§7219 — Title 15 Commerce and Trade | U.S. Code

Summary

The Board (the accounting oversight board) and the standard‑setting body (the group chosen under section 77s(b) to set accounting rules) must be paid from fees and other receipts under the rules below. Each must write a yearly budget and approve it at least 1 month before that fiscal year starts (or at the start of the Board’s first, possibly short, fiscal year). The Board’s budget must also be approved by the Commission. The first Board budget must be made quickly after the first five Board members are appointed so the Board can do its initial organizational tasks under section 7211(d). Money the Board gets from penalties, if allowed in advance by Congress, must be used for merit scholarships for students in accredited accounting programs, run by the Board or its agent. Accounting support fees and other receipts are not treated as public U.S. government money. The Secretary of the Treasury may advance the Board whatever it needs from unused Commission funds from fiscal year 2003 to cover the Board’s first fiscal year. The Board must set, with Commission approval, a fair annual accounting support fee or formula to pay its budget and may include first‑year costs. The standard‑setting body also gets an annual fee to be collected from issuers by agents, subject to Commission review. Fees must be fairly allocated among issuers and among brokers and dealers and may vary by class. Issuers’ shares are based on each issuer’s average monthly equity market capitalization over the 12 months before the fiscal year, divided by the average monthly market cap of all such issuers for that period. Brokers’ and dealers’ shares are based on each firm’s net capital compared to the total net capital of all brokers and dealers, under Board rules. Total fees collected for a year cannot exceed the recoverable budget expenses of the Board or the standard‑setting body. The Board and the standard‑setting body are not put under congressional appropriation procedures and may use other revenue sources so long as the Commission believes their independence is preserved.

Title 15, §7219

Commerce and Trade — Source: USLM XML via OLRC

(a)The Board, and the standard setting body designated pursuant to section 77s(b) of this title, shall be funded as provided in this section.

(b)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 7211(d) of this title.

(c)(1)The budget of the Board (reduced by any registration or annual fees received under section 7212(e) of this title 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)Subject to the availability in advance in an appropriations Act, and notwithstanding subsection (j), 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)(1)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)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), and among brokers and dealers, in accordance with subsection (h), and allowing for differentiation among classes of issuers, brokers and dealers, as appropriate.

(3)The Board shall begin the allocation, assessment, and collection of fees under paragraph (2) with respect to brokers and dealers with the payment of support fees to fund the first full fiscal year beginning after July 21, 2010.

(e)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)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)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)(1)Each broker or dealer shall pay to the Board the annual accounting support fee allocated to such broker or dealer under this section.

(2)Any amount due from a broker or dealer (or from a particular class of brokers and dealers) under this section shall be allocated among brokers and dealers and payable by the broker or dealer (or the brokers and dealers in the particular class, as applicable).

(3)The amount due from a broker or dealer shall be in proportion to the net capital of the broker or dealer (before or after any adjustments), compared to the total net capital of all brokers and dealers (before or after any adjustments), in accordance with rules issued by the Board.

(i)

(j)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.

(k)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).

Notes & Related Subsidiaries

Editorial Notes

Codification Section is comprised of section 109 of Pub. L. 107–204. Subsec. (i) of section 109 of Pub. L. 107–204 amended section 78m of this title.

Amendments

2010—Subsec. (c)(2). Pub. L. 111–203, § 982(h)(1), substituted “subsection (j)” for “subsection (i)”. Subsec. (d)(2). Pub. L. 111–203, § 982(h)(2)(A), substituted “and among brokers and dealers, in accordance with subsection (h), and allowing for differentiation among classes of issuers, brokers and dealers, as appropriate” for “allowing for differentiation among classes of issuers, as appropriate”. Subsec. (d)(3). Pub. L. 111–203, § 982(h)(2)(B), added par. (3). Subsecs. (h) to (k). Pub. L. 111–203, § 982(h)(3), (4), added subsec. (h) and redesignated former subsecs. (h) to (j) as (i) to (k), respectively.

Statutory Notes and Related Subsidiaries

Effective Date

of 2010 AmendmentAmendment by Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an

Effective Date

note under section 5301 of Title 12, Banks and Banking. Obligation of Funds for Accounting Scholarship Program Pub. L. 116–93, div. C, title VI, § 620(b), Dec. 20, 2019, 133 Stat. 2481, provided that: “Beginning in fiscal year 2021 and for each fiscal year thereafter, the Board [Public Company Accounting Oversight Board] shall have authority to obligate funds for the scholarship program established by section 109(c)(2) of the Sarbanes-Oxley Act of 2002 (Public Law 107–204) [15 U.S.C. 7219(c)(2)] in such fiscal year in an aggregate amount not exceeding the amounts of funds collected by the Board between October 1 and September 30 of such fiscal year, including accrued interest, as a result of the assessment of monetary penalties. Funds made available for obligation in any fiscal year shall be in addition to amounts made available in prior fiscal years and shall remain available until expended.” Monetary Penalties To Fund Scholarships for Accounting Students Pub. L. 116–6, div. D, title VI, § 620, Feb. 15, 2019, 133 Stat. 184, provided in part that: “Beginning in fiscal year 2020 and for each fiscal year thereafter, monetary penalties collected pursuant to 15 U.S.C. 7215 shall be deposited in the Public Company Accounting Oversight Board account as discretionary offsetting receipts.”

§7219 Funding

Summary

Title 15, §7219

Notes & Related Subsidiaries

Editorial Notes

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Citations & Metadata