(1) be an amendment or modification of any 
LIBOR Contract for the purpose of the governing 
law of such LIBOR Contract; or 
(2) prejudice, impair, or affect any person’s 
rights, interests, or obligations under or in respect 
of any LIBOR Contract. 
(e) Except as provided in either subsections (a), (b), 
or (c) of section 4, the provisions of this Act shall not 
be interpreted as creating any negative inference or nega-
tive presumption regarding the validity or enforceability 
of— 
(1) any Benchmark Replacement (including any 
method for calculating, determining, or imple-
menting an adjustment to the Benchmark Replace-
ment to account for any historical differences be-
tween LIBOR and the Benchmark Replacement) 
that is not a Board-Selected Benchmark Replace-
ment; or 
(2) any changes, alterations, or modifications to 
or in respect of a LIBOR Contract that are not 
Benchmark Replacement Conforming Changes. 
SEC. 6. PREEMPTION. 
(a) This Act and the regulations hereunder shall su-
persede any and all laws, statutes, rules, regulations, or 
standards of any State, the District of Columbia, or any
territory or possession of the United States, insofar as 
they provide for the selection or use of a Benchmark Re-
placement or related conforming changes. 
(b) No provision of State or local law that expressly 
limits the manner of calculating interest, including the 
compounding of interest, shall apply to the selection or 
use of a Board-Selected Benchmark Replacement or 
Benchmark Replacement Conforming Changes. 
SEC. 7. TRUST INDENTURE ACT OF 1939. 
Section 316 of the Trust Indenture Act of 1939 (15 
U.S.C. 77ppp) is amended— 
(1) by striking ‘‘and’’ after ‘‘of subsection (a),’’ 
in subsection (b); and 
(2) by inserting ‘‘, and except that the right of 
any holder of any indenture security to receive pay-
ment of the principal of and interest on such inden-
ture security shall not be deemed to be impaired or 
affected by any change occurring by the application 
of section 4 of the Adjustable Interest Rate 
(LIBOR) Act of 2021 to any indenture security’’ 
after ‘‘subject to such lien’’ in subsection (b). 
SEC. 8. RULEMAKING. 
Not later than 180 days after the date of enactment 
of this Act, the Board shall issue such regulations as may
be necessary or appropriate to enable it to administer and 
carry out the purposes of this Act. 
SEC. 9. REVISED CALCULATION RULE TO ADDRESS IN-
STANCES 
WHERE 
1-MONTH 
USD 
LIBOR 
CEASES OR IS NON-REPRESENTATIVE. 
Section 438(b)(2)(I) of the Higher Education Act of 
1965 (20 U.S.C. 1087–1(b)(2)(I)) is amended by adding 
at the end the following: 
‘‘(viii) REVISED
CALCULATION
RULE 
TO ADDRESS INSTANCES WHERE 1-MONTH 
USD
LIBOR
CEASES
OR
IS
NON-REP-
RESENTATIVE.— 
‘‘(I) 
SUBSTITUTE
REFERENCE 
INDEX.—The provisions of this clause 
apply to loans for which the special al-
lowance payment would otherwise be 
calculated pursuant to clause (vii). 
‘‘(II) CALCULATION
BASED
ON 
SOFR.—For loans described in sub-
clause (III) or (IV), the special allow-
ance payment described in this sub-
clause shall be substituted for the 
payment provided under clause (vii). 
For each calendar quarter, the for-
mula for computing the special allow-
ance that would otherwise apply under 
clause (vii) shall be revised by sub-
stituting ‘of the quotes of the 30-day 
Average Secured Overnight Financing 
Rate (SOFR) in effect for each of the 
days in such quarter as published by 
the Federal Reserve Bank of New 
York (or a successor administrator), 
adjusted daily by adding the Tenor 
Spread Adjustment, as that term is 
defined in the Adjustable Interest 
Rate (LIBOR) Act of 2021, for 1- 
month LIBOR contracts of 0.11448 
percent’ for ‘of the 1-month London 
Inter Bank Offered Rate (LIBOR) for 
United States dollars in effect for 
each of the days in such quarter as 
compiled and released by the British 
Bankers Association’. The special al-
lowance calculation for loans subject 
to clause (vii) shall otherwise remain 
in effect. 
‘‘(III) 
LOANS
ELIGIBLE
FOR 
SOFR-BASED
CALCULATION.—Except 
as provided in subclause (IV), the spe-
cial allowance payment calculated 
under subclause (II) shall apply to all 
loans for which the holder (or, if the 
holder acts as an eligible lender trust-
ee for the beneficial owner of the loan, 
the beneficial owner of the loan) at 
any time after the effective date of 
this clause notifies the Secretary that 
the holder or beneficial owner affirma-
tively and permanently elects to waive 
all contractual, statutory, or other 
legal rights to a special allowance paid 
under clause (vii) or to the special al-
lowance paid pursuant to any other 
formula that was previously in effect 
with respect to such loan, and accepts 
the rate described in subclause (II). 
Any such waiver shall apply to all 
loans then held, or to be held from 
time to time, by such holder or bene-
ficial owner; provided that, due to the 
need to obtain the approval of one of 
the following, demonstrated to the 
satisfaction of the Secretary—
‘‘(aa) one or more third par-
ties with a legal or beneficial in-
terest in loans eligible for the 
SOFR-based calculation, or 
‘‘(bb) a nationally recog-
nized rating organization assign-
ing a rating to a financing se-
cured by loans otherwise eligible 
for the SOFR-based calculation, 
the holder of the loan (or, if the hold-
er acts as an eligible lender trustee 
for the beneficial owner of the loan, 
the beneficial owner of the loan) may 
elect to apply the rate described in 
subclause (II) to specified loan port-
folios established for financing pur-
poses by separate notices with dif-
ferent effective dates. The special al-
lowance rate based on SOFR shall be 
effective with respect to a portfolio as 
of the first day of the calendar quar-
ter following the applicable effective 
date of the waiver received by the Sec-
retary from the holder or beneficial 
owner and shall permanently and ir-