Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Financial Regulation topic
No spam. Unsubscribe anytime.
Sponsors propose redirecting securities fees to fund division operations, restitution for defrauded investors
Summary
Sponsors of HB 2,990 said redirecting existing securities‑registration fees to a dedicated securities division fund and creating a restitution recovery fund will allow stronger regulation and limited restitution for investors; the securities commissioner said the division now receives only a small portion of the roughly $19M in fees collected.
Representatives Steve Butts and Philip Bullock told the committee House Bill 2,990 would change how the state handles securities‑registration fees so more of the revenue funds the securities division's examinations, restitution assistance and consumer protection work rather than being returned to general revenue. Bullock said the division currently receives about $1.83 million while fee collections total roughly $18.9 million in a typical year.
Commissioner Michael O'Donnell of the securities division explained the bill's mechanics: the bill would create a directed securities‑division fund to pay examiners, investigators and attorneys and a restitution recovery fund that would provide partial payments to aggrieved investors (up to 25% of an award, capped at $25,000) when defendants cannot satisfy restitution orders. The bill also would authorize the commissioner to set additional fee amounts to fund operations; sponsors said they would include legislative checks in substitutes so fee rule changes are subject to a legislative review period and can be rescinded by concurrent resolution.
Supporters argued the state is underinvesting in securities oversight, which reduces audit frequency and enforcement capacity; Bullock said other states allocate between 25% and 100% of similar fees to regulation, while Missouri sends most to general revenue. Opponents cautioned that fee increases are effectively a cost shift to investors and that creating new directed funds resembles a tax increase; Arnie C., State Public Advocate, opposed the bills on fiscal and fairness grounds.
Committee members asked how the restitution fund would be financed, whether the commissioner could be trusted with fee‑setting authority, and what legislative checks would prevent unchecked fee inflation. Commissioner O'Donnell and sponsors said the restitution fund would be funded by any surplus after division operating needs (and that any commissioner fee changes would be enacted as rules subject to a legislative delay and revocation process already used elsewhere in state law).
The committee requested additional fiscal and statutory language clarifications before advancing the bill.
