[Congressional Record Volume 144, Number 85 (Thursday, June 25, 1998)]
[Extensions of Remarks]
[Pages E1231-E1232]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


             THE SAVINGS AND INVESTMENT RELIEF ACT OF 1998

                                 ______
                                 

                        HON. GERALD B.H. SOLOMON

                              of new york

                    in the house of representatives

                        Thursday, June 25, 1998

  Mr. SOLOMON. Mr. Speaker, I rise today to introduce H.R. 4120, the 
Savings and Investment Relief Act of 1998. This legislation would 
provide relief to every American who invests in the stock market. 
Fortunately, Mr. Speaker, in this day and age, the stock market is no 
longer the sole province of the rich and the elite. Our capital 
markets, which are the most liquid and efficient in the world, are 
accessible to virtually every American. In fact, as of 1995, nearly 
half of all households in America owned stock, either individually, in 
a mutual fund or through a pension plan. However, I suspect that many 
of these Americans do not know that they are subject to a tax every 
time they--or their pension plan or mutual fund--sell stock. This tax 
yields the government hundreds of millions of dollars in revenue each 
year. This is in addition to the income taxes and capital gains taxes 
which Americans are already paying.
  Under our securities laws, the Securities and Exchange Commission 
(SEC) collects transaction fees on sales of stocks. These fees were 
originally designed solely to fund the SEC's regulation and supervision 
of the securities markets. The SEC's role in protecting investors is 
critical, and the hardworking members of the Commission and its staff 
should be commended for the good job that they do. However, the SEC is 
now collecting transaction fees far in excess of what it needs to carry 
out these functions, transforming what was intended to be a user fee 
with a specific purpose into a huge, general tax.
  When Congress enacted the National Securities Markets Improvement Act 
of 1996 (NSMIA), we intended to bring total SEC fee collections, which 
had already grown to significantly exceed the Commission's budget, more 
in line with its costs. However, in fiscal year 1997, total SEC 
collections actually grew to 324% of its appropriated budget authority, 
and 382% of its requested budget. Frankly, Mr. Speaker, this situation 
is ridiculous and it must be addressed. We talk a lot on this floor 
about common sense government and about putting money back in the 
pockets of the ordinary, hardworking Americans. The legislation I am 
introducing today would accomplish both of these objectives.
  Mr. Speaker, my bill is really very simple. It would cap annual 
collections of transaction

[[Page E1232]]

fees assessed on trades of NASDAQ and exchange-listed stocks, so that 
when the Commission had collected all the money it needs for the year, 
the fee would simply shut off. All we are saying with this bill is that 
once the SEC has collected sufficient money to fund itself, then 
investors do not have to pay any more fees.
  At the same time, Mr. Speaker, my bill would offer more flexibility 
than under current law and ensure that the SEC always has sufficient 
money to carry out its important mission of protecting investors. The 
bill provides that for any year in which the SEC does not collect 
enough fee revenue to cover its budget, the Appropriations Committee 
can temporarily raise the transaction fee rate through an 
Appropriations Act to ensure that sufficient money is collected to fund 
SEC functions for that fiscal year.
  I urge all Members to support this important legislation which would 
save a substantial amount of money for millions of American investors, 
and guarantee that the SEC always has enough funding to carry out its 
critical function of protecting shareholders.

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