H.R. 3382 would require the Securities and Exchange Commission (SEC) to study its current definition of “small entity” under the Regulatory Flexibility Act (RFA) and revise its rules based on the results of the study. Under current law, agencies subject to the RFA need to determine if their rules have a significant economic effect on small entities, including businesses, nonprofit organizations, and governmental jurisdictions. If so, agencies must consider alternatives that minimize that effect.

Using information about the cost of similar provisions, CBO estimates that implementing the bill would cost $2 million over the 2025-2030 period. CBO expects that the SEC would need about five employees, at an average annual cost of $330,000 for each employee, to carry out the study and amend the rules. 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 2025-2030 period would be negligible, assuming appropriation actions consistent with that authority.

If the SEC increases fees to offset the costs associated with implementing the bill, H.R. 3382 would increase the cost of an existing mandate on private entities required to pay those assessments. CBO estimates that the incremental cost of the mandate would be small and would fall well below the threshold established in the Unfunded Mandates Reform Act (UMRA) for private-sector mandates ($206 million in 2025, adjusted annually for inflation).

H.R. 3382 contains no intergovernmental mandates as defined in UMRA.

The CBO staff contacts for this estimate are Aurora Swanson (for federal costs) and Rachel Austin (for mandates). The estimate was reviewed by H. Samuel Papenfuss, Deputy Director of Budget Analysis.