02-26163. Loan Guaranty, Insurance, and Interest Subsidy; Correction

AGENCY:

Bureau of Indian Affairs, Interior.

ACTION:

Final rule; correction.

SUMMARY:

The Office of Economic Development, Bureau of Indian Affairs published a final rule in the Federal Register of January 17, 2001. We are amending this rule to correct wording on how BIA calculates interest subsidy payments in the Loan Guaranty, Insurance and Interest Subsidy Program. The current wording is inaccurate and potentially misleading. This change will make clear that BIA retains the flexibility to recover administrative costs in establishing an interest rate.

EFFECTIVE DATE:

October 15, 2002.

FOR FURTHER INFORMATION CONTACT:

George Gover, Director, Office of Economic Development Programs, 202-208-5324.

SUPPLEMENTARY INFORMATION:

The final rule was published in the Federal Register on January 17, 2001 (66 FR 3861) with an effective date of April 17, 2001. One feature of the Program, interest subsidy, lets qualified borrowers seek reimbursement of a portion of the interest they pay on a loan guaranteed or insured by BIA. Section 103.22 addresses how BIA calculates the amount of the reimbursement. Section 103.22 is supposed to follow the statutory scheme established in 25 U.S.C. 1511, which directs BIA to pay a borrower the difference between the lender's rate and the interest rate established in 25 U.S.C. 1464 (i.e., the interest rate that BIA would charge a borrower if BIA were making the loan itself). Section 103.22 inadvertently suggests that the calculation of an interest rate under 25 U.S.C. 1464 would equal the rate the Secretary of the Treasury sets. See, 25 U.S.C. 1464(a). Section 103.22 fails to account for the flexibility that Interior has to increase this interest rate to recover associated administrative costs. See, 25 U.S.C. 1464(b). BIA has not historically used 25 U.S.C. 1464(b) to increase an interest rate established under 25 U.S.C. 1464(a), but it has never consciously abandoned the right to do so.

This document contains a correction to the final regulation, 25 CFR part 103, which was published in the Federal Register, Doc. 01-1249, on January 17, 2001 (66 FR 3861).

List of Subjects in 25 CFR 103

• Indians—Insurance
• Interest subsidy, and Loan guaranty

Accordingly, 25 CFR part 103, subpart C is corrected by making the following correcting amendment:

Subpart C—Interest Subsidy

1. The authority citation for Subpart C continues to read as follows:

Authority: 25 U.S.C. 1498, 1511.

2. In § 103.22, in the first sentence, remove the words “by the Secretary of the Treasury.”

Dated: October 8, 2002.

Neal A. McCaleb,

Assistant Secretary—Indian Affairs.