H.R. 3357, Enhancing Multi-Class Share Disclosures Act

H.R. 3357 would direct the Securities and Exchange Commission (SEC) to issue rules requiring securities issuers with multi-class stock structures to disclose to all shareholders information about the shares of all classes of securities owned by and the voting power of particular shareholders specified in the bill. A multi-class stock structure is one in which a company offers two or more classes of securities with different voting rights in an election of directors.

Using information about the cost of similar rulemakings, CBO estimates that implementing H.R. 3357 would cost $1 million over the 2025-2030 period. CBO expects the commission would need three employees, at an average annual cost of $330,000 for each employee, to issue rules over one year. 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 increased fees to offset the costs for rulemaking as required by the bill, H.R. 3357 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 ($206 million in 2025, adjusted annually for inflation).

The bill would not impose any intergovernmental mandates.

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.