[Congressional Record Volume 146, Number 135 (Wednesday, October 25, 2000)]
[Senate]
[Pages S10989-S10990]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 S. 1854, THE 21ST CENTURY ACQUISITION REFORM AND IMPROVEMENTS ACT OF 
                                  2000

  Mr. HATCH. Mr. President, I was pleased that last Thursday the Senate 
unanimously passed S. 1854, the ``21st Century Acquisition Reform and 
Improvements Act of 2000.'' I originally introduced the bill last year 
with Senators DeWine and Kohl, and we are hopeful that it will be 
enacted into law this year. I want to express my thanks to Senator 
Leahy, the Ranking Member of the Judiciary Committee, and to Senators 
DeWine and Kohl, the Chairman and Ranking Member of the Antitrust 
Subcommittee, respectively, for their hard work and cooperation in 
developing and passing the bipartisan proposal that the Senate 
approved. The reforms that will be put in place upon enactment of this 
legislation are long overdue. Businesses, both small and large, as well 
as the antitrust enforcement agencies, have much to gain by its 
enactment.
  As my colleagues know, the Hart-Scott-Rodino Antitrust Improvements 
Act of 1976 requires companies contemplating a merger or acquisition to 
file a pre-merger notification with the Antitrust Division or the 
Federal Trade Commission if the size of the companies and the size of 
the proposed transaction are greater than certain

[[Page S10990]]

monetary thresholds. These monetary thresholds, however, are seriously 
outdated. They have not been changed--even for inflation--since the 
legislation was enacted more than two decades ago.
  Because these monetary thresholds are obsolete, businesses today 
often are required to notify the Antitrust Division and the FTC of 
proposed transactions that simply do not raise competitive issues. As a 
result, the agencies are required to expend valuable resources 
performing needless reviews of transactions that were never intended to 
be reviewed. In short, current law senselessly imposes a costly 
regulatory and financial burden upon companies, particularly small 
businesses, and needlessly drains the resources of the agencies. 
Because of the unnecessarily low monetary thresholds, current law fails 
to reflect the true economic impact of mergers and acquisitions in 
today's economy.
  In addition, after a pre-merger notification is filed, the Hart-
Scott-Rodino Act imposes a 30-day waiting period, during which the 
proposed transaction may not close and the Antitrust Division or the 
FTC conducts an antitrust investigation. Prior to the expiration of 
this waiting period, the agency investigating the transaction may make 
a ``second request''--a demand for additional information or 
documentary material that is relevant to the proposed transaction. 
Unfortunately, many second requests require the production of an 
enormous volume of materials, many of which are unnecessary for even 
the most comprehensive merger review. Complying with such second 
requests has become extraordinarily burdensome, often costing companies 
in excess of $1 million. Second requests also extend the waiting period 
for an additional 20 days, a period of time that does not begin to run 
until the agencies have determined that the transacting companies have 
``substantially complied'' with the second request. This procedure 
results in many lawful transactions being unnecessarily delayed for 
extended periods of time, causing an enormous strain on the businesses, 
their employees, and their shareholders.
  I am pleased that this legislation will rectify many of the problems 
with the 1976 Hart-Scott-Rodino Act. First, the legislation increases 
the size-of-transaction threshold from $15 million to $50 million, 
effectively exempting mergers and acquisitions that would not pose any 
competitive concerns from the Act's notification requirement. Such 
mergers make up over half of all transactions reported in 1999. 
Therefore, this legislation provides significant regulatory and 
financial relief for all businesses, particularly small and medium-
sized ones. In addition, the legislation indexes the threshold for 
inflation, so that the problem of an expanding economy outgrowing the 
statute's monetary threshold will not recur.
  In addition to providing regulatory and financial relief for 
companies, another purpose of this legislation is to ensure that the 
Antitrust Division and the FTC efficiently allocate their finite 
resources to those transactions that truly warrant antitrust scrutiny. 
To that end, one of its main objectives is to achieve a more effective 
and efficient merger review process by eliminating unnecessary burden, 
costly duplication and undue delay. In order to accomplish this 
objective, this legislation directs the Assistant Attorney General and 
the FTC to conduct an internal review and implement reforms of the 
merger review process, including the designation of a senior official 
for expedited review of appeals regarding the scope of and compliance 
with second requests. Fortunately, these reforms will be implemented 
quickly because, under this legislation, the Assistant Attorney General 
and the FTC will have 120 days to issue the guidelines and make the 
necessary changes to their regulations and policy documents to 
implement the reforms, and they must report back to Congress within 180 
days.
  This legislation sets forth reforms to the Hart-Scott-Rodino Act that 
are long overdue. It provides significant regulatory and financial 
relief for businesses, while ensuring that transactions that truly 
deserve antitrust scrutiny will continue to undergo review. Again, I 
thank my colleagues who joined me in supporting passage of this 
legislation. In the waning hours of this Congressional Session, it is 
my intention to see this non-controversial consensus legislation 
enacted into law this year, and I will seek its attachment to one of 
the remaining ``must-pass'' vehicles.
  Finally, I would like to recognize the hard work and efforts of 
several staff members of the Judiciary Committee who were instrumental 
in the successful passage of this legislation. On my staff, I 
particularly would like to thank the Committee's Chief Counsel and 
Staff Director, Manus Cooney, the lead counsels who worked on this 
measure, Makan Delrahim, Rene Augustine, and Kyle Sampson, and legal 
fellow Thadd Prisco. On Senator Leahy's staff, I would like to 
recognize the professional skills and input of the Minority Chief 
Counsel, Bruce Cohen, and the Minority General Counsel, Beryl Howell. 
On the Antitrust Subcommittee, I would like to thank Peter Levitas and 
Mark Grundvig, who are Senator DeWine's able counsels, as well as Jon 
Leibowitz and Seth Bloom, counsels to Senator Kohl, for their tireless 
efforts and input. Without the assistance and hard work of these loyal 
public servants, the important reforms in this legislation would not 
have been possible. Thank you.

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