Under current law, a business that has issued or proposes to issue stock and that has had total annual gross revenues of less than $1.07 billion during its most recently completed fiscal year is considered an emerging growth company and may retain that designation for up to five years. Emerging growth companies are exempt from certain disclosure rules of the Securities and Exchange Commission (SEC).
H.R. 6130 would establish a new designation—recent emerging growth company—that would confer an additional five-year exemption from many of those disclosure rules as long as a company continued to qualify on the basis of the other criteria.
Using information from the SEC, CBO estimates that implementing H.R. 6130 would cost less than $500,000 for the agency to amend its rules to establish the new designation. 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, assuming appropriation actions consistent with that authority.
Enacting H.R. 6130 would not affect direct spending or revenues; therefore, pay-as-you-go procedures do not apply.
CBO estimates that enacting H.R. 6130 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2029.
H.R. 6130 contains no intergovernmental mandates as defined in the Unfunded Mandates Reform Act (UMRA).
If the SEC increased fees to offset the costs associated with implementing the bill, H.R. 6130 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 less than $500,000, well below the annual threshold for private-sector mandates established in UMRA ($160 million in 2018, adjusted annually for inflation).
