Understanding the Capital Reserve Subsidy Amount and Its Legal Implications

Q: How is the capital reserve subsidy amount calculated?

It is calculated on a net present value basis, excluding administrative costs.

Q: Why is this term important?

It helps ensure that the government can meet its financial obligations regarding federal credit programs.

Definition & Meaning

The term "capital reserve subsidy amount" refers to the budget authority needed to cover the estimated long-term costs that the U.S. government may incur from a federal credit instrument. This amount is calculated based on net present value, which means it considers the current value of future cash flows, excluding administrative expenses and any incidental impacts on government receipts or expenditures. This definition is established under the Federal Credit Reform Act of 1990.

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Legal Use & context

The capital reserve subsidy amount is primarily used in the context of federal financing and economic regulation, particularly within the aviation sector. It plays a crucial role in determining the financial implications of federal credit programs, ensuring that the government can meet its obligations without incurring unexpected costs. Legal practitioners may encounter this term when dealing with federal credit instruments, budgetary matters, or aviation-related financing. Users can manage related forms or procedures using templates available through US Legal Forms, which are drafted by qualified attorneys.

Key legal elements

Real-world examples

Here are a couple of examples of abatement:

1. A regional airline applies for a federal loan to expand its fleet. The capital reserve subsidy amount is calculated to ensure that the government can cover potential losses associated with the loan.

2. A state agency seeks funding for a new airport terminal. The capital reserve subsidy amount will be assessed to determine the budget authority required to support the federal credit instrument involved in the financing (hypothetical example).

Relevant laws & statutes

The capital reserve subsidy amount is defined under the Federal Credit Reform Act of 1990, which governs the budgeting and accounting of federal credit programs. This act outlines how to calculate budget authority and manage federal credit risks.

Comparison with related terms

Term	Definition	Difference
Capital Reserve	Funds set aside for future capital expenses.	Capital reserve subsidy amount specifically refers to the budget authority related to federal credit instruments.
Subsidy	Financial assistance given by the government to support a specific industry or activity.	The capital reserve subsidy amount is a specific calculation related to federal credit, not a general subsidy.

Common misunderstandings

What to do if this term applies to you

If you are involved in a federal credit program or seeking funding that may involve a capital reserve subsidy amount, it is essential to understand the financial implications. You can explore US Legal Forms for templates that can assist you in preparing necessary documents. If your situation is complex, consider consulting with a legal professional for tailored advice.

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Quick facts

Typical use: Federal credit programs in aviation.
Calculation basis: Net present value.
Exclusions: Administrative costs and incidental effects.

Key takeaways

Frequently asked questions

What is the capital reserve subsidy amount?

It is the budget authority needed to cover the estimated long-term costs of a federal credit instrument.