H.R. 3868 would direct the Securities and Exchange Commission (SEC) to amend certain regulations that affect business development companies (BDCs) – companies that operate like a mutual fund to invest in the stocks of small, private companies and offer significant managerial assistance to the issuer. H.R. 3868 would allow BDCs to invest in advisors to investment companies and would raise the limits on the amount of leverage allowed to a BDC.
The staff of the Joint Committee on Taxation (JCT) estimates that enacting H.R. 3868 would reduce federal revenues by $95 million over the 2016-2026 period; therefore, pay-as-you-go procedures apply. CBO estimates that enacting H.R. 3868 would not affect direct spending.
CBO estimates that implementing H.R. 3868 would increase spending by the SEC by less than $500,000 per year to amend certain regulations affecting BDCs. However, the SEC is authorized to collect fees sufficient to offset its annual appropriation; therefore, CBO estimates that the net effect on discretionary spending would be negligible.
CBO and JCT estimate that enacting the legislation would not increase net direct spending or on-budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2027.
H.R. 3868 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would not affect the budgets of state, local, or tribal governments.
