I 

116TH CONGRESS 

2D SESSION H. R. 8695 

To impose a limitation on taxation and fees on transactions by certain 

securities industry participants, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 27, 2020 

Mr. MCHENRY (for himself and Mr. HUIZENGA) introduced the following bill; 

which was referred to the Committee on the Judiciary 

A BILL 

To impose a limitation on taxation and fees on transactions 

by certain securities industry participants, and for other 

purposes. 

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 ‘‘Protecting Retirement 

5 Savers and Everyday Investors Act’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) The United States capital markets are so9 phisticated, complex, diverse, and highly inter10 connected interstate marketplaces that effect and 


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1 process millions of trades daily for the benefit of in2 dividual and institutional investors throughout the 

3 United States, including the retirement accounts of 

4 union members, pensioners, teachers, policemen, 

5 firemen, first responders, and other working Ameri6 cans, as well as the endowments of colleges and uni7 versities and charitable organizations. 

8 (2) The United States capital markets are the 

9 deepest, most liquid markets in the world in large 

10 measure because of the low transaction costs that in11 vestors pay to trade securities. 

12 (3) Under the Federal securities laws, the Secu13 rities and Exchange Commission serves as the pri14 mary supervisor and regulator of the United States 

15 capital markets (with the assistance of other Federal 

16 regulators), while under State securities laws, State 

17 regulators serve a secondary function of helping to 

18 protect investors with respect to securities offered 

19 and sold within their States. 

20 (4) Also pursuant to the Federal securities 

21 laws, Congress directs the Securities and Exchange 

22 Commission to assess transaction fees upon the 

23 United States capital markets that are designed to 

24 recover the Commission’s costs of supervising and 

25 regulating the United States capital markets. 


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1 (5) Some States have proposed taxes and fees 

2 that are based on securities transactions and proc3 essing activity related thereto from investors from 

4 other States and would raise costs for all United 

5 States investors, even investors outside of the States 

6 levying the taxes and fees. 

7 SEC. 3. LIMITATION ON TAXATION AND FEES ON TRANS8 ACTIONS BY CERTAIN SECURITIES INDUSTRY 

9 PARTICIPANTS. 

10 (a) IN GENERAL.—The Dodd-Frank Wall Street Re11 form and Consumer Protection Act is amended by adding 

12 at the end the following new title: 

13 ‘‘TITLE XVII—LIMITATION ON 

14 TAXATION AND FEES ON 

15 TRANSACTIONS BY CERTAIN 

16 SECURITIES INDUSTRY PAR17 TICIPANTS 

18 ‘‘SEC. 1701. LIMITATION. 

19 ‘‘(a) IN GENERAL.—No State or political subdivision 

20 thereof may impose a direct or indirect tax upon a securi21 ties industry participant where that tax is based upon— 

22 ‘‘(1) the number or volume of securities trans23 actions that the securities industry participant con24 summates or processes, in whole or in part, within 

25 that State or political subdivision or by utilizing perVerDate Sep 11 2014 19:29 Nov 17, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8695.IH H8695

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1 sonnel, resources, systems, facilities, vendors, tech2 nology, or infrastructure that are located in or that 

3 traverse that State or political subdivision; or 

4 ‘‘(2) the value of such securities transactions. 

5 ‘‘(b) PRESERVATION OF STATE AND LOCAL TAXING

6 AUTHORITY.—Except as provided in this section, nothing 

7 in this title shall be construed to modify, impair, or super8 sede, or authorize the modification, impairment, or super9 seding of, any State or local law pertaining to taxation 

10 that is otherwise permissible by or under the Constitution 

11 of the United States or other Federal law and in effect 

12 on the date of enactment of this Act. 

13 ‘‘(c) EXCEPTION.— 

14 ‘‘(1) IN GENERAL.—Individual States may im15 pose taxes and collections of those taxes on covered 

16 persons for transactions, which may have occurred 

17 within the national market system, to buy or sell se18 curities of their own accord. 

19 ‘‘(2) COVERED PERSON DEFINED.—For pur20 poses of paragraph (1) and with respect to a State, 

21 the term ‘covered person’ means— 

22 ‘‘(A) an individual with primary residence 

23 and domicile in that State; and 

24 ‘‘(B) businesses, corporations, and other 

25 entities that— 


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1 ‘‘(i) are not part of the national mar2 ket system; and 

3 ‘‘(ii) are domiciled in and subject to 

4 that State’s legal requirements. 

5 ‘‘(d) DEFINITIONS.—For purposes of this section: 

6 ‘‘(1) ALTERNATIVE TRADING SYSTEM.—The 

7 term ‘alternative trading system’ shall have the 

8 meaning set forth in section 242.300 of title 17, 

9 Code of Federal Regulations. 

10 ‘‘(2) COMMODITY.—The term ‘commodity’ shall 

11 have the meaning set forth in section 1a of the Com12 modity Exchange Act (7 U.S.C. 1a(9)). 

13 ‘‘(3) NATIONAL SECURITIES EXCHANGE.—The 

14 term ‘national securities exchange’ shall have the 

15 meaning given such term under section 6 of the Se16 curities Exchange Act of 1934 (15 U.S.C. 78f(a)). 

17 ‘‘(4) PROCESS.—The term ‘process’ shall in18 clude all activities involved directly or indirectly in 

19 effectuating a securities transaction, including enter20 ing, transmitting, routing, matching, and executing 

21 orders in securities, as well as clearing, settling, re22 porting, and consolidation and dissemination of data 

23 and any other incidental activity relating to securi24 ties transactions, including to the maintenance and 


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1 operation of backup and disaster recovery facilities 

2 and systems. 

3 ‘‘(5) SECURITIES INDUSTRY PARTICIPANT.— 

4 The term ‘securities industry participant’ means a 

5 federally regulated self-regulatory organization, na6 tional securities exchange, alternative trading sys7 tem, securities information processor, commodities 

8 exchange, clearing agency, trade reporting facility, 

9 broker, dealer, or securities trading system or plat10 form owned or operated by a broker or dealer. 

11 ‘‘(6) SECURITIES TRANSACTION.—The term ‘se12 curities transaction’ means the purchase or sale of 

13 a security. 

14 ‘‘(7) OTHER SECURITIES DEFINITIONS.—The 

15 terms ‘broker’, ‘clearing agency’, ‘dealer’, ‘exchange’, 

16 ‘securities information processor’, ‘security’, and 

17 ‘self-regulatory organization’ shall have the mean18 ings given those terms, respectively, under section 

19 3(a) of the Securities Exchange Act of 1934 (15 

20 U.S.C. 78c(a)).’’. 

21 (b) CLERICAL AMENDMENT.—The table of contents 

22 under section 1(b) of the Dodd-Frank Wall Street Reform 

23 and Consumer Protection Act is amended by adding at 

24 the end the following: 


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‘‘TITLE XVII—LIMITATION ON TAXATION AND FEES ON TRANSACTIONS BY CERTAIN SECURITIES INDUSTRY PARTICIPANTS. 

‘‘Sec. 1701. Limitation.’’. 

Æ 


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