Page:United States Statutes at Large Volume 111 Part 1.djvu/717

 .^ Vi-,-»._j«*''-^ PUBLIC LAW 105-33 —AUG. 5, 1997 111 STAT. 693 "(iii) payments of interest and other payments by or to the Government over the Hfe of the loan after adjusting for estimated defaults, prepa3anents, 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: 2 USC 66lc. (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;".

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