Union Calendar No. 231

104TH CONGRESS

2D SESSION H. R. 2972

[Report No. 104–479]

A BILL

To authorize appropriations for the Securities and

other purposes.lected under the Federal securities laws, and forExchange Commission, to reduce the fees colMARCH 12, 1996

Reported with an amendment, committed to the Commitordered to be printed tee of the Whole House on the State of the Union, and
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Union Calendar No. 231

104TH CONGRESS

2D SESSION H. R. 2972

[Report No. 104–479]

To authorize appropriations for the Securities and Exchange Commission,

to reduce the fees collected under the Federal securities laws, and for

other purposes.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 27, 1996

Mr. BLILEY (for himself, Mr. ARCHER, Mr. ROGERS, Mr. FIELDS of Texas,

Mr. DINGELL, Mr. MARKEY, Mr. OXLEY, and Mr. TAUZIN) introduced

the following bill; which was referred to the Committee on Commerce

MARCH 12, 1996

Additional sponsors: Mr. GILLMOR, Mr. KLUG, Mr. FRISA, Mr. HASTERT, and

Mr. RUSH

MARCH 12, 1996

Reported with an amendment, committed to the Committee of the Whole

House on the State of the Union, and ordered to be printed

[Strike out all after the enacting clause and insert the part printed in italic]

[For text of introduced bill, see copy of bill as introduced on February 27, 1996]

A BILL

To authorize appropriations for the Securities and Exchange

Commission, to reduce the fees collected under the Federal securities laws, and for other purposes.
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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Securities and Exchange

5 Commission Authorization Act of 1996’’.

6 SEC. 2. PURPOSES.

7 The purposes of this Act are—

8 (1) to authorize appropriations for the Securities

9 and Exchange Commission for fiscal year 1997; and

10 (2) to reduce over time the rates of fees charged

11 under the Federal securities laws.

12 SEC. 3. AUTHORIZATION OF APPROPRIATIONS.

13 Section 35 of the Securities Exchange Act of 1934 is

14 amended to read as follows:

15 ‘‘SEC. 35. AUTHORIZATION OF APPROPRIATIONS.

16 ‘‘There are authorized to be appropriated to carry out

17 the functions, powers, and duties of the Commission

18 $317,000,000 for fiscal year 1997.’’.

19 SEC. 4. REGISTRATION FEES.

20 Section 6(b) of the Securities Act of 1933 (15 U.S.C.

21 77f(b)) is amended to read as follows:

22 ‘‘(b) REGISTRATION FEE.—

23 ‘‘(1) RECOVERY OF COST OF SERVICES.—The

24 Commission shall, in accordance with this subsection,

25 collect registration fees that are designed to recover
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1 the costs to the government of the securities registra2 tion process, and costs related to such process, includ3 ing enforcement activities, policy and rulemaking ac4 tivities, administration, legal services, and inter5 national regulatory activities.

6 ‘‘(2) FEE PAYMENT REQUIRED.—At the time of

7 filing a registration statement, the applicant shall

8 pay to the Commission a fee that shall be equal to the

9 sum of the amounts (if any) determined under the

10 rates established by paragraphs (3) and (4). The

11 Commission shall publish in the Federal Register no12 tices of the fee rates applicable under this section for

13 each fiscal year. In no case shall the fee required by

14 this subsection be less than $200, except that during

15 fiscal year 2002 or any succeeding fiscal year such

16 minimum fee shall be $182.

17 ‘‘(3) GENERAL REVENUE FEES.—The rate deter18 mined under this paragraph is a rate equal to $200

19 for each $1,000,000 of the maximum aggregate price

20 at which such securities are proposed to be offered, ex21 cept that during fiscal year 2002 and any succeeding

22 fiscal year such rate is equal to $182 for each

23 $1,000,000 of the maximum aggregate price at which

24 such securities are proposed to be offered. Fees col25 lected during any fiscal year pursuant to this para-
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1 graph shall be deposited and credited as general reve2 nues of the Treasury.

3 ‘‘(4) OFFSETTING COLLECTION FEES.—

4 ‘‘(A) IN GENERAL.—Except as provided in

5 subparagraphs (B) and (C), the rate determined

6 under this paragraph is a rate equal to the fol7 lowing amount for each $1,000,000 of the maxi8 mum aggregate price at which such securities are

9 proposed to be offered:

10 ‘‘(i) $103 during fiscal year 1997;

11 ‘‘(ii) $70 during fiscal year 1998;

12 ‘‘(iii) $38 during fiscal year 1999;

13 ‘‘(iv) $17 during fiscal year 2000; and

14 ‘‘(v) $0 during fiscal year 2001 or any

15 succeeding fiscal year.

16 ‘‘(B) LIMITATION; DEPOSIT.—Except as

17 provided in subparagraph (C), no amounts shall

18 be collected pursuant to this paragraph (4) for

19 any fiscal year except to the extent provided in

20 advance in appropriations acts. Fees collected

21 during any fiscal year pursuant to this para22 graph shall be deposited and credited as offset23 ting collections in accordance with appropria24 tions Acts.
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1 ‘‘(C) LAPSE OF APPROPRIATIONS.—If on the

2 first day of a fiscal year a regular appropriation

3 to the Commission has not been enacted, the

4 Commission shall continue to collect fees (as off5 setting collections) under this paragraph at the

6 rate in effect during the preceding fiscal year,

7 until such a regular appropriation is enacted.’’.

8 SEC. 5. TRANSACTION FEES.

9 (a) AMENDMENT.—Section 31 of the Securities Ex10 change Act of 1934 (15 U.S.C. 78ee) is amended to read

11 as follows:

12 ‘‘SEC. 31. TRANSACTION FEES.

13 ‘‘(a) RECOVERY OF COST OF SERVICES.—The Commis14 sion shall, in accordance with this subsection, collect trans15 action fees that are designed to recover the costs to the Gov16 ernment of the supervision and regulation of securities mar17 kets and securities professionals, and costs related to such

18 supervision and regulation, including enforcement activi19 ties, policy and rulemaking activities, administration, legal

20 services, and international regulatory activities.

21 ‘‘(b) EXCHANGE-TRADED SECURITIES.—Every na22 tional securities exchange shall pay to the Commission a

23 fee at a rate equal to $33 for each $1,000,000 of the aggre24 gate dollar amount of sales of securities (other than bonds,

25 debentures, and other evidences of indebtedness) transacted
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1 on such national securities exchange, except that for fiscal

2 year 2002 or any succeeding fiscal year such rate shall be

3 equal to $25 for each $1,000,000 of such aggregate dollar

4 amount of sales. Fees collected pursuant to this subsection

5 shall be deposited and collected as general revenue of the

6 Treasury.

7 ‘‘(c) OFF-EXCHANGE-TRADES OF EXCHANGE REG8 ISTERED SECURITIES.—Every national securities associa9 tion shall pay to the Commission a fee at a rate equal $33

10 for each $1,000,000 of the aggregate dollar amount of sales

11 transacted by or through any member of such association

12 otherwise than on a national securities exchange of securi13 ties registered on such an exchange (other than bonds, de14 bentures, and other evidences of indebtedness), except that

15 for fiscal year 2002 or any succeeding fiscal year such rate

16 shall be equal to $25 for each $1,000,000 of such aggregate

17 dollar amount of sales. Fees collected pursuant to this sub18 section shall be deposited and collected as general revenue

19 of the Treasury.

20 ‘‘(d) OFF-EXCHANGE-TRADES OF LAST-SALE-RE21 PORTED SECURITIES.—

22 ‘‘(1) COVERED TRANSACTIONS.—Every national

23 securities association shall pay to the Commission a

24 fee at a rate equal to the dollar amount determined

25 under paragraph (2) for each $1,000,000 of the aggre-
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1 gate dollar amount of sales transacted by or through

2 any member of such association otherwise than on a

3 national securities exchange of securities (other than

4 bonds, debentures, and other evidences of indebted5 ness) subject to prompt last sale reporting pursuant

6 to the rules of the Commission or a registered na7 tional securities association, excluding any sales for

8 which a fee is paid under subsection (c).

9 ‘‘(2) FEE RATES.—Except as provided in para10 graph (4), the dollar amount determined under this

11 paragraph is—

12 ‘‘(A) $12 for fiscal year 1997;

13 ‘‘(B) $14 for fiscal year 1998;

14 ‘‘(C) $17 for fiscal year 1999;

15 ‘‘(D) $18 for fiscal year 2000;

16 ‘‘(E) $20 for fiscal year 2001; and

17 ‘‘(F) $25 for fiscal year 2002 or for any

18 succeeding fiscal year.

19 ‘‘(3) LIMITATION; DEPOSIT OF FEES.—Except as

20 provided in paragraph (4), no amounts shall be col21 lected pursuant to this subsection (d) for any fiscal

22 year beginning before October 1, 2001, except to the

23 extent provided in advance in appropriations Acts.

24 Fees collected during any such fiscal year pursuant to

25 this subsection shall be deposited and credited as off-
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1 setting collections to the account providing appropria2 tions to the Commission, except that any amounts in

3 excess of the following amounts (and any amount col4 lected for fiscal years beginning on or after October

5 1, 2001) shall be deposited and credited as general

6 revenues of the Treasury:

7 ‘‘(A) $20,000,000 for fiscal year 1997;

8 ‘‘(B) $26,000,000 for fiscal year 1998;

9 ‘‘(C) $32,000,000 for fiscal year 1999;

10 ‘‘(D) $32,000,000 for fiscal year 2000;

11 ‘‘(E) $32,000,000 for fiscal year 2001; and

12 ‘‘(F) $0 for fiscal year 2002 and any suc13 ceeding fiscal year.

14 ‘‘(4) LAPSE OF APPROPRIATIONS.—If on the first

15 day of a fiscal year a regular appropriation to the

16 Commission has not been enacted, the Commission

17 shall continue to collect fees (as offsetting collections)

18 under this subsection at the rate in effect during the

19 preceding fiscal year, until such a regular appropria20 tion is enacted.

21 ‘‘(e) DATES FOR PAYMENT OF FEES.—The fees re22 quired by subsections (b), (c), and (d) of this section shall

23 be paid—

24 ‘‘(1) on or before March 15, with respect to

25 transactions and sales occurring during the period be-
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1 ginning on the preceding September 1 and ending at

2 the close of the preceding December 31; and

3 ‘‘(2) on or before September 30, with respect to

4 transactions and sales occurring during the period be5 ginning on the preceding January 1 and ending at

6 the close of the preceding August 31.

7 ‘‘(f) EXEMPTIONS.—The Commission, by rule, may ex8 empt any sale of securities or any class of sales of securities

9 from any fee imposed by this section, if the Commission

10 finds that such exemption is consistent with the public in11 terest, the equal regulation of markets and brokers and deal12 ers, and the development of a national market system.

13 ‘‘(g) PUBLICATION.—The Commission shall publish in

14 the Federal Register notices of the fee rates applicable under

15 this section for each fiscal year.’’.

16 (b) EFFECTIVE DATES; TRANSITION.—

17 (1) IN GENERAL.—Except as provided in para18 graph (2), the amendment made by subsection (a)

19 shall apply with respect to transactions in securities

20 that occur on or after January 1, 1997.

21 (2) OFF-EXCHANGE TRADES OF LAST SALE RE22 PORTED TRANSACTIONS.—The amendment made by

23 subsection (a) shall apply with respect to transactions

24 described in section 31(d)(1) of the Securities Ex-
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1 change Act of 1934 (as amended by subsection (a) of

2 this section) that occur on or after September 1, 1996.

3 (3) RULE OF CONSTRUCTION.—Nothing in this

4 subsection shall be construed to affect the obligation of

5 national securities exchanges and registered brokers

6 and dealers under section 31 of the Securities Ex7 change Act of 1934 (15 U.S.C. 78ee) as in effect prior

8 to the amendment made by subsection (a) to make the

9 payments required by such section on March 15,

10 1997.

11 SEC. 6. TIME FOR PAYMENT.

12 Section 4(e) of the Securities Exchange Act of 1934

13 (15 U.S.C. 78d(e)) is amended by inserting before the period

14 at the end thereof the following: ‘‘and the Commission may

15 also specify the time that such fee shall be determined and

16 paid relative to the filing of any statement or document

17 with the Commission’’.

18 SEC. 7. SENSE OF THE CONGRESS CONCERNING FEES.

19 It is the sense of the Congress that—

20 (1) the fees authorized by the amendments made

21 by this Act are in lieu of, and not in addition to, any

22 fees that the Securities and Exchange Commission is

23 authorized to impose or collect pursuant to section

24 9701 of title 31, United States Code; and
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1 (2) in order to maintain the competitiveness of

2 United States securities markets relative to foreign

3 markets, no fee should be assessed on transactions in4 volving portfolios of equity securities taking place at

5 times of day characterized by low volume and during

6 non-traditional trading hours.