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Antitrust filing fees paid by merging companies rose in the past two months, reversing a precipitous decline in collections caused by revisions to the Hart-Scott-Rodino Antitrust Improvements Act and an overall drop in mergers and acquisitions activity. According to the Federal Trade Commission, the agency collected $22.6 million in pre-merger notification fees in June and $17.87 million in May. Those totals are up significantly from February, March and April, and above comparable figures from a year earlier. “We had an exceptionally good month in June, and we expect to have fully recovered,” FTC spokeswoman Cathy MacFarlane said. “Clearly the numbers are coming up.” The rebound in fees could not come at a better time for the FTC and the Department of Justice’s antitrust division, both indirectly funded by HSR collections. Senate and House appropriation committees are meeting this month to decide the agencies’ 2002 fiscal-year budgets. In April, President Bush called for a $20 million increase for the antitrust division and a $9 million increase for the FTC, $4 million of which would go to the bureau of competition. That budget, however, assumed that the FTC, which administers the HSR filing system for both agencies, would collect $415 million in fees. Of that amount, the antitrust division was scheduled to spend $141 million and the FTC $157 million. The remaining $117 million in fees would be deposited with the Treasury Department. Yet as recently as April, it appeared HSR filing fees for the 2001 fiscal year would come in as much as $60 million below fiscal 2000 levels. With the depressed M&A market, signs of a recovery in filing fees were nonexistent. Given the budgetary pressures on Capitol Hill, at the time it appeared unlikely the agencies would get their increases next year. But the FTC says filings and fees are returning to expected levels. For June, the agency collected $600,000 more than a year ago, while in May collections were up $60,000 from 2000. Those numbers represent a significant improvement from February, March and April. In April, the FTC collected $10.2 million, compared with $15 million in 2000, while in March it was $12.85 million against $19.7 million in 2000. February was the worst month. Collections were $7.2 million, down from $19.4 million the year prior. Still, it may be premature to declare a recovery in HSR fees. “I’d be hesitant to call it a trend,” said Joel Mitnick, a partner in the New York office of Sidley Austin Brown & Wood. “There are not yet enough data points to know if the fees are recovering. You need at least a couple of more months of market data.” The early year damage is still likely to cause FTC collections to fall short of 2000 totals. Since the fiscal year started Oct. 1, the agency has received $130.68 million, compared with $164.82 million in the same nine-month period in fiscal-year 2000. That represents a 21 percent drop in filing fees for the year, although it is better than the agencies were faring at the halfway point in the year. Collections after six months were down 27 percent from the first half of fiscal year 2000. About one-third of the decline appears related to changes to the HSR Act that took effect Feb. 1. Congress increased the size of deals exempt from the filing requirement from $15 million to $50 million. The remainder of the shortfall looks like a result of the general decrease in mergers. At the current rate, the FTC and DOJ will collect $174.25 million in HSR fees for the 2001 fiscal year. That is still about $45 million less than in fiscal year 2000. Copyright (c)2001 TDD, LLC. All rights reserved.

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