H.R. 835 would codify current rules that include individuals with a net worth exceeding $1 million or an annual income exceeding $200,000 in the definition of accredited investors. In addition, the bill would expand that definition to include individuals with education or experience related to a particular investment. Accredited investors may participate in investment opportunities not available to nonaccredited investors, such as purchasing securities that are exempt from registration with the Securities and Exchange Commission (SEC).
Using information from the SEC, CBO estimates that implementing H.R. 835 would cost less than $500,000 to amend current 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 2023-2028 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. 835 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 annual threshold established in the Unfunded Mandates Reform Act (UMRA) for private-sector mandates ($198 million in 2023, adjusted annually for inflation).
H.R. 835 contains no intergovernmental mandates as defined in UMRA.