I
107TH CONGRESS
1ST SESSION
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.
IN THE HOUSE OF REPRESENTATIVES
MARCH 19, 2001
Mr. FOSSELLA (for himself, Mr. OXLEY, Mr. BAKER, Mrs. KELLY, Mrs.
MALONEY of New York, Mr. MENENDEZ, Mr. REYNOLDS, Mr. ROYCE,
Mr. KING, Mr. OSE, Mrs. ROUKEMA, Mr. FOLEY, Mr. TOOMEY, Mr.
GILLMOR, Mr. GARY MILLER of California, Mr. ROGERS of Michigan, Mr.
SHADEGG, Mr. GRUCCI, Mr. WELDON of Florida, Mr. SHAYS, Mr. MAN-
ZULLO, Mr. ACKERMAN, Mr. CROWLEY, Mr. FORD, Mr. MOORE, Mr.
BLAGOJEVICH, Mr. ISRAEL, Mr. BENTSEN, Mr. BACHUS, Ms. HART, Mr.
JONES of North Carolina, Mr. NEY, Mr. SWEENEY, Mr. ROSS, Ms.
VELA´ZQUEZ, and Mr. ENGEL) introduced the following bill; which was re-
ferred to the Committee on Financial Services
A BILL
To amend the Securities Exchange Act of 1934 to reduce
fees collected by the Securities and Exchange Commis-
sion, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT 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
‘‘$12 per $1,000,000’’;
(2) in the first sentence of subsection (b), by
striking ‘‘, except that’’ and all that follows through
the end of such sentence;
(3) in paragraph (1) of subsection (d), by strik-
ing ‘‘, except that’’ and all that follows through the
end of such paragraph;
(4) in subsection (e), by striking ‘‘$0.02’’ and
inserting ‘‘$0.0072’’; and
(5) by adding at the end the following new sub-
section:
‘‘(i) PRO
RATA
APPLICATION.—The rates per
$1,000,000 required by this section shall be applied pro
rata to amounts and balances equal to less than
$1,000,000.’’.
SEC. 3. REVISION OF SECURITIES TRANSACTION FEE PRO-
VISIONS; 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:
‘‘(d) OFF-EXCHANGE TRADES
OF LAST-SALE-RE-
PORTED SECURITIES.—
‘‘(1) COVERED TRANSACTIONS.—Each national
securities’’
and inserting the following:
‘‘(c) OFF-EXCHANGE TRADES OF EXCHANGE REG-
ISTERED AND LAST-SALE-REPORTED SECURITIES.—Sub-
ject to subsection (j), each national securities’’;
(C) by inserting ‘‘registered on a national
securities exchange or’’ after ‘‘security futures
products)’’; and
(D) by striking ‘‘, excluding any sales for
which a fee is paid under subsection (c)’’;
(4) in subsection (e)—
(A) 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 suc-
ceeding 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 insert-
ing ‘‘DATES FOR PAYMENTS.—The fees and assess-
ments 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 sub-
section:
‘‘(i) DEPOSIT OF FEES.—
‘‘(1) OFFSETTING
COLLECTIONS.—Fees col-
lected pursuant to subsections (b), (c), and (d) for
any fiscal year—
‘‘(A) shall be deposited and credited as off-
setting collections to the account providing ap-
propriations 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 appropria-
tion 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) 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 aggre-
gate dollar amount of sales for fiscal year 2012, is
reasonably likely to produce aggregate fee collections
under this section in fiscal year 2012 (including as-
sessments collected under subsection (d)) equal to
the target offsetting collection amount for fiscal year
2011.
‘‘(3) REVIEW AND EFFECTIVE DATE.—An ad-
justed rate prescribed under paragraph (1) or (2)
and published under subsection (g) shall not be sub-
ject 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) 30 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 (2) shall take effect on the later of—
‘‘(i) the first day of fiscal year 2012;
or
‘‘(ii) 30 days after the date on which
a regular appropriation to the Commission
for fiscal year 2012 is enacted.
‘‘(k) 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.
‘‘(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 de-
termined according to the following table:
Fiscal year
Target offsetting collection amount
2002 ................................
$585,720,000
2003 ................................
$679,320,000
2004 ................................
$822,240,000
2005 ................................
$976,320,000
2006 ................................
$1,148,040,000
2007 ................................
$880,880,000
2008 ................................
$892,080,000
2009 ................................
$1,023,120,000
2010 ................................
$1,161,440,000
2011 ................................
$1,321,040,000
‘‘(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, de-
bentures, other evidences of indebtedness, and secu-
rity futures products) to be transacted on each na-
tional securities exchange and by or through any
member of each national securities association (oth-
erwise than on a national securities exchange) dur-
ing such fiscal year as determined by the Commis-
sion, 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 pe-
riod at the end the following: ‘‘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 $125 per $1,000,000 of the maximum ag-
gregate 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 ad-
justed pursuant to paragraph (5) or (6).
‘‘(3) OFFSETTING
COLLECTIONS.—Fees col-
lected pursuant to this subsection for any fiscal
year—
‘‘(A) shall be deposited and credited as off-
setting collections to the account providing ap-
propriations 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 appropria-
tion Acts.
‘‘(4) GENERAL
REVENUES
PROHIBITED.—No
fees collected pursuant to this subsection for fiscal
year 2002 or any succeeding fiscal year shall be de-
posited 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 col-
lection 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 ap-
plied pro rata to amounts and balances equal to less
than $1,000,000.
‘‘(8) REVIEW AND EFFECTIVE DATE.—An ad-
justed 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) 30 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) 30 days after the date on which
a regular appropriation to the Commission
for fiscal year 2012 is enacted.
‘‘(9) LAPSE
OF
APPROPRIATION.—If on the
first day of a fiscal year a regular appropriation to
the Commission has not been enacted, the Commis-
sion shall continue to collect fees (as offsetting col-
lections) under this subsection at the rate in effect
during the preceding fiscal year, until 30 days after
the date such a regular appropriation is enacted.
‘‘(10) 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 esti-
mates or projections on which such rate is based.
‘‘(11) DEFINITIONS.—For purposes of this sub-
section:
‘‘(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:
Fiscal year
Target offsetting collection amount
2002 ................................
$512,500,000
2003 ................................
$589,380,000
2004 ................................
$650,385,000
2005 ................................
$790,075,000
2006 ................................
$949,050,000
2007 ................................
$214,200,000
2008 ................................
$233,700,000
2009 ................................
$284,115,000
2010 ................................
$333,840,000
2011 ................................
$394,110,000
‘‘(B) BASELINE ESTIMATE OF THE AGGRE-
GATE MAXIMUM OFFERING PRICES.—The base-
line estimate of the aggregate maximum offer-
ing prices for any fiscal year is the baseline es-
timate 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 de-
termined 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 $125
per $1,000,000 of the value of securities proposed to
be purchased’’;
(2) by inserting after paragraph (3) the fol-
lowing new paragraphs:
‘‘(4) OFFSETTING
COLLECTIONS.—Fees col-
lected pursuant to this subsection for any fiscal year
shall be deposited and credited as offsetting collec-
tions 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 appli-
cable 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 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 ap-
plied pro rata to amounts and balances equal to less
than $1,000,000.
‘‘(8) REVIEW AND EFFECTIVE DATE.—An ad-
justed 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) 30 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) 30 days after the date on which
a regular appropriation to the Commission
for fiscal year 2012 is enacted.
‘‘(9) LAPSE
OF
APPROPRIATION.—If on the
first day of a fiscal year a regular appropriation to
the Commission has not been enacted, the Commis-
sion shall continue to collect fees (as offsetting col-
lections) under this subsection at the rate in effect
during the preceding fiscal year, until 30 days after
the date such a regular appropriation is enacted.
‘‘(10) 
PUBLICATION.—The 
rate 
applicable
under this subsection for each fiscal year is pub-
lished pursuant to section 6(b)(10) of the Securities
Act of 1933.’’.
SEC. 6. FEES FOR PROXY SOLICITATIONS AND STATE-
MENTS IN CORPORATE CONTROL TRANS-
ACTIONS.
Section 14(g) of the Securities Exchange Act of 1934
(15 U.S.C. 78m(e)(3)) 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 para-
graphs (5) and (6), is equal to $125 per $1,000,000
of’’;
(2) by redesignating paragraph (4) as para-
graph (11); and
(3) by inserting after paragraph (3) the fol-
lowing new paragraphs:
‘‘(4) OFFSETTING
COLLECTIONS.—Fees col-
lected pursuant to this subsection for any fiscal year
shall be deposited and credited as offsetting collec-
tions 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 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 (ex-
pressed 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 ap-
plied pro rata to amounts and balances equal to less
than $1,000,000.
‘‘(8) REVIEW AND EFFECTIVE DATE.—An ad-
justed 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) 30 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) 30 days after the date on which
a regular appropriation to the Commission
for fiscal year 2012 is enacted.
‘‘(9) LAPSE
OF
APPROPRIATION.—If on the
first day of a fiscal year a regular appropriation to
the Commission has not been enacted, the Commis-
sion shall continue to collect fees (as offsetting col-
lections) under this subsection at the rate in effect
during the preceding fiscal year, until 30 days after
the date such a regular appropriation is enacted.
‘‘(10) 
PUBLICATION.—The 
rate 
applicable
under this subsection for each fiscal year is pub-
lished 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 ‘‘Commis-
sion, but, in the case’’ and all that follows and inserting
‘‘Commission.’’.
SEC. 8. PAY PARITY PROVISIONS.
(a) SECURITIES AND EXCHANGE COMMISSION EM-
PLOYEES.—Section 4(b) of the Securities Exchange Act
of 1934 (15 U.S.C. 78d(b)) is amended—
(1) by striking paragraphs (1) and (2) and by
inserting the following:
‘‘(1) APPOINTMENT, COMPENSATION, AND BEN-
EFITS.—
‘‘(A) IN GENERAL.—The Commission may
appoint and fix the compensation of such offi-
cers, attorneys, economists, examiners, and
other employees as may be necessary for car-
rying 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) ADDITIONAL
COMPENSATION
AND
BENEFITS.—The Commission may provide addi-
tional compensation and benefits to employees
of the Commission if the same type of com-
pensation 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 or, if not then
being provided, could be provided by such an
agency under applicable provisions of law, rule,
or regulation.
‘‘(2) INFORMATION; COMPARABILITY.—In es-
tablishing and adjusting schedules of compensation
and additional benefits for employees of the Com-
mission, which are to be determined solely by the
Commission under this subsection, the Commis-
sion—
‘‘(A) shall consult with and inform the
heads of the agencies referred to under section
1206 of the Financial Institutions Reform, Re-
covery, and Enforcement Act of 1989;
‘‘(B) shall inform the Congress of such
compensation and benefits; and
‘‘(C) shall seek to maintain comparability
with such agencies regarding compensation and
benefits.’’.
(b) 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 of the following:
‘‘(E) the Securities and Exchange Commis-
sion.’’.
(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 pe-
riod and inserting ‘‘; or’’; and
(C) by adding at the end the following:
‘‘(4) section 4(b) of the Securities Exchange
Act of 1934.’’.
SEC. 9. EFFECTIVE DATES.
(a) IN GENERAL.—Except as provided in subsection
(b), the amendments made by this Act shall take effect
on October 1, 2001.
(b) PAY PARITY.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by section 8 shall
take effect on the date of enactment of this Act.
(2) EXCEPTION.—The amendments made by
section 8(b)(1) shall take effect as of such date as
the Securities and Exchange Commission shall (by
order published in the Federal Register) prescribe,
but in no event later than 1 year after the date of
enactment of this Act.
Æ