2 U.S.C. § 661a — Definitions

Page 212 TITLE 2—THE CONGRESS § 661 1 So in original. Probably should be capitalized. pared to the authorization level for the last year in which authorization of appropriations is already provided. (Pub. L. 93–344, title IV, § 428, as added Pub. L. 104–4, title I, § 101(a)(2), Mar. 22, 1995, 109 Stat. 59.) Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective Jan. 1, 1996, or on the date 90 days after appropriations are made available as authorized under section 1516 of this title, whichever is earlier, and applicable to legislation considered on and after such date, see section 110 of Pub. L. 104–4, set out as a note under section 1511 of this title. SUBCHAPTER III—CREDIT REFORM § 661. Purposes The purposes of this subchapter are to— (1) measure more accurately the costs of Federal credit programs; (2) place the cost of credit programs on a budgetary basis equivalent to other Federal spending; (3) encourage the delivery of benefits in the form most appropriate to the needs of bene- ficiaries; and (4) improve the allocation of resources among credit programs and between credit and other spending programs. (Pub. L. 93–344, title V, § 501, as added Pub. L. 101–508, title XIII, § 13201(a), Nov. 5, 1990, 104 Stat. 1388–610.) Editorial Notes PRIOR PROVISIONS A prior section 661, Pub. L. 93–344, title VI, § 606, July 12, 1974, 88 Stat. 325, directed that Budget Committees of House and Senate study, on a continuing basis, any provisions of law which exempt agencies or programs from inclusion in the budget and make recommenda- tions from time to time with regard to terminating or modifying such provisions, prior to repeal by Pub. L. 99–177, title II, §§ 223, 275(a)(1), Dec. 12, 1985, 99 Stat. 1060, 1100, effective Dec. 12, 1985, and applicable with re- spect to fiscal years beginning after Sept. 30, 1985. A prior section 501 of Pub. L. 93–344, title V, July 12, 1974, 88 Stat. 321, was classified to section 1020 of former Title 31, prior to repeal and reenactment as section 1102 of Title 31, Money and Finance, by Pub. L. 97–258, § 5(b), Sept. 13, 1982, 96 Stat. 1068, the first section of which enacted Title 31. Statutory Notes and Related Subsidiaries SHORT TITLE For short title of title V of Pub. L. 93–344, which en- acted this subchapter, as the ‘‘Federal Credit Reform Act of 1990’’, see section 500 of Pub. L. 93–344, set out as a note under section 621 of this title. § 661a. Definitions For purposes of this subchapter— (1) The term ‘‘direct loan’’ means a disburse- ment of funds by the Government to a non- Federal borrower under a contract that re- quires the repayment of such funds with or without interest. The term includes the pur- chase of, or participation in, a loan made by another lender and financing arrangements that defer payment for more than 90 days, in- cluding the sale of a government 1 asset on credit terms. The term does not include the acquisition of a federally guaranteed loan in satisfaction of default claims or the price sup- port loans of the Commodity Credit Corpora- tion. (2) The term ‘‘direct loan obligation’’ means a binding agreement by a Federal agency to make a direct loan when specified conditions are fulfilled by the borrower. (3) The term ‘‘loan guarantee’’ means any guarantee, insurance, or other pledge with re- spect to the payment of all or a part of the principal or interest on any debt obligation of a non-Federal borrower to a non-Federal lend- er, but does not include the insurance of de- posits, shares, or other withdrawable accounts in financial institutions. (4) The term ‘‘loan guarantee commitment’’ means a binding agreement by a Federal agen- cy to make a loan guarantee when specified conditions are fulfilled by the borrower, the lender, or any other party to the guarantee agreement. (5)(A) The term ‘‘cost’’ means the estimated long-term cost to the Government of a direct loan or loan guarantee or modification there- of, calculated on a net present value basis, ex- cluding administrative costs and any inci- dental effects on governmental receipts or outlays. (B) The cost of a direct loan shall be the net present value, at the time when the direct loan is disbursed, of the following estimated cash flows: (i) loan disbursements; (ii) repayments of principal; and (iii) payments of interest and other pay- ments by or to the Government over the life of the loan after adjusting for estimated de- faults, prepayments, fees, penalties, and other recoveries; including the effects of changes in loan terms resulting from the exercise by the borrower of an option included in the loan contract. (C) The cost of a loan guarantee shall be the net present value, at the time when the guar- anteed loan is disbursed, of the following esti- mated cash flows: (i) payments by the Government to cover defaults and delinquencies, interest sub- sidies, or other payments; and (ii) payments to the Government including origination and other fees, penalties and re- coveries; including the effects of changes in loan terms resulting from the exercise by the guaranteed lender of an option included in the loan guar- antee contract, or by the borrower of an op- tion included in the guaranteed loan contract. (D) The cost of a modification is the dif- ference between the current estimate of the net present value of the remaining cash flows under the terms of a direct loan or loan guar- antee contract, and the current estimate of the net present value of the remaining cash flows under the terms of the contract, as modified. Page 213 TITLE 2—THE CONGRESS § 661b (E) In estimating net present values, the dis- count rate shall be the average interest rate on marketable Treasury securities of similar maturity to the cash flows of the direct loan or loan guarantee for which the estimate is being made. (F) When funds are obligated for a direct loan or loan guarantee, the estimated cost shall be based on the current assumptions, ad- justed to incorporate the terms of the loan contract, for the fiscal year in which the funds are obligated. (6) The term ‘‘credit program account’’ means the budget account into which an ap- propriation to cover the cost of a direct loan or loan guarantee program is made and from which such cost is disbursed to the financing account. (7) The term ‘‘financing account’’ means the non-budget account or accounts associated with each credit program account which holds balances, receives the cost payment from the credit program account, and also includes all other cash flows to and from the Government resulting from direct loan obligations or loan guarantee commitments made on or after Oc- tober 1, 1991. (8) The term ‘‘liquidating account’’ means the budget account that includes all cash flows to and from the Government resulting from direct loan obligations or loan guarantee commitments made prior to October 1, 1991. These accounts shall be shown in the budget on a cash basis. (9) The term ‘‘modification’’ means any Gov- ernment action that alters the estimated cost of an outstanding direct loan (or direct loan obligation) or an outstanding loan guarantee (or loan guarantee commitment) from the cur- rent estimate of cash flows. This includes the sale of loan assets, with or without recourse, and the purchase of guaranteed loans. This also includes any action resulting from new legislation, or from the exercise of administra- tive discretion under existing law, that di- rectly or indirectly alters the estimated cost of outstanding direct loans (or direct loan ob- ligations) or loan guarantees (or loan guar- antee commitments) such as a change in col- lection procedures. (10) The term ‘‘current’’ has the same mean- ing as in section 900(c)(9) of this title. (11) The term ‘‘Director’’ means the Director of the Office of Management and Budget. (Pub. L. 93–344, title V, § 502, as added Pub. L. 101–508, title XIII, § 13201(a), Nov. 5, 1990, 104 Stat. 1388–610; amended Pub. L. 105–33, title X, § 10117(a), Aug. 5, 1997, 111 Stat. 692.) Editorial Notes PRIOR PROVISIONS A prior section 502 of Pub. L. 93–344, title V, July 12, 1974, 88 Stat. 321, was set out as a note under section 1020 of former Title 31, prior to repeal by Pub. L. 97–258, § 5(b), Sept. 13, 1982, 96 Stat. 1068. AMENDMENTS 1997—Par. (1). Pub. L. 105–33, § 10117(a)(1), inserted ‘‘and financing arrangements that defer payment for more than 90 days, including the sale of a government asset on credit terms’’ after ‘‘another lender’’. Par. (5)(A). Pub. L. 105–33, § 10117(a)(2), inserted ‘‘or modification thereof’’ after ‘‘or loan guarantee’’. Par. (5)(B), (C). Pub. L. 105–33, § 10117(a)(3), added sub- pars. (B) and (C) and struck out former subpars. (B) and (C) which read as follows: ‘‘(B) The cost of a direct loan shall be the net present value, at the time when the direct loan is disbursed, of the following cash flows: ‘‘(i) loan disbursements; ‘‘(ii) repayments of principal; and ‘‘(iii) payments of interest and other payments by or to the Government over the life of the loan after adjusting for estimated defaults, prepayments, fees, penalties and other recoveries. ‘‘(C) The cost of a loan guarantee shall be the net present value when a guaranteed loan is disbursed of the cash flow from— ‘‘(i) estimated payments by the Government to cover defaults and delinquencies, interest subsidies, or other payments, and ‘‘(ii) the estimated payments to the Government in- cluding origination and other fees, penalties and re- coveries.’’ Par. (5)(D). Pub. L. 105–33, § 10117(a)(4), amended sub- par. (D) generally. Prior to amendment, subpar. (D) read as follows: ‘‘Any Government action that alters the estimated net present value of an outstanding di- rect loan or loan guarantee (except modifications with- in the terms of existing contracts or through other ex- isting authorities) shall be counted as a change in the cost of that direct loan or loan guarantee. The calcula- tion of such changes shall be based on the estimated present value of the direct loan or loan guarantee at the time of modification.’’ Par. (5)(E). Pub. L. 105–33, § 10117(a)(5), inserted ‘‘the cash flows of’’ after ‘‘similar maturity to’’. Par. (5)(F). Pub. L. 105–33, § 10117(a)(6), added subpar. (F). Pars. (9) to (11). Pub. L. 105–33, § 10117(a)(7), added pars. (9) and (10) and redesignated former par. (9) as (11). § 661b. OMB and CBO analysis, coordination, and review (a) In general For the executive branch, the Director shall be responsible for coordinating the estimates re- quired by this subchapter. The Director shall consult with the agencies that administer direct loan or loan guarantee programs. (b) Delegation The Director may delegate to agencies author- ity to make estimates of costs. The delegation of authority shall be based upon written guide- lines, regulations, or criteria consistent with the definitions in this subchapter. (c) Coordination with Congressional Budget Of- fice In developing estimation guidelines, regula- tions, or criteria to be used by Federal agencies, the Director shall consult with the Director of the Congressional Budget Office. (d) Improving cost estimates The Director and the Director of the Congres- sional Budget Office shall coordinate the devel- opment of more accurate data on historical per- formance of direct loan and loan guarantee pro- grams. They shall annually review the perform- ance of outstanding direct loans and loan guar- antees to improve estimates of costs. The Office of Management and Budget and the Congres- sional Budget Office shall have access to all agency data that may facilitate the develop- ment and improvement of estimates of costs.