II
Calendar No. 74
107TH CONGRESS
1ST SESSION
H. R. 1088
IN THE SENATE OF THE UNITED STATES
JUNE 14, 2001
Received; read twice and placed on the calendar
AN ACT
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,
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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
‘‘$15 per $1,000,000’’;
(2) by striking ‘‘and security futures products’’
each place it appears in such subsections and insert-
ing ‘‘security futures products, and options on secu-
rities 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 strik-
ing ‘‘, 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 sub-
section:
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‘‘(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 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’’;
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(C) by inserting ‘‘registered on a national
securities exchange or’’ after ‘‘narrow-based se-
curity 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 fol-
lowing: ‘‘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 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—
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‘‘(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
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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) 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 vol-
ume of sales during the first 5 months of such fiscal
year, the baseline estimate of the aggregate dollar
volume 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 per-
cent (or more) greater or less than the actual aggre-
gate dollar volume of sales for such fiscal year. 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 aggre-
gate dollar amount of sales for the remainder of
such fiscal year, is reasonably likely to produce ag-
gregate fee collections under this section (including
fees collected during such 5-month period and as-
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sessments 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 Man-
agement and Budget, use the same methodology re-
quired 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 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.
‘‘(4) REVIEW AND EFFECTIVE DATE.— In exer-
cising its authority under this subsection, the Com-
mission shall not be required to comply with the pro-
visions 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
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not be subject to judicial review. Subject to sub-
sections (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;
‘‘(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) 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
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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:
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, de-
bentures, 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 securi-
ties association (otherwise than on a national securi-
ties exchange) during such fiscal year as determined
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by the Commission, after consultation with the Con-
gressional Budget Office and the Office of Manage-
ment 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 $92 per $1,000,000 of the maximum aggre-
gate 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).
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‘‘(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.
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‘‘(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 of less than
$1,000,000.
‘‘(8) REVIEW AND EFFECTIVE DATE.— In exer-
cising its authority under this subsection, the Com-
mission shall not be required to comply with the pro-
visions 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—
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‘‘(i) the first day of the fiscal year to
which such rate applies; or
‘‘(ii) 5 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) 5 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 5 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
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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:
Target offsetting
‘‘Fiscal year:
collection amount
2002 ......................................................................................
$337,000,000
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 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
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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 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
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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 of less than
$1,000,000.
‘‘(8) REVIEW AND EFFECTIVE DATE.— In exer-
cising its authority under this subsection, the Com-
mission shall not be required to comply with the pro-
visions of section 553 of title 5, United States Code.
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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) 5 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) 5 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 5 days after
the date such a regular appropriation is enacted.
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‘‘(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 $92 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
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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 of less than
$1,000,000.
‘‘(8) REVIEW AND EFFECTIVE DATE.— In exer-
cising its authority under this subsection, the Com-
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mission shall not be required to comply with the pro-
visions 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) 5 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) 5 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
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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 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. COMPARABILITY PROVISIONS.
(a) COMMISSION DEMONSTRATION PROJECT.—Sub-
part C of part III of title 5, United States Code, is amend-
ed by adding at the end the following:
‘‘CHAPTER 48—AGENCY PERSONNEL
DEMONSTRATION PROJECT
‘‘Sec.
‘‘4801. Nonapplicability of chapter 47.
‘‘4802. Securities and Exchange Commission.
‘‘§ 4801. Nonapplicability of chapter 47
‘‘Chapter 47 shall not apply to this chapter.
‘‘§ 4802. Securities and Exchange Commission
‘‘(a) In this section, the term ‘Commission’ means the
Securities and Exchange Commission.
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‘‘(b) The Commission may appoint and fix the com-
pensation of such officers, attorneys, economists, exam-
iners, and other employees as may be necessary for car-
rying 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 Com-
mission may be set and adjusted by the Commission with-
out regard to the provisions of chapter 51 or subchapter
III of chapter 53.
‘‘(d) The Commission may provide additional com-
pensation 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 Enforce-
ment Act of 1989 (12 U.S.C. 1833b) or, if not then being
provided, could be provided by such an agency under ap-
plicable provisions of law, rule, or regulation. In setting
and adjusting the total amount of compensation and bene-
fits for employees, the Commission shall consult with, and
seek to maintain comparability with, the agencies referred
to under section 1206 of the Financial Institutions Re-
form, Recovery, and Enforcement Act of 1989 (12 U.S.C.
1833b).
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‘‘(e) The Commission shall consult with the Office of
Personnel Management in the implementation of this sec-
tion.
‘‘(f) This section shall be administered consistent
with merit system principles.’’.
(b) EMPLOYEES REPRESENTED BY LABOR ORGANI-
ZATIONS.—To the extent that any employee of the Securi-
ties 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) IMPLEMENTATION PLAN AND REPORT.—
(1) IMPLEMENTATION PLAN.—
(A) IN GENERAL.—The Securities and Ex-
change Commission shall develop a plan to im-
plement section 4802 of title 5, United States
Code, as added by this section.
(B) INCLUSION IN ANNUAL PERFORMANCE
PLAN AND REPORT.—The Securities and Ex-
change Commission shall include—
(i) the plan developed under this para-
graph in the annual program performance
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plan submitted under section 1115 of title
31, United States Code; and
(ii) the effects of implementing the
plan developed under this paragraph in the
annual program performance report sub-
mitted under section 1116 of title 31,
United States Code.
(2) IMPLEMENTATION REPORT.—
(A) IN
GENERAL.—Before implementing
the plan developed under paragraph (1), the Se-
curities and Exchange Commission shall submit
a report to the Committee on Governmental Af-
fairs and the Committee on Banking, Housing,
and Urban Affairs of the Senate, the Com-
mittee on Government Reform and the Com-
mittee 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 docu-
mentation justifying the plan; and
(ii) budgeting projections on costs and
benefits resulting from the plan.
(d) TECHNICAL AND CONFORMING AMENDMENTS.—
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(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 add-
ing 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 fol-
lowing:
‘‘(E) the Securities and Exchange Commis-
sion;’’.
(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 fol-
lowing:
‘‘(4) section 4802.’’.
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(2) AMENDMENT
TO
SECURITIES
EXCHANGE
ACT OF 1934.—Section 4(b) of the Securities Ex-
change 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 employ-
ees in accordance with section 4802 of title 5,
United States Code.
‘‘(2) REPORTING OF INFORMATION.—In estab-
lishing and adjusting schedules of compensation and
benefits for officers, attorneys, economists, exam-
iners, 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 such compensation and ben-
efits and shall seek to maintain comparability with
such agencies regarding compensation and bene-
fits.’’.
(3) AMENDMENT TO FIRREA OF 1989.—Section
1206 of the Financial Institutions Reform, Recov-
ery, and Enforcement Act of 1989 (12 U.S.C.
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1833b) is amended by striking ‘‘the Thrift Depositor
Protection Oversight Board of the Resolution Trust
Corporation’’.
SEC. 9. 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 securi-
ties industry directly and indirectly benefitting from
the fee reductions, including purchasers and sellers
of securities, members of national securities ex-
changes, issuers, broker-dealers, underwriters, par-
ticipants in investment companies, retirement pro-
grams, and others;
(2) consider the impact on different types of in-
vestors, 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
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(4) consider the economic benefits to investors
flowing from the fee reductions to include such fac-
tors as market efficiency, expansion of investment
opportunities, and enhanced liquidity and capital
formation.
(c) REPORT TO CONGRESS.—Not later than 2 years
after the date of 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 Gen-
eral 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 in-
clude analysis of the following issues:
(1) SEC OPERATIONS.—The impact of such
conversion on the Commission’s operations, includ-
ing staff quality, recruitment, and retention.
(2) CONGRESSIONAL OVERSIGHT.—The implica-
tions for congressional oversight of the Commission,
including whether imposing annual expenditure limi-
tations would be beneficial to such oversight.
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(3) FEES.—The likely consequences of the con-
version on the rates, collection procedures, and pre-
dictability of fees collected by the Commission.
(4) APPROPRIATIONS.—The methods by which
the conversion may be accomplished without reduc-
ing the availability of offsetting collections for appro-
priations.
(5) OTHER MATTERS.—Such other impacts, im-
plications, and consequences as the Comptroller
General may consider relevant to congressional con-
sideration of the question of such conversion.
(b) SUBMISSION OF REPORT.—The Comptroller Gen-
eral shall submit to the Committees on Financial Services
and Government Reform of the House of Representatives
and the Committees on Banking, Housing, and Urban Af-
fairs and Governmental Affairs of the Senate a report on
the study required by subsection (a) no later than 180
after the date of 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 re-
ceipts of its collections in the Treasury of the United
States, or in a depository institution, but such de-
posits are not treated as Government funds or ap-
propriated monies, and are available for the salaries
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and other expenses of the Commission and its em-
ployees without annual appropriation or apportion-
ment; 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 com-
pensation are paid without regard to the provisions
of other laws applicable to officers and employees of
the United States.
SEC. 11. 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) 30 days after the date on which a regular
appropriation to the Commission for such fiscal year
is
enacted.
(c) ADDITIONAL EXCEPTIONS.—The authorities pro-
vided 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 Ex-
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change Act of 1934, as so designated by this Act, shall
not apply until October 1, 2002.
Passed the House of Representatives June 14, 2001.
Attest:
JEFF TRANDAHL,
Clerk.
Calendar No. 74
107TH CONGRESS
1ST SESSION
H. R. 1088
AN ACT
To amend the Securities Exchange Act of 1934 to
reduce fees collected by the Securities and Ex-
change Commission, and for other purposes.
JUNE 14, 2001
Received; read twice and placed on the calendar