[Federal Register Volume 89, Number 102 (Friday, May 24, 2024)]
[Rules and Regulations]
[Pages 45772-45776]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-11139]


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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

49 CFR Parts 80 and 260

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


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: Final rule.

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SUMMARY: In this final rule, the Department of Transportation 
(Department) amends the Railroad Rehabilitation and Improvement 
Financing and Transportation Infrastructure Finance and Innovation Act 
program regulations to implement provisions of the Infrastructure 
Investment and Jobs Act and make other necessary updates.

DATES: Effective Date: This rule is effective on June 24, 2024.

FOR FURTHER INFORMATION CONTACT: Morteza Farajian, Executive Director, 
National Surface Transportation and Innovative Finance Bureau, 1200 New 
Jersey Avenue SE, Washington, DC 20590, (202) 366-2300, email at 
[email protected].

SUPPLEMENTARY INFORMATION: 
I. Introduction and Background
II. Public Comments on the Notice of Proposed Rulemaking and DOT's 
Responses
    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. Regulatory Review
    A. Executive Orders 12866, 13563, and 14094
    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

    This final rule establishes additional policies and procedures for 
the Railroad Rehabilitation and Improvement Financing (RRIF) program 
authorized by title V of the Railroad Revitalization and Regulatory 
Reform Act of 1976, as amended (49 U.S.C. Ch. 224; the RRIF Act) and 
the Transportation Infrastructure Finance and Innovation Act (TIFIA) 
program authorized by the Transportation Infrastructure Finance and 
Innovation Act of 1998, as amended (23 U.S.C. Ch. 6; the TIFIA Act). 
The RRIF Act authorizes the Secretary of Transportation (Secretary) to 
make direct loans and loan guarantees for eligible projects that meet 
enumerated criteria, and the TIFIA Act authorizes the Secretary to 
issue secured loans, loan guarantees, and lines of credit for eligible 
projects that meet statutory factors.
    On January 25, 2024, the Department published a notice of proposed 
rulemaking (89 FR 4880; NPRM) that proposed to amend the RRIF and TIFIA 
program regulations to implement provisions of the Infrastructure 
Investment and Jobs Act (IIJA) and make other necessary updates. Having 
considered all comments submitted to DOT in response to the NPRM, the 
Department is issuing this final rule that adopts the proposal without 
change.

II. Public Comments on the Notice of Proposed Rulemaking and DOT's 
Responses

    DOT received comments on the NPRM from nine interested parties. The 
Department carefully reviewed all comments it received. In sections 
II.A.-C. of the preamble to this final rule, the Department summarizes 
the areas of the NPRM on which it received public comment and discusses 
DOT's responses to those comments.

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

    In the NPRM, DOT proposed to require an interest rate spread on any 
RRIF or TIFIA obligation if the United States Treasury does not post 
the yield for securities of a similar maturity on the date of execution 
of the loan agreement. The spread would be applied to any RRIF or TIFIA 
loan that has both: (1) a final maturity date 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--of more than 40 years. 
The interest rate would be equal to the rate on thirty-to-forty-year 
State

[[Page 45773]]

and Local Government Series (SLGS) securities plus one basis point plus 
an annual interest rate adjustment for any period of the loan term 
after year 40 through year 100, which would be cumulative.
Public Comments
    Several commenters are supportive of the proposed methodology for 
setting the interest rate for obligations with a long tenor. One 
commenter supports the proposed rule but encourages DOT to provide more 
clarity on whether a project qualifies for the extended maturities 
authorized by the IIJA. (Pub. L. 117-58, sec. 12001(e)(2), 21301(d)(6) 
(2021).) Other commenters request specific terms for long-tenor loans.
    The America Public Transportation Association (APTA), which 
represents a diverse membership of transportation entities, supports 
the proposed rule to set interest rates, but encourages DOT to increase 
transparency about the specific criteria a project would need to meet 
to qualify for a loan with a term longer than those authorized before 
the passage of the IIJA. In addition, APTA requests that the 
flexibility currently offered under the TIFIA and RRIF programs apply 
equally to long-tenor loans.
    Rembe Urban Design + Development (Rembe) recommend a minimum 40-
year amortization period, and ideally 60-year amortization period, for 
RRIF transit-oriented development (TOD) projects. In their view, this 
extended amortization period would increase feasibility for RRIF TOD 
projects and match ``the 40-year fully amortizing non-recourse 
construction loan'' provided by other Federal loan programs.
DOT Response
    As mentioned in the NPRM, DOT administers the RRIF and TIFIA 
programs pursuant to their respective statutes and regulations, as well 
as additional criteria in notices of funding, which are issued and 
updated as necessary, and guidance \1\ to applicants. The Department 
uses criteria in the statutes, regulations, notices of funding, and 
guidance to determine the loan tenor of all projects and will do the 
same to determine whether a project qualifies for a loan with a long 
tenor. Specifically, to qualify for a loan with a term longer than 
those authorized before passage of the IIJA, the project must meet the 
criteria of either 49 U.S.C. 22402(g)(1) or 23 U.S.C. 603(b)(5)(C). In 
addition, DOT must determine with a reasonable degree of confidence 
that the loan is able to be repaid by the maturity date. Furthermore, 
each project undergoes an in-depth review of its creditworthiness and 
must satisfy applicable creditworthiness criteria. Using the above 
criteria, as well as relevant statutes, regulations, notices of 
funding, and guidance, DOT will assess each project individually to 
determine whether it qualifies for a loan with a long tenor.
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    \1\ https://www.transportation.gov/buildamerica/financing/program-guide.
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    RRIF loans or loan guarantees, including those for TOD projects, 
may be structured to allow for a 40-year, or longer, amortization 
period, if such amortization period complies with the requirements of 
the RRIF statute. As mentioned in the NPRM, the Secretary shall not 
make a RRIF direct loan or loan guarantee unless repayment of the 
obligation is made within 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.

(49 U.S.C. 22402(g)(1).) In addition, payment of the RRIF direct loan 
or loan guarantee must commence no later than 5 years after the date of 
substantial completion. (49 U.S.C. 22402(j)(1).) Because of the 
variable nature of the estimated useful life and substantial completion 
of RRIF projects, not all RRIF loans will be able to support a 40-year, 
or longer, amortization period, while complying with the requirements 
of 49 U.S.C. 22402(g)(1) and (j)(1). Therefore, the Department cannot 
establish a minimum 40-year amortization schedule for any type of RRIF 
project, including TOD projects. Instead, DOT will evaluate each 
project on a project-by-project basis to determine whether it qualifies 
for a loan with a long tenor.

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

    DOT proposed to add a credit spread, equivalent to the rate needed 
to reduce the credit risk premium (CRP) to zero dollars, to the 
interest rate charged on any RRIF direct loan projected to have a 
positive subsidy cost. The additional interest would not qualify as a 
CRP payment and would not be returned to the original source once the 
obligation is satisfied.
Public Comments
    Multiple commenters are supportive of the proposal to add a credit 
spread to any RRIF obligation with a positive subsidy cost. One 
commenter supports the proposed rule but suggests that the CRP be 
waived or reduced for RRIF projects that meet certain criteria. Another 
commenter requests that the Department delay consideration of this 
proposal because the commenter believes the credit spread would prevent 
project sponsors from applying for RRIF loans.
    The American Short Line and Regional Railroad Association (ASLRRA), 
a non-profit trade association representing the interests of more than 
600 short line railroads, notes that paying an upfront CRP payment can 
be a potential challenge to borrowers and states that the proposed rule 
will support lending to short line railroads by eliminating that 
payment.
    Amtrak requests additional clarity on the implementation of the 
proposed rule, including explanations of the rate adjustment required 
to achieve zero CRP and how any future appropriations or statutory 
revisions would affect a RRIF loan with an interest rate adjustment.
    APTA urges DOT to delay consideration of this part of the proposed 
rule because it would increase the cost of RRIF loans and limit demand 
in the RRIF program. APTA also states that the proposed rule would 
prevent project sponsors from applying for RRIF loans, in part because 
the expected credit spread was not discussed in the NPRM. Finally, APTA 
notes that the proposed rule may not align with Congress's intent, as 
enacted in 49 U.S.C. 22402(f)(7).
    Rembe suggests that special consideration be given to RRIF projects 
considered catalytic and that CRP should be reduced or waived for 
certain projects. Specifically, Rembe suggests the reduction of CRP for 
RRIF projects that: (1) have a debt coverage ratio over 1.28; (2) 
provide multifamily or workforce housing; (3) have a market study that 
strongly supports the project; or (4) are public-private partnerships. 
Rembe also suggests that the DOT consider the size of a project and the 
project's ability to cover the interest rate spread in calculating that 
spread.
DOT Response
    The Department will continue to determine the applicable CRP by 
estimating the total long-term cost to the Federal Government of the 
RRIF direct

[[Page 45774]]

loan or loan guarantee. (49 U.S.C. 22402(f)(2).) To calculate the CRP 
for a RRIF obligation, the Department uses the criteria in 49 U.S.C. 
22402(f), the regulations, notices of funding, and guidance, to 
determine the net present value of expected losses due to default or 
delinquency. This calculation is then reviewed and confirmed by the 
Office of Management and Budget (OMB). OMB either concurs with the CRP, 
as calculated, or advises DOT of changes needed to the calculation to 
fully capture the estimated cost to the government of providing the 
financial assistance.
    In the NPRM, the Department proposed to add a credit spread to the 
interest rate charged on a RRIF direct loan where the calculated CRP is 
a positive amount. To determine this credit spread, the President's 
Budget rate would be adjusted to an interest level sufficient to bring 
the CRP down to zero dollars. The interest rate on the RRIF direct loan 
would then be adjusted to match the President's Budget rate credit 
spread. The interest rate will continue to be set on the date of the 
execution of the loan agreement for the RRIF direct loan or loan 
guarantee.
    The NPRM provides that removal of the requirement that the 
Department return CRP payments would remove the requirement for the 
addition of a credit spread. As mentioned above, the interest rate, 
plus any credit spread, will be calculated on the date of execution of 
the RRIF loan agreement. Therefore, the removal of the credit spread 
would apply to any RRIF loans not yet entered into, but would not 
change the requirements of an existing RRIF obligation. Similarly, any 
future appropriation from Congress to cover subsidy cost would not 
change the terms of an existing RRIF loan agreement.
    In the NPRM, DOT also addressed the fact that without an 
appropriation from Congress to cover the subsidy cost and with the 
requirement to return CRP payments, the cost of RRIF loans would 
increase and result in a CRP that would be cost prohibitive to 
borrowers. In initial calculations carried out with the assistance of 
the Department of Treasury and OMB, the Department found that the CRP 
would have to be sized to the face value of the direct loan to allow 
CRP payments, plus interest accrued, to be returned to the original 
source once the loan obligation is satisfied. Without an appropriation 
to cover the CRP, the Department calculated that a RRIF borrower would 
be required to pay a CRP payment equal to each loan disbursement, prior 
to such disbursement. DOT believes that such high CRP payments would 
prevent project sponsors from applying for RRIF loans and severely 
limit demand in the RRIF program.
    The Department proposed the credit spread to remove the barriers to 
utilization of the RRIF program created by the need to repay CRP, while 
ensuring proper accounting of the government's risk. The Department 
considered preserving optionality for borrowers and allowing each 
borrower to determine whether it is preferable to pay a high CRP, but 
have those payments returned upon satisfaction of the obligation, or to 
pay an interest rate premium. DOT determined, however, that the vast 
majority, if not all, borrowers could not afford to pay the face value 
of the RRIF direct loan to preserve repayment. This conclusion is 
supported by feedback from prospective RRIF applicants that the need to 
pay CRP contributed to their decision to not apply for a RRIF loan and 
the comment from the ASLRRA that reiterates that paying the cost of the 
loan before the loan proceeds are disbursed to the borrower is a 
challenge to borrowers.
    For these reasons, the Department has determined not to delay 
consideration of this portion of the proposal and is adopting it as 
proposed. In addition, the Department proposed to add a credit spread 
in the amount needed to result in a CRP of zero dollars. Given that the 
CRP will be $0, DOT does not plan to waive or reduce the CRP further. 
Furthermore, the Department cannot waive or reduce the subsidy cost of 
a loan.

C. Inclusion in Transportation Plans and Programs

    In the NPRM, the Department proposed to amend 49 CFR part 80 to 
delete outdated statutory language. With this change, a TIFIA project 
would only need 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 U.S.C. 602(a)(3).)
Public Comments
    The Airports Council International--North America (ACI-NA), 
representing local, regional, and state governing bodies that own and 
operate commercial airports in the United States and Canada, believes 
that FAA's Master Plan and Airport Layout Plan approval processes 
should be sufficient to enable airports to meet the requirements of 23 
U.S.C. 602(a)(3) and requests that DOT clarify that airport projects 
included in a FAA-approved Airport Master Plan and Airport Layout Plan 
do not also need to meet the requirements of 23 U.S.C. 134 and 135.
    APTA supports the objective to revise the TIFIA regulations to 
comply with 23 U.S.C. 602(a)(3) but believes that this would be better 
accomplished by adding the statutory language to the rule. In addition, 
APTA notes that the rule should be implemented in a way that recognizes 
the unique characteristics of transit-oriented development projects.
    LOCUS, Smart Growth America's coalition of triple bottom line real 
estate developers, recommends that the final rule explicitly exclude or 
exempt TOD projects from the requirements of 23 U.S.C. 602(a)(3).
DOT Response
    The Department proposed to amend 49 CFR part 80 to align with 23 
U.S.C. 602(a)(3) and has done so by replacing outdated statutory 
language with the requirement that a project comply with 23 U.S.C. 
602(a)(3). The Department believes that the approach taken in the final 
rule addresses the concern raised by APTA in their comment suggesting 
that DOT include the language of the current statutory provision in the 
final rule at 49 CFR 80.13(a)(1). In addition, sections 134 and 135 of 
title 23 of the U.S.C., and the underlying regulations, are 
administered by the Federal Highway Administration and the Federal 
Transit Administration. The Department believes it is in the best 
interest of TIFIA borrowers to rely on the agencies with expertise in 
transportation planning and programming to determine which projects 
must satisfy the requirements of sections 134 and 135 of title 23 of 
the U.S.C.
    The Department may consider in future rulemaking whether referring 
to this and other statutory requirements in the regulations assists in 
program administration.

III. Regulatory Review

A. Executive Order 12866, 13563, and 14094

    This rule has been determined to not be a significant regulatory 
action under Executive Order (E.O.) 12866, ``Regulatory Planning and 
Review,'' 58 FR 51735 (October 4, 1993), as supplemented by E.O. 13563, 
``Improving Regulation and Regulatory Review,'' 76 FR 3821 (Jan. 21, 
2011), and amended by E.O. 14094, ``Modernizing Regulatory Review,'' 88 
FR 21870 (Apr. 11, 2023). Accordingly, this action was not subject to 
review under that Executive order by the Office of Information and 
Regulatory Affairs

[[Page 45775]]

within the Office of Management and Budget.

B. 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 OMB control number. The National 
Surface Transportation and Innovative Finance Bureau (Bureau) received 
approval from OMB for use of forms for the RRIF and TIFIA program under 
OMB control number 2105-0569, with an expiration date of February 28, 
2025. This 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.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.), as amended, 
requires preparation of a final regulatory flexibility analysis for any 
final rule that by law must first 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 action on small 
entities and has determined that the 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 
large number 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 49 CFR part 80 related to inclusion in 
the transportation plans and programs will not have any economic impact 
because the regulatory change merely updates the regulation consistent 
with existing statutory requirements. While the changes to 49 CFR parts 
80 and 260 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.
    The Department did not receive comments on its certification in the 
proposed rule and responds to comments on the economic impact of the 
rule in the preamble to the final rule.
    For the reasons discussed in this section, the Department certifies 
that this action would not have a significant economic impact on a 
substantial number of small entities.

D. 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 rule does not contain such a mandate; 
therefore, the analytical requirements of title II of the Act do not 
apply.

E. 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.

F. 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 rule.

G. 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 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.

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.

    Issued in Washington, DC, on May 16, 2024.
Peter Paul Montgomery Buttigieg,
Secretary, Department of Transportation.

    For the reasons stated in the preamble, the Department of 
Transportation amends 49 CFR parts 80 and 260 as follows:

PART 80--CREDIT ASSISTANCE FOR SURFACE TRANSPORTATION

0
1. The authority citation for part 80 is revised 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 U.S.C. 116.


0
2. Amend Sec.  80.13 by:
0
a. In the introductory text of paragraph (a), removing the word 
``five'' and adding in its place the word ``four'';
0
b. Revising paragraph (a)(1); and
0
c. Removing paragraph (a)(5).
    The revision reads as follows:


Sec.  80.13  Threshold criteria.

    (a) * * *

[[Page 45776]]

    (1) A project shall comply with 23 U.S.C. 602(a)(3).
* * * * *

0
3. Add 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 23 
U.S.C. chapter 6.
    (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 revised to read as follows:

    Authority: 49 U.S.C. 22401, 22402, 22403, 22404, 22405, 22406; 
49 U.S.C. 116.


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.

0
6. Amend Sec.  260.17 by adding paragraph (d) to read as follows:


Sec.  260.17  Credit risk premium analysis.

* * * * *
    (d)(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 Sec.  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.

[FR Doc. 2024-11139 Filed 5-23-24; 8:45 am]
BILLING CODE 4910-9X-P