[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1584 Introduced in House (IH)]
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117th CONGRESS
1st Session
H. R. 1584
To impose a limitation on taxation and fees on transactions by certain
securities industry participants, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 3, 2021
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.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Protecting Retirement Savers and
Everyday Investors Act''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) The United States capital markets are sophisticated,
complex, diverse, and highly interconnected interstate
marketplaces that effect and process millions of trades daily
for the benefit of individual and institutional investors
throughout the United States, including the retirement accounts
of union members, pensioners, teachers, policemen, firemen,
first responders, and other working Americans, as well as the
endowments of colleges and universities and charitable
organizations.
(2) The United States capital markets are the deepest, most
liquid markets in the world in large measure because of the low
transaction costs that investors pay to trade securities.
(3) Under the Federal securities laws, the Securities and
Exchange Commission serves as the primary supervisor and
regulator of the United States capital markets (with the
assistance of other Federal regulators), while under State
securities laws, State regulators serve a secondary function of
helping to protect investors with respect to securities offered
and sold within their States.
(4) Also pursuant to the Federal securities laws, Congress
directs the Securities and Exchange Commission to assess
transaction fees upon the United States capital markets that
are designed to recover the Commission's costs of supervising
and regulating the United States capital markets.
(5) Some States have proposed taxes and fees that are based
on securities transactions and processing activity related
thereto from investors from other States and would raise costs
for all United States investors, even investors outside of the
States levying the taxes and fees.
SEC. 3. LIMITATION ON TAXATION AND FEES ON TRANSACTIONS BY CERTAIN
SECURITIES INDUSTRY PARTICIPANTS.
(a) In General.--The Dodd-Frank Wall Street Reform and Consumer
Protection Act is amended by adding at the end the following new title:
``TITLE XVII--LIMITATION ON TAXATION AND FEES ON TRANSACTIONS BY
CERTAIN SECURITIES INDUSTRY PARTICIPANTS
``SEC. 1701. LIMITATION.
``(a) In General.--No State or political subdivision thereof may
impose a direct or indirect tax upon a securities industry participant
where that tax is based upon--
``(1) the number or volume of securities transactions that
the securities industry participant consummates or processes,
in whole or in part, within that State or political subdivision
or by utilizing personnel, resources, systems, facilities,
vendors, technology, or infrastructure that are located in or
that traverse that State or political subdivision; or
``(2) the value of such securities transactions.
``(b) Preservation of State and Local Taxing Authority.--Except as
provided in this section, nothing in this title shall be construed to
modify, impair, or supersede, or authorize the modification,
impairment, or superseding of, any State or local law pertaining to
taxation that is otherwise permissible by or under the Constitution of
the United States or other Federal law and in effect on the date of
enactment of this Act.
``(c) Exception.--
``(1) In general.--Individual States may impose taxes and
collections of those taxes on covered persons for transactions,
which may have occurred within the national market system, to
buy or sell securities of their own accord.
``(2) Covered person defined.--For purposes of paragraph
(1) and with respect to a State, the term `covered person'
means--
``(A) an individual with primary residence and
domicile in that State; and
``(B) businesses, corporations, and other entities
that--
``(i) are not part of the national market
system; and
``(ii) are domiciled in and subject to that
State's legal requirements.
``(d) Definitions.--For purposes of this section:
``(1) Alternative trading system.--The term `alternative
trading system' shall have the meaning set forth in section
242.300 of title 17, Code of Federal Regulations.
``(2) Commodity.--The term `commodity' shall have the
meaning set forth in section 1a of the Commodity Exchange Act
(7 U.S.C. 1a(9)).
``(3) National securities exchange.--The term `national
securities exchange' shall have the meaning given such term
under section 6 of the Securities Exchange Act of 1934 (15
U.S.C. 78f(a)).
``(4) Process.--The term `process' shall include all
activities involved directly or indirectly in effectuating a
securities transaction, including entering, transmitting,
routing, matching, and executing orders in securities, as well
as clearing, settling, reporting, and consolidation and
dissemination of data and any other incidental activity
relating to securities transactions, including to the
maintenance and operation of backup and disaster recovery
facilities and systems.
``(5) Securities industry participant.--The term
`securities industry participant' means a federally regulated
self-regulatory organization, national securities exchange,
alternative trading system, securities information processor,
commodities exchange, clearing agency, trade reporting
facility, broker, dealer, or securities trading system or
platform owned or operated by a broker or dealer.
``(6) Securities transaction.--The term `securities
transaction' means the purchase or sale of a security.
``(7) Other securities definitions.--The terms `broker',
`clearing agency', `dealer', `exchange', `securities
information processor', `security', and `self-regulatory
organization' shall have the meanings given those terms,
respectively, under section 3(a) of the Securities Exchange Act
of 1934 (15 U.S.C. 78c(a)).''.
(b) Clerical Amendment.--The table of contents under section 1(b)
of the Dodd-Frank Wall Street Reform and Consumer Protection Act is
amended by adding at the end the following:
``TITLE XVII--LIMITATION ON TAXATION AND FEES ON TRANSACTIONS BY
CERTAIN SECURITIES INDUSTRY PARTICIPANTS.
``Sec. 1701. Limitation.''.
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