H.R. 1388: Fair-Value Accounting and Budget Act

This bill, known as the Fair-Value Accounting and Budget Act, seeks to amend the 1974 Congressional Budget and Impoundment Control Act in order to require fair-value estimates for federal credit programs. Here are the key aspects of what the bill proposes:

Fair-Value Estimates for Loan Programs

The bill mandates that any estimates prepared by the Director of the Congressional Budget Office (CBO) for programs that establish or change existing loan or loan guarantee programs must include a fair-value estimate. This means that the estimates will reflect the economic value of these loans more accurately, rather than just the nominal values.

Inclusion in Budget Reports

• The CBO must include fair-value and credit reform estimates for loan programs in its publication, The Budget and Economic Outlook, or any equivalent future report. This aims to provide Congress with a clearer financial picture of these programs.

Compliance and Enforcement

When the CBO provides such fair-value estimates, the chairpersons of the Budget Committees in both the House of Representatives and the Senate are required to use these estimates to ensure compliance with budget enforcement parameters outlined in existing law.

Annual Reporting Requirement

• Starting in 2026, and in each subsequent year, the Director of the Office of Management and Budget will need to submit a report to the Congressional Budget Committees within 90 days of the President's budget submission. This report will detail fair-value estimates regarding federal credit programs.

Definition of Fair-Value

For the implementation of this section, both the CBO and the Office of Management and Budget are instructed to utilize the definition of "fair-value" as clarified by the Government Accounting Standards Board in its 2015 publication, Fair Value Measurement and Application.

Clerical Amendment

The bill also includes a clerical amendment to update the table of contents of the 1974 Act to incorporate the new section regarding fair-value credit estimates.

Relevant Companies

• None found