Title 2 — The Congress

Chapter 17A — Congressional Budget and Fiscal Operations

§ 661a. Definitions

Statutory text

For purposes of this subchapter—

The term “direct loan” means a disbursement of funds by the Government to a non-Federal borrower under a contract that requires the repayment of such funds with or without interest. The term includes the purchase of, or participation in, a loan made by another lender and financing arrangements that defer payment for more than 90 days, including 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 support loans of the Commodity Credit Corporation.

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.

The term “loan guarantee” means any guarantee, insurance, or other pledge with respect 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 lender, but does not include the insurance of deposits, shares, or other withdrawable accounts in financial institutions.

The term “loan guarantee commitment” means a binding agreement by a Federal agency to make a loan guarantee when specified conditions are fulfilled by the borrower, the lender, or any other party to the guarantee agreement.

The term “cost” means the estimated long-term cost to the Government of a direct loan or loan guarantee or modification thereof, calculated on a net present value basis, excluding administrative costs and any incidental effects on governmental receipts or outlays.

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:

loan disbursements;

repayments of principal; and

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;

including the effects of changes in loan terms resulting from the exercise by the borrower of an option included in the loan contract.

The cost of a loan guarantee shall be the net present value, at the time when the guaranteed loan is disbursed, of the following estimated cash flows:

payments by the Government to cover defaults and delinquencies, interest subsidies, or other payments; and

payments to the Government including origination and other fees, penalties and recoveries;

including the effects of changes in loan terms resulting from the exercise by the guaranteed lender of an option included in the loan guarantee contract, or by the borrower of an option included in the guaranteed loan contract.

The cost of a modification is the difference between the current estimate of the net present value of the remaining cash flows under the terms of a direct loan or loan guarantee contract, and the current estimate of the net present value of the remaining cash flows under the terms of the contract, as modified.

In estimating net present values, the discount 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.

When funds are obligated for a direct loan or loan guarantee, the estimated cost shall be based on the current assumptions, adjusted to incorporate the terms of the loan contract, for the fiscal year in which the funds are obligated.

The term “credit program account” means the budget account into which an appropriation 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.

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 October 1, 1991.

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.

The term “modification” means any Government 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 current 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 administrative discretion under existing law, that directly or indirectly alters the estimated cost of outstanding direct loans (or direct loan obligations) or loan guarantees (or loan guarantee commitments) such as a change in collection procedures.

The term “current” has the same meaning as in section 900(c)(9) of this title.

The term “Director” means the Director of the Office of Management and Budget.

Footnotes

1 So in original. Probably should be capitalized.

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1990
Pub. L. 93–344 title V § 502 · 88 Stat. 297
Enacted · 2 U.S.C. § 661a
Pub. L. 93–344, title V, § 502, as added Pub. L. 101–508, title XIII, § 13201(a), Nov. 5, 1990, 104 Stat. 1388–610
Source evidence
Code source credit
Pub. L. 93–344, title V, § 502, as added Pub. L. 101–508, title XIII, § 13201(a), Nov. 5, 1990, 104 Stat. 1388–610
Enacted provision · exact public law section
Sec. 502. (a) As soon as practicable, the President shall prepare 31 USC 1020 note. Budget estimates and proposed legislation, submittal to Congress. and submit to the Congress— (1) after consultation with the Committees on Appropriations of the House of Representatives and the Senate, budget estimates for the United States Government for the period commencing July 1, 1976, and ending on September 30, 1976, in such form and detail as he may determine; and (2) proposed legislation he considers appropriate with respect to changes in law necessary to provide authorizations of appropriations for that period. (b) The Director of the Office of Management and Budget shall provide by regulation, order, or otherwise for the orderly transition by all departments, agencies, and instrumentalities of the United States Government and the government of the District of Columbia from the use of the fiscal year in effect on the date of enactment of this Act to the use of the new fiscal year prescribed by section 237 (a) (2) of the Revised Statutes. The Director shall prepare and submit Supra. to the Congress such additional proposed legislation as he considers necessary to accomplish this objective. (c) The Director of the Office of Management and Budget and Study. the Director of the Congressional Budget Office jointly shall conduct a study of the feasibility and advisability of submitting the Budget or portions thereof, and enacting new budget authority or portions thereof, for a fiscal year during the regular session of the Congress which begins in the year preceding the year in which such fiscal year begins. The Director of the Office of Management and Budget and Reports, submittal to Congress. the Director of the Congressional Budget Office each shall submit a report of the results of the study conducted by them, together with his own conclusions and recommendations, to the Congress not later than 2 years after the effective date of this subsection.
1997
Balanced Budget Act of 1997
Pub. L. 105–33 § 10117(a)(1) · 111 Stat. 251
Inserted · 2 U.S.C. § 661a(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”
Source evidence
Code amendment note
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”.
Enacted provision · exact public law section
(1) In the second sentence of paragraph (1), insert “and financing arrangements that defer payment for more than 90 days, including the sale of a government asset on credit terms” before the period.
1997
Balanced Budget Act of 1997
Pub. L. 105–33 § 10117(a)(2) · 111 Stat. 251
Inserted · 2 U.S.C. § 661a(5)(A)
Pub. L. 105–33, § 10117(a)(2), inserted “or modification thereof” after “or loan guarantee”
Source evidence
Code amendment note
Par. (5)(A). Pub. L. 105–33, § 10117(a)(2), inserted “or modification thereof” after “or loan guarantee”.
Enacted provision · exact public law section
(2) In paragraph (5)(A), insert “or modification thereof” before the first comma.
1997
Balanced Budget Act of 1997
Pub. L. 105–33 § 10117(a)(3) · 111 Stat. 251
1. Added · 2 U.S.C. § 661a(5)(B); 2 U.S.C. § 661a(5)(C)
  Pub. L. 105–33, § 10117(a)(3), added subpars. (B) and (C)
2. Struck · 2 U.S.C. § 661a(5)(B); 2 U.S.C. § 661a(5)(C)
  Pub. L. 105–33, § 10117(a)(3), struck out former subpars. (B) and (C) which read as follows:
Source evidence
Code amendment note
Par. (5)(B), (C). Pub. L. 105–33, § 10117(a)(3), added subpars. (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 including origination and other fees, penalties and recoveries.”
Enacted provision · exact public law section
(3) In paragraph (5), strike subparagraphs (B) and (C) and insert the following: “(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 payments by or to the Government over the life of the loan after adjusting for estimated defaults, 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 guaranteed loan is disbursed, of the following estimated cash flows: “(i) payments by the Government to cover defaults and delinquencies, interest subsidies, or other payments; and “(ii) payments to the Government including origination and other fees, penalties and recoveries; including the effects of changes in loan terms resulting from the exercise by the guaranteed lender of an option included in the loan guarantee contract, or by the borrower of an option included in the guaranteed loan contract.”.
1997
Balanced Budget Act of 1997
Pub. L. 105–33 § 10117(a)(4) · 111 Stat. 251
Amended · 2 U.S.C. § 661a(5)(D)
Pub. L. 105–33, § 10117(a)(4), amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: “Any Government action that alters the estimated net present value of an outstanding direct loan or loan guarantee (except modifications within the terms of existing contracts or through other existing authorities) shall be counted as a change in the cost of that direct loan or loan guarantee. The calculation of such changes shall be based on the estimated present value of the direct loan or loan guarantee at the time of modification.”
Source evidence
Code amendment note
Par. (5)(D). Pub. L. 105–33, § 10117(a)(4), amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: “Any Government action that alters the estimated net present value of an outstanding direct loan or loan guarantee (except modifications within the terms of existing contracts or through other existing authorities) shall be counted as a change in the cost of that direct loan or loan guarantee. The calculation of such changes shall be based on the estimated present value of the direct loan or loan guarantee at the time of modification.”
Enacted provision · exact public law section
(4) In paragraph (5), amend subparagraph (D) to read as follows: “(D) The cost of a modification is the difference between the current estimate of the net present value of the remaining cash flows under the terms of a direct loan or loan guarantee contract, and the current estimate of the net present value of the remaining cash flows under the terms of the contract, as modified.”.
1997
Balanced Budget Act of 1997
Pub. L. 105–33 § 10117(a)(5) · 111 Stat. 251
Inserted · 2 U.S.C. § 661a(5)(E)
Pub. L. 105–33, § 10117(a)(5), inserted “the cash flows of” after “similar maturity to”
Source evidence
Code amendment note
Par. (5)(E). Pub. L. 105–33, § 10117(a)(5), inserted “the cash flows of” after “similar maturity to”.
Enacted provision · exact public law section
(5) In paragraph (5)(E), insert “the cash flows of” after “to”.
1997
Balanced Budget Act of 1997
Pub. L. 105–33 § 10117(a)(6) · 111 Stat. 251
Added · 2 U.S.C. § 661a(5)(F)
Pub. L. 105–33, § 10117(a)(6), added subpar. (F)
Source evidence
Code amendment note
Par. (5)(F). Pub. L. 105–33, § 10117(a)(6), added subpar. (F).
Enacted provision · exact public law section
(6) In paragraph (5), by adding at the end the following: “(F) When funds are obligated for a direct loan or loan guarantee, the estimated cost shall be based on the current assumptions, adjusted to incorporate the terms of the loan contract, for the fiscal year in which the funds are obligated.”.
1997
Balanced Budget Act of 1997
Pub. L. 105–33 § 10117(a)(7) · 111 Stat. 251
1. Added · 2 U.S.C. § 661a(9)(11)
  Pub. L. 105–33, § 10117(a)(7), added pars. (9) and (10)
2. Redesignated · 2 U.S.C. § 661a(9)(11)
  Pub. L. 105–33, § 10117(a)(7), redesignated former par. (9) as (11)
Source evidence
Code amendment note
Pars. (9) to (11). Pub. L. 105–33, § 10117(a)(7), added pars. (9) and (10) and redesignated former par. (9) as (11).
Enacted provision · exact public law section
(7) Redesignate paragraph (9) as paragraph (11) and after paragraph (8) add the following new paragraphs: “(9) The term ‘modification’ means any Government 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 current 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 administrative discretion under existing law, that directly or indirectly alters the estimated cost of outstanding direct loans (or direct loan obligations) or loan guarantees (or loan guarantee commitments) such as a change in collection procedures. “(10) The term ‘current’ has the same meaning as in section 250(c)(9) of the Balanced Budget and Emergency Deficit Control Act of 1985.”.

10 of 10 references resolved to an enrolled provision

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 subpars. (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 including origination and other fees, penalties and recoveries.”

Par. (5)(D). Pub. L. 105–33, § 10117(a)(4), amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: “Any Government action that alters the estimated net present value of an outstanding direct loan or loan guarantee (except modifications within the terms of existing contracts or through other existing authorities) shall be counted as a change in the cost of that direct loan or loan guarantee. The calculation 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).

Credits

1990–1997 · 2 acts

1990Pub. L. 93–344, title V, § 502, as added Pub. L. 101–508, title XIII, § 13201(a), Nov. 5, 1990, 104 Stat. 1388–610
1997amended Pub. L. 105–33, title X, § 10117(a), Aug. 5, 1997, 111 Stat. 692.

Show as published

(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.)