[Congressional Record Volume 147, Number 39 (Thursday, March 22, 2001)]
[Senate]
[Pages S2785-S2792]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               COMPETITIVE MARKET SUPERVISION ACT OF 2001

  Mr. GRAMM. Mr. President, I ask unanimous consent that the Senate now 
proceed to the consideration of Calendar No. 20, S. 143.
  The PRESIDING OFFICER. The clerk will report the bill by title.
  The assistant legislative clerk read as follows:

       A bill (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.

  There being no objection, the Senate proceeded to consider the bill 
which had been reported from the Committee on Banking, Housing, and 
Urban Affairs, with an amendment to strike all after the enacting 
clause and inserting in lieu thereof the following:

     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.

[[Page S2786]]

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.

       (a) Securities Act of 1933.--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.''.
       (b) Trust Indenture Act of 1939.--Section 307(b) of the 
     Trust Indenture Act of 1939 (15 U.S.C. 77ggg(b)) is amended 
     by striking ``, but, in the case of '' and all that follows 
     through the end of the subsection and inserting a period.

     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, 
     other evidences of indebtedness, and security futures 
     products)--
       ``(A) transacted on such national securities exchange; and
       ``(B) transacted by or through any member of such 
     association otherwise than on a national securities exchange 
     of securities that are--
       ``(i) registered on such an exchange; or
       ``(ii) subject to prompt last sale reporting pursuant to 
     the rules of the Commission or a registered national 
     securities association.
       ``(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 30 days after the date of enactment of 
     appropriations legislation setting such rate.
       ``(B) Transaction fee cap.--Subject to subparagraph (C), 
     for purposes of this paragraph, the `transaction fee cap' 
     shall be equal to--
       ``(i) $915,000,000 for fiscal year 2002;
       ``(ii) $1,115,000,000 for fiscal year 2003;
       ``(iii) $1,340,000,000 for fiscal year 2004;
       ``(iv) $1,665,000,000 for fiscal year 2005;
       ``(v) $2,010,000,000 for fiscal year 2006;
       ``(vi) $1,015,000,000 for fiscal year 2007;
       ``(vii) $1,035,000,000 for fiscal year 2008;
       ``(viii) $1,225,000,000 for fiscal year 2009;
       ``(ix) $1,430,000,000 for fiscal year 2010; and
       ``(x) $1,665,000,000 for fiscal year 2011 and each fiscal 
     year thereafter.
       ``(C) Reduction.--The amounts specified in clauses (i) 
     through (x) of subparagraph (B)

[[Page S2787]]

     shall be reduced by the amount of assessments estimated to be 
     collected by the Commission for the subject fiscal year 
     pursuant to subsection (e).
       ``(c) Limitation; Deposit of Fees and Assessments.--
       ``(1) Limitation.--Except as provided in subsection (d), no 
     amount may be collected pursuant to subsection (b) or (e) for 
     any fiscal year, except to the extent provided in advance in 
     appropriations Acts.
       ``(2) Deposit of fees and assessments.--Fees and 
     assessments 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, 
     until such a regular appropriation is enacted--
       ``(1) continue to collect fees (as offsetting collections) 
     under subsection (b) 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 of 2001); and
       ``(2) continue to collect assessments (as offsetting 
     collections) under subsection (e) at the assessment rate in 
     effect during the preceding fiscal year.'';
       (2) in subsection (e), by striking ``Assessments 
     collected'' and all that follows through the period; and
       (3) in subsection (f), by striking ``(f)'' and all that 
     follows through ``paid--'' and inserting the following:
       ``(f) Dates for Payment of Fees and Assessments.--The fees 
     and assessments required by subsections (b) and (e) shall be 
     paid--''.

     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 and 
     assessments 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 and the assessment 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 that month; and
       (B) such other information and documents as the Commission 
     may require, as necessary or appropriate to project the 
     aggregate amount of fees and assessments pursuant to 
     paragraph (1).
       (b) Floor for Total Fee and Assessment 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 and assessments collected by the 
     Commission will, during that fiscal year, fall below an 
     amount equal to the floor for total fee and assessment 
     collections, the Commission may, by order, subject to 
     subsection (e) of this section, increase the fee rate 
     established under section 31(b)(2) 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 to the Commission the fee required by section 31(b) 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 and Assessment 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 and assessments collected by the 
     Commission will exceed the cap on total fee and assessment 
     collections by more than 10 percent during any fiscal 
     year, the Commission shall, by order, subject to 
     subsection (e), decrease the fee rate established under 
     paragraph (2) of section 31(b) of the Securities Exchange 
     Act of 1934, or suspend collection of fees under that 
     section 31(b), to the extent necessary to bring estimated 
     collections to an amount that is not more than 110 percent 
     of 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 to the Commission the fee required by 
     section 31(b) 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 and assessment 
     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 2011, 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 2012 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,

[[Page S2788]]

     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.


                  Amendments Nos. 142 and 143, En Bloc

  Mr. GRAMM. I have two amendments at the desk and I ask they be 
considered en bloc.
  The PRESIDING OFFICER. The clerk will report the amendments, en bloc.
  The assistant legislative clerk read as follows:

       The Senator from Texas [Mr. GRAMM] proposes amendments Nos. 
     142 and 143, en bloc.

  The amendments are as follows:


                           Amendment No. 142

  (Purpose: To require a study to be conducted by the Securities and 
Exchange Commission for the purpose of determining the extent to which 
             reductions in fees are passed on to investors)

       Insert the following new section 8 at the end of the bill:

           ``SEC. 8.  STUDY OF THE EFFECT OF FEE REDUCTIONS.

       ``(a) Study.--The Office of Economic Analysis of the 
     Securities and Exchange Commission (hereinafter referred to 
     as the ``Office'') shall conduct a study of the extent to 
     which the benefits of reductions in fees effected as a result 
     of this Act are passed on to investors.
       ``(b) Factors for Consideration.--In conducting the study 
     under subsection (a), the Office shall--
       ``(1) consider all of the various elements of the 
     securities industry directly and indirectly benefiting from 
     the fee reductions, including purchasers and sellers of 
     securities, members of national securities exchanges, 
     issuers, broker-dealers, underwriters, participants in 
     investment companies, retirement programs, and others;
       ``(2) evaluate the impact on different types of investors, 
     such as individual equity holders, individual investment 
     company shareholders, businesses, and other types of 
     investors;
       ``(3) include in the interpretation of the term 
     ``investor'' shareholders of entities subject to the fee 
     reductions; and
       ``(4) consider the economic benefits to investors flowing 
     from the fee reductions to include such factors as market 
     efficiency, expansion of investment opportunities, and 
     enhanced liquidity and capital formation.
       ``(c) Report to Congress.--Not later than 2 years after the 
     date of enactment of this Act, the Securities and Exchange 
     Commission shall submit to the Congress the report prepared 
     by the Office on the results of the study conducted under 
     subjection (a).''.
                                  ____



                           Amendment No. 143

(Purpose: To provide for a demonstration project under title 5, United 
 States Code, relating to compensation of employees of the Securities 
            and Exchange Commission, and for other purposes)

       On page 41, line 8, strike all through page 44, line 16, 
     and insert the following:

     SEC. 6. COMPARABILITY PROVISIONS.

       (a) Commission Demonstration Project.--Subpart C of part 
     III of title 5, United States Code, is amended by adding at 
     the end the following:

          ``CHAPTER 48--AGENCY PERSONNEL DEMONSTRATION PROJECT

``Sec.
``4801. Nonapplicability of chapter 47.
``4802. Securities and Exchange Commission.

     ``Sec. 4801. Nonapplicability of chapter 47.

       ``Chapter 47 shall not apply to this chapter.

     ``Sec. 4802. Securities and Exchange Commission

       ``(a) In this section, the term `Commission' means the 
     Securities and Exchange Commission.
       ``(b) 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 the securities laws as defined under section 3 of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78c).
       ``(c) 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.
       ``(d) 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 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 of the Financial Institutions Reform, Recovery, and 
     Enforcement Act of 1989 (12 U.S.C. 1833b).
       ``(e) The Commission shall consult with the Office of 
     Personnel Management in the implementation of this section.
       ``(f) This section shall be administered consistent with 
     merit system principles.''.
       (b) Employees Represented by Labor Organizations.--To the 
     extent that any employee of the Securities and Exchange 
     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 section 
     (including the amendments made by this section).
       (c) Implementation Plan and Report.--
       (1) Implementation plan.--
       (A) In general.--The Securities and Exchange Commission 
     shall develop a plan to implement section 4802 of title 5, 
     United States Code, as added by this section.
       (B) Inclusion in annual performance plan and report.--The 
     Securities and Exchange Commission shall include--
       (i) the plan developed under this paragraph in the annual 
     program performance plan submitted under section 1115 of 
     title 31, United States Code; and
       (ii) the effects of implementing the plan developed under 
     this paragraph in the annual program performance report 
     submitted under section 1116 of title 31, United States Code.
       (2) Implementation report.--
       (A) In general.--Before implementing the plan developed 
     under paragraph (1), the Securities and Exchange Commission 
     shall submit a report to the Committee on Governmental 
     Affairs and the Committee on Banking, Housing, and Urban 
     Affairs of the Senate, the Committee on Government Reform and 
     the Committee on Financial Services of the House of 
     Representatives, and the Office of Personnel Management on 
     the details of the plan.
       (B) Content.--The report under this paragraph shall 
     include--
       (i) evidence and supporting documentation justifying the 
     plan; and
       (ii) budgeting projections on costs and benefits resulting 
     from the plan.
       (d) Technical and Conforming Amendments.--
       (1) Amendments to title 5, united states code.--
       (A) The table of chapters for part III of title 5, United 
     States Code, is amended by adding at the end of subpart C the 
     following:

``48. Agency Personnel Demonstration Project...................4801.''.

       (B) Section 3132(a)(1) of title 5, United States Code, is 
     amended--
       (i) in subparagraph (C), by striking ``or'' after the 
     semicolon;
       (ii) in subparagraph (D), by inserting ``or'' after the 
     semicolon; and
       (iii) by adding at the end the following:
       ``(E) the Securities and Exchange Commission;''.
       (C) Section 5373(a) of title 5, United States Code, is 
     amended--
       (i) in paragraph (2), by striking ``or'' after the 
     semicolon;
       (ii) in paragraph (3), by striking the period and inserting 
     ``; or''; and
       (iii) by adding at the end the following:
       ``(4) section 4802.''.
       (2) Amendment to securities and exchange act of 1934.--
     Section 4(b) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78d(b)) is amended by striking paragraphs (1) and (2) 
     and inserting the following:
       ``(1) Appointment and compensation.--The Commission shall 
     appoint and compensate officers, attorneys, economists, 
     examiners, and other employees in accordance with section 
     4802 of title 5, United States Code.
       ``(2) Reporting of information.--In establishing and 
     adjusting schedules of compensation and benefits for 
     officers, attorneys, economists, examiners, and other 
     employees of the Commission under applicable provisions of 
     law, the Commission shall inform the heads of the agencies 
     referred to under section 1206 of the Financial Institutions 
     Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 
     1833b) and Congress of such compensation and benefits and 
     shall seek to maintain comparability with such agencies 
     regarding compensation and benefits.''.
       (3) Amendment to firrea of 1989.--Section 1206 of the 
     Financial Institutions Reform, Recovery, and Enforcement Act 
     of 1989 (12 U.S.C. 1833b) is amended by striking ``the Thrift 
     Depositor Protection Oversight Board of the Resolution Trust 
     Corporation''.

[[Page S2789]]


  Mr. GRAMM. I ask unanimous consent that the amendments, en bloc, be 
agreed to.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendments (Nos. 142 and 143) were agreed to.


                         Conventional User Fees

  Mr. GRASSLEY. I engage in a colloquy with the distinguished chairman 
of the Committee on Banking, Housing, and Urban Affairs, Senator Gramm.
  Tonight, the Senate will pass S. 143, the Competitive Market 
Supervision Act of 2001. This bill, which has been approved by the 
Banking Committee, reduces the schedule of Securities and Exchange 
Commission fees in a manner that properly conforms the structure of 
these fees to conventional user fees. If enacted, this bill ensures 
that these fees will be conventional user fees, not taxes, not generate 
general revenue, and therefore matters within the jurisdiction of the 
Banking Committee.
  Mr. GRAMM. The distinguished Chairman of the Committee on finance is 
correct.
  Mr. AKAKA. Mr. President, I too wish to express my appreciation to 
Senator Gramm and Senator Sarbanes for their willingness to work with 
the Committee on Governmental Affairs to provide a new compensation 
system for employees at the Securities and Exchange Commission. I also 
wish to thank Senator Thompson, the chairman of the Governmental 
Affairs Committee for his interest in this matter.
  The Federal Government has a serious problem in attracting, 
motivating, and retaining its workforce, and the Committee on 
Governmental Affairs is no stranger to working with the Office of 
Personnel Management and Federal agencies in this regard. The Gramm/
Thompson amendment will provide the SEC the flexibility it needs in 
personnel matters but also will ensure that basic employee statutory 
protections such as leave, health insurance and non-discrimination 
still apply.
  Mr. THOMPSON. Mr. President, I thank the Chairman of the Banking 
Committee, Senator Gramm, and the Ranking Member, Senator Sarbanes, for 
their kind assistance in working with me and the other members of the 
Committee on Governmental Affairs, in crafting a fair and balanced 
solution to the current workforce needs of the Securities and Exchange 
Commission (SEC). Senators Gramm, Voinovich, Cochran, and I have 
drafted an amendment which permits the SEC to establish a new 
compensation system for its employees. This new system is to be 
patterned on the pay and compensation systems established for other 
federal banking agencies under section 1206 (a) of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989.
  Agencies in trouble often come to the Governmental Affairs Committee 
seeking flexibility because they can't get their job done under the 
current civil service system. Like most federal agencies, the 
Securities and Exchange Commission has difficulty finding, hiring, and 
retaining the people with the right skills to do the jobs they need 
done. In these situations, I often ask, if flexibility is good for one 
agency, why shouldn't we grant such flexibility governmentwide.
  Clearly, flexibility is right for the Securities and Exchange 
Commission. At a very minimum, however, this legislation requires the 
SEC to plan strategically for the adoption of these flexibilities and 
report to us on the success of their implementation. We require that 
the SEC include its plans for these flexibilities in its annual 
performance plans and reports, required under the Government 
Performance and Results Act.
  The Results Act requires agencies to adopt performance management 
principles--drafting a strategic plan, setting annual goals, and 
reporting to Congress on the extent to which they are meeting their 
goals. I applaud the fact that the SEC has embraced performance 
management in the past. I am sure they will agree that this is an 
excellent mechanism with which the SEC can report on its progress in 
addressing its workforce problems.
  Guidance set forth by the Office of Management and Budget requires 
that agencies include their human resource strategies in their annual 
performance plans. Specifically, this guidance requires that agencies 
include in their performance plan the specific workforce they need to 
meet their goals. This legislation will allow the SEC to take the lead 
in integrating workforce planning with their performance plan and 
report to Congress on the extent to which the flexibilities they were 
granted allowed them to better meet their goals.
  Again, I thank Chairman Gramm and Ranking Member Sarbanes for their 
cooperation and support on this important amendment. We've crafted 
something that may prove of enormous benefit to the Government as a 
whole, especially with respect to the workforce challenges that lie 
ahead.
  Mr. GRAMM. I ask unanimous consent the committee substitute, as 
amended, be agreed to; the bill, as amended, be read the third time and 
passed; and the motion to reconsider be laid upon the table and any 
statements related to the bill be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The committee amendment, in the nature of a substitute, as amended, 
was agreed to.
  The bill (S. 143), as amended, was read the third time and passed, 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. Study of the effect of fee reductions.
Sec. 8. Effective date.

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

       (a) Securities Act of 1933.--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.''.
       (b) Trust Indenture Act of 1939.--Section 307(b) of the 
     Trust Indenture Act of 1939 (15 U.S.C. 77ggg(b)) is amended 
     by striking ``, but, in the case of '' and all that follows 
     through the end of the subsection and inserting a period.

     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

[[Page S2790]]

     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, 
     other evidences of indebtedness, and security futures 
     products)--
       ``(A) transacted on such national securities exchange; and
       ``(B) transacted by or through any member of such 
     association otherwise than on a national securities exchange 
     of securities that are--
       ``(i) registered on such an exchange; or
       ``(ii) subject to prompt last sale reporting pursuant to 
     the rules of the Commission or a registered national 
     securities association.
       ``(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 30 days after the date of enactment of 
     appropriations legislation setting such rate.
       ``(B) Transaction fee cap.--Subject to subparagraph (C), 
     for purposes of this paragraph, the `transaction fee cap' 
     shall be equal to--
       ``(i) $915,000,000 for fiscal year 2002;
       ``(ii) $1,115,000,000 for fiscal year 2003;
       ``(iii) $1,340,000,000 for fiscal year 2004;
       ``(iv) $1,665,000,000 for fiscal year 2005;
       ``(v) $2,010,000,000 for fiscal year 2006;
       ``(vi) $1,015,000,000 for fiscal year 2007;
       ``(vii) $1,035,000,000 for fiscal year 2008;
       ``(viii) $1,225,000,000 for fiscal year 2009;
       ``(ix) $1,430,000,000 for fiscal year 2010; and
       ``(x) $1,665,000,000 for fiscal year 2011 and each fiscal 
     year thereafter.
       ``(C) Reduction.--The amounts specified in clauses (i) 
     through (x) of subparagraph (B) shall be reduced by the 
     amount of assessments estimated to be collected by the 
     Commission for the subject fiscal year pursuant to subsection 
     (e).
       ``(c) Limitation; Deposit of Fees and Assessments.--
       ``(1) Limitation.--Except as provided in subsection (d), no 
     amount may be collected pursuant to subsection (b) or (e) for 
     any fiscal year, except to the extent provided in advance in 
     appropriations Acts.
       ``(2) Deposit of fees and assessments.--Fees and 
     assessments 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, 
     until such a regular appropriation is enacted--
       ``(1) continue to collect fees (as offsetting collections) 
     under subsection (b) 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 of 2001); and
       ``(2) continue to collect assessments (as offsetting 
     collections) under subsection (e) at the assessment rate in 
     effect during the preceding fiscal year.'';
       (2) in subsection (e), by striking ``Assessments 
     collected'' and all that follows through the period; and
       (3) in subsection (f), by striking ``(f)'' and all that 
     follows through ``paid--'' and inserting the following:
       ``(f) Dates for Payment of Fees and Assessments.--The fees 
     and assessments required by subsections (b) and (e) shall be 
     paid--''.

     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 and 
     assessments 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 and the assessment 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 that month; and
       (B) such other information and documents as the Commission 
     may require, as necessary or appropriate to project the 
     aggregate amount of fees and assessments pursuant to 
     paragraph (1).
       (b) Floor for Total Fee and Assessment Collections.--If, at 
     any time after the end

[[Page S2791]]

     of the first half of the fiscal year, the Commission projects 
     under subsection (a) that the aggregate amount of fees and 
     assessments collected by the Commission will, during that 
     fiscal year, fall below an amount equal to the floor for 
     total fee and assessment collections, the Commission may, by 
     order, subject to subsection (e) of this section, increase 
     the fee rate established under section 31(b)(2) 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 to the Commission the fee required by 
     section 31(b) 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 and Assessment 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 and assessments collected by the 
     Commission will exceed the cap on total fee and assessment 
     collections by more than 10 percent during any fiscal year, 
     the Commission shall, by order, subject to subsection (e), 
     decrease the fee rate established under paragraph (2) of 
     section 31(b) of the Securities Exchange Act of 1934, or 
     suspend collection of fees under that section 31(b), to the 
     extent necessary to bring estimated collections to an amount 
     that is not more than 110 percent of 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 to the Commission the fee 
     required by section 31(b) 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 and assessment 
     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 2011, 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 2012 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) Commission Demonstration Project.--Subpart C of part 
     III of title 5, United States Code, is amended by adding at 
     the end the following:

          ``CHAPTER 48--AGENCY PERSONNEL DEMONSTRATION PROJECT

``Sec.
``4801. Nonapplicability of chapter 47.
``4802. Securities and Exchange Commission.

     ``Sec. 4801. Nonapplicability of chapter 47.

       ``Chapter 47 shall not apply to this chapter.

     ``Sec. 4802. Securities and Exchange Commission

       ``(a) In this section, the term `Commission' means the 
     Securities and Exchange Commission.
       ``(b) 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 the securities laws as defined under section 3 of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78c).
       ``(c) 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.
       ``(d) 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 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 of the Financial Institutions Reform, Recovery, and 
     Enforcement Act of 1989 (12 U.S.C. 1833b).
       ``(e) The Commission shall consult with the Office of 
     Personnel Management in the implementation of this section.
       ``(f) This section shall be administered consistent with 
     merit system principles.''.
       (b) Employees Represented by Labor Organizations.--To the 
     extent that any employee of the Securities and Exchange 
     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 section 
     (including the amendments made by this section).
       (c) Implementation Plan and Report.--
       (1) Implementation plan.--
       (A) In general.--The Securities and Exchange Commission 
     shall develop a plan to implement section 4802 of title 5, 
     United States Code, as added by this section.
       (B) Inclusion in annual performance plan and report.--The 
     Securities and Exchange Commission shall include--
       (i) the plan developed under this paragraph in the annual 
     program performance plan submitted under section 1115 of 
     title 31, United States Code; and
       (ii) the effects of implementing the plan developed under 
     this paragraph in the annual program performance report 
     submitted under section 1116 of title 31, United States Code.
       (2) Implementation report.--
       (A) In general.--Before implementing the plan developed 
     under paragraph (1), the Securities and Exchange Commission 
     shall submit a report to the Committee on Governmental 
     Affairs and the Committee on Banking, Housing, and Urban 
     Affairs of the Senate, the Committee on Government Reform and 
     the Committee on Financial Services of the House of 
     Representatives, and the Office of Personnel Management on 
     the details of the plan.
       (B) Content.--The report under this paragraph shall 
     include--
       (i) evidence and supporting documentation justifying the 
     plan; and
       (ii) budgeting projections on costs and benefits resulting 
     from the plan.
       (d) Technical and Conforming Amendments.--
       (1) Amendments to title 5, united states code.--
       (A) The table of chapters for part III of title 5, United 
     States Code, is amended by adding at the end of subpart C the 
     following:

``48. Agency Personnel Demonstration Project...................4801.''.

       (B) Section 3132(a)(1) of title 5, United States Code, is 
     amended--
       (i) in subparagraph (C), by striking ``or'' after the 
     semicolon;
       (ii) in subparagraph (D), by inserting ``or'' after the 
     semicolon; and
       (iii) by adding at the end the following:
       ``(E) the Securities and Exchange Commission;''.
       (C) Section 5373(a) of title 5, United States Code, is 
     amended--
       (i) in paragraph (2), by striking ``or'' after the 
     semicolon;
       (ii) in paragraph (3), by striking the period and inserting 
     ``; or''; and
       (iii) by adding at the end the following:
       ``(4) section 4802.''.
       (2) Amendment to securities and exchange act of 1934.--
     Section 4(b) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78d(b)) is amended by striking paragraphs (1) and (2) 
     and inserting the following:
       ``(1) Appointment and compensation.--The Commission shall 
     appoint and compensate officers, attorneys, economists, 
     examiners, and other employees in accordance with section 
     4802 of title 5, United States Code.
       ``(2) Reporting of information.--In establishing and 
     adjusting schedules of compensation and benefits for 
     officers, attorneys,

[[Page S2792]]

     economists, examiners, and other employees of the Commission 
     under applicable provisions of law, the Commission shall 
     inform the heads of the agencies referred to under section 
     1206 of the Financial Institutions Reform, Recovery, and 
     Enforcement Act of 1989 (12 U.S.C. 1833b) and Congress of 
     such compensation and benefits and shall seek to maintain 
     comparability with such agencies regarding compensation and 
     benefits.''.
       (3) Amendment to firrea of 1989.--Section 1206 of the 
     Financial Institutions Reform, Recovery, and Enforcement Act 
     of 1989 (12 U.S.C. 1833b) is amended by striking ``the Thrift 
     Depositor Protection Oversight Board of the Resolution Trust 
     Corporation''.

     SEC. 7. STUDY OF THE EFFECT OF FEE REDUCTIONS.

       (a) Study.--The Office of Economic Analysis of the 
     Securities and Exchange Commission (hereinafter referred to 
     as the ``Office'') shall conduct a study of the extent to 
     which the benefits of reductions in fees effected as a result 
     of this Act are passed on to investors.
       (b) Factors for Consideration.--In conducting the study 
     under subsection (a), the Office shall--
       (1) consider all of the various elements of the securities 
     industry directly and indirectly benefitting from the fee 
     reductions, including purchasers and sellers of securities, 
     members of national securities exchanges, issuers, broker-
     dealers, underwriters, participants in investment companies, 
     retirement programs, and others;
       (2) evaluate the impact on different types of investors, 
     such as individual equity holders, individual investment 
     company shareholders, businesses, and other types of 
     investors;
       (3) include in the interpretation of the term ``investor'' 
     shareholders of entities subject to the fee reductions; and
       (4) consider the economic benefits to investors flowing 
     from the fee reductions to include such factors as market 
     efficiency, expansion of investment opportunities, and 
     enhanced liquidity and capital formation.
       (c) Report to Congress.--Not later than 2 years after the 
     date of enactment of this Act, the Securities and Exchange 
     Commission shall submit to the Congress the report prepared 
     by the Office on the results of the study conducted under 
     subsection (a).

     SEC. 8. 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.

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