[Congressional Record Volume 147, Number 7 (Monday, January 22, 2001)]
[Senate]
[Pages S415-S419]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRAMM (for himself, Mr. Schumer, Mr. Hagel, Mr. Enzi, Mr. 
        Bennett, Mr. Bunning, Mr. Bond, Mr. Torricelli, Mr. Allard, and 
        Mr. Crapo):
  S. 143. A bill to amend the Securities Act of 1933 and the Securities 
Exchange Act of 1934, to reduce securities fees in excess of those 
requires to fund the operations of the Securities and Exchange 
Commission, to adjust compensation provisions for employees of the 
Commission, and for other purposes; to the Committee on Banking, 
Housing, and Urban Affairs.


               competitive market supervision act of 2001

  Mr. GRAMM. Mr. President, today I am joined by Senator Schumer, 
together with Senators Hagel, Enzi, Bennett, Bunning, Bond, Torricelli, 
Allard, and Crapo in introducing the Competitive Market Supervision Act 
of 2001. This important legislation will reduce the excess fees 
collected by the Securities and Exchange Commission (SEC). At the same 
time, the legislation will guarantee that the SEC is fully funded by 
fee collections, allowing fee adjustments to meet appropriated amounts. 
This legislation, moreover, will level unaffected the funds available 
for appropriations purposes by walling off the offsetting fee 
collections that are expected under current law.
  Under current budget estimates, this legislation will result in a 
reduction of fee collections by more than $1 billion in the first year 
and by about $8 billion over the next 5 years.
  A second key element of the bill is that it will extend to the SEC 
the same salary authority for its employees as is exercised by the 
Federal banking agencies.
  A similar bill, S. 2107, which included the identical provisions of 
the bill I am introducing today, was approved by the Senate Banking, 
Housing, and Urban Affairs Committee last year.


                   reduction of securities user fees

  The original objective of the user fees collected by the Commission 
was to provide a funding source for the agency's operations. However, 
increases in stock market volume and valuation have spawned revenues 
that far surpass what is needed to operate the agency. In fiscal year 
2000, to fund a budget of $375 million, the SEC collected $2.27 
billion. According to the most recent Congressional Budget Office (CBO) 
projections, the savings to

[[Page S416]]

investors and issuers from this legislation will be approximately $8 
billion over 5 years, and nearly $14 billion over ten years, without 
reducing funds available for the SEC or for necessary appropriations.
  Rather than user fees, these revenues have become taxes on savings 
and investment, taxes that lower the returns of every investor who buys 
stock, owns a mutual fund, or plans to use Individual Retirement 
Accounts, 401(k) plans, or pensions to fund retirement. Furthermore, 
excess Section 6(b) fees are particularly harmful since these taxes are 
imposed at the beginning of the investment cycle, subtracting from the 
economy monies that could be leveraged into several times their value 
to finance efforts to create jobs, develop new products, and build 
America.
  Section 2 of the bill amends Section 6(b) of the Securities Act of 
1933 to lower registration fee rates. In addition, this section 
eliminates the general revenue portion of the registration fee. The 
offsetting collection rate is set at $67 per $1 million of securities 
registered for FY 2002-06, and at $33 per $1 million for FY 2007 and 
thereafter. Section 3 reduces merger and tender fee rates in Section 
13(e)(3) and Section 14(g) of the Securities Exchange Act of 1934 from 
one fiftieth percent under current law to $67 per $1 million of 
securities involved for the period FY 2002-06, and reduces rates 
further to $33 per $1 million for FY 2007 and thereafter, and all fees 
are also reclassified from general revenues to offsetting collections. 
It is important to harmonize the fee registration, and merger and 
tender fee rates so as to provide no distortions or inject any 
unintended incentives into the managerial decision as to when a merger 
should occur.

  Under Section 4, all transactions included in Section 31 of the 
Securities Exchange Act of 1934 are consolidated, with the same fee 
rate applied to each as an offsetting collection. Transaction fees in 
any particular fiscal year will be set in appropriations acts at a rate 
estimated to collect the target dollar amount set in Section 4 for that 
year. The target dollar amount is calculated to approximate the amount 
of transaction fees required so that, when combined with anticipated 
registration and merger/tender fees, total offsetting collections will 
approximately equal the offsetting collections anticipated under 
current law. If the most recent projections prove accurate, this will 
reduce transaction fee rates by as much as two-thirds.
  I would note that the fee targets established under Section 4 are 
based upon the most recent budget estimates available. It is my 
intention to adjust those targets prior to Committee action on the bill 
as new budget estimates become available in the next few weeks.


                authority of sec to adjust to fee rates

  Given the difficulty in predicting fee revenues, it is also important 
to provide a framework that ensures full funding for the SEC. 
Therefore, Section 5 of this legislation provides the Commission with 
the authority to adjust fee rates to ensure that the agency is fully 
funded in the event that reductions in market valuations or volume 
produce revenues below the legislated targets. In addition, Section 5 
requires the agency to lower fee rates when fees are projected to bring 
in revenues that are in excess of the cap on fee collections laid out 
in the bill. To provide a safeguard against misuse of the authority 
granted in Section 5, the legislation requires the agency to report to 
Congress before it exercises any authority to adjust fees.


                         sec pay comparability

  Section 6 of the bill amends the Securities Exchange Act of 1934 to 
extend to the SEC the same authority provided to the federal bank 
regulators to adjust base rates of compensation for all of its 
employees. Under existing law, the Commission may do this only for its 
economists. The provisions allow parity among the Commission and 
Federal banking agency compensation programs. This change is 
particularly timely since under the terms of the Gramm-Leach-Bliley 
Act, in many institutions, examiners from the SEC will be working along 
side examiners from the federal banking regulators. Without this pay 
comparability, we could witness a drain of talent from the SEC toward 
the other examiners. An amendment also is made to the Federal Deposit 
Insurance Act to bring the SEC within the consultation and information-
sharing requirements of other agencies mentioned at 12 U.S.C. 1833b 
with respect to rates of employee compensation. A further technical 
amendment to section 1833b deletes references to entities that have 
been abolished.
  The legislation assures that reductions, if any, in the base pay of a 
Commission employee represented by a labor organization with exclusive 
recognition in accordance with Chapter 71 of Title 5 of the United 
States Code, result from negotiations between such organization and 
Commission management, rather than by reason of the enactment of this 
amendment.
  Mr. President, I look forward to early and favorable consideration of 
the Competitive Market Supervision Act of 2001. I ask that a summary of 
the provisions of the bill and bill text be included in the Record.
  There being no objection, the additional material was ordered to be 
printed in the Record, as follows:

                                 S. 143

       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.

[[Page S417]]

       ``(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

[[Page S418]]

     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.
                                  ____


 Section-by-Section Analysis of the Competitive Market Supervision Act 
                                of 2001

     Section 1. Short title
       Designates this title as the ``Competitive Market 
     Supervision Act of 2001.''
     Section 2. Reduction in registration fees; elimination of 
         general revenue component
       Registration fee rates in Section 6(b) of the Securities 
     Act of 1933 (15 U.S.C. 77f(b)) are reduced. The general 
     revenue portion of the registration fee is eliminated. The 
     offsetting collection rate is set at $67 per $1 million of 
     securities registered for FY 2002-2006, and at $33 per $1 
     million for FY 2007 and thereafter.
     Section 3. Reduction in merger and tender fees; 
         reclassification as offsetting collections
       Section 3 reduces merger and tender fee rates in Section 
     13(e)(3) and Section 14(g) of the Securities Exchange Act of 
     1934 (15 U.S.C. 78m(e)(3) and 78n(g), respectively) from one 
     fiftieth percent under current law, to $67 per $1 million of 
     securities involved for the period FY 2002-2006, and reduces 
     rates further to $33 per $1 million for FY 2007 and 
     thereafter. All fees are reclassified from general revenues 
     to offsetting collections.
     Section 4. Reduction in transaction fees; elimination of 
         general revenue component
       Under this section, all transactions included in Section 31 
     of the Securities Exchange Act of 1934 are consolidated, with 
     the same fee rate applied to each as an offsetting 
     collection. Transaction fees in any particular fiscal year 
     will be set in appropriations acts at a rate estimated to 
     collect the target dollar amount set for that year. The 
     target dollar amount is calculated to appropriate the amount, 
     when combined with anticipated registration and merger/tender 
     fees, that will approximately equal the offsetting 
     collections anticipated to be produced under current law.
     Section 5. Adjustment to fee rates
       The Commission is given authority to increase or decrease 
     transaction fee rates after the first half of the fiscal year 
     if projections show that either the cap or floor for total 
     fee collections will be breached. To provide a safeguard 
     against misuse of the authority granted in Section 5, the 
     legislation requires the agency to report to Congress before 
     it exercises any authority to adjust fees.
     Section 6. Comparability provisions
       Section 6(a) amends Section 4(b) of the Securities Exchange 
     Act of 1934 (15 U.S.C. 78d(b)) to authorize, but not require, 
     the SEC to compensate its employees according to a scale 
     outside the Federal Government's General Schedule (GS) rates. 
     Pursuant to this authority, the SEC may provide additional 
     compensation and benefits to its employees on the same 
     comparable basis as do the agencies referred to under Section 
     1206(a) of the Financial Institutions Reform, Recovery, and 
     Enforcement Act of 1989 (12 U.S.C. 1833b). Such agencies 
     include the Federal banking agencies, the National Credit 
     Union Administration, the Federal Housing Finance Board, and 
     the Farm Credit Administration.

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     The amendment ensures that reductions, if any, in base pay 
     for an employee of the SEC represented by a labor 
     organization with exclusive recognition in accordance with 
     Chapter 71 of Title 5 of the United States Code, result from 
     negotiations between such organizations and SEC management, 
     as opposed to by reason of the enactment of this amendment.
       In establishing and adjusting schedules of compensation and 
     benefits for its employees, Section 6(b) requires the SEC to 
     inform the heads of the agencies mentioned above and must 
     seek to maintain comparability with such agencies regarding 
     compensation and benefits. A technical change is made to 
     strike from Section 1206(a) the reference to the Thrift 
     Depositor Protection Oversight Board of the Resolution Trust 
     Corporation, which was abolished on December 31, 1995. 
     Section 6(c) provides certain conforming amendments to Title 
     5 of the United States Code to reflect changes made under 
     subsection (a).
     Section 7. Effective date
       In general, the effective date is October 1, 2001. However, 
     certain fee reductions will not become effective until 
     October 1, 2002.
                                 ______