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1 1 (October 27, 2017)

handle is hein.congrec/cbo3828 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE COST ESTIMATE October 27, 2017 H.R. 3903 Encouraging Public Offerings Act of 2017 As ordered reported by the House Committee on Financial Services on October 12, 2017 Under current law, issuers of securities are generally required to register with the Securities and Exchange Commission (SEC) prior to an initial public offering (IPO) of their securities for sale. Emerging growth companies are allowed to submit draft registration statements to the SEC for confidential review before publicly filing and also can submit draft registration statements for follow-on securities offerings within one year of an IPO. SEC's current policy guidance extends that allowance to all issuers of securities. H.R. 3903 would codify that policy guidance. Additionally, emerging growth companies are exempt from a prohibition on issuers of securities from communicating with certain potential investors about such securities without first registering them with the SEC. H.R. 3903 would expand that exemption to include all issuers of securities. Based on an analysis of information from the SEC, CBO estimates that implementing H.R. 3903 would cost less than $500,000 to update the SEC's guidance. Moreover, 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. 3903 would not affect direct spending or revenues; therefore, pay-as-you- go procedures do not apply. CBO estimates that enacting H.R. 3903 would not increase net direct spending or on- budget deficits in any of the four consecutive 10-year periods beginning in 2028. H.R. 3903 contains no intergovernmental mandates as defined in the Unfunded Mandates Reform Act (UMRA). If the SEC increases fees to offset the costs associated with implementing the bill, H.R. 3903 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 for private-sector mandates established in UMRA ($156 million in 2017, adjusted annually for inflation). The CBO staff contacts for this estimate are Stephen Rabent (for federal costs) and Logan Smith (for private-sector mandates). The estimate was approved by H. Samuel Papenfuss, Deputy Assistant Director for Budget Analysis.

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