[Federal Register Volume 62, Number 87 (Tuesday, May 6, 1997)]
[Rules and Regulations]
[Pages 24573-24574]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-11729]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 573
[Docket No. FR-4108-C-06]
RIN 2506-AB87
Loan Guarantee Recovery Fund; Technical Amendment to Final Rule
AGENCY: Office of the Assistant Secretary for Community Planning and
Development, HUD.
ACTION: Technical amendment to final rule.
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SUMMARY: On September 6, 1996 (61 FR 47404), HUD published a final rule
implementing section 4 of the Church Arson Prevention Act of 1996.
Specifically, the September 26, 1996 final rule established the
procedures, terms, and conditions by which HUD will guarantee loans to
assist nonprofit organizations in financing activities designed to
rebuild and rehabilitate structures, to replace and restore personal
property, and to finance other eligible activities as provided for in
the final rule. The September 6, 1996 final rule inadvertently omitted
from the list of eligible activities the refinancing of
[[Page 24574]]
existing indebtedness secured by a property which has been constructed,
rehabilitated, or reconstructed. The purpose of this document is to
make the necessary correction.
EFFECTIVE DATE: October 7, 1996.
SUPPLEMENTARY INFORMATION: On July 3, 1996, President Clinton signed
into law the ``Church Arson Prevention Act of 1996'' (Pub. L. 104-155)
(the Act). The Act provides Federal, State and local law-enforcement
agencies with the needed additional tools to address violent crimes
against places of worship, strengthens the penalties for these crimes,
and authorizes Federal assistance for rebuilding efforts. Section 4 of
the Act, entitled ``Loan Guarantee Recovery Fund,'' authorizes the
Secretary of HUD to guarantee loans made by financial institutions to
assist certain nonprofit organizations (organizations described in
section 501(c)(3) of the Internal Revenue Code of 1986) that have been
damaged as a result of acts of arson or terrorism.
On September 6, 1996 (61 FR 47404), HUD published a final rule
implementing section 4 of the Act by establishing a new 24 CFR part
573. Part 573 describes the procedures, terms, and conditions by which
HUD will guarantee loans to assist eligible nonprofit organizations.
Under Sec. 573.3, eligible borrowers may use guaranteed loan funds for
a wide range of activities. Paragraph (i) of Sec. 573.3 permits the use
of guaranteed loan funds to refinance existing indebtedness secured by
a property to be constructed, rehabilitated, or reconstructed.
Unfortunately, Sec. 573.3(i) inadvertently omitted to include the
refinancing of existing indebtedness secured by a property for which
construction, rehabilitation, or reconstruction has already begun. As
evidenced by the preamble to the September 6, 1996 final rule, HUD
intended to include such refinancings in the list of eligible
activities. For example, the summary of eligible activities set forth
in the preamble provided that guaranteed loan funds may be used for the
``refinancing of existing indebtedness'' (61 FR 47404). The summary did
not limit such refinancings to indebtedness secured by properties where
rebuilding was a future event.
Further, in justifying the need for final rulemaking without prior
public comment, HUD noted that the Department of Justice had identified
more than 40 eligible organizations whose properties had been damaged
or destroyed by acts of arson or terrorism and that those organizations
were in immediate need of loan guarantee assistance (61 FR 47404). It
was known to HUD that some of these organizations had already rebuilt
their damaged properties with loans carrying interest rates that might
have been lower with HUD loan guarantee assistance.
List of Subjects in 24 CFR Part 573
Loan programs--housing and community development, Nonprofit
organizations, Reporting and recordkeeping requirements.
Accordingly, in title 24 of the Code of Federal Regulations, part
573 is amended as follows:
1. The authority citation for part 573 continues to read as
follows:
Authority: Pub. L. 104-155, 110 Stat. 1392, 18 U.S.C. 241 note;
42 U.S.C. 3535(d).
2. In Sec. 573.3, paragraph (i) is revised to read, as follows:
Sec. 573.3 Eligible activities.
* * * * *
(i) Loans for refinancing existing indebtedness secured by a
property which has been or will be acquired, constructed, rehabilitated
or reconstructed, if such financing is determined to be appropriate to
achieve the objectives of the Act and this part.
* * * * *
Dated: May 1, 1997.
Camille E. Acevedo,
Assistant General Counsel for Regulations.
[FR Doc. 97-11729 Filed 5-5-97; 8:45 am]
BILLING CODE 4210-29-P
