportunity to submit the Dole-Hatch 
measure addressing this serious problem of violent, repeat, hard-core 
juvenile offenders and to commend the majority leader and the chairman 
of the Judiciary Committee for this farsighted measure, which will take 
serious steps to curtail this threat to the liberty which all Americans 
have a right to enjoy.
                                 ______

      By Mr. GRAMM (for himself and Mr. D'Amato):
  S. 1855. A bill to reduce registration fees required to be paid by 
issuers of securities, and for other purposes; to the Committee on 
Banking, Housing, and Urban Affairs.


    the securities and exchange commission fee reduction act of 1996

 Mr. GRAMM. Mr. President, today, I am joined by Banking 
Committee

[[Page S6016]]

Chairman D'Amato in introducing the Securities and Exchange Commission 
Fee Reduction Act of 1996. This legislation is similar to a bill that 
was approved overwhelmingly by the House of Representatives earlier 
this year, and it should enjoy similar support in the Senate.
  Today, so-called user fees collected by the Securities and Exchange 
Commission [SEC] will pay for the entire SEC budget nearly three times 
over. These fees have become transformed into a tax on investment and 
capital formation. The legislation that we are introducing today will 
reduce these excess fees in stages over a period of 5 years until the 
amounts collected are approximately in line with the budget of the SEC.
  Mr. President, permit me to review the history of these fees, so that 
this bill, and its importance, can be placed in context. For many years 
a variety of user fees have been assessed to support the budget of the 
SEC. The most significant of these fees is assessed on new securities 
issues as they are registered with the Commission. A lesser fee is 
imposed on New York and American Stock Exchange trades.
  From their inception, fees were kept minimal, closely related to the 
cost of actually running the SEC, and therefore could be called user 
fees, paid so that the SEC could guard the integrity of our securities 
markets, a clear benefit to everybody. That began to change with the 
1990 budget. The slump in market activity following Black Monday in 
1987 caused worry in some quarters that the money generated by existing 
fees might not keep pace with the growing budget of the SEC. So the 
registration fees were raised, temporarily. That not only made up for 
lost revenue, it inadvertently produced annual surpluses of up to $70 
million over and above the SEC's budget.
  Creating a surplus by raising a fee is a dangerous precedent. Before 
1992, the SEC user fees had become a cash cow. Even so, the 
registration fee ratio was altered again. The surplus then jumped to 
$180 million and had continued to climb each year since. It will 
approach $400 million this year.
  It it improbable that a more destructive way to raise revenues could 
be found. Not unlike an increase in interest rates, the registration 
fees increase the cost of raising equity capital, with the unavoidable 
result that equity investment is lower than it would otherwise be. 
These fees have raised the cost of entry into the equity markets.
  The cost to the economy is immense. These fees tax our economy's seed 
capital--the money needed to create a harvest of new jobs, goods, 
services, economic growth, and opportunity. Clearly, the cost of these 
taxes imposed on new stock issues and stock trades measured in loss of 
economic activity must be counted in billions of dollars.
  Since a tax on new issues and equity transactions must be among the 
most inefficient ways to raise revenues, such a tax should never be 
used to fund general government. That is why I oppose setting fees at a 
level higher than necessary to fund the SEC. The adoption of this bill 
will return us to this principle, which governed SEC fees prior to the 
change in 1990.
  These excess fees have been recognized as a tax by the House Ways and 
Means Committee. This fact resulted in a near shutdown of the SEC 2 
years ago in a dispute between the Appropriations and Ways and Means 
Committees over jurisdiction for tax legislation. To prevent a 
recurrence of that problem, a compromise was reached whereby the Ways 
and Means Committee will withhold its objections to such fees being 
raised in appropriations bills, but only while the excess fees are on 
track to their elimination. This bill implements that compromise, which 
also has the full support of the authorizing committee in the House and 
the SEC.
  This legislation is revenue neutral, since the excess SEC fees have 
not been used for deficit reduction but rather as offsetting 
collections in appropriations bills. The fees collected for deficit 
reduction purposes remain unchanged.
  Mr. President, this position finds a strong consensus in this 
Congress. The legislation adopted by the House of Representatives had 
the support of Republicans and Democrats and was carefully crafted in 
consultation with the Ways and Means, Commerce, and Appropriations 
Committees of the other body. I believe that the companion bill we are 
introducing today will find similar support here.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1855

       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 ``Securities and Exchange 
     Commission Fee Reduction Act of 1996''.

     SEC. 2. REDUCING REGISTRATION FEES.

       Section 6(b) of the Securities Act of 1933 (15 U.S.C. 
     77f(b)) is amended to read as follows:
       ``(b) Registration Fee.--
       ``(1) Fee payment required.--
       ``(A) In general.--At the time of filing a registration 
     statement, the applicant shall pay to the Commission a fee 
     that shall be equal to the sum of the amounts (if any) 
     determined under the rates established by paragraph (3).
       ``(B) Publication of fees.--The Commission shall publish in 
     the Federal Register notices of the fee rates applicable 
     under this subsection for each fiscal year.
       ``(C) Amounts of fees.--In no case shall a minimum fee 
     required by this subsection be greater than $100.
       ``(2) General revenue fees.--
       ``(A) Rate.--The rate determined under this paragraph is a 
     rate equal to--
       ``(i) during each fiscal year before fiscal year 2002, $200 
     for each $1,000,000 of the maximum aggregate price at which 
     the subject securities are proposed to be offered; and
       ``(ii) during fiscal year 2002 and each succeeding fiscal 
     year, $182 for each $1,000,000 of the maximum aggregate price 
     at which the subject securities are proposed to be offered.
       ``(B) Revenues of treasury.--Fees collected during any 
     fiscal year pursuant to this paragraph shall be deposited and 
     credited as general revenues of the Treasury.
       ``(3) Offsetting collection fees.--
       ``(A) In general.--Except as provided in subparagraphs (B) 
     and (C), for each $1,000,000 of the maximum aggregate price 
     at which the subject securities are proposed to be offered, 
     the rate determined under this paragraph is a rate equal to--
       ``(i) $103 during fiscal year 1997;
       ``(ii) $70 during fiscal year 1998;
       ``(iii) $38 during fiscal year 1999;
       ``(iv) $17 during fiscal year 2000; and
       ``(v) $0 during fiscal year 2001 or any succeeding fiscal 
     year.
       ``(B) Limitation; deposit.--Except as provided in 
     subparagraph (C), no amounts shall be collected pursuant to 
     this paragraph for any fiscal year except to the extent 
     provided in advance in appropriations Acts. Fees collected 
     during any fiscal year pursuant to this paragraph shall be 
     deposited and credited as offsetting collections in 
     accordance with appropriations Acts.
       ``(C) Lapse of appropriations.--If, on the first day of a 
     fiscal year, a regular appropriation to the Commission has 
     not been enacted, 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.''.

     SEC. 3. TRANSACTION FEES.

       (a) Amendment.--Section 31 of the Securities Exchange Act 
     of 1934 (15 U.S.C. 78ee) is amended to read as follows:

     ``SEC. 31. TRANSACTION FEES.

       ``(a) Exchange-Traded Securities.--
       ``(1) Rate.--Each national securities exchange shall pay to 
     the Commission a fee at a rate equal to--
       ``(A) $33 for each $1,000,000 of the aggregate dollar 
     amount of sales of securities (other than bonds, debentures, 
     and other evidences of indebtedness) transacted on such 
     national securities exchange during the period to which the 
     fee relates under subsection (d); and
       ``(B) for fiscal year 2002 and each succeeding fiscal year, 
     $25 for each $1,000,000 of such aggregate dollar amount of 
     sales during the period to which the fee relates under 
     subsection (d).
       ``(2) Revenues of treasury.--Fees collected pursuant to 
     this subsection shall be deposited and collected as general 
     revenue of the Treasury.
       ``(b) Off-Exchange-Trades of Exchange-Registered 
     Securities.--
       ``(1) Rates.--Each national securities association shall 
     pay to the Commission a fee at a rate equal to--
       ``(A) $33 for each $1,000,000 of the aggregate dollar 
     amount of sales transacted during the period to which the fee 
     relates under subsection (d) by or through any member of such 
     association otherwise than on a national securities exchange 
     of securities registered on such an exchange (other than 
     bonds, debentures, and other evidences of indebtedness); and
       ``(B) for fiscal year 2002 and each succeeding fiscal year, 
     $25 for each $1,000,000 of the aggregate dollar amount of 
     sales referral to in subparagraph (A) during the period to 
     which the fee relates under subsection (d).
       ``(2) Revenues of treasury.--Fees collected pursuant to 
     this subsection shall be deposited and collected as general 
     revenue of the Treasury.
       ``(c) Off-Exchange-Trades of Last-Sale-Reported 
     Securities.--

[[Page S6017]]

       ``(1) Covered transactions.--Each national securities 
     association shall pay to the Commission a fee at a rate equal 
     to the dollar amount determined under paragraph (2) for each 
     $1,000,000 of the aggregate dollar amount of sales transacted 
     during the period to which the fee relates under subsection 
     (d) by or through any member of such association otherwise 
     than on a national securities exchange of securities (other 
     than bonds, debentures, and other evidences of indebtedness) 
     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 subsection (b).
       ``(2) Fee rates.--Except as provided in paragraph (4), the 
     dollar amount determined under this paragraph is--
       ``(A) $12 for fiscal year 1997;
       ``(B) $14 for fiscal year 1998;
       ``(C) $17 for fiscal year 1999;
       ``(D) $18 for fiscal year 2000;
       ``(E) $20 for fiscal year 2001; and
       ``(F) $25 for fiscal year 2002 or for any succeeding fiscal 
     year.
       ``(3) Limitation; deposit of fees.--Except as provided in 
     paragraph (4), no amounts shall be collected pursuant to this 
     subsection for any fiscal year beginning before October 1, 
     2001, except to the extent provided in advance in 
     appropriations Acts. Fees collected during any such fiscal 
     year pursuant to this subsection shall be deposited and 
     credited as offsetting collections to the account providing 
     appropriations to the Commission, except that any amounts in 
     excess of the following amounts (and any amount collected for 
     fiscal years beginning on or after October 1, 2001) shall be 
     deposited and credited as general revenues of the Treasury:
       ``(A) $20,000,000 for fiscal year 1997.
       ``(B) $26,000,000 for fiscal year 1998.
       ``(C) $32,000,000 for fiscal year 1999.
       ``(D) $32,000,000 for fiscal year 2000.
       ``(E) $32,000,000 for fiscal year 2001.
       ``(F) $0 for fiscal year 2002 and any succeeding fiscal 
     year.
       ``(4) Lapse of appropriations.--If, on the first day of a 
     fiscal year, a regular appropriation to the Commission has 
     not been enacted, the Commission shall continue to collect 
     fees (as offsetting collections) under this subsection at the 
     rate in effect during the preceding fiscal year, until such a 
     regular appropriation is enacted.
       ``(d) Dates for Payment of Fees.--The fees required by 
     subsections (a), (b), and (c) shall be paid--
       ``(1) on or before March 15, with respect to transactions 
     and sales occurring during the period beginning on the 
     preceding September 1 and ending at the close of the 
     preceding December 31; and
       ``(2) on or before September 30, with respect to 
     transactions and sales occurring during the period beginning 
     on the preceding January 1 and ending at the close of the 
     preceding August 31.
       ``(e) Exemptions.--
       ``(1) Commission authority.--The Commission may, by rule, 
     exempt any sale of securities or any class of sales of 
     securities from any fee imposed by this section, if the 
     Commission finds that such exemption is consistent with the 
     public interest, the equal regulation of markets and brokers 
     and dealers, and the development of a national market system.
       ``(2) Low-volume transactions.--No fee shall be assessed 
     under this section for transactions involving portfolios of 
     equity securities taking place at times of day characterized 
     by low volume and during nontraditional trading hours, as 
     determined by the Commission.
       ``(f) Publication.--The Commission shall publish in the 
     Federal Register notices of the fee rates applicable under 
     this section for each fiscal year.''.
       (b) Effective Date; Transition.--
       (1) Effective date.--Except as provided in paragraph (2), 
     the amendment made by subsection (a) shall apply with respect 
     to transactions in securities that occur on or after October 
     1, 1996.
       (2) Off-exchange trades of last sale reported 
     transactions.--The amendment made by subsection (a) shall 
     apply with respect to transactions described in section 
     31(d)(1) of the Securities Exchange Act of 1934 (as amended 
     by subsection (a) of this section) that occur on or after 
     October 1, 1996.
       (3) Rule of construction.--Nothing in this subsection shall 
     be construed to affect the obligation of national securities 
     exchanges and registered brokers and dealers under section 31 
     of the Securities Exchange Act of 1934, as in effect on the 
     day before the effective date of the amendment made by 
     subsection (a), to make the payments required by such section 
     on March 15, 1997.

     SEC. 4. TIME FOR PAYMENT.

       Section 4(e) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78d(e)) is amended by inserting before the period at 
     the end the following: ``, and the Commission may also 
     specify the time that such fee shall be determined and paid 
     relative to the filing of any statement or document with the 
     Commission''.

     SEC. 5. ELIMINATION OF UNNECESSARY FEES.

       The fees authorized by the amendments made by this Act are 
     in lieu of, and not in addition to, any fees that the 
     Securities and Exchange Commission is authorized to impose or 
     collect pursuant to section 9701 of title 31, United States 
     Code.
 Mr. D'AMATO. Mr. President, I am pleased to join my 
distinguished colleague and Securities Subcommittee Chairman, Senator 
Gramm, in sponsoring legislation to fully and fairly fund the 
Securities and Exchange Commission. The Securities and Exchange 
Commission Fee Reduction Act of 1996 provides a long-term solution to 
the SEC's current funding problems.
  The Securities and Exchange Commission is funded through offsetting 
collections to increases in its section 6(b) fees. Section 6(b) fees 
are paid by issuers who register their securities with the Securities 
and Exchange Commission. In the last several years, the section 6(b) 
fees assessed on issuers has resulted in fees collected by the agency 
that far exceeds the cost of regulation. Any fees raised over and above 
the Securities and Exchange Commission's budget are deposited into the 
General Treasury for deficit reduction. Last year, the SEC raised 
approximately $750 million in fees to pay for a budget of less than 
$300 million.
  The section 6(b) fees have become a tax on capital formation. These 
user fees now raise enough money to fund the SEC three times. The 
proposed 1997 budget continues this trend by raising the statutory fee 
level and expanding the fee base. The 1997 budget proposal raises $776 
million in fees to fund the SEC's $307 million budget.
  The Securities and Exchange Commission Fee Reduction Act will 
stabilize the SEC's fee structure by reducing fees and increasing 
appropriations over a 5-year period. It will return the section 6(b) 
registration fees closer to the statutory level of one-fiftieth of 1 
percent and it will create a more equitable fee structure by expanding 
current section 31 trading fees now paid only for transactions executed 
on securities exchanges to include transactions on the over-the-counter 
market. As fees are reduced over the 5-year period, direct 
appropriations will be used to fund the SEC.
  Mr. President, the bill Senator Gramm and I introduce today will 
create a permanent funding structure for the SEC that enables the 
agency to pay for itself. At one point several years ago, Congress 
considered making the SEC a self-funded agency. The fee structure in 
H.R. 2972 allows the SEC to be virtually self-funded, yet gives 
Congress greater control over the agency.
  It is critical for Congress to ensure that a stable and fair funding 
structure exists for the agency responsible for safeguarding our 
preeminent capital markets. Further, fees paid by participants in the 
securities markets--particularly for capital formation--should bear a 
rational relationship to the cost of regulation.
  In the words of Securities and Exchange Commission Levitt when 
testifying before the Commerce, State, Judiciary Appropriations 
Subcommittee: ``In order to continue the Commission's excellent record 
of effective law enforcement, market oversight, and investor protection 
the SEC will need a long-term funding mechanism.''
  Mr. President, the bill we introduce today resolves the long-debated 
problem of how to provide the Securities and Exchange Commission with a 
permanent funding structure that allows the SEC to pay for itself. I 
commend my colleague from Texas for his leadership on this legislation 
and look forward to working with him to enact the Securities and 
Exchange Commission Fee Reduction Act of 1996.

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