[Federal Register Volume 89, Number 17 (Thursday, January 25, 2024)]
[Proposed Rules]
[Pages 4880-4884]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-01243]


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DEPARTMENT OF TRANSPORTATION

Office of Secretary of Transportation

49 CFR Parts 80 and 260

[Docket Number DOT-OST-2024-0006]
RIN 2105-AE69


Amendment to the Railroad Rehabilitation and Improvement 
Financing Program and Transportation Infrastructure Finance and 
Innovation Act Program Regulations

AGENCY: Office of the Secretary of Transportation, Department of 
Transportation.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Department of Transportation (``DOT'' or ``the 
Department'') proposes to implement provisions of the Infrastructure 
Investment and Jobs Act (the ``IIJA'') that expand or modify the 
authorities applicable to the Railroad Rehabilitation and Improvement 
Financing (``RRIF'') and Transportation Infrastructure

[[Page 4881]]

Finance and Innovation Act (``TIFIA'') programs, and make other 
necessary updates, by amending the RRIF program and TIFIA program 
regulations. DOT solicits written comments on this rulemaking.

DATES: Written comments will be accepted until February 26, 2024. We 
will consider late comments to the extent practicable.

ADDRESSES: Your comments may be submitted by one of the following 
methods:
    <bullet> Federal eRulemaking Portal: Go to www.regulations.gov and 
follow the instructions for submitting comments.
    <bullet> Mail: Send comments to Docket Operations, U.S. Department 
of Transportation, 1200 New Jersey Avenue SE, Room W12-140, Washington, 
DC 20590.
    <bullet> Hand-Delivery or Courier: Take comments to Docket 
Operations in Room W12-140 on the ground floor of the West Building at 
1200 New Jersey Avenue SE, Washington, DC between 9 a.m. to 5 p.m., 
Monday through Friday, except Federal holidays.
    Instructions: All comments must include the agency name and docket 
number or Regulation Identifier Number (``RIN'') for this rulemaking. 
To avoid duplication, please submit comments using only one of the 
above methods. For detailed instructions on submitting comments and 
additional information on the rulemaking process, see the section 
entitled Public Comment Procedures.

FOR FURTHER INFORMATION CONTACT: For technical questions concerning 
this proposed rule, contact Tanya Langman of the National Surface 
Transportation and Innovative Finance Bureau at 1200 New Jersey Avenue 
SE, Washington, DC 20590, (202) 366-2300, email at 
<a href="/cdn-cgi/l/email-protection#d7a3b6b9aeb6f9bbb6b9b0bab6b997b3b8a3f9b0b8a1"><span class="__cf_email__" data-cfemail="a5d1c4cbdcc48bc9c4cbc2c8c4cbe5c1cad18bc2cad3">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:
I. Introduction and Background
II. Discussion of Proposed Rule
    A. Interest Rate Setting for TIFIA and RRIF Obligations With a 
Long Tenor
    B. Interest Rate Spread on RRIF Direct Loans and Loan Guarantees 
With a Positive CRP
    C. Inclusion in Transportation Plans and Programs
III. Public Comment Procedures
IV. Regulatory Review
    A. Executive Order 12866
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act of 1995
    E. Executive Order 12988
    F. Executive Order 13175
    G. Executive Order 13132

I. Introduction and Background

    The National Surface Transportation and Innovative Finance Bureau, 
also known as the Build America Bureau (the ``Bureau''), administers 
certain Department of Transportation lending programs, including under 
Title V of the Railroad Revitalization and Regulatory Reform Act of 
1976, as amended (the ``RRIF Act''),\1\ and the Transportation 
Infrastructure Finance and Innovation Act of 1998, as amended (the 
``TIFIA Act,'' and together with the RRIF Act, the ``Acts'').\2\ The 
RRIF Act authorizes the Secretary of Transportation (the ``Secretary'') 
to make direct loans and loan guarantees for eligible projects that 
meet enumerated criteria,\3\ and the TIFIA Act authorizes the Secretary 
to issue secured loans, loan guarantees, and lines of credit for 
eligible projects that meet statutory factors.\4\ The Bureau has 
administered both programs pursuant to their respective regulations set 
forth at 49 CFR part 260 (the ``RRIF Rule'') and 49 CFR part 80 (the 
``TIFIA Rule,'' and together with the RRIF Rule, the ``Rules''), as 
well as additional criteria in notices of funding, which are issued and 
updated from time to time, and guidance \5\ to applicants.
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    \1\ Public Law 94-210, title V (1976), codified by Public Law 
117-58 (2021) as chapter 224 of title 49; 49 U.S.C. Ch. 224.
    \2\ Public Law 105-178, sec. 1504-10 (1998); 23 U.S.C. Ch. 6.
    \3\ 49 U.S.C. 22402(b)(1).
    \4\ 23 U.S.C. 603(a), 603(e), and 604(a).
    \5\ https://www.transportation.gov/buildamerica/financing/program-guide.
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    The IIJA \6\ was enacted in November 2021, as a historic investment 
in the Nation's infrastructure. That investment includes the expansion 
and modification of the authorities in the Acts. Specifically, the IIJA 
authorizes a longer term for both RRIF and TIFIA obligations than was 
previously allowed,\7\ expands the definition of projects eligible for 
TIFIA funding,\8\ and adds a requirement that the Secretary return 
credit risk premiums paid to the Government plus accrued interest to 
the source of the payment when all obligations of a loan or loan 
guarantee have been satisfied.\9\ The Bureau proposes to implement 
these provisions of the IIJA by amending the Rules.
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    \6\ Public Law 117-58 (2021).
    \7\ Public Law 117-58, sec. 12001(e)(2), 21301(d)(6) (2021).
    \8\ Public Law 117-58, sec. 12001(a) (2021).
    \9\ Public Law 117-58, sec. 21301(d)(5)(B) (2021).
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II. Discussion of Proposed Rule

A. Interest Rate Setting for TIFIA and RRIF Obligations With a Long 
Tenor

    The IIJA amends both Acts to allow obligations with long tenors. 
Section 21301(d)(6) of the IIJA amends Section 22402(g)(1) of the RRIF 
Act to allow the Secretary to issue direct loans or loan guarantees 
with a term that is not longer than the shorter of:

    (A) 75 years after the date of substantial completion of the 
project;
    (B) the estimated useful life of the rail equipment or 
facilities to be acquired, rehabilitated, improved, developed, or 
established, subject to an adequate determination of long-term risk; 
or
    (C) for projects determined to have an estimated useful life 
that is longer than 35 years, the period that is equal to the sum 
of--
    (i) 35 years; and
    (ii) the product of--
    (I) the difference between the estimated useful life and 35 
years; multiplied by
    (II) 75 percent.\10\
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    \10\ 49 U.S.C. 22402(g)(1), as amended through Public Law 117-
58, sec. 21301(d)(6) (2021).

    Similarly, capital assets with an estimated life of more than 50 
years may be issued a TIFIA secured loan or loan guarantee with a final 
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maturity date that is the lesser of:

    (i) 75 years after the date of substantial completion of the 
project; or
    (ii) 75 percent of the estimated useful life of the capital 
asset.\11\
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    \11\ 23 U.S.C. 603(b)(5)(C), as added by Public Law 117-58, sec. 
12001(e)(2) (2021).

    The RRIF Act, and the TIFIA Act, except as provided in 23 U.S.C. 
603(b)(4)(B)-(C), require that the interest rate on a loan be not less 
than the yield on United States Treasury securities of a similar 
maturity.\12\ Both RRIF and TIFIA obligations currently bear interest 
at a fixed rate, calculated by adding one basis point (.01%) to the 
interest rate of securities of a similar maturity as published, on the 
execution date of the loan agreement, in the United States Treasury 
Bureau of Public Debt's daily rate table for State and Local Government 
Series (SLGS) securities. The daily rate table for SLGS securities, 
however, does not currently post rates for maturities longer than 30-40 
years.
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    \12\ 49 U.S.C. 22402(e); 23 U.S.C. 603(b)(4)(A).
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    The Bureau proposes to amend the Rules to address compliance with 
these interest rate requirements for RRIF or TIFIA obligations if the 
United States Treasury does not post the yield for securities of a 
similar maturity. The amended Rules will require an interest rate 
spread on any RRIF or TIFIA loan with both: (1) a final maturity date 
that is more than 35 years after the date of substantial completion of 
the project; and (2) a loan term--the period beginning on the date of 
execution of the loan agreement and ending on the final maturity date--
that is more than 40 years. The interest rate will be equal to not less 
than the rate on thirty-to-forty-year SLGS securities plus an annual 
interest rate adjustment for any period of the loan term after year 40

[[Page 4882]]

through year 100, as detailed in Sec.  80.23 of this proposed 
rulemaking. This interest rate adjustment will be cumulative.
    The conceptual framework and methodology for the interest rate 
adjustment on loans with long tenors is in large part based on results 
from a working paper out of the San Francisco Federal Reserve Bank.\13\ 
Relying both on bonds with long tenors originated by other countries as 
well as an extrapolation of United States Treasury data using a 
statistical model, the paper found a difference centering around 14 
basis points between 30-year and hypothetical 50-year Treasury rates. 
This finding is further supported by both the Treasury Nominal Coupon 
\14\ and High Quality Market Corporate Bond Par Yield \15\ interest 
rate spread over the time period sampled in the Federal Reserve paper. 
The proposed annual interest rate adjustment is consistent with the 
above findings and data. A 14-basis point spread is reflected in the 
proposed rate adjustment for each year between year 40 and 50.
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    \13\ https://www.frbsf.org/wp-content/uploads/sites/4/wp2021-19.pdf.
    \14\ https://home.treasury.gov/data/treasury-coupon-issues-and-corporate-bond-yield-curves/treasury-coupon-issues.
    \15\ https://home.treasury.gov/data/treasury-coupon-issues-and-corporate-bond-yield-curve/corporate-bond-yield-curve.
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    Consistent with financial theory and historic tendencies, both the 
High Quality Market Corporate Bond Par Yield and the Treasury Nominal 
Coupon anticipate milder increases in interest rates after year 50 than 
before. Accordingly, the Bureau does not expect that the interest rates 
on hypothetical Treasury securities would grow linearly from year 51. 
Instead, the rates for such maturities would be expected to flatten out 
in the outyears. To reflect this expectation, the Bureau proposes to 
lower the interest rate adjustment in the outyears. Specifically, the 
Bureau proposes to add 0.4 basis points for each year between years 51 
and 70, and 0.2 basis points for each year between years 71 and 100. 
This tapering is consistent with the projected flattening of the 
Treasury Nominal Coupon and High Quality Market Corporate Bond yield 
curves beyond 2050.

B. Interest Rate Spread on RRIF Direct Loans and Loan Guarantees With a 
Positive CRP

    The Federal Credit Reform Act of 1990, as amended (``FCRA''),\16\ 
requires that new direct loan obligations and new loan guarantee 
commitments be made only to the extent that: (1) new budget authority 
to cover their costs is provided in advance in an appropriations Act; 
(2) a limitation on the use of funds otherwise available for the cost 
of a direct loan or loan guarantee program has been provided in advance 
in an appropriations Act; or 3) authority is otherwise provided in 
appropriation Acts.\17\ Section 22402(f) of the RRIF Act provides that 
a source of the subsidy cost \18\ may be either appropriated budget 
authority, funds from a non-Federal source, or any combination thereof. 
In the absence of appropriated budget authority for RRIF loan subsidy, 
the subsidy cost associated with any RRIF direct loan or loan guarantee 
must be provided by the borrower or project infrastructure partner, 
which includes any participant in the project.\19\ This subsidy cost, 
referred to as the credit risk premium (``CRP'') in the RRIF statute, 
is determined by estimating the total long-term cost to the Federal 
Government of the RRIF direct loan or loan guarantee.\20\ The CRP must 
be paid before the disbursements of the direct loan.\21\
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    \16\ Public Law 101-508, title XIII (1990); 2 U.S.C. 661 et seq.
    \17\ 2 U.S.C. 661c(b).
    \18\ 2 U.S.C. 661a(5)(A).
    \19\ 49 U.S.C. 22402(f)(1). Please note that Congress 
appropriated $25M to cover RRIF subsidy costs, which the Bureau 
allocated to the RRIF Express Program, as laid out in the Notice of 
Funding Opportunity published at 88 FR 35995. Congress has further 
authorized $50M per year to cover RRIF subsidy costs, but that 
funding has not yet been appropriated to the Bureau.
    \20\ 49 U.S.C. 22402(f)(2).
    \21\ 49 U.S.C. 22402(f)(4).
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    Section 21301(d)(5)(B) of the IIJA amends Section 22402(f)(7) of 
the RRIF Act to require the Secretary to ``return credit risk premiums 
paid, and interest accrued on such premiums, to the original source 
when all obligations of a loan or loan guarantee have been satisfied.'' 
\22\ However, without an appropriation from Congress to cover a loan's 
subsidy cost, under FCRA budgeting requirements a loan's CRP would be 
cost prohibitive in order to be returned to the original source. To 
avoid an outcome in which the CRP due by a borrower impedes the 
issuance of RRIF direct loans, the Bureau proposes to amend the RRIF 
Rule to add a credit spread to the interest rate charged on any RRIF 
direct loan or loan guarantee that is projected to have a positive 
subsidy cost (i.e., would require the payment of CRP). The additional 
interest would not qualify as a CRP payment and would not be returned 
to the original source once the obligation is satisfied. Amendments to 
update the TIFIA and RRIF regulations in other areas not addressed in 
this rulemaking will be included in a subsequent rulemaking at a later 
date.
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    \22\ 49 U.S.C. 22402(f)(7), as amended through Public Law 117-
58, sec. 21301(d)(5)(B) (2021).
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C. Inclusion in Transportation Plans and Programs

    The TIFIA Act requires a project to ``satisfy the applicable 
planning and programming requirements of sections 134 and 135 at such 
time as an agreement to make available a Federal credit instrument is 
entered into under the TIFIA program.'' \23\ This requirement was added 
by the Safe, Accountable, Flexible, Efficient Transportation Equity 
Act: A Legacy for Users (SAFETEA-LU).\24\ Prior to this amendment, the 
TIFIA Act included a similar, but more specific provision.\25\
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    \23\ 23 U.S.C. 602(a)(3).
    \24\ Public Law 109-59 (2005).
    \25\ The text read: ``The project--
    (A) shall be included in the State transportation plan required 
under section 135; and
    (B) at such time as an agreement to make available a Federal 
credit instrument is entered into under this subchapter, shall be 
included in the approved State transportation improvement program 
required under section 134.''
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    The TIFIA Rule was published in 1998 \26\ and section 80.13, which 
includes language about the inclusion of projects in transportation 
plans and programs, has not been amended since then. As a result, 
section 80.13 mirrors the pre-SAFETEA-LU statutory language. The Bureau 
proposes to amend the TIFIA Rule to reflect the current statutory 
requirements of 23 U.S.C. 602(a)(3).
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    \26\ 64 FR 29750 (June 2, 1999).
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III. Public Comment Procedures

    Interested persons are invited to participate in this proposed 
rulemaking by submitting data, views, and comments. Written comments 
must include the agency name and docket number or Regulation Identifier 
Number (``RIN''), RIN 2105-AE69, and should be submitted to one of the 
addresses indicated in the ADDRESSES section of this Notice of Proposed 
Rulemaking. To help the Bureau review the comments, interested persons 
are asked to refer to specific proposed rule provisions, whenever 
possible.
    The Bureau will consider all comments received before the close of 
business on the comment closing date indicated above under DATES.
    Background documents or comments received may be read at 
www.regulations.gov at any time. Follow the online instructions for 
accessing the docket or go to Docket Operations in Room W12-140 on the 
ground floor of the West Building at 1200 New Jersey Avenue SE,

[[Page 4883]]

Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, 
except Federal holidays.
    In accordance with 5 U.S.C. 553(c), DOT solicits comments from the 
public to better inform its rulemaking process. DOT posts these 
comments, without edit, including any personal information the 
commenter provides, to www.regulations.gov, as described in the system 
of records notice (DOT/ALL-14 FDMS), which can be reviewed at 
www.dot.gov/privacy. If you submit information that you believe to be 
exempt by law from public disclosure, you should submit one complete 
copy, as well as one copy from which the information claimed to be 
exempt by law from public disclosure has been deleted. DOT is 
responsible for the final determination with regard to disclosure or 
nondisclosure of the information and for treating it in accordance with 
the DOT's Freedom of Information regulations (49 CFR part 7).

IV. Regulatory Review

A. Executive Order 12866

    This proposed rule has been determined to not be a significant 
regulatory action under Executive Order 12866, ``Regulatory Planning 
and Review,'' 58 FR 51735 (October 4, 1993). Accordingly, this action 
was not subject to review under that Executive Order by the Office of 
Information and Regulatory Affairs within the Office of Management and 
Budget.

B. Rulemaking Summary, 5 U.S.C. 553(b)(4)

    As required by 5 U.S.C. 553(b)(4), a summary of this rule can be 
found in the Abstract section of the Department's Unified Agenda entry 
for this rulemaking at https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202304&RIN=2105-AE69.

C. Paperwork Reduction Act

    According to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq.), no Federal agency may collect or sponsor the collection of 
information, nor may it impose an information collection requirement 
unless it displays a currently valid Office of Management and Budget 
(OMB) control number. The Bureau received approval from OMB for use of 
its forms under OMB control number 2105-0569, with an expiration date 
of February 28, 2025. This proposed rule does not change that 
collection of information or create any collection of information, and 
therefore, is not subject to the Paperwork Reduction Act requirements.

D. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.), as amended, 
requires preparation of an initial regulatory flexibility analysis for 
any rule that by law must be proposed for public comment, unless the 
Federal agency certifies that the rule, if promulgated, will not have a 
significant economic impact on a substantial number of small entities. 
As required by Executive Order 13272, ``Proper Consideration of Small 
Entities in Agency Rulemaking,'' 67 FR 53461 (August 16, 2002), DOT 
issued procedures and policies to ensure that the potential impacts of 
its rules on small entities are properly considered during the 
rulemaking process and DOT has made its procedures and policies 
available on its website: https://www.transportation.gov/regulations/rulemaking-requirements-concerning-small-entities.
    The Bureau has evaluated the effects of this proposed action on 
small entities and has determined that the proposed rule would not have 
a significant economic impact on a substantial number of small 
entities. First, the Bureau does not expect to enter into loans with a 
substantial number of small entities. In the last five years, the 
Bureau has obligated almost 40 loans under both the RRIF and TIFIA 
programs, and no borrowers have been small entities. Given that zero 
percent of borrowers were small entities in the time period sampled, 
the Bureau does not expect that a substantial percentage of borrowers 
will be small entities in the future. Second, the Bureau doesn't 
believe that this action would have a significant economic impact. The 
changes to the TIFIA Rule related to inclusion in the transportation 
plans and programs will not have any economic impact. While the changes 
to the Rules related to long-tenored obligations will raise interest 
rates for borrowers of long-tenored obligations, this impact can be 
avoided by a borrower opting for a loan term that is less than 40 
years. A RRIF loan with a positive CRP will similarly have a higher 
interest rate, but the Bureau believes this economic impact is 
preferable to a CRP payment that is so large it is cost prohibitive. 
For those reasons, the Bureau certifies that this action would not have 
a significant economic impact on a substantial number of small 
entities.

E. Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1501 
et seq.) requires each Federal agency, to the extent permitted by law, 
to prepare a written assessment of the effects of any Federal mandate 
in a proposed or final rule that may result in the expenditure by 
state, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any one year. The proposed rule does not contain such a 
mandate; therefore, the analytical requirements of Title II of the Act 
do not apply.

F. Executive Order 12988

    Executive Order 12988, ``Civil Justice Reform,'' 61 FR 4729 
(February 7, 1996), requires that Federal agencies promulgating new 
regulations or reviewing existing regulations take steps to minimize 
litigation, eliminate ambiguity and to reduce burdens on the regulated 
public. The Bureau has reviewed this rulemaking and has determined that 
this rulemaking action conforms to the applicable standards in sections 
3(a) and 3(b)(2) of Executive Order 12988.

G. Executive Order 13175

    Consistent with Executive Order 13175, ``Consultation and 
Coordination with Indian Tribal Governments, 65 FR 67249 (Nov. 6, 
2000), DOT ensures that Federally Recognized Tribes (Tribes) are given 
the opportunity to provide meaningful and timely input regarding 
proposed Federal actions that have the potential to affect uniquely or 
significantly their respective Tribes. The Bureau has not identified 
any unique or significant effects, environmental or otherwise, on 
Tribes resulting from this proposed rule.

H. Executive Order 13132

    Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 4, 1999) 
imposes certain requirements on agencies formulating and implementing 
policies or regulations that preempt State law or that have federalism 
implications. Agencies are required to examine the constitutional and 
statutory authority supporting any action that would limit the 
policymaking discretion of the States and carefully assess the 
necessity for such actions. DOT has examined this proposed rule and has 
determined that it would not preempt State law and would not have a 
substantial direct effect on the States, on the relationship between 
the National Government and the States, or on the distribution of power 
and responsibilities among the various levels of government. No further 
action is required by Executive Order 13132.

[[Page 4884]]

List of Subjects

49 CFR Part 80

    Credit, Highways and roads, Loan programs--transportation, Mass 
transportation, Railroads.

49 CFR Part 260

    Loan programs--transportation, Railroads.

The Proposed Rule

    In consideration of the foregoing, the Bureau proposes to amend 
Subtitle B of title 49 of the Code of Regulations, to read as follows:

PART 80--CREDIT ASSISTANCE FOR SURFACE TRANSPORTATION PROJECTS

0
1. The authority citation for part 80 is amended to read as follows:

    Authority:  Secs. 1501 et seq., Pub. L. 105-178, 112 Stat. 107, 
241, as amended; 23 U.S.C. 601-611 and 315; 49 CFR 1.48 and 1.49.


Sec.  80.13   [Amended]

0
2. In Sec.  80.13:
0
a. Remove ``five'' in the introductory text of paragraph (a) and 
replace with ``three''.
0
b. Remove paragraphs (a)(1) and (a)(5) and renumber paragraphs (a)(2) 
through (a)(4) as (a)(1) through (a)(3).
0
3. Add a new Sec.  80.23 to read as follows:


Sec.  80.23   Loan terms.

    (a) The interest rate on a secured loan will be not less than the 
rate on United States Treasury securities of a similar maturity to the 
maturity of the secured loan on the date of the execution of the loan 
agreement, except as provided in paragraph (b) of this section and 
chapter 6 of title 23 of the United States Code.
    (b) If, on the date of the execution of the loan agreement, the 
United States Treasury does not post the rate of securities of a 
similar maturity to the maturity of the secured loan, the interest rate 
on any secured loan with both a final maturity date that is more than 
35 years after the date of substantial completion of the project, and a 
loan term that is more than 40 years, will be equal to not less than 
the rate on thirty-to-forty year Treasury securities plus an annual 
interest rate adjustment. The annual interest rate adjustment will be, 
cumulatively:
    (i) 1.4 basis points for each year of the loan term after year 40 
to, but not including, year 51;
    (ii) 0.4 basis points for each year of the loan term from year 51 
to, but not including, year 71; and
    (iii) 0.2 basis points for each year of the loan term from year 71 
to year 100.
    (c) For purposes of this section, ``loan term'' means the period 
beginning on the date of the execution of the loan agreement and ending 
on the final maturity date.

PART 260--REGULATIONS GOVERNING LOANS AND LOAN GUARANTEES UNDER THE 
RAILROAD REHABILITATION AND IMPROVEMENT FINANCING PROGRAM

0
4. The authority citation for part 260 is amended to read as follows:

    Authority:  49 U.S.C. 22401, 22402, 22403, 22404, 22405, 22406; 
49 CFR 1.49.

0
5. Revise Sec.  260.9 to read as follows:


Sec.  260.9   Loan terms.

    (a) The interest rate on a direct loan will be not less than the 
rate on United States Treasury securities of a similar maturity of the 
direct loan on the date of the execution of the loan agreement, except 
as described in paragraph (b) of this section and in Sec.  260.17(d).
    (b) If, on the date of the execution of the loan agreement, the 
United States Treasury does not post the rate of securities of a 
similar maturity of the direct loan, the interest rate on any direct 
loan with both a final maturity date that is more than 35 years after 
the date of substantial completion of the project, and a loan term that 
is more than 40 years, will be equal to not less than the rate on 
thirty-to-forty year Treasury securities plus an annual interest rate 
adjustment. The annual interest rate adjustment will be, cumulatively:
    (i) 1.4 basis points for each year of the loan term after year 40 
to, but not including, year 51;
    (ii) 0.4 basis points for each year of the loan term from year 51 
to, but not including, year 71; and
    (iii) 0.2 basis points for each year of the loan term from year 71 
to year 100.
    (c) For purposes of this section, ``loan term'' means the period 
beginning on the date of the execution of the loan agreement and ending 
on the final maturity date.


Sec.  260.17   [Amended]

0
6. Amend Sec.  260.17 by adding paragraph (d) to read as follows:
* * * * *
    (d) Positive Credit Risk Premium.
    (1) Where the Credit Risk Premium determined pursuant to paragraph 
(a) of this section is a positive amount, the interest rate on the 
direct loan will be equal to not less than the rate set pursuant to 
section 260.9 plus an interest rate adjustment sufficient to result in 
a Credit Risk Premium of zero dollars.
    (2) Paragraph (d)(1) of this section shall apply to a direct loan 
or loan guarantee only so long as the Act requires the Secretary to 
return Credit Risk Premiums paid on that loan or loan guarantee to the 
original source.

(Authority: Pub. L. 117-58, sec. 12001 and sec. 21301 (2021); 23 
U.S.C. 601-611 and 315; 49 U.S.C. 22401-22406; and 49 CFR 121.)

Peter Paul Montgomery Buttigieg,
Secretary, Department of Transportation.
[FR Doc. 2024-01243 Filed 1-24-24; 8:45 am]
BILLING CODE 4910-9X-P


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