Congressional Record, Volume 147 Issue 83 (Thursday, June 14, 2001)

[Congressional Record Volume 147, Number 83 (Thursday, June 14, 2001)]
[House]
[Pages H3156-H3159]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

PROVIDING FOR CONSIDERATION OF H.R. 1088, INVESTOR AND CAPITAL MARKETS
FEE RELIEF ACT

Mr. LINDER. Mr. Speaker, by direction of the Committee on Rules, I
call up House Resolution 161 and ask for its immediate consideration.
The Clerk read the resolution, as follows:

H. Res. 161

Resolved, That upon the adoption of this resolution it
shall be in order without intervention of any point of order
to consider in the House the bill (H.R. 1088) to amend the
Securities Exchange Act of 1934 to reduce fees collected by
the Securities and Exchange Commission, and for other
purposes. The bill shall be considered as read for amendment.
In lieu of the amendment recommended by the Committee on
Financial Services now printed in the bill, the amendment in
the nature of a substitute printed in the Congressional
Record and numbered 1 pursuant to clause 8 of rule XVIII
shall be considered as adopted. The previous question shall
be considered as ordered on the bill, as amended, and on any
further amendment thereto to final passage without
intervening motion except: (1) one hour of debate on the
bill, as amended, equally divided and controlled by the
chairman and ranking minority member of the Committee on
Financial Services; (2) the further amendment printed in the
Congressional Record and numbered 2 pursuant to clause 8 of
rule XVIII, if offered by Representative LaFalce of New York
or his designee, which shall be in order without intervention
of any point of order, shall be considered as read, and shall
be separately debatable for one hour equally divided and
controlled by the proponent and an opponent; and (3) one
motion to recommit with or without instructions.

The SPEAKER pro tempore (Mr. Isakson). The gentleman from Georgia
(Mr. Linder) is recognized for 1 hour.
Mr. LINDER. Mr. Speaker, for purposes of debate only, I yield the
customary 30 minutes to the gentlewoman from New York (Ms. Slaughter);
pending which I yield myself such time as I may consume. During
consideration of this resolution, all time yielded is for the purpose
of debate only.
Mr. Speaker, House Resolution 161 is a modified closed rule providing
for the consideration of H.R. 1088, the Investor and Capital Markets
Fee Relief Act. This bill is designed to provide tax relief to
investors and market participants by reducing or eliminating many of
the user fees imposed by the Securities and Exchange Commission for
buying and selling securities.
H. Res. 161 provides for 1 hour of debate equally divided and
controlled by the chairman and the ranking minority member of the
Committee on Financial Services. Upon the adoption of this rule, an
amendment in the nature of a substitute, printed in the Congressional
Record and offered by the gentleman from Ohio (Mr. Oxley), chairman of
the Committee on Financial Services, will be considered as adopted in
lieu of the amendment originally recommended by the Committee on
Financial Services.
The rule also makes in order a substitute amendment for the minority,
offered by the gentleman from New York (Mr. LaFalce) or his designee,
which can be debated for up to 1 hour, evenly divided.
The rule also waives all points of order against consideration of
both amendments. Finally, the rule provides for one motion to recommit
with or without instructions as is the right of the minority.
Mr. Speaker, the purpose of H.R. 1088 is to provide significant tax
relief to millions and millions of investors and market participants.
When it was originally established, the SEC was supposed to be a user
fee-funded entity. The SEC currently taxes investors and companies
trading in securities with user fees, using the monies generated by
these fees to fund its enforcement of Federal securities' laws and
regulations.
As investments in mutual funds, 401(k) plans, and retirement funds
have dramatically increased over the last 20 years, the SEC's current
fee schedule has unfortunately not been changed to reflect these new
circumstances. This has, in turn, created a situation in which billions
of dollars in SEC fees, above and beyond the level needed to fund its
enforcement activities, are being used for other purposes. H.Res. 161
modernizes the fee schedule, saving investors and companies $14 billion
over the next 10 years by significantly reducing five SEC taxes on
securities transactions.
The bill provides much needed relief for investors and companies by
also terminating the mandatory application fees and reducing
registration fees. Also, the new fee schedule gives the SEC the
necessary funding to continue enforcing our laws while retaining top
quality employees.

{time} 1030

Mr. Speaker, I hope my friends on both sides of the aisle will join
me in supporting this legislation to return a greater portion of the
Federal Government's excess funds to our investors so they can use
these moneys as they see fit.
The Committee on Rules approved this rule by voice vote yesterday,
and I urge my colleagues to support it so we may proceed with debate
and consideration of this bipartisan bill.
Mr. Speaker, I reserve the balance of my time.
(Ms. SLAUGHTER asked and was given permission to revise and extend
her remarks.)
Ms. SLAUGHTER. Mr. Speaker, I yield myself such time as I may
consume; and I thank my colleague from Georgia (Mr. Linder) for
yielding me the customary time.
Mr. Speaker, this is a modified closed rule that will allow for the
consideration of H.R. 1088, the Investor and Capital Markets Fee Relief
Act.
Under this restrictive rule, a Democratic substitute may be offered
on the floor by the gentleman from New York (Mr. LaFalce).
Unfortunately, no other amendments may be offered.
The underlying bill reduces fees levied by the Securities and
Exchange Commission for stock-related transactions. This will result in
a loss of about $14 billion in Federal receipts between the years 2002
and 2011. This general budget effect is a large revenue depletion. In
the year 2002 alone, CBO estimates this will be more than $1.3 billion.
It is a drain on the treasury.
The reduction of fees is motivated by an increase in collections,
which is the result of greater stock market activity in the last few
years. It makes perfect sense to reduce fees that might benefit
individual investors. In fact, the Democratic substitute would do just
that. However, given the uncertain future of financial markets and the
unforeseeable need for regulation and enforcement, it seems imprudent
to reduce revenues by such a large amount as this bill does. Moreover,
minority

[[Page H3157]]

members of the Committee on Financial Services warn that these cuts
could ultimately result in cuts in important government programs like
Head Start, medical research, and transportation and infrastructure
improvements.
A more sound approach would be to examine the long-term needs of the
Securities and Exchange Commission as well as other government
activities involved with protecting the securities markets, including
the Federal Bureau of Investigation inquiries, Department of Justice
criminal prosecutions, and any other Federal resources needed to
prosecute securities cases. Only then would we have a sound basis for
establishing an appropriate fee reduction.
Mr. Speaker, for these reasons, I urge my colleagues to support the
Democratic substitute at the proper time.
Mr. Speaker, I reserve the balance of my time.
Mr. LINDER. Mr. Speaker, I yield such time as he may consume to the
gentleman from Ohio (Mr. Oxley), the chairman of the Committee on
Financial Services.
(Mr. OXLEY asked and was given permission to revise and extend his
remarks.)
Mr. OXLEY. Mr. Speaker, I thank the gentleman from Georgia (Mr.
Linder), the gentleman from California (Mr. Dreier), and the rest of
the Committee on Rules for crafting a very effective rule; a rule that
allows the gentleman from New York (Mr. LaFalce), the ranking member of
the Committee on Financial Services, to offer his substitute amendment
for consideration by the House.
Congress has authorized the Securities and Exchange Commission to
impose user fees on investors and market participants. The fee,
intended to fund Securities and Exchange Commission operations, has
turned into a cash cow for the U.S. Treasury. The government now
collects fee revenues that far exceed the operating cost of the
Securities and Exchange Commission. In fiscal year 2002, actual
Securities and Exchange Commission collections reached a staggering
$2.27 billion. That is over six times the Securities and Exchange
Commission's $377 million budget.
H.R. 1088, the Investor and Capital Markets Fee Relief Act, addresses
this excess collections problem. It is important legislation that
returns some $14 billion over the next 10 years to America's investors
and those seeking access to our markets. It reduces or eliminates all
of the excess securities fees in a responsible way, holding the
appropriators harmless and ensuring that the Securities and Exchange
Commission has a long-term stable funding source for its important
mission of protecting investors and promoting capital formation.
Mr. Speaker, the legislation introduced by my good friend, the
gentleman from New York (Mr. Fossella), will help America's nearly 100
million investors save and invest for college, retirement, or simply
for a better life.
H.R. 1088 includes pay parity for the Securities and Exchange
Commission staff. The SEC is experiencing severe recruiting and
retention problems. In the last 3 years, more than 1,000 employees,
over one-third of the agency staff, have left the agency. The
Securities and Exchange Commission's overall attrition rate is more
than twice the government average.
In an effort to combat this staffing crisis, the Securities and
Exchange Commission has explored every available tool, including
recruitment bonuses, retention allowances, emergency child care and
other measures. There is no justification whatsoever for paying
Securities and Exchange Commission staff 24 to 39 percent less than the
Federal banking regulators, especially in light of the passage of
Gramm-Leach-Bliley which requires the SEC staff to work side by side
with the Federal banking regulators.
Mr. Speaker, I urge my colleagues to support this very fair rule, and
support this needed legislation. Let us give money back to investors
and strengthen the Securities and Exchange Commission at the same time.
Ms. SLAUGHTER. Mr. Speaker, I yield 2\1/2\ minutes to the gentlewoman
from New York (Mrs. Maloney).
Mrs. MALONEY of New York. Mr. Speaker, I rise in support of the rule
and the underlying bill. Investors and capital market participants were
overcharged $9.2 billion over the last 10 years in fees that support
the operations of the Securities and Exchange Commission. These
overcharges will grow to $14 billion over the next 10 years without fee
relief now.
For fiscal year 2001, the Securities and Exchange Commission's budget
is $423 million, but the agency is set to collect $2.5 billion in fees,
over 6 times the Securities and Exchange Commission's budget. Congress
created the fee structure so that the operating costs of the Securities
and Exchange Commission would be funded by those benefiting from
securities regulation. The fees have evolved into a tax on investors
which was not the original intent of Congress.
The Investor and Capital Markets Fee Relief Act reduces the fees on
stock transactions, mergers, tender offers and new issues that
investors and market participants pay to support the Securities and
Exchange Commission. These fees, many of which are paid by individual
investors and pension funds, were never intended to grow so
dramatically. At the same time, the legislation provides pay parity for
Securities and Exchange Commission employees.
Mr. Speaker, the Investor and Capital Markets Fee Relief Act will
save $14 billion that can potentially be reinvested in the capital
markets. It allows fees to be readjusted if the Securities and Exchange
Commission ever faces a funding shortage. It provides pay parity for
Securities and Exchange Commission employees. The agency has lost one-
third of its employees in the last 3 years, and is truly facing a
staffing crisis.
Mr. Speaker, this particular bill passed the Committee on Financial
Services and the full Senate by unanimous consent. I urge my colleagues
to support both the rule and the underlying bill.
Ms. SLAUGHTER. Mr. Speaker, I have no further requests for time; and
I yield back the balance of my time.
Mr. LINDER. Mr. Speaker, I urge my colleagues to support this rule so
we can move on to debate on this important bill.
Mr. Speaker, I yield back the balance of my time, and I move the
previous question on the resolution.
The SPEAKER pro tempore (Mr. Isakson). The question is on ordering
the previous question.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Ms. SLAUGHTER. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
Pursuant to clause 9 of rule XX, the Chair announces that he will
reduce to a minimum of 5 minutes the period of time within which a vote
by electronic device, if ordered, will be taken on the question of
agreeing to the resolution.
The vote was taken by electronic device, and there were--yeas 418,
nays 1, not voting 13, as follows:

[Roll No. 162]

YEAS--418

[[Page H3158]]

Ganske
Gekas
Gephardt
Gibbons
Gilchrest
Gillmor
Gilman
Gonzalez
Goode
Goodlatte
Gordon
Goss
Graham
Granger
Graves
Green (TX)
Green (WI)
Greenwood
Grucci
Gutierrez
Gutknecht
Hall (OH)
Hall (TX)
Hansen
Harman
Hart
Hastings (FL)
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hill
Hilleary
Hilliard
Hinchey
Hinojosa
Hobson
Hoeffel
Hoekstra
Holden
Holt
Honda
Hooley
Horn
Hostettler
Hoyer
Hulshof
Hunter
Hutchinson
Hyde
Inslee
Isakson
Israel
Issa
Istook
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Jenkins
John
Johnson (CT)
Johnson (IL)
Johnson, Sam
Jones (NC)
Kaptur
Keller
Kelly
Kennedy (MN)
Kennedy (RI)
Kerns
Kildee
Kilpatrick
Kind (WI)
King (NY)
Kingston
Kirk
Kleczka
Knollenberg
Kolbe
Kucinich
LaFalce
LaHood
Lampson
Langevin
Lantos
Largent
Larsen (WA)
Larson (CT)
Latham
LaTourette
Leach
Lee
Levin
Lewis (CA)
Lewis (GA)
Lewis (KY)
Linder
Lipinski
LoBiondo
Lofgren
Lowey
Lucas (KY)
Lucas (OK)
Luther
Maloney (CT)
Maloney (NY)
Manzullo
Markey
Mascara
Matheson
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McCrery
McDermott
McGovern
McHugh
McInnis
McIntyre
McKeon
McKinney
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Mica
Millender-McDonald
Miller (FL)
Miller, Gary
Miller, George
Mink
Mollohan
Moore
Moran (KS)
Moran (VA)
Morella
Murtha
Myrick
Nadler
Napolitano
Neal
Nethercutt
Ney
Northup
Norwood
Nussle
Oberstar
Obey
Olver
Ortiz
Osborne
Ose
Otter
Owens
Oxley
Pallone
Pascrell
Pastor
Paul
Payne
Pelosi
Pence
Peterson (MN)
Peterson (PA)
Petri
Phelps
Pickering
Pitts
Platts
Pombo
Pomeroy
Portman
Price (NC)
Pryce (OH)
Putnam
Quinn
Radanovich
Rahall
Ramstad
Rangel
Regula
Rehberg
Reyes
Reynolds
Riley
Rivers
Rodriguez
Roemer
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Ross
Rothman
Roukema
Roybal-Allard
Royce
Rush
Ryan (WI)
Ryun (KS)
Sabo
Sanchez
Sanders
Sandlin
Sawyer
Saxton
Scarborough
Schaffer
Schakowsky
Schiff
Schrock
Scott
Sensenbrenner
Serrano
Sessions
Shadegg
Shaw
Shays
Sherman
Sherwood
Shimkus
Shows
Shuster
Simmons
Simpson
Skeen
Skelton
Slaughter
Smith (MI)
Smith (NJ)
Smith (TX)
Smith (WA)
Snyder
Solis
Souder
Spence
Spratt
Stark
Stearns
Stenholm
Strickland
Stump
Stupak
Sununu
Sweeney
Tancredo
Tanner
Tauscher
Tauzin
Taylor (MS)
Taylor (NC)
Terry
Thomas
Thompson (CA)
Thompson (MS)
Thornberry
Thune
Thurman
Tiahrt
Tiberi
Tierney
Toomey
Towns
Traficant
Turner
Udall (CO)
Udall (NM)
Upton
Velazquez
Visclosky
Vitter
Walden
Walsh
Wamp
Waters
Watkins (OK)
Watson (CA)
Watt (NC)
Watts (OK)
Waxman
Weiner
Weldon (FL)
Weldon (PA)
Weller
Wexler
Wicker
Wilson
Wolf
Woolsey
Wu
Wynn
Young (FL)

NAYS--1

Kanjorski

NOT VOTING--13

Brown (FL)
Carson (IN)
Cubin
Cummings
DeGette
Engel
Ferguson
Frost
Houghton
Johnson, E. B.
Jones (OH)
Whitfield
Young (AK)

{time} 1103

Mr. BURTON of Indiana and Mrs. NORTHUP changed their vote from
``nay'' to ``yea.''
So the previous question was ordered.
The result of the vote was announced as above recorded.
Stated for:
Ms. CARSON of Indiana. Mr. Speaker, for reasons beyond my control,
the voting machine would not accept my voting card on Thursday, June
14, 2001, and therefore, I was unable to vote on rollcall vote 162. I
alerted the Speaker pro tempore, Mr. Quinn, to the problem, but by the
time I reached the well, the voting was closed. Had I been able to cast
my vote I would have voted ``yea''.
The SPEAKER pro tempore (Mr. Isakson). The question is on the
resolution.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.

Recorded Vote

Ms. SLAUGHTER. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The SPEAKER pro tempore. This will be a 5-minute vote.
The vote was taken by electronic device, and there were--ayes 408,
noes 12, not voting 12, as follows:

[Roll No. 163]

AYES--408

Abercrombie
Ackerman
Aderholt
Akin
Allen
Andrews
Armey
Baca
Bachus
Baird
Baker
Baldacci
Baldwin
Ballenger
Barcia
Barr
Barrett
Bartlett
Barton
Bass
Becerra
Bentsen
Bereuter
Berkley
Berman
Berry
Biggert
Bilirakis
Bishop
Blagojevich
Blumenauer
Blunt
Boehlert
Boehner
Bonilla
Bonior
Bono
Borski
Boswell
Boucher
Boyd
Brady (PA)
Brady (TX)
Brown (OH)
Brown (SC)
Bryant
Burr
Buyer
Callahan
Calvert
Camp
Cannon
Cantor
Capito
Capps
Capuano
Cardin
Carson (IN)
Carson (OK)
Castle
Chabot
Chambliss
Clay
Clayton
Clement
Clyburn
Coble
Collins
Combest
Condit
Conyers
Cooksey
Cox
Coyne
Cramer
Crane
Crenshaw
Crowley
Culberson
Cummings
Cunningham
Davis (CA)
Davis (FL)
Davis (IL)
Davis, Jo Ann
Davis, Tom
Deal
Delahunt
DeLauro
DeLay
DeMint
Deutsch
Diaz-Balart
Dicks
Dingell
Doggett
Dooley
Doolittle
Doyle
Dreier
Duncan
Dunn
Edwards
Ehlers
Ehrlich
Emerson
Engel
English
Eshoo
Etheridge
Evans
Everett
Farr
Fattah
Filner
Flake
Fletcher
Foley
Ford
Fossella
Frelinghuysen
Gallegly
Ganske
Gekas
Gephardt
Gibbons
Gilchrest
Gillmor
Gilman
Gonzalez
Goode
Goodlatte
Gordon
Goss
Graham
Granger
Graves
Green (TX)
Green (WI)
Greenwood
Grucci
Gutierrez
Gutknecht
Hall (OH)
Hall (TX)
Hansen
Harman
Hart
Hastings (FL)
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hill
Hilleary
Hinchey
Hinojosa
Hobson
Hoeffel
Hoekstra
Holden
Holt
Honda
Hooley
Horn
Hostettler
Hoyer
Hulshof
Hunter
Hutchinson
Hyde
Inslee
Isakson
Israel
Issa
Istook
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Jenkins
Johnson (CT)
Johnson (IL)
Johnson, Sam
Jones (NC)
Kaptur
Keller
Kelly
Kennedy (MN)
Kennedy (RI)
Kerns
Kildee
Kilpatrick
Kind (WI)
King (NY)
Kingston
Kirk
Kleczka
Knollenberg
Kolbe
Kucinich
LaHood
Lampson
Langevin
Lantos
Largent
Larsen (WA)
Larson (CT)
Latham
LaTourette
Leach
Lee
Levin
Lewis (CA)
Lewis (GA)
Lewis (KY)
Linder
Lipinski
LoBiondo
Lofgren
Lowey
Lucas (KY)
Lucas (OK)
Luther
Maloney (CT)
Maloney (NY)
Manzullo
Markey
Mascara
Matheson
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McCrery
McDermott
McGovern
McHugh
McInnis
McIntyre
McKeon
McKinney
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Mica
Millender-McDonald
Miller (FL)
Miller, Gary
Miller, George
Mink
Mollohan
Moore
Moran (KS)
Moran (VA)
Morella
Murtha
Myrick
Nadler
Napolitano
Neal
Nethercutt
Ney
Northup
Norwood
Nussle
Oberstar
Obey
Olver
Ortiz
Osborne
Ose
Otter
Owens
Oxley
Pallone
Pascrell
Pastor
Paul
Payne
Pelosi
Pence
Peterson (MN)
Peterson (PA)
Petri
Phelps
Pickering
Pitts
Platts
Pombo
Pomeroy
Portman
Price (NC)
Pryce (OH)
Putnam
Quinn
Radanovich
Ramstad
Rangel
Regula
Rehberg
Reyes
Reynolds
Riley
Rivers
Rodriguez
Roemer
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Ross
Rothman
Roukema
Roybal-Allard
Royce
Rush
Ryan (WI)
Ryun (KS)
Sabo
Sanchez
Sanders
Sandlin
Sawyer
Saxton
Scarborough
Schaffer
Schakowsky
Schiff
Schrock
Scott
Sensenbrenner
Serrano
Sessions
Shadegg
Shaw
Shays
Sherman
Sherwood
Shimkus
Shows
Shuster
Simmons
Simpson
Skeen
Skelton
Slaughter
Smith (MI)
Smith (NJ)
Smith (TX)
Smith (WA)
Snyder
Solis
Souder
Spence
Spratt
Stark
Stearns
Stenholm
Strickland
Stump
Stupak
Sununu
Sweeney
Tancredo
Tanner
Tauscher
Tauzin
Taylor (NC)
Terry
Thomas
Thompson (CA)
Thompson (MS)
Thornberry
Thune
Thurman
Tiahrt
Tiberi
Tierney
Toomey
Towns
Traficant
Turner
Udall (CO)
Udall (NM)
Upton
Vitter
Walden
Walsh
Wamp
Watkins (OK)
Watson (CA)
Watt (NC)
Watts (OK)
Waxman
Weiner
Weldon (FL)
Weldon (PA)
Weller
Wexler
Wicker
Wilson
Wolf
Woolsey
Wynn
Young (FL)

NOES--12

Burton
Costello
DeFazio
Frank
Hilliard
Kanjorski

[[Page H3159]]

LaFalce
Rahall
Taylor (MS)
Visclosky
Waters
Wu

NOT VOTING--12

Brown (FL)
Cubin
DeGette
Ferguson
Frost
Houghton
John
Johnson, E. B.
Jones (OH)
Velazquez
Whitfield
Young (AK)

{time} 1114

So the resolution was agreed to.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.

____________________