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[107th Congress Public Law 123]
[From the U.S. Government Printing Office]

<DOC>
[DOCID: f:publ123.107]

[[Page 2389]]

               INVESTOR AND CAPITAL MARKETS FEE RELIEF ACT

[[Page 115 STAT. 2390]]

Public Law 107-123
107th Congress

                                 An Act

 
To amend the Securities <<NOTE: Jan. 16, 2002 -  [H.R. 1088]>>  Exchange 
  Act of 1934 to reduce fees collected by the Securities and Exchange 
                   Commission, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress <<NOTE: Investor and Capital 
Markets Fee Relief Act.>> assembled,

SECTION 1. SHORT <<NOTE: 15 USC 78a note.>> TITLE.

    This Act may be cited as the ``Investor and Capital Markets Fee 
Relief Act''.

SEC. 2. IMMEDIATE TRANSACTION FEE REDUCTIONS.

    Section 31 of the Securities Exchange Act of 1934 (15 U.S.C. 78ee) 
is amended--
            (1) by striking ``\1/300\ of one percent'' each place it 
        appears in subsections (b) and (d) and inserting ``$15 per 
        $1,000,000'';
            (2) by striking ``and security futures products'' each place 
        it appears in such subsections and inserting ``security futures 
        products, and options on securities indexes (excluding a narrow-
        based security index)'';
            (3) in the first sentence of subsection (b), by striking ``, 
        except that'' and all that follows through the end of such 
        sentence and inserting a period;
            (4) in paragraph (1) of subsection (d), by striking ``, 
        except that'' and all that follows through the end of such 
        paragraph and inserting a period;
            (5) in subsection (e), by striking ``$0.02'' and inserting 
        ``$0.009''; and
            (6) by adding at the end the following new subsection:

    ``(i) Pro Rata Application.--The rates per $1,000,000 required by 
this section shall be applied pro rata to amounts and balances of less 
than $1,000,000.''.

SEC. 3. REVISION OF SECURITIES TRANSACTION FEE PROVISIONS; ADDITIONAL 
            FEE REDUCTIONS.

    (a) Pooling and Allocation of Collections.--Section 31 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78ee) is further amended--
            (1) in subsection (b)--
                    (A) by striking ``Every'' and inserting ``Subject to 
                subsection (j), each''; and
                    (B) by striking the last sentence;
            (2) by striking subsection (c);
            (3) in subsection (d)--
                    (A) by striking paragraphs (2) and (3);
                    (B) by striking the following:

[[Page 115 STAT. 2391]]

    ``(d) Off-Exchange Trades of Last-Sale-Reported Securities.--
            ``(1) Covered transactions.--Each national securities''
                and inserting the following:

    ``(c) Off-Exchange Trades of Exchange Registered and Last-Sale-
Reported Securities.--Subject to subsection (j), each national 
securities'';
                    (C) by inserting ``registered on a national 
                securities exchange or'' after ``narrow-based security 
                index))'' (as added by section 2(2)); and
                    (D) by striking ``, excluding any sales for which a 
                fee is paid under subsection (c)'';
            (4) in subsection (e), by striking ``except that for fiscal 
        year 2007'' and all that follows through the end of such 
        subsection and inserting the following: ``except that for fiscal 
        year 2007 and each succeeding fiscal year such assessment shall 
        be equal to $0.0042 for each such transaction.'';
            (5) in subsection (f), by striking ``Dates for Payment of 
        Fees.--The fees required'' and inserting ``Dates for Payments.--
        The fees and assessments required'';
            (6) by redesignating subsections (e) through (i) (as added 
        by section 2(5)) as subsections (d) through (h), respectively;
            (7) by adding at the end the following new subsection:

    ``(i) Deposit of Fees.--
            ``(1) Offsetting collections.--Fees collected pursuant to 
        subsections (b), (c), and (d) for any fiscal year--
                    ``(A) shall be deposited and credited as offsetting 
                collections to the account providing appropriations to 
                the Commission; and
                    ``(B) except as provided in subsection (k), shall 
                not be collected for any fiscal year except to the 
                extent provided in advance in appropriation Acts.
            ``(2) General revenues prohibited.--No fees collected 
        pursuant to subsections (b), (c), and (d) for fiscal year 2002 
        or any succeeding fiscal year shall be deposited and credited as 
        general revenue of the Treasury.''.

    (b) Additional Reductions of Fees.--
            (1) Amendment.--Section 31 of the Securities Exchange Act of 
        1934 (15 U.S.C. 78ee) is further amended by adding after 
        subsection (i) (as added by subsection (a)(7)) the following new 
        subsections:

    ``(j) Recapture of Projection Windfalls for Further Rate 
Reductions.--
            ``(1) Annual adjustment.--For each of the fiscal years 2003 
        through 2011, the Commission shall by order adjust each of the 
        rates applicable under subsections (b) and (c) for such fiscal 
        year to a uniform adjusted rate that, when applied to the 
        baseline estimate of the aggregate dollar amount of sales for 
        such fiscal year, is reasonably likely to produce aggregate fee 
        collections under this section (including assessments collected 
        under subsection (d)) that are equal to the target offsetting 
        collection amount for such fiscal year.
            ``(2) <<NOTE: Deadline.>> Mid-year adjustment.--For each of 
        the fiscal years 2002 through 2011, the Commission shall 
        determine, by March 1 of such fiscal year, whether, based on the 
        actual aggregate dollar volume of sales during the first 5 
        months of such fiscal year, the baseline estimate of the 
        aggregate dollar volume

[[Page 115 STAT. 2392]]

        of sales used under paragraph (1) for such fiscal year (or 
        $48,800,000,000,000 in the case of fiscal year 2002) is 
        reasonably likely to be 10 percent (or more) greater or less 
        than the actual aggregate dollar volume of sales for such fiscal 
        year. <<NOTE: Deadline.>> If the Commission so determines, the 
        Commission shall by order, no later than such March 1, adjust 
        each of the rates applicable under subsections (b) and (c) for 
        such fiscal year to a uniform adjusted rate that, when applied 
        to the revised estimate of the aggregate dollar amount of sales 
        for the remainder of such fiscal year, is reasonably likely to 
        produce aggregate fee collections under this section (including 
        fees collected during such 5-month period and assessments 
        collected under subsection (d)) that are equal to the target 
        offsetting collection amount for such fiscal year. In making 
        such revised estimate, the Commission shall, after consultation 
        with the Congressional Budget Office and the Office of 
        Management and Budget, use the same methodology required by 
        subsection (l)(2).
            ``(3) Final rate adjustment.--For fiscal year 2012 and all 
        of the succeeding fiscal years, the Commission shall by order 
        adjust each of the rates applicable under subsections (b) and 
        (c) for all of such fiscal years to a uniform adjusted rate 
        that, when applied to the baseline estimate of the aggregate 
        dollar amount of sales for fiscal year 2012, is reasonably 
        likely to produce aggregate fee collections under this section 
        in fiscal year 2012 (including assessments collected under 
        subsection (d)) equal to the target offsetting collection amount 
        for fiscal year 2011.
            ``(4) Review and effective date.--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. An adjusted rate prescribed under 
        paragraph (1), (2), or (3) and published under subsection (g) 
        shall not be subject to judicial review. Subject to subsections 
        (i)(1)(B) and (k)--
                    ``(A) an adjusted rate prescribed under paragraph 
                (1) shall take effect on the later of--
                          ``(i) the first day of the fiscal year to 
                      which such rate applies; or
                          ``(ii) thirty days after the date on which a 
                      regular appropriation to the Commission for such 
                      fiscal year is enacted;
                    ``(B) an adjusted rate prescribed under paragraph 
                (2) shall take effect on April 1 of the fiscal year to 
                which such rate applies; and
                    ``(C) an adjusted rate prescribed under paragraph 
                (3) shall take effect on the later of--
                          ``(i) the first day of fiscal year 2012; or
                          ``(ii) thirty days after the date on which a 
                      regular appropriation to the Commission for fiscal 
                      year 2012 is enacted.

    ``(k) <<NOTE: Termination date.>> Lapse of Appropriation.--If on the 
first day of a fiscal year a regular appropriation to the Commission has 
not been enacted, the Commission shall continue to collect (as 
offsetting collections) the fees and assessments under subsections (b), 
(c), and (d) at the rate in effect during the preceding fiscal year, 
until 30 days after the date such a regular appropriation is enacted.

[[Page 115 STAT. 2393]]

    ``(l) Definitions.--For purposes of this section:
            ``(1) Target offsetting collection amount.--The target 
        offsetting collection amount for each of the fiscal years 2002 
        through 2011 is determined according to the following table:

                                                       Target offsetting
      ``Fiscal year:                                   collection amount

        2002...............................................$732,000,000 
        2003...............................................$849,000,000 
        2004.............................................$1,028,000,000 
        2005.............................................$1,220,000,000 
        2006.............................................$1,435,000,000 
        2007...............................................$881,000,000 
        2008...............................................$892,000,000 
        2009.............................................$1,023,000,000 
        2010.............................................$1,161,000,000 
        2011.............................................$1,321,000,000 

            ``(2) Baseline estimate of the aggregate dollar amount of 
        sales.--The baseline estimate of the aggregate dollar amount of 
        sales for any fiscal year is the baseline estimate of the 
        aggregate dollar amount of sales of securities (other than 
        bonds, debentures, other evidences of indebtedness, security 
        futures products, and options on securities indexes (excluding a 
        narrow-based security index)) to be transacted on each national 
        securities exchange and by or through any member of each 
        national securities association (otherwise than on a national 
        securities exchange) during such fiscal year as determined by 
        the Commission, after consultation with the Congressional Budget 
        Office and the Office of Management and Budget, using the 
        methodology required for making projections pursuant to section 
        257 of the Balanced Budget and Emergency Deficit Control Act of 
        1985.''.
            (2) Conforming amendment.--Section 31(g) of such Act (as 
        redesignated by subsection (a)(6) of this section) is amended by 
        inserting before the period at the end the 
        following: <<NOTE: Deadline.>>  ``not later than April 30 of the 
        fiscal year preceding the fiscal year to which such rate 
        applies, together with any estimates or projections on which 
        such fees are based''.

SEC. 4. REDUCTION OF REGISTRATION FEES.

    Section 6(b) of the Securities Act of 1933 (15 U.S.C. 77f(b)) is 
amended by striking paragraphs (2) through (5) 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 at a rate that shall be equal to $92 per 
        $1,000,000 of the maximum aggregate price at which such 
        securities are proposed to be offered, except that during fiscal 
        year 2003 and any succeeding fiscal year such fee shall be 
        adjusted pursuant to paragraph (5) or (6).
            ``(3) Offsetting collections.--Fees collected pursuant to 
        this subsection for any fiscal year--
                    ``(A) shall be deposited and credited as offsetting 
                collections to the account providing appropriations to 
                the Commission; and
                    ``(B) except as provided in paragraph (9), shall not 
                be collected for any fiscal year except to the extent 
                provided in advance in appropriation Acts.

[[Page 115 STAT. 2394]]

            ``(4) General revenues prohibited.--No fees collected 
        pursuant to this subsection for fiscal year 2002 or any 
        succeeding fiscal year shall be deposited and credited as 
        general revenue of the Treasury.
            ``(5) Annual adjustment.--For each of the fiscal years 2003 
        through 2011, the Commission shall by order adjust the rate 
        required by paragraph (2) for such fiscal year to a rate that, 
        when applied to the baseline estimate of the aggregate maximum 
        offering prices for such fiscal year, is reasonably likely to 
        produce aggregate fee collections under this subsection that are 
        equal to the target offsetting collection amount for such fiscal 
        year.
            ``(6) Final rate adjustment.--For fiscal year 2012 and all 
        of the succeeding fiscal years, the Commission shall by order 
        adjust the rate required by paragraph (2) for all of such fiscal 
        years to a rate that, when applied to the baseline estimate of 
        the aggregate maximum offering prices for fiscal year 2012, is 
        reasonably likely to produce aggregate fee collections under 
        this subsection in fiscal year 2012 equal to the target 
        offsetting collection amount for fiscal year 2011.
            ``(7) Pro rata application.--The rates per $1,000,000 
        required by this subsection shall be applied pro rata to amounts 
        and balances of less than $1,000,000.
            ``(8) Review and effective date.--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. An adjusted rate prescribed under 
        paragraph (5) or (6) and published under paragraph (10) shall 
        not be subject to judicial review. Subject to paragraphs (3)(B) 
        and (9)--
                    ``(A) an adjusted rate prescribed under paragraph 
                (5) shall take effect on the later of--
                          ``(i) the first day of the fiscal year to 
                      which such rate applies; or
                          ``(ii) five days after the date on which a 
                      regular appropriation to the Commission for such 
                      fiscal year is enacted; and
                    ``(B) an adjusted rate prescribed under paragraph 
                (6) shall take effect on the later of--
                          ``(i) the first day of fiscal year 2012; or
                          ``(ii) five days after the date on which a 
                      regular appropriation to the Commission for fiscal 
                      year 2012 is enacted.
            ``(9) <<NOTE: Termination date.>> Lapse of appropriation.--
        If on the first day of a fiscal year a regular appropriation to 
        the Commission has not been enacted, the Commission shall 
        continue to collect fees (as offsetting collections) under this 
        subsection at the rate in effect during the preceding fiscal 
        year, until 5 days after the date such a regular appropriation 
        is enacted.
            ``(10) <<NOTE: Federal Register, 
        publication. Notice. Deadline.>> Publication.--The Commission 
        shall publish in the Federal Register notices of the rate 
        applicable under this subsection and under sections 13(e) and 
        14(g) for each fiscal year not later than April 30 of the fiscal 
        year preceding the fiscal year to which such rate applies, 
        together with any estimates or projections on which such rate is 
        based.
            ``(11) Definitions.--For purposes of this subsection:

[[Page 115 STAT. 2395]]

                    ``(A) Target offsetting collection amount.--The 
                target offsetting collection amount for each of the 
                fiscal years 2002 through 2011 is determined according 
                to the following table:
                                                       Target offsetting
          ``Fiscal year:                               collection amount
            2002............................................$377,000,000
            2003............................................$435,000,000
            2004............................................$467,000,000
            2005............................................$570,000,000
            2006............................................$689,000,000
            2007............................................$214,000,000
            2008............................................$234,000,000
            2009............................................$284,000,000
            2010............................................$334,000,000
            2011............................................$394,000,000

                    ``(B) Baseline estimate of the aggregate maximum 
                offering prices.--The baseline estimate of the aggregate 
                maximum offering prices for any fiscal year is the 
                baseline estimate of the aggregate maximum offering 
                price at which securities are proposed to be offered 
                pursuant to registration statements filed with the 
                Commission during such fiscal year as determined by the 
                Commission, after consultation with the Congressional 
                Budget Office and the Office of Management and Budget, 
                using the methodology required for projections pursuant 
                to section 257 of the Balanced Budget and Emergency 
                Deficit Control Act of 1985.''.

SEC. 5. FEES FOR STOCK REPURCHASE STATEMENTS.

    Section 13(e) of the Securities Exchange Act of 1934 (15 U.S.C. 
78m(e)) is amended--
            (1) in paragraph (3), by striking ``a fee of \1/50\ of 1 per 
        centum of the value of securities proposed to be purchased'' and 
        inserting ``a fee at a rate that, subject to paragraphs (5) and 
        (6), is equal to $92 per $1,000,000 of the value of securities 
        proposed to be purchased'';
            (2) by inserting after paragraph (3) the following new 
        paragraphs:
            ``(4) Offsetting collections.--Fees collected pursuant to 
        this subsection for any fiscal year shall be deposited and 
        credited as offsetting collections to the account providing 
        appropriations to the Commission, and, except as provided in 
        paragraph (9), shall not be collected for any fiscal year except 
        to the extent provided in advance in appropriation Acts. No fees 
        collected pursuant to this subsection for fiscal year 2002 or 
        any succeeding fiscal year shall be deposited and credited as 
        general revenue of the Treasury.
            ``(5) Annual adjustment.--For each of the fiscal years 2003 
        through 2011, the Commission shall by order adjust the rate 
        required by paragraph (3) for such fiscal year to a rate that is 
        equal to the rate (expressed in dollars per million) that is 
        applicable under section 6(b) of the Securities Act of 1933 for 
        such fiscal year.
            ``(6) Final rate adjustment.--For fiscal year 2012 and all 
        of the succeeding fiscal years, the Commission shall by order 
        adjust the rate required by paragraph (3) for all of such fiscal 
        years to a rate that is equal to the rate (expressed

[[Page 115 STAT. 2396]]

        in dollars per million) that is applicable under section 6(b) of 
        the Securities Act of 1933 for all of such fiscal years.
            ``(7) Pro rata application.--The rates per $1,000,000 
        required by this subsection shall be applied pro rata to amounts 
        and balances of less than $1,000,000.
            ``(8) Review and effective date.--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. An adjusted rate prescribed under 
        paragraph (5) or (6) and published under paragraph (10) shall 
        not be subject to judicial review. Subject to paragraphs (4) and 
        (9)--
                    ``(A) an adjusted rate prescribed under paragraph 
                (5) shall take effect on the later of--
                          ``(i) the first day of the fiscal year to 
                      which such rate applies; or
                          ``(ii) five days after the date on which a 
                      regular appropriation to the Commission for such 
                      fiscal year is enacted; and
                    ``(B) an adjusted rate prescribed under paragraph 
                (6) shall take effect on the later of--
                          ``(i) the first day of fiscal year 2012; or
                          ``(ii) five days after the date on which a 
                      regular appropriation to the Commission for fiscal 
                      year 2012 is enacted.
            ``(9) <<NOTE: Termination date.>> Lapse of appropriation.--
        If on the first day of a fiscal year a regular appropriation to 
        the Commission has not been enacted, the Commission shall 
        continue to collect fees (as offsetting collections) under this 
        subsection at the rate in effect during the preceding fiscal 
        year, until 5 days after the date such a regular appropriation 
        is enacted.
            ``(10) Publication.--The rate applicable under this 
        subsection for each fiscal year is published pursuant to section 
        6(b)(10) of the Securities Act of 1933.''.

SEC. 6. FEES FOR PROXY SOLICITATIONS AND STATEMENTS IN CORPORATE CONTROL 
            TRANSACTIONS.

    Section 14(g) of the Securities Exchange Act of 1934 (15 U.S.C. 
78n(g)) is amended--
            (1) in paragraphs (1) and (3), by striking ``a fee of \1/50\ 
        of 1 per centum of'' each place it appears and inserting ``a fee 
        at a rate that, subject to paragraphs (5) and (6), is equal to 
        $92 per $1,000,000 of'';
            (2) by redesignating paragraph (4) as paragraph (11); and
            (3) by inserting after paragraph (3) the following new 
        paragraphs:
            ``(4) Offsetting collections.--Fees collected pursuant to 
        this subsection for any fiscal year shall be deposited and 
        credited as offsetting collections to the account providing 
        appropriations to the Commission, and, except as provided in 
        paragraph (9), shall not be collected for any fiscal year except 
        to the extent provided in advance in appropriation Acts. No fees 
        collected pursuant to this subsection for fiscal year 2002 or 
        any succeeding fiscal year shall be deposited and credited as 
        general revenue of the Treasury.
            ``(5) Annual adjustment.--For each of the fiscal years 2003 
        through 2011, the Commission shall by order adjust each

[[Page 115 STAT. 2397]]

        of the rates required by paragraphs (1) and (3) for such fiscal 
        year to a rate that is equal to the rate (expressed in dollars 
        per million) that is applicable under section 6(b) of the 
        Securities Act of 1933 for such fiscal year.
            ``(6) Final rate adjustment.--For fiscal year 2012 and all 
        of the succeeding fiscal years, the Commission shall by order 
        adjust each of the rates required by paragraphs (1) and (3) for 
        all of such fiscal years to a rate that is equal to the rate 
        (expressed in dollars per million) that is applicable under 
        section 6(b) of the Securities Act of 1933 for all of such 
        fiscal years.
            ``(7) <<NOTE: Applicability.>> Pro rata application.--The 
        rates per $1,000,000 required by this subsection shall be 
        applied pro rata to amounts and balances of less than 
        $1,000,000.
            ``(8) Review and effective date.--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. An adjusted rate prescribed under 
        paragraph (5) or (6) and published under paragraph (10) shall 
        not be subject to judicial review. Subject to paragraphs (4) and 
        (9)--
                    ``(A) an adjusted rate prescribed under paragraph 
                (5) shall take effect on the later of--
                          ``(i) the first day of the fiscal year to 
                      which such rate applies; or
                          ``(ii) five days after the date on which a 
                      regular appropriation to the Commission for such 
                      fiscal year is enacted; and
                    ``(B) an adjusted rate prescribed under paragraph 
                (6) shall take effect on the later of--
                          ``(i) the first day of fiscal year 2012; or
                          ``(ii) five days after the date on which a 
                      regular appropriation to the Commission for fiscal 
                      year 2012 is enacted.
            ``(9) <<NOTE: Termination date.>> Lapse of appropriation.--
        If on the first day of a fiscal year a regular appropriation to 
        the Commission has not been enacted, the Commission shall 
        continue to collect fees (as offsetting collections) under this 
        subsection at the rate in effect during the preceding fiscal 
        year, until 5 days after the date such a regular appropriation 
        is enacted.
            ``(10) Publication.--The rate applicable under this 
        subsection for each fiscal year is published pursuant to section 
        6(b)(10) of the Securities Act of 1933.''.

SEC. 7. TRUST INDENTURE ACT FEE.

    Section 307(b) of the Trust Indenture Act of 1939 (15 U.S.C. 
77ggg(b)) is amended by striking ``Commission, but, in the case'' and 
all that follows and inserting ``Commission.''.

SEC. 8. 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:

[[Page 115 STAT. 2398]]

          ``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) <<NOTE: 5 USC 4802 note.>> 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) <<NOTE: 5 USC 4802 note.>> 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

[[Page 115 STAT. 2399]]

                          (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 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

[[Page 115 STAT. 2400]]

        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. 9. <<NOTE: 15 USC 78ee note.>> 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 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) consider 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) <<NOTE: Deadline.>> Report to Congress.--Not later than 2 years 
after the date of the enactment of this Act, the Securities and Exchange 
Commission shall submit to the Congress the report prepared by the 
Office on the findings of the study conducted under subsection (a).

SEC. 10. STUDY OF CONVERSION TO SELF-FUNDING.

    (a) GAO Study Required.--The Comptroller General shall conduct a 
study of the impact, implications, and consequences of converting the 
Securities and Exchange Commission to a self-funded basis. Such study 
shall include analysis of the following issues:
            (1) SEC operations.--The impact of such conversion on the 
        Commission's operations, including staff quality, recruitment, 
        and retention.
            (2) Congressional oversight.--The implications for 
        congressional oversight of the Commission, including whether 
        imposing annual expenditure limitations would be beneficial to 
        such oversight.
            (3) Fees.--The likely consequences of the conversion on the 
        rates, collection procedures, and predictability of fees 
        collected by the Commission.
            (4) Appropriations.--The methods by which the conversion may 
        be accomplished without reducing the availability of offsetting 
        collections for appropriations.
            (5) Other matters.--Such other impacts, implications, and 
        consequences as the Comptroller General may consider relevant

[[Page 115 STAT. 2401]]

        to congressional consideration of the question of such 
        conversion.

    (b) <<NOTE: Deadline.>> Submission of Report.--The Comptroller 
General shall submit to the Committees on Financial Services and 
Government Reform of the House of Representatives and the Committees on 
Banking, Housing, and Urban Affairs and Governmental Affairs of the 
Senate a report on the study required by subsection (a) no later than 
180 days after the date of the enactment of this Act.

    (c) Definition.--For the purposes of this section, the term ``self-
funded basis'' means that--
            (1) an agency is authorized to deposit the receipts of its 
        collections in the Treasury of the United States, or in a 
        depository institution, but such deposits are not treated as 
        Government funds or appropriated monies, and are available for 
        the salaries and other expenses of the Commission and its 
        employees without annual appropriation or apportionment; and
            (2) the agency is authorized to employ and fix the salaries 
        and other compensation of its officers and employees, and such 
        salaries and other compensation are paid without regard to the 
        provisions of other laws applicable to officers and employees of 
        the United States.

SEC. 11. <<NOTE: 15 USC 78ee note.>> EFFECTIVE DATES.

    (a) In General.--Except as provided in subsections (b) and (c), the 
amendments made by this Act shall take effect on October 1, 2001.
    (b) Immediate Transaction Fee Reductions.--The amendments made by 
section 2 shall take effect on the later of--
            (1) the first day of fiscal year 2002; or
            (2) thirty days after the date on which a regular 
        appropriation to the Commission for such fiscal year is enacted.

    (c) Additional Exceptions.--The authorities provided by section 
6(b)(9) of the Securities Act of 1933 and sections 13(e)(9), 14(g)(9), 
and 31(k) of the Securities Exchange Act of 1934, as so designated by 
this Act, shall not apply until October 1, 2002.

    Approved January 16, 2002.

LEGISLATIVE HISTORY--H.R. 1088:
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HOUSE REPORTS: No. 107-52, Pt. 1 (Comm. on Financial Services).
CONGRESSIONAL RECORD, Vol. 147 (2001):
            June 14, considered and passed House.
            Dec. 20, considered and passed Senate.

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