AMENDMENTS TO TITLE V.

SEC. 10117. AMENDMENTS TO TITLE V. (a) Section 502.—Section 502 of the Federal Credit Reform Act of 1990 is amended as follows: (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. (2) In paragraph (5)(A), insert “or modification thereof” before the first comma. (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; and111 STAT. 693 “(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.”. (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.”. (5) In paragraph (5)(E), insert “the cash flows of” after “to”. (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.”. (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.”. (b) Section 504.—Section 504 of the Federal Credit Reform Act of 1990 is amended as follows: (1) Amend subsection (b)(1) to read as follows: “(1) new budget authority to cover their costs is provided in advance in an appropriations Act;”.111 STAT. 694 (2) In subsection (b)(2), strike “is enacted” and insert “has been provided in advance in an appropriations Act”. (3) In subsection (c), strike “Subsection (b)” and insert “Subsections (b) and (e)”. (4) In subsection (d)(1), strike “directly or indirectly alter the costs of outstanding direct loans and loan guarantees” and insert “modify outstanding direct loans (or direct loan obligations) or loan guarantees (or loan guarantee commitments)”. (5) Amend subsection (e) to read as follows: “(e) Modifications.—An outstanding direct loan (or direct loan obligation) or loan guarantee (or loan guarantee commitment) shall not be modified in a manner that increases its costs unless budget authority for the additional cost has been provided in advance in an appropriations Act.”. (c) Section 505.—Section 505 of the Federal Credit Reform Act of 1990 is amended as follows: (1) In subsection (c), by inserting before the period at the end of the second sentence the following: “, except that the rate of interest charged by the Secretary on lending to financing accounts (including amounts treated as lending to financing accounts by the Federal Financing Bank (hereinafter in this subsection referred to as the ‘Bank’) pursuant to section 406(b)) and the rate of interest paid to financing accounts on uninvested balances in financing accounts shall be the same as the rate determined pursuant to section 502(5)(E). For guaranteed loans financed by the Bank and treated as direct loans by a Federal agency pursuant to section 406(b), any fee or interest surcharge (the amount by which the interest rate charged exceeds the rate determined pursuant to section 502(5)(E)) that the Bank charges to a private borrower pursuant to section 6(c) of the Federal Financing Bank Act of 1973 shall be considered a cash flow to the Government for the purposes of determining the cost of the direct loan pursuant to section 502(5). All such amounts shall be credited to the appropriate financing account. The Bank is authorized to require reimbursement from a Federal agency to cover the administrative expenses of the Bank that are attributable to the direct loans financed for that agency. All such payments by an agency shall be considered administrative expenses subject to section 504(g). This subsection shall apply to transactions related to direct loan obligations or loan guarantee commitments made on or after October 1, 1991”. (2) In subsection (c), by striking “supercede” and inserting “supersede”. (3) By amending subsection (d) to read as follows: “(d) Authorization for Liquidating Accounts.—(1) Amounts in liquidating accounts shall be available only for payments resulting from direct loan obligations or loan guarantee commitments made prior to October 1, 1991, for— “(A) interest payments and principal repayments to the Treasury or the Federal Financing Bank for amounts borrowed; “(B) disbursements of loans; “(C) default and other guarantee claim payments; “(D) interest supplement payments;111 STAT. 695 “(E) payments for the costs of foreclosing, managing, and selling collateral that are capitalized or routinely deducted from the proceeds of sales; “(F) payments to financing accounts when required for modifications; “(G) administrative expenses, if— “(i) amounts credited to the liquidating account would have been available for administrative expenses under a provision of law in effect prior to October 1, 1991; and “(ii) no direct loan obligation or loan guarantee commitment has been made, or any modification of a direct loan or loan guarantee has been made, since September 30, 1991; or “(H) such other payments as are necessary for the liquidation of such direct loan obligations and loan guarantee commitments. “(2) Amounts credited to liquidating accounts in any year shall be available only for payments required in that year. Any unobligated balances in liquidating accounts at the end of a fiscal year shall be transferred to miscellaneous receipts as soon as practicable after the end of the fiscal year. “(3) If funds in liquidating accounts are insufficient to satisfy obligations and commitments of such accounts, there is hereby provided permanent, indefinite authority to make any payments required to be made on such obligations and commitments.”. (d) Section 506.—Section 506 of the Federal Credit Reform Act of 1990 is amended— (1) by striking “(a) In General.—”; (2) by striking “(1)” and inserting the following: “(a) In General.—”; (3) by striking “(2) The” and inserting the following: “(b) Study.—The”; (4) by striking “(3)” and inserting the following: “(c) Access to Data.—”; and (5) in subsection (c) (as redesignated) by striking “paragraph (2)” and inserting “subsection (b)”.