Description:
H.R. 2795 would direct the Securities and Exchange Commission (SEC) to issue rules requiring securities issuers with multi-class stock structures to disclose to shareholders information on the shares of all classes of securities owned by and the voting power of certain individuals. A multi-class stock structure is one in which a company offers two or more classes of securities that have different voting rights in an election of directors. Using information about the cost of similar rulemakings, CBO estimates that implementing H.R. 2795 would cost $1 million over the 2023-2024 period. CBO expects the commission would need three employees, at an average annual cost of $300,000 per employee, to issue rules over one year. However, because the SEC is authorized to collect fees each year to offset its annual appropriation, CBO expects that the net effect on discretionary spending over the 2023-2024 period would be negligible, assuming appropriation actions consistent with that authority. If the SEC increased fees to offset the costs for rulemaking as required by the bill, H.R. 2795 would increase the cost of an existing mandate as defined in the Unfunded Mandates Reform Act (UMRA) on private entities required to pay those fees. CBO estimates that the incremental cost of the mandate would be small and would fall well below the annual threshold for private-sector mandates established in UMRA ($198 million in 2023, adjusted annually for inflation). The bill would not impose any intergovernmental mandates.
