Sarbanes Oxley Act Section 109

 

SEC. 109. FUNDING.
 
(a) IN GENERAL.—
The Board, and the standard setting body
designated pursuant to section 19(b) of the Securities Act of 1933, as amended by section 108, shall be funded as provided in this
section.
 
(b) ANNUAL BUDGETS.—The Board and the standard setting
body referred to in subsection (a) shall each establish a budget
for each fiscal year, which shall be reviewed and approved according
to their respective internal procedures not less than 1 month prior
to the commencement of the fiscal year to which the budget pertains
(or at the beginning of the Board’s first fiscal year, which may
be a short fiscal year). The budget of the Board shall be subject
to approval by the Commission. The budget for the first fiscal
year of the Board shall be prepared and approved promptly following
the appointment of the initial five Board members, to permit
action by the Board of the organizational tasks contemplated by
section 101(d).
 
(c) SOURCES AND USES OF FUNDS.—
 
(1) RECOVERABLE BUDGET EXPENSES.—The budget of the
Board (reduced by any registration or annual fees received
under section 102(e) for the year preceding the year for which
the budget is being computed), and all of the budget of the
standard setting body referred to in subsection (a), for each
fiscal year of each of those 2 entities, shall be payable from
annual accounting support fees, in accordance with subsections
(d) and (e). Accounting support fees and other receipts of the
Board and of such standard-setting body shall not be considered
public monies of the United States.
 
(2) FUNDS GENERATED FROM THE COLLECTION OF MONETARY
PENALTIES.—Subject to the availability in advance in an appropriations
Act, and notwithstanding subsection (i), all funds
collected by the Board as a result of the assessment of monetary
penalties shall be used to fund a merit scholarship program
for undergraduate and graduate students enrolled in accredited
accounting degree programs, which program is to be administered
by the Board or by an entity or agent identified by
the Board.
 
(d) ANNUAL ACCOUNTING SUPPORT FEE FOR THE BOARD.—
 
(1) ESTABLISHMENT OF FEE.—The Board shall establish,
with the approval of the Commission, a reasonable annual
accounting support fee (or a formula for the computation
thereof), as may be necessary or appropriate to establish and
maintain the Board. Such fee may also cover costs incurred
in the Board’s first fiscal year (which may be a short fiscal
year), or may be levied separately with respect to such short
fiscal year.
 
(2) ASSESSMENTS.—The rules of the Board under paragraph
(1) shall provide for the equitable allocation, assessment, and
collection by the Board (or an agent appointed by the Board)
of the fee established under paragraph (1), among issuers,
in accordance with subsection (g), allowing for differentiation
among classes of issuers, as appropriate.
 
(e) ANNUAL ACCOUNTING SUPPORT FEE FOR STANDARD SETTING
BODY.—The annual accounting support fee for the standard setting
body referred to in subsection (a)—
 
(1) shall be allocated in accordance with subsection (g),
and assessed and collected against each issuer, on behalf of
the standard setting body, by 1 or more appropriate designated
collection agents, as may be necessary or appropriate to pay
for the budget and provide for the expenses of that standard
setting body, and to provide for an independent, stable source
of funding for such body, subject to review by the Commission;and
 
(2) may differentiate among different classes of issuers.
 
(f) LIMITATION ON FEE.—The amount of fees collected under
this section for a fiscal year on behalf of the Board or the standards
setting body, as the case may be, shall not exceed the recoverable
budget expenses of the Board or body, respectively (which may
include operating, capital, and accrued items), referred to in subsection
(c)(1).
 
(g) ALLOCATION OF ACCOUNTING SUPPORT FEES AMONG
ISSUERS.—Any amount due from issuers (or a particular class of
issuers) under this section to fund the budget of the Board or
the standard setting body referred to in subsection (a) shall be
allocated among and payable by each issuer (or each issuer in
a particular class, as applicable) in an amount equal to the total
of such amount, multiplied by a fraction—
 
(1) the numerator of which is the average monthly equity
market capitalization of the issuer for the 12-month period
immediately preceding the beginning of the fiscal year to which
such budget relates; and
 
(2) the denominator of which is the average monthly equity
market capitalization of all such issuers for such 12-month
period.
 
(h) CONFORMING AMENDMENTS.—Section 13(b)(2) of the Securities
Exchange Act of 1934 (15 U.S.C. 78m(b)(2)) is amended—
 
(1) in subparagraph (A), by striking ‘‘and’’ at the end; and
 
(2) in subparagraph (B), by striking the period at the
end and inserting the following: ‘‘; and ‘‘(C) notwithstanding
 any other provision of law, pay the allocable share of such issuer
of a reasonable annual accounting support fee or fees, determined
in accordance with section 109of the Sarbanes-Oxley Act of 2002.’’.
 
(i) RULE OF CONSTRUCTION.—Nothing in this section shall be
construed to render either the Board, the standard setting body
referred to in subsection (a), or both, subject to procedures in
Congress to authorize or appropriate public funds, or to prevent
such organization from utilizing additional sources of revenue for
its activities, such as earnings from publication sales, provided
that each additional source of revenue shall not jeopardize, in
the judgment of the Commission, the actual and perceived independence
of such organization.
 
(j) START-UP EXPENSES OF THE BOARD.—
From the unexpended balances of the appropriations to the Commission for fiscal year 2003, the Secretary of the Treasury is authorized to advance to the Board not to exceed
the amount necessary to cover the expenses
of the Board during its first fiscal year (which may be a short
fiscal year).
 


   

 

 

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