For purposes of this subchapter:
(1)
(A) The term "cost" means the estimated long-term cost to the Government of a direct loan or loan guarantee or modification thereof, calculated on a net present value basis, excluding administrative costs and any incidental effects on governmental receipts or outlays.
(B) The cost of a direct loan shall be the net present value, at the time when the direct loan is disbursed, of the following estimated cash flows:
(i) Loan disbursements.
(ii) Repayments of principal.
(iii) Payments of interest and other payments by or to the Government over the life of the loan after adjusting for estimated defaults, prepayments, fees, penalties, and other recoveries.
Calculation of the cost of a direct loan shall include the effects of changes in loan terms resulting from the exercise by the borrower of an option included in the loan contract.
(C) The cost of a loan guarantee shall be the net present value, at the time when the guaranteed loan is disbursed, of the following estimated cash flows:
(i) Payments by the Government to cover defaults and delinquencies, interest subsidies, or other payments.
(ii) Payments to the Government, including origination and other fees, penalties, and recoveries.
Calculation of the cost of a loan guarantee shall include the effects of changes in loan terms resulting from the exercise by the guaranteed lender of an option included in the loan guarantee contract, or by the borrower of an option included in the guaranteed loan contract.
(D) The cost of a modification is the difference between the current estimate of the net present value of the remaining cash flows under the terms of a direct loan or loan guarantee contract, and the current estimate of the net present value of the remaining cash flows under the terms of the contract, as modified.
(E) In estimating net present values, the discount rate shall be the average interest rate on marketable Treasury securities of similar maturity to the cash flows of the direct loan or loan guarantee for which the estimate is being made.
(F) When funds are obligated for a direct loan or loan guarantee, the estimated cost shall be based on the current assumptions, adjusted to incorporate the terms of the loan contract, for the fiscal year in which the funds are obligated.
(2) The term "current" has the same meaning as in section 900(c)(9) of title 2.
(3) The term "direct loan" means a disbursement of funds by the Government to a non-Federal borrower under a contract that requires the repayment of such funds. The term includes the purchase of, or participation in, a loan made by another lender and financing arrangements that defer payment for more than 90 days, including the sale of a Government asset on credit terms. The term does not include the acquisition of a federally guaranteed loan in satisfaction of default claims.
(4) The term "direct loan obligation" means a binding agreement by the Secretary to make a direct loan when specified conditions are fulfilled by the borrower.
(5) The term "intermodal" means of or relating to the connection between rail service and other modes of transportation, including all parts of facilities at which such connection is made.
(6) The term "investment-grade rating" means a rating of BBB minus, Baa 3, bbb minus, BBB(low), or higher assigned by a rating agency.
(7) The term "loan guarantee" means any guarantee, insurance, or other pledge with respect to the payment of all or a part of the principal or interest on any debt obligation of a non-Federal borrower to a non-Federal lender, but does not include the insurance of deposits, shares, or other withdrawable accounts in financial institutions.
(8) The term "loan guarantee commitment" means a binding agreement by the Secretary to make a loan guarantee when specified conditions are fulfilled by the borrower, the lender, or any other party to the guarantee agreement.
(9) The term "master credit agreement" means an agreement to make 1 or more direct loans or loan guarantees at future dates for a program of related projects on terms acceptable to the Secretary.
(10) The term "modification" means any Government action that alters the estimated cost of an outstanding direct loan (or direct loan obligation) or an outstanding loan guarantee (or loan guarantee commitment) from the current estimate of cash flows. This includes the sale of loan assets, with or without recourse, and the purchase of guaranteed loans. This also includes any action resulting from new legislation, or from the exercise of administrative discretion under existing law, that directly or indirectly alters the estimated cost of outstanding direct loans (or direct loan obligations) or loan guarantees (or loan guarantee commitments) such as a change in collection procedures.
(11) The term "project obligation" means a note, bond, debenture, or other debt obligation issued by a borrower in connection with the financing of a project, other than a direct loan or loan guarantee under this subchapter.
(12) The term "railroad" has the meaning given the term "railroad carrier" in section 20102 of title 49.
(13) The term "rating agency" means a credit rating agency registered with the Securities and Exchange Commission as a nationally recognized statistical rating organization (as defined in section 78c(a) of title 15).
(14) The term "substantial completion" means—
(A) the opening of a project to passenger or freight traffic; or
(B) a comparable event, as determined by the Secretary and specified in the terms of the direct loan or loan guarantee provided by the Secretary.
Editorial Notes
Prior Provisions
A prior section 821, Pub. L. 94–210, title V, §501, Feb. 5, 1976, 90 Stat. 66; Pub. L. 95–620, title VIII, §803(c)(1), Nov. 9, 1978, 92 Stat. 3347; Pub. L. 96–101, §24(b), Nov. 4, 1979, 93 Stat. 747; Pub. L. 96–448, title IV, §405(d), Oct. 14, 1980, 94 Stat. 1947; Pub. L. 97–35, title XI, §1162(b), Aug. 13, 1981, 95 Stat. 684; Pub. L. 99–509, title IV, §4033(c)(2), Oct. 21, 1986, 100 Stat. 1908, defined terms for purposes of this subchapter, prior to repeal by Pub. L. 105–178, title VII, §7203(a)(1), June 9, 1998, 112 Stat. 471.
Amendments
2015—Pars. (6) to (8). Pub. L. 114–94, §11602(2), (3), added par. (6) and redesignated former pars. (6) and (7) as (7) and (8), respectively. Former par. (8) redesignated (10).
Par. (9). Pub. L. 114–94, §11602(4), added par. (9).
Par. (10). Pub. L. 114–94, §11602(1), redesignated par. (8) as (10).
Pars. (11) to (14). Pub. L. 114–94, §11602(5), added pars. (11) to (14).
Effective Date of 2015 Amendment
Amendment by Pub. L. 114–94 effective Oct. 1, 2015, see section 1003 of Pub. L. 114–94, set out as a note under section 5313 of Title 5, Government Organization and Employees.
Statutory Notes and Related Subsidiaries
Savings Provision
Pub. L. 114–94, div. A, title XI, §11607(b), Dec. 4, 2015, 129 Stat. 1699, provided that: "All provisions under sections 502 through 504 [45 U.S.C. 822, 823, 836] of the Railroad Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 801 et seq.) as they existed on the day before enactment of this Act shall apply to direct loans provided by the Secretary [of Transportation] prior to the date of enactment of this Act [Dec. 4, 2015], and nothing in this title [see Tables for classification] may be construed to limit the payback of a credit risk premium, with interest accrued thereon, if a direct loan provided by the Secretary under such sections has been paid back in full, prior to the date of enactment of this Act."
Pub. L. 114–94, div. A, title XI, §11610, Dec. 4, 2015, 129 Stat. 1700, provided that:
"(a)
"(b)
Pub. L. 105–178, title VII, §7203(b)(2), June 9, 1998, 112 Stat. 477, provided that: "A transaction entered into under the authority of title V of the Railroad Revitalization and Regulatory Reform Act of 1976 (45 U.S.C. 821 et seq.) before the date of enactment of this Act [June 9, 1998] shall be administered until completion under its terms as if this Act [see Tables for classification] were not enacted."
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