October 12, 2000
The Honorable David R. Obey The Honorable José E. Serrano Dear David and José: Last week the House Commerce Committee approved H.R. 2441, the Fairness in Securities Transactions Act, on a 24-16 partisan vote after trampling on the rights of the Minority. We are writing to respectfully request your support in assuring that this legislation is not added as a rider to any pending appropriations legislation. Sponsored by Representative Rick Lazio, H.R. 2441 reduces the federal fees on stock trades, a goal that we all support since burgeoning stock market volume is causing the so-called section 31 fees to collect more than intended or needed. However, Representative Lazio’s fee reduction bill attempts to achieve a dramatic reduction in fee collections by targeting only the offsetting collections used by the SEC’s appropriators to fund SEC operations. It makes no attempt to reduce the general revenue portion of fee collections, which represents approximately 70 percent of total fee collections. The Lazio bill increases the risk that the SEC will face a funding shortfall by giving general revenue first claim on any fee collections. This creates serious potential SEC funding shortfall and cash flow issues. At the full Committee markup, Chairman Bliley ruled nongermane a bipartisan amendment sponsored by Rep. Edolphus Towns that offered more fee reduction than the Lazio amendment, while safeguarding SEC funding. It did this by giving offsetting collections first claim on any Section 31 fee collections. It also provided the SEC with the ability to match the pay and benefits of federal banking regulators in order to address the agency’s inability to attract and retain qualified staff. The Towns amendment was supported by the SEC, the Securities Industry Association, the New York Stock Exchange, and the Nasdaq Stock Market. Representative Towns’ request to appeal the ruling of the chair was tabled by another partisan vote in order to gag the Democrats and stifle criticism of the Lazio bill. Chairman Bliley offered to rule the Towns amendment germane if we would accept otherwise nongermane provisions on electronic delivery of documents and imposing a cost-benefit analysis requirement on SEC rules, amendments that were highly objectionable both to the Administration and to Democrats on the Commerce Committee. Please block any efforts to add the Lazio bill to any pending spending bills. Today, there are more American families invested in our markets than ever before, and the number is growing every day. Never has the need for investor protection and a fully-funded and well-staffed SEC been greater. Thank you for your consideration of our request. If you need any additional information, please do not hesitate to contact us. Sincerely,
JOHN D. DINGELL EDOLPHUS TOWNS EDWARD J. MARKEY cc: The Honorable Richard A. Gephardt, Minority Leader
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