Environmental Review Procedures for Entities Assuming HUD Environmental Responsibilities

SUMMARY: This proposed rule would amend the existing environmental

regulations governing entities that assume HUD responsibilities by

making the environmental review procedures consistent under the various

programs to which these regulations apply. This proposed rule would

also make clarifying and editorial changes to the existing

environmental regulations governing entities that assume HUD

responsibilities.

DATES: Comment Due Date: November 24, 1995.

ADDRESSES: Interested persons are invited to submit comments regarding

this proposed rule to the Rules Docket Clerk, Office of General

Counsel, Room 10276, Department of Housing and Urban Development, 451

Seventh Street, SW, Washington, DC 20410-0500. Communications should

refer to the above docket number and title. Facsimile (FAX) comments

are not acceptable. A copy of each communication submitted will be

available for public inspection and copying between 7:30 a.m. and 5:30

p.m. weekdays at the above address.

FOR FURTHER INFORMATION CONTACT: Richard H. Broun, Director, Office of

Environment and Energy, Room 7240, Department of Housing and Urban

Development, 451 Seventh Street, S.W., Washington, DC 20410, telephone

(202) 708-2894. For telephone communication, contact Fred Regetz,

Environmental Review Division at (202) 708-1201. Hearing or speech-

impaired individuals may call the Federal Information Relay Service

number at 1-800-877-TDDY (1-800-877-8339) and refer to (202) 708-4346.

SUPPLEMENTARY INFORMATION:

I. Background

This proposed rule would revise and restate the procedures for

recipients of HUD assistance and other responsible entities in

applicable HUD programs to carry out environmental reviews in

accordance with the National Environmental Policy Act of 1969 (42

U.S.C. 4321-4347) (``NEPA''), the NEPA implementing regulations of the

Council on Environmental Quality (CEQ), and other NEPA related federal

laws. Applicable HUD programs include any program in which specific

statutory authority allows the environmental review responsibilities to

be assumed by responsible entities. Currently, applicable HUD programs,

and therefore those covered by part 58 only include: (1) Title I

Community Development Block Grant Programs, (2) the Rental

Rehabilitation Program and the Housing Development Grant Program (3)

the HOME programs under the Cranston-Gonzalez National Affordable

Housing Act (NAHA), (4) the homeless programs authorized by Title IV of

the Stewart B. McKinney Homeless Assistance Act, (5) Grants to States

and units of general local government for abatement of lead-based

paint, (6) Public and Indian Housing and most Section 8 programs under

Title I of the United States Housing Act for 1937, (7) Special projects

appropriated under an appropriation Act of HUD, and (8) The FHA Multi-

Family Housing Finance Agency Pilot Program under section 542(c) of the

Housing and Community Development Act of 1992.

A. Historical Perspective

On April 12, 1982, the Department published an interim rule in the

Federal Register at 47 FR 15750, revising part 58. It set forth the

environmental requirements for the Title I Community Development Block

Grant programs of the Department, as authorized by section 104(g) of

the Housing and Community Development Act of 1974 (HCD Act of 1974).

Under section 104(g), block grant recipients may assume the

environmental review responsibilities of the Secretary.

On June 7, 1984, the Department published another interim rule in

the Federal Register at 49 FR 23610. It amended part 58 to implement

section 17 of the United States Housing Act, as added by section 301 of

the Housing and Urban Rural Recovery Act of 1983. Section 17

established two new housing programs--the Rental Rehabilitation Program

(24 CFR part 511) and the Housing Development Grant Program (24 CFR

part 850) and made these programs subject to section 104(g) of the HCD

Act of 1974. In addition, the rule added Sec. 58.17. Section 58.17

implemented section 17(i)(1) of the 1937 Act by establishing conditions

under which assistance may be provided when the rehabilitation or

development would affect a property on or eligible for inclusion on the

National Register of Historic Places.

On August 10, 1988 (53 FR 30186), the Department amended part 58 by

adding paragraph (a)(6) to Sec. 58.35 to categorically exclude

maintenance and administrative activities which are undertaken to

support housing and shelter programs for the homeless including those

authorized by the Stewart B. McKinney Homeless Assistance Act (McKinney

Act). The McKinney Act was amended in 1988 by adding section 443 which

authorized the use of the environmental review provisions of section

104(g) of the HCD Act of 1974 for HUD's homeless assistance programs.

An interim rule published on June 23, 1993 (58 FR 34130) amended

part 58 to expand its applicability to the HOME program and the

homeless assistance programs under title IV of the McKinney Act. The

1993 interim rule also broadened, where appropriate, program-specific

references to various activities, responsibilities and categorical

exclusions so that they apply to activities and participants under

these two programs.

The 1993 interim rule also amended part 58 to relocate three

statutory and regulatory provisions from the list of laws and

authorities in Sec. 58.5 for which recipients must assume environmental

responsibilities. The three authorities--the Flood Disaster Protection

Act of 1973 (FDPA), the Coastal Barrier Resources Act (CBRA), and the

notice to purchasers of property in runway clear zones of a civil

airport and clear zones of a military airfield--were relocated from

Sec. 58.5 to a new Sec. 58.6. (HUD determined that, intrinsically,

these three authorities are not like the other authorities listed in

Sec. 58.5 that trigger the environmental certification, public notice

and release of funds procedures. FDPA pertains to mandatory purchase of

flood insurance protection; CBRA pertains to the direct prohibition

against use of any funds in designated coastal barriers; and the notice

to purchasers of property in runway clear zones is a disclosure

requirement.)

In this change, the Department also amended part 58 further to

incorporate categorical exclusions from NEPA review and statements

regarding the inapplicability of other environmental laws with respect

to certain activities for which comparable provisions were already made

in 24 CFR part 50. Part 50 applies to programs under which HUD itself

is responsible for performing environmental reviews, and it would be

anomalous to require a different standard of review for recipients

where similar activities are carried out under

[[Page 49467]]

programs covered by part 58. The interim rule also provided an

additional categorical exclusion and statement regarding

inapplicability of related laws for activities to assist homeownership

of existing dwelling units. (This is an important activity under the

HOME program.) This provision derived from the current categorical

exclusion from NEPA review for individual actions on one- to four-

family properties in cases under part 50, and from HUD's determination

that related laws and authorities requiring environmental reviews do

not apply to such homeownership assistance.

The provision in part 58 regarding limitations on actions pending

environmental clearance was also revised to more closely reflect (1)

the already applicable statutory prohibition against premature

commitment of HUD funds, and (2) the already applicable provision in

regulations of the Council on Environmental Quality (CEQ) (40 CFR

1506.1) prohibiting premature undertaking of activities that have

adverse environmental impact or limit the choice of reasonable

alternatives. Finally, the Department made other clarifying and

editorial revisions to part 58 in the interim rule.

On April 21, 1994, HUD published in the Federal Register (59 FR

19100) a final rule that amended 24 CFR part 585(b) to refer to HUD's

Floodplain management regulations in 24 CFR part 55.

On August 26, 1994, under the Multifamily Housing Property

Disposition Reform Act of 1994 (MHPDRA) the Department published an

interim rule in the Federal Register (59 FR 44258) that revised the

sections in 24 CFR part 58 which govern the assumption if environmental

responsibilities by recipients under the HOME Investment Partnership

Program and the Lead-based Paint Hazard Reduction and Abatement

Program.

On March 13, 1995 an interim rule was published in the Federal

Register (60 FR 13518) which provided that the part 58 procedures for

the assumption and carrying out of responsibilities for environmental

review, decisionmaking and action apply to public and Indian housing

programs, the Section 8 program other than Section 8 assistance under

24 CFR part 866 to projects with HUD-insured or HUD-held mortgages and

in connection with the disposition of HUD-owned projects special

projects, and the FHA Multifamily Housing Finance Agency Risk Sharing

Pilot Program covered by the MHPDRA amendments.

II. Discussion of Public Comments From 1993 Interim Rule

The Department received 6 public comments concerning part 58 in

response to the interim rule published on June 23, 1993 (58 FR 34130):

4 comments from local governments and 2 comments from private housing

associations. As a result of these comments, the Department proposes to

make certain revisions to the June 23, 1993 interim rule which are

incorporated into today's proposed rule. The following discussion

summarizes the comments and provides HUD's responses to those comments.

Every comment was reviewed and considered, although it may not be

specifically addressed in this preamble.

Two commenters suggested that the Department exempt recipients from

complying with Sec. 58.5 unless the activity actually has a physical

impact on the land. One commenter cited down payment and closing cost

assistance with HOME funds as an activity with no physical impact on

land, and one which should therefore not be subject to Sec. 58.5. The

Department agrees with this suggestion, and proposes to add more

specific language to Sec. 58.35(b) to restrict the applicability of

Sec. 58.5 in the case of activities which do not have any physical

impact or result in any physical change to land.

Two commenters recommended that the final rule modify part 58 to

allow recipients to enter into option agreements for property

acquisition or to commit non-federal money prior to the completion of

the environmental assessment. These commenters argued that this

restriction prevents recipients from pursuing many viable projects. An

option obtained by a recipient is allowable prior to the completion of

an environmental review and the approval of the RROF when the recipient

can cancel the option if the recipient determines that the property is

undesirable as a result of the environmental review required by 24 CFR

part 58 and the recipient has alternative sites under consideration or

option. There is no constraint on the purchase of options or properties

by third parties that have not been selected for HUD funding, have no

responsibility for the environmental review and have no say in the

approval or disapproval of the project.

Two commenters suggested that the Department exempt rehabilitation

projects of one to four units and owner-occupied rental and

homeownership projects from the environmental requirements of part 58.

This Department has provided some relief in this area in

Secs. 58.35(a)(4) and 58.35(b). A new category of activities (actions

on one to four family structures) was identified (Sec. 58.35(a)(7)) in

the interim rule published on June 23, 1993 as being Categorically

Excluded from the National Environmental Policy Act (NEPA). The

proposed rule proposes to change this section to Sec. 58.35(a)(4).

Categorically excluded activities must still comply with 24 CFR 58.5

unless, on a case-by-case basis, the recipient determines the proposed

action will not alter any conditions that would require compliance with

any of the related laws in Sec. 58.5. In such case, no compliance or

environmental review procedure is necessary. An activity that has the

potential to trigger one or more of the related laws in Sec. 58.5

cannot be exempt.

One commenter suggested that the Department exclude all

rehabilitation projects from the thresholds of Sec. 58.35(a)(4)(i),

arguing that these thresholds are not statutorily based and not

relevant to rehabilitation projects, and constitute an excessive

regulatory burden. The Department does not agree. The Department

believes that maintaining the thresholds identified in

Sec. 58.35(a)(4)(i) is necessary to determine whether NEPA applies.

B. Proposed Rule

This proposed rule would make further changes to part 58 to ensure

that the environmental review procedures are consistent for entities

assuming HUD environmental responsibilities regardless of the program

under which the activity is funded. In addition, it would make

clarifying and editorial revisions to part 58.

In Subpart A, terms, abbreviations and definitions would be

expanded to include acronyms of recently authorized programs, and would

more precisely define terms such as ``unit density,'' ``vacant

building'' and when extraordinary circumstances would warrant a higher

level review of an activity that is normally categorically excluded.

Subpart B would be changed to clarify and emphasize the role that

the responsible entity and the certifying officer play in the

assumption of the responsibilities of the Secretary.

The Department has also proposed to make changes to encourage early

program planning as required by the regulations implementing the

procedural provisions of NEPA (40 CFR 1501.2). Changes in subpart B

would emphasize (a) the need to centralize expertise in preparing

reviews, (b) the development of an environmental data base, (c)

balancing development and economic needs with environmental

[[Page 49468]]

concerns, and (d) the use of a ``tiering'' concept so that

environmental reviews or assessments can consider issues ripe for

review at various points in the development process. The main objective

of the revisions to this subpart would be to eliminate repetitive

discussions of the same issues, to allow a single review to be prepared

and adopted by multiple users, and to increase the credibility of the

environmental process.

The Department has proposed in subpart D to change the focus of

decision-making away from the project-by-project approach to encourage

communities to take environmental factors into account prior to program

and site selection. This new approach would provide for the

identification of areas which may be less suitable for development or

which would require additional costs to develop so that these factors

can be taken into consideration in making site selection decisions. It

also would allow a grantee to determine in advance of the environmental

review, those factors that are most relevant to each area and those

that are minor or of no concern. This data would be of value to all

parties proposing development in the community including private

persons, non-profits and Federal, State and local governments.

A second objective of the revision of subpart D would be to

identify programs and projects that are exempt by statute,

categorically excluded from NEPA, or determined not subject to the

related Federal authorities described in Sec. 58.5, except under

extraordinary circumstances. The list of activities that are normally

considered categorically excluded would also be expanded to reflect the

new programs and activities funded by the Department.

In this proposed rule, former subparts C, G and J would be

incorporated into subpart A. Former subpart H would appear as subpart

F, and former subpart I would appear as subpart G.

Finally, the Department has consulted with the Council on

Environmental Quality and the Environmental Protection Agency by

providing them with advance copies of this proposed rule. When a final

rule is issued, it will take into consideration the comments and

recommendations of those agencies along with the other comments

submitted.

III. Other Matters

A. Environmental Impact

A Finding of No Significant Impact (FONSI) with respect to the

environment has been made in accordance with HUD regulations at 24 CFR

part 50, which implement section 102(2)(C) of the National

Environmental Policy Act (NEPA) of 1969. The FONSI is available for

public inspection during regular business hours in the Office of

General Counsel, the Rules Docket Clerk, room 10276, 451 Seventh

Street, SW., Washington, DC 20410.

B. Executive Order 12612, Federalism

The General Counsel, as the Designated Official under section 6(a)

of Executive order 12612, Federalism, has determined that the policies

contained in this proposed rule will not have substantial direct

effects on states or their political subdivisions, or the relationship

between the Federal government and the States, or on the distribution

of power and responsibilities among the various levels of government.

As a result, the proposed rule is not subject to review under the

order. Specifically, this proposed rule modifies environmental

requirements for recipients of HUD assistance and other entities that

assume environmental review responsibilities for activities and

projects in which specific statutory authority exists to assign the

environmental review responsibilities to the recipients or to allow

States and local governments to assume those responsibilities on behalf

of certain recipients.

C. Executive Order 12606, the Family

The General Counsel, as the Designated Official under Executive

Order, The Family, has determined that this proposed rule does not have

potential for significant impact on family formation, maintenance, and

general well-being, and, thus, is not subject to review under the

order. No significant change in existing HUD policies or programs will

result from promulgation of this proposed rule, as those policies and

programs relate to family concerns.

D. Regulatory Flexibility Act

The Secretary, in accordance with the Regulatory Flexibility Act (5

U.S.C. 605(b)) has reviewed and approved this proposed rule, and in so

doing certifies that this proposed rule will not have a significant

economic impact on a substantial number of small entities. This

proposed rule would streamline part 58 and carry out the statutory

mandate of providing for the assumption of environmental review

responsibilities by certain recipients of HUD assistance or other

entities in accordance with section 104(g) of the Housing and Community

Development Act of 1974 and similar statutory provisions.

List of Subjects in 24 CFR Part 58

Community development block grants, Environmental impact

statements, Environmental protection, Grant programs--housing and

community development, Reporting and recordkeeping requirements.

Accordingly, 24 CFR part 58 is proposed to be revised to read as

follows:

PART 58--ENVIRONMENTAL REVIEW PROCEDURES FOR ENTITIES ASSUMING HUD

ENVIRONMENTAL RESPONSIBILITIES

Subpart A--Purpose, Legal Authority, Federal Laws and Authorities

Sec.

58.1 Purpose, scope and applicability.

58.2 Terms, abbreviations and definitions.

58.3 [Reserved].

58.4 Assumption authority.

58.5 Related Federal laws and authorities.

58.6 Other requirements.

58.7-58.9 [Reserved].

Subpart B--General Policy: Responsibilities of Responsible Entities

58.10 Basic environmental responsibility.

58.11 Legal capacity and performance.

58.12 Technical and administrative capacity.

58.13 Responsibilities of the certifying officer.

58.14 Interaction with State, Federal and non-Federal entities.

58.15 Tiering.

58.16 [Reserved].

58.17 Historic Preservation requirements for prior Section 17

grants.

58.18 Responsibilities of States Assuming HUD Responsibilities.

58.19-58.20 [Reserved].

Subpart C--General Policy: Environmental Review Procedures

58.20 Incorporation of NEPA regulations by reference.

58.21 Time periods.

58.22 Limitations on activities pending clearance.

58.23 Financial assistance for environmental review.

58.24-58.29 [Reserved].

Subpart D--Environmental Review Process: Documentation, Range of

Activities, Project Aggregation and Classification

58.30 Environmental Review Process.

58.31 [Reserved].

58.32 Project aggregation.

58.33 Emergencies.

58.34 Exempt activities.

58.35 Categorical exclusions.

58.36 Environmental assessments.

58.37 Environmental impact statement determinations.

58.38 Environmental review record.

58.39 [Reserved].

[[Page 49469]]

Subpart E--Environmental Review Process: Environmental Assessments

(EA's)

58.40 Preparing the environmental assessment.

58.41-58.42 [Reserved].

58.43 Dissemination and/or publication of the findings of no

significant impact.

58.44 [Reserved].

58.45 Public comment periods.

58.46 Time delays for exceptional circumstances.

58.47 Re-evaluation of assessment findings.

58.48-58.51 [Reserved].

Subpart F--Environmental Review Process: Environmental Impact Statement

Determinations

58.52 Adoption of other agencies' EISs.

58.53 Use of prior environmental impact statements.

58.54 [Reserved].

Subpart G--Environmental Review Process: Procedures for Draft, Final

and Supplemental Environmental Impact Statements

58.55 Notice of intent to prepare an EIS.

58.56 Scoping process.

58.57 Lead agency designation.

58.58 [Reserved].

58.59 Public hearings and meetings.

58.60 Preparation and filing of environmental impact statements.

58.61-58.69 [Reserved].

Subpart H--Release of Funds for Particular Projects

58.70 Notice of intent to request release of funds.

58.71 Request for release of funds and certification.

58.72 HUD or State actions on RROFs and certifications.

58.73 Objections to release of funds.

58.74 Time for objecting.

58.75 Permissible bases for objections.

58.76 Procedure for objections.

58.77 Effect of approval of certification.

58.78-58.79 [Reserved].

Authority: 12 U.S.C. 1707 note; 42 U.S.C. 1437o(i) (1) and (2),

1437x, 3535(d), 3547, 4332, 4852, 5304(g), 11402, and 12838; E.O.

11514, 35 FR 4247, 3 CFR, 1966-1970, Comp., p. 902, as amended by

E.O. 11991, 42 FR 26967, 3 CFR, 1977 Comp., p.123.

Subpart A--Purpose, Legal Authority, Federal Laws and Authorities

Sec. 58.1 Purpose, scope and applicability.

(a) Purpose. This part provides instructions and guidance to

recipients of HUD assistance and other responsible entities for

conducting an environmental review for a particular project or activity

and for obtaining approval of a Request for Release of Funds.

(b) Applicability. This part applies to activities and projects

where specific statutory authority exists for recipients or other

responsible entities to assume environmental responsibilities. Programs

and activities subject to this part include:

(1) Community Development Block Grant programs authorized by title

I of the Housing and Community Development Act of 1974, in accordance

with section 104(g) (42 U.S.C. 5304(g));

(2) The Rental Rehabilitation program and Housing Development Grant

program authorized by section 17 of the United States Housing Act of

1937, in accordance with sections 17(i)(1) and 17(i)(2) with respect to

projects and programs for which binding commitments have been entered

into prior to October 1, 1991, since section 17 was repealed by the

Cranston-Gonzalez National Affordable Housing Act enacted November 28,

1990 (42 U.S.C. 1437o(i) (1) and (2).

(3) The Emergency Shelter Grant Program, Supportive Housing program

(and its predecessors, the Supportive Housing Demonstration program

(both Transitional Housing and Permanent Housing for Homeless Persons

with Disabilities) and Supplemental Assistance for Facilities to Assist

the Homeless), Shelter Plus Care program, Safe Havens for Homeless

Individuals Demonstration Program, and Rural Homeless Housing

Assistance, authorized by title IV of the Stewart B. McKinney Homeless

Assistance Act, in accordance with section 443 (42 U.S.C. 11402);

(4) The HOME Investment Partnerships Program authorized by title II

of the Cranston-Gonzalez National Affordable Housing Act (NAHA), in

accordance with section 288 (42 U.S.C. 12838);

(5) Grants to States and units of general local government for

abatement of lead-based paint and lead dust hazards pursuant to title

II of the Departments of Veterans Affairs and Housing and Urban

Development and Independent Agencies Appropriations Act, 1992, and

grants for lead-based paint hazard reduction under section 1011 of the

Housing and Community Development Act of 1992, in accordance with

section 1011(o) (42 U.S.C. 4852(o));

(6)(i) Public Housing Programs under Title I of the United States

Housing Act of 1937, in accordance with section 26 (42 U.S.C. 1437x);

(ii) Indian Housing Programs under Title I of the United States

Housing Act of 1937, including the Mutual Help Program, in accordance

with section 26 (42 U.S.C. 1437x); and

(iii) Assistance administered by a public housing agency or Indian

housing authority under section 8 of the United States Housing Act of

1937, except for assistance provided under 24 CFR part 886, in

accordance with section 26 (42 U.S.C. 1437x).

(7) Special Projects appropriated under an appropriation act for

HUD, such as special projects under the head ``Annual Contributions for

Assisted Housing'' in Title II of various Departments of Veterans

Affairs and Housing and Urban Development, and Independent Agencies

Appropriations Acts, in accordance with section 305(c) of the

Multifamily Housing Property Disposition Reform Act of 1994 (42 U.S.C.

3547); and

(8) The FHA Multifamily Housing Finance Agency Pilot Program under

section 542(c) of the Housing and Community Development Act of 1992, in

accordance with section 542(c)(9)(12 U.S.C. 1707 note).

Sec. 58.2 Terms, abbreviations and definitions.

(a) For the purposes of this part, the following definitions

supplement the uniform terminology provided in 40 CFR part 1508:

(1) Activity means an action that a grantee or recipient puts forth

as part of an assisted project, regardless of whether its cost is to be

borne by the HUD assistance or is an eligible expense under the HUD

assistance program.

(2) Certifying officer means the official who is authorized to

execute the Request for Release of Funds and Certification and has the

legal capacity to carry out the responsibilities of Sec. 58.13.

(3) Extraordinary circumstances means a situation in which an

environmental assessment (EA) or environmental impact statement (EIS)

is not normally required, but due to unusual conditions, an EA or EIS

is appropriate. Indicators of unusual conditions are:

(i) Actions that are unique or without precedent;

(ii) Actions that are substantially similar to those that normally

require an EIS;

(iii) Actions that are likely to alter existing HUD policy or HUD

mandates; or

(iv) Actions that, due to unusual physical conditions on the site

or in the vicinity, have the potential for a significant impact on the

environment or in which the environment could have a significant impact

on users of the facility.

(4) Project means an activity, or a group of integrally related

activities, designed by the recipient to accomplish, in whole or in

part, a specific objective.

(5) Recipient means any of the following entities, when they are

eligible recipients or grantees under a program listed in Sec. 58.1(b):

[[Page 49470]]

(i) A State that does not distribute HUD assistance under the

program to a unit of general local government;

(ii) Guam, the Northern Mariana Islands, the Virgin Islands,

American Samoa, and Palau;

(iii) A unit of general local government;

(iv) An Indian tribe.

(v)(A) With respect to Public Housing Programs under

Sec. 58.1(b)(6)(i), a public housing agency;

(B) With respect to Indian Housing Programs under

Sec. 58.1(b)(6)(ii), an Indian housing authority;

(C) With respect to section 8 assistance under

Sec. 58.1(b)(6)(iii), a public housing agency or Indian housing

authority;

(vi) Any direct grantee of HUD for a special project under

Sec. 58.1(b)(7); and

(vii) With respect to the FHA Multifamily Housing Finance Agency

Pilot Program under Sec. 58.1(b)(8), a qualified housing finance

agency.

(6) Release of funds. In the case of The FHA Multifamily Housing

Finance Agency Pilot Program under Sec. 58.1(b)(8), Release of Funds,

as used in this part, refers to HUD issuance of a firm approval letter,

and Request for Release of Funds refers to a recipient's request for a

firm approval letter.

(7) Responsible entity means:

(i) With respect to environmental responsibilities under programs

listed in Sec. 58.1(b) (1) through (5), a recipient under the program.

(ii) With respect to environmental responsibilities under the

programs listed in Sec. 58.1(b) (6) through (8), a State, unit of

general local government, Indian tribe or Alaska native village, when

it is the recipient under the program. Non-recipient responsible

entities are designated as follows:

(A) For qualified housing finance agencies, the State or a unit of

general local government, Indian tribe or Alaska native village whose

jurisdiction contains the project site;

(B) For public housing agencies, the unit of general local

government within which the project is located that exercises land use

responsibility, or if HUD determines this infeasible, the county, or if

HUD determines this infeasible, the State;

(C) For non-profit organizations and other entities, the unit of

general local government, Indian tribe or Alaska native village within

which the project is located that exercises land use responsibility, or

if HUD determines this infeasible, the county, or if HUD determines

this infeasible, the State;

(D) For Indian housing authorities (outside of Alaska), the Indian

tribe in whose jurisdiction the project is located, or if the project

is located outside of a reservation, the Indian tribe that established

the authority; and

(E) For Indian housing authorities in Alaska, the Alaska native

village in whose community the project is located, or if HUD determines

this infeasible, a unit of general local government or the State, as

designated by HUD.

(8) Unit density refers to a change in the number of dwelling

units. Where a threshold is identified as a percentage change in

density that triggers review requirements, no distinction is made

between an increase or a decrease in density.

(9) Tiering means the evaluation of an action or an activity at

various points in the development process as a proposal or event

becomes ripe for an Environment Assessment or Review.

(10) Vacant building means a habitable structure that has been

vacant for more than one year.

(b) The following abbreviations are used throughout this part:

CDBG--Community Development Block Grant

CEQ--Council on Environmental Quality

EA--Environmental Assessment

EIS--Environmental Impact Statement

EPA--Environmental Protection Agency

ERR--Environmental Review Record

FONSI--Finding of No Significant Impact

HUD--Department of Housing and Urban Development

NAHA--Cranston-Gonzalez National Affordable Housing Act of 1990

NEPA--National Environmental Policy Act of 1969, as amended

NOI/EIS--Notice of Intent to Prepare an EIS

NOI/RROF--Notice of Intent to Request Release of Funds

ROD--Record of Decision

ROF--Release of Funds

RROF--Request for Release of Funds

Sec. 58.3 [Reserved].

Sec. 58.4 Assumption authority.

(a) Assumption authority for responsible entities: General.

Responsible entities shall assume the responsibility for environmental

review, decision-making, and action that would otherwise apply to HUD

under NEPA and other provisions of law that further the purposes of

NEPA, as specified in Sec. 58.5. Responsible entities that receive

assistance directly from HUD assume these responsibilities by execution

of a grant agreement with HUD and/or a legally binding document such as

the certification contained on HUD Form 7015.15, certifying to the

assumption of environmental responsibilities. When a State distributes

funds to a responsible entity, the State must provide for appropriate

procedures by which these responsible entities will evidence their

assumption of environmental responsibilities.

(b) Particular responsibilities of the States. (1) States are

recipients for purposes of directly undertaking a State project and

must assume the environmental review responsibilities for the State's

activities and those of any non-governmental entity that may

participate in the project. In this case, the State must submit the

certification and RROF to HUD for approval.

(2) In accordance with Sec. 58.18, State program agencies are

authorized to exercise HUD's responsibilities with respect to approval

of a unit of local government's environmental certification and RROF

for a HUD assisted project funded through the State, except for

projects assisted by Section 17 Rental Rehabilitation assistance and

Housing Development Grants. Approval by the State of a unit of local

government's certification and RROF satisfies the Secretary's

responsibilities under NEPA and the related laws cited in Sec. 58.5.

(3) For section 17 Rental Rehabilitation projects and Housing

Development Grants, the State program agency shall meet the

responsibilities set forth in Sec. 58.18. However, for section 17

projects, the State lacks authority to approve RROFs and therefore must

forward to the responsible HUD Field Office the local recipient's

certification and RROF, any objections to the release of funds

submitted by another party, and the State's recommendation as to

whether HUD should approve the certification and the RROF.

Sec. 58.5 Related Federal laws and authorities.

In accordance with the provisions of law cited in Sec. 58.1(b), the

responsible entity must assume responsibilities for environmental

review, decision-making and action that would apply to HUD under the

following specified laws and authorities. The responsible entity must

certify that it has complied with the requirements that would apply to

HUD under these laws and authorities and must consider the criteria,

standards, policies and regulations of these laws and authorities.

(a) Historic properties. (1) The National Historic Preservation Act

of 1966 as amended (16 U.S.C. 470 et seq.), particularly sections 106

and 110 (16 U.S.C. 470 and 4-70h-2), except as provided in Sec. 58.17

for Section 17 projects.

[[Page 49471]]

(2) Executive Order 11593, Protection and Enhancement of the

Cultural Environment, May 13, 1971 (36 FR 8921) particularly section

2(c).

(3) Federal historic preservation regulations as follows:

(i) 36 CFR part 800 with respect to HUD programs other than Urban

Development Action Grants (UDAG); and

(ii) 36 CFR part 801 with respect to UDAG.

(4) The Reservoir Salvage Act of 1960 (16 U.S.C. 469 et seq);

particularly section 3 (16 U.S.C. 469a-1); as amended by the

Archeological and Historic Preservation Act of 1974.

(b) Floodplain management and wetland protection. (1) Executive

Order 11988, Floodplain Management, May 24, 1977 (42 FR 26951), as

interpreted in HUD regulations at 24 CFR part 55, particularly section

2 (a) of the order (For an explanation of relationship between the

decision-making process in 24 CFR part 55 and this part, see Sec. 55.10

of this subtitle.)

(2) Executive Order 11990, Protection of Wetlands, May 24, 1977 (42

FR 26961) particularly sections 2 and 5.

(c) Coastal Zone Management. The Coastal Zone Management Act of

1972 (16 U.S.C. 1451 et seq.), as amended particularly section 307 (c)

and (d) (16 U.S.C. 1456 (c) and (d)).

(d) Sole source aquifers. (1) The Safe Drinking Water Act of 1974

(42 U.S.C. 201, 300(f) et seq., and 21 U.S.C. 349) as amended;

particularly section 1424(e) (42 U.S.C. 300h-3(e)).

(2) Sole Source Aquifers (Environmental Protection Agency)-- 40 CFR

part 149.

(e) Endangered species. The Endangered Species Act of 1973 (16

U.S.C. 1531 et seq) as amended particularly section 7 (16 U.S.C.

1536)).

(f) Wild and scenic rivers. The Wild and Scenic Rivers Act of 1968

(16 U.S.C. 1271 et seq) as amended particularly section 7 (b) and (c)

(16 U.S.C. 1278 (b) and (c)).

(g) Air quality. (1) The Clean Air Act (42 U.S.C. 7401 et. seq.) as

amended; particularly section 176 (c) and (d) (42 U.S.C. 7506 (c) and

(d)).

(2) Determining Conformity of Federal Actions to State or Federal

Implementation Plans (Environmental Protection Agency)--40 CFR parts 6,

51, and 93.

(h) Farmlands protection. (1) Farmland Protection Policy Act of

1981 (7 U.S.C. 4201 et seq.) particularly sections 1540(b) and 1541 (7

U.S.C. 4201(b) and 4202).

(2) Farmland Protection Policy (Department of Agriculture)--(7 CFR

part 658).

(i) HUD environmental standards. Applicable criteria and standards

specified in HUD environmental regulations (24 CFR part 51) (other than

the runway clear zone and clear zone notification requirement in 24 CFR

51.303 (a)(3)) and HUD Notice 79-33, Policy Guidance to Address the

Problems Posed by Toxic Chemicals and Radioactive Materials, September

10, 1979).

(j) Environmental justice. Executive Order 12898--Federal Actions

to Address Environmental Justice in Minority Populations and Low-Income

Populations, February 11, 1994 (59 FR 7629.)

Sec. 58.6 Other requirements.

In addition to the duties under the laws and authorities specified

in Sec. 58.5 for assumption by the responsible entity under the laws

cited in Sec. 58.1(b), the responsible entity must comply with the

following requirements. Applicability of the following requirements

does not trigger the certification and release of funds procedure under

this part or preclude exemption of an activity under Sec. 58.34(a)(11)

and/or the applicability of Sec. 58.35(b). However, the responsible

entity remains responsible for addressing the following requirements in

its ERR and meeting these requirements, where applicable, regardless of

whether the activity is exempt under Sec. 58.34 or categorically

excluded under Sec. 58.35 (a) or (b).

(a)(1) Under the Flood Disaster Protection Act of 1973, as amended

(42 U.S.C. 4001-4128), Federal financial assistance for acquisition and

construction purposes (including rehabilitation) may not be used in an

area identified by the Federal Emergency Management Agency (FEMA) as

having special flood hazards, unless:

(i) The community in which the area is situated is participating in

the National Flood Insurance Program (see 44 CFR parts 59 through 79),

or less than one year has passed since the FEMA notification regarding

such hazards; and

(ii) Flood insurance protection is to be obtained as a condition of

the approval of financial assistance to the property owner.

(2) Where a recipient provides financial assistance for acquisition

or construction purposes (including rehabilitation) for property

located in an area identified by FEMA as having special flood hazards,

the responsible entity is responsible for assuring that flood insurance

under the National Flood Insurance Program is obtained and maintained.

(3) Paragraph (a) of this section does not apply to Federal formula

grants made to a State.

(b) Pursuant to the Coastal Barrier Resources Act, as amended by

the Coastal Barrier Improvement Act of 1990 (16 U.S.C. 3501), HUD

assistance may not be used for most activities proposed in the Coastal

Barrier Resources System.

(c) In all cases involving HUD assistance, subsidy, or insurance

for the purchase or sale of an existing property in a Runway Clear Zone

or Clear Zone, as defined in 24 CFR part 51, the responsible entity

shall advise the buyer that the property is in a runway clear zone or

clear zone, what the implications of such a location are, and that

there is a possibility that the property may, at a later date, be

acquired by the airport operator. The buyer must sign a statement

acknowledging receipt of this information.

Secs. 58.7-58.9 [Reserved]

Subpart B--General Policy: Responsibilities of Responsible Entities

Sec. 58.10 Basic environmental responsibility.

In accordance with the provisions of law cited in Sec. 58.1(b), the

responsible entity must assume the environmental responsibilities for

projects under programs cited in Sec. 58.1(b), and in doing so must

comply with the provisions of NEPA and the CEQ regulations contained in

40 CFR parts 1500 through 1508, including the procedures set forth in

this part. This includes responsibility for compliance with the

applicable provisions and requirements of the Federal laws and

authorities specified in Sec. 58.5. The provisions of the CEQ

regulations in 40 CFR parts 1500 through 1508 are incorporated by

reference into this part.

Sec. 58.11 Legal capacity and performance.

(a) A responsible entity which believes that it does not have the

legal capacity to carry out the environmental responsibilities required

by this part should contact the appropriate local HUD Office or the

State for further instructions. Determinations of legal capacity will

be made on a case-by-case basis.

(b) If a public housing, Indian housing, or special project

recipient objects to the non-recipient responsible entity conducting

the environmental review on the basis of performance, timing, or

compatibility of objectives, HUD will review the facts to determine

[[Page 49472]]

who will perform the environmental review.

(c) At any time, HUD may reject the use of a responsible entity to

conduct the environmental review in a particular case on the basis of

performance, timing or compatibility of objectives, or in accordance

with Sec. 58.77(d)(1).

(d) If a responsible entity, other than a recipient, objects to

performing an environmental review, or if HUD determines that the

responsible entity should not perform the environmental review, HUD may

designate another responsible entity to conduct the review in

accordance with this part or may itself conduct the environmental

review in accordance with the provisions of 24 CFR part 50.

Sec. 58.12 Technical and administrative capacity.

The responsible entity must develop the technical and

administrative capability necessary to comply with 40 CFR parts 1500

through 1508 and the procedures of this part.

Sec. 58.13 Responsibilities of the certifying officer.

Under the terms of the certification required by Sec. 58.71, a

responsible entity's certifying officer is the ``responsible Federal

official'' as that term is used in section 102 of NEPA and in statutory

provisions cited in Sec. 58.1(b). The Certifying Officer is therefore

responsible for all the requirements of section 102 of NEPA and the

related provisions in 40 CFR parts 1500 through 1508, and 24 CFR part

58, including the related Federal authorities listed in Sec. 58.5 of

this part. The Certifying Officer must also:

(a) Represent the responsible entity and be subject to the

jurisdiction of the Federal courts. The Certifying Officer will not be

represented by the Department of Justice in court; and

(b) Ensure that the responsible entity reviews and comments on all

EISs prepared for Federal projects that may have an impact on the

recipient's program.

Sec. 58.14 Interaction with State, Federal and non-Federal entities.

A responsible entity shall consult, as appropriate, environmental

agencies, State, Federal and non-Federal entities and the public in the

preparation of an EIS, EA or other environmental reviews undertaken

under the related laws and authorities cited in Sec. 58.5 and

Sec. 58.6. The responsible entity must also cooperate with other

agencies to reduce duplication between NEPA and comparable

environmental review requirements of the State (see 40 CFR 1506.2 (b)

and (c)). The responsible entity must prepare its EAs and EISs so that

they comply with the environmental review requirements of both Federal

and State laws unless otherwise specified or provided by law. State,

Federal and local agencies may participate or act in a joint lead or

cooperating agency capacity in the preparation of joint EISs (see 40

CFR 1501.5(b) and 1501.6). A single EIS may be prepared and adopted by

multiple users to the extent that the review addresses the relevant

environmental issues and there is a written agreement between the

cooperating agencies which sets forth the coordinated and overall

responsibilities.

Sec. 58.15 Tiering.

Responsible entities may tier their environmental reviews and

assessments to eliminate repetitive discussions of the same issues at

subsequent levels of review. Tiering is appropriate when there is a

requirement to evaluate a policy or proposal in the early stages of

development or when site-specific analysis or mitigation is not

currently feasible and a more narrow or focused analysis is better at a

later date. The site specific review need only reference or summarize

the issues addressed in the broader review. The broader review should

identify and evaluate those issues ripe for decision and exclude those

issues not relevant to the policy, program or project under

consideration. The broader review should also establish the policy,

standard or process to be followed in the site specific review. The

Finding of No Significant Impact (FONSI) with respect to the broader

assessment shall include a summary of the assessment and identify the

significant issues to be considered in site specific reviews.

Subsequent site-specific reviews will not require notices or a Request

for Release of Funds unless the Certifying Officer determines that

there are unanticipated impacts or impacts not adequately addressed in

the prior review. A tiering approach can be used for meeting

environmental review requirements in areas designated for special focus

in local Consolidated Plans. Local and State Governments are encouraged

to use the Consolidated Plan process to facilitate environmental

reviews.

Sec. 58.16 [Reserved].

Sec. 58.17 Historic Preservation requirements for prior Section 17

grants.

A recipient of a section 17 grant shall comply with the historic

preservation requirements of this part and existing grant agreements.

Sec. 58.18 Responsibilities of States Assuming HUD Responsibilities.

(a) States that elect to administer a HUD program shall ensure that

the program complies with the provisions of this part. The State must:

(1) Designate the State agency or agencies which will be

responsible for carrying out the requirements and administrative

responsibilities set forth in subpart H and which will:

(i) Develop a monitoring and enforcement program for post-review

actions on environmental reviews and monitor compliance with any

environmental conditions included in the award.

(ii) Receive public notices, RROFs and certifications from

recipients pursuant to Secs. 58.70 and 58.71; accept objections from

the public and from other agencies (Sec. 58.73); and perform other

related responsibilities regarding releases of funds.

(2) Fulfill the State role in Subpart H relative to the time period

set for the receipt and disposition of comments, objections and appeals

(if any) on particular projects.

(b) States administering section 17 Programs shall assume the

responsibilities set forth in this section for overseeing the State

recipient's performance and compliance with NEPA and related Federal

authorities as set forth in this part, including receiving RROFs and

environmental certifications for particular projects from State

recipients and objections from government agencies and the public in

accordance with the procedures contained in subpart H of this part. The

State shall forward to the responsible HUD Field Office the

environmental certification, the RROF and any objections received, and

shall recommend whether to approve or disapprove the certification and

RROF.

Secs. 58.19-58.20 [Reserved].

Subpart C--General Policy: Environmental Review Procedures

Sec. 58.21 Time periods.

All time periods in this part shall be counted in calendar days.

The first day of a time period begins at 12:01 a.m. local time on the

day following the publication date of the notice which initiates the

time period.

Sec. 58.22 Limitations on activities pending clearance.

(a) A recipient may not commit HUD assistance funds under a program

listed in Sec. 58.1(b) on an activity or project until HUD or the State

has approved the recipient's RROF and the related certification of the

responsible entity. In

[[Page 49473]]

addition, until the RROF and related certification has been approved,

the recipient may not commit local (non-HUD) funds on an activity or

project under a program listed in Sec. 58.1(b) if the activity or

project would have an adverse environmental impact or limit the choice

of reasonable alternatives. If an activity is exempt under Sec. 58.34,

or not subject to Sec. 58.5 under Sec. 58.35(b), no RROF is required

and a recipient may undertake the activity immediately after the award

of the assistance.

(b) An option agreement on a proposed site or property is allowable

prior to the completion of the environmental review if the option

agreement is subject to a determination by the recipient on the

desirability of the property for the project as a result of the

completion of the environmental review in accordance with 24 CFR part

58 and its cost is fully refundable. There is no constraint on the

purchase of an option by third parties that have not been selected for

HUD funding, have no responsibility for the environmental review and

have no say in the approval or disapproval of the project.

(c) Relocation Costs. Relocation costs may be incurred before the

approval of the RROF and related certification for the project provided

that they are required by 24 CFR part 42.

Sec. 58.23 Financial assistance for environmental review.

The costs of environmental reviews, including costs incurred in

complying with any of the related laws and authorities cited in

Sec. 58.5 and Sec. 58.6, are eligible project costs to the extent

allowable under the HUD assistance program regulations.

Secs. 58.24-58.29 [Reserved]

Subpart D--Environmental Review Process: Documentation, Range of

Activities, Project Aggregation and Classification

Sec. 58.30 Environmental Review Process.

The environmental review process consists of all the actions that a

responsible entity must take to determine compliance with NEPA and

related provisions of law and this part. The environmental review

process includes all the compliance actions needed for other activities

and projects that are not assisted by HUD but are aggregated by the

responsible entity in accordance with Sec. 58.32.

Sec. 58.31 [Reserved]

Sec. 58.32 Project aggregation.

(a) A responsible entity must group together and evaluate as a

single project all individual activities which are related either on a

geographical or functional basis, or are logical parts of a composite

of contemplated actions.

(b) In deciding the most appropriate basis for aggregation when

evaluating activities under more than one program, the responsible

entity may choose: Functional aggregation when a specific type of

activity (e.g., water improvements) is to take place in several

separate locales or jurisdictions; geographic aggregation when a mix of

dissimilar but related activities is to be concentrated in a fairly

specific project area (e.g., a combination of water, sewer and street

improvements and economic development activities); or a combination of

aggregation approaches, which, for various project locations, considers

the impacts arising from each functional activity and its

interrelationship with other activities.

(c) The purpose of project aggregation is to group together related

activities so that the responsible entity can:

(1) Address adequately and analyze, in a single environmental

review, the separate and combined impacts of activities that are

similar, connected and closely related, or that are dependent upon

other activities and actions. (See 40 CFR 1508.25(a)).

(2) Consider reasonable alternative courses of action.

(3) Schedule the activities to resolve conflicts or mitigate the

individual, combined and/or cumulative effects.

(4) Prescribe mitigation measures and safeguards including project

alternatives and modifications to individual activities.

(d) Multi-year project aggregation.

(1) Release of funds. When a recipient's planning and program

development provide for activities to be implemented over two or more

years, the responsible entity's environmental review should consider

the relationship among all component activities of the multi-year

project regardless of the source of funds and address and evaluate

their cumulative environmental effects. The full schedule of all the

aggregated activities and the estimated cost of the total project must

be listed and described by the responsible entity in the environmental

review and included in the RROF. The release of funds will cover the

entire project period.

(2) When one or more of the conditions described in Sec. 58.47

exists, the recipient or other responsible entity must re-evaluate the

environmental review.

Sec. 58.33 Emergencies.

(a) In the cases of emergency, disaster or imminent threat to

health and safety which warrant the taking of an action with

significant environmental impact, the provisions of 40 CFR 1506.11

shall apply.

(b) If funds are needed on an emergency basis and when adherence to

separate comment periods would prevent the giving of assistance, the

combined Notice of FONSI and the Notice of the Intent to Request

Release of Funds may be disseminated and/or published simultaneously

with the submission of the Request for Release of Funds (RROF). The

combined Notice of FONSI and NOI/ROF shall state that the funds are

needed on an immediate emergency basis due to a Presidentially declared

disaster and that the comment periods have been combined. The Notice

shall also invite commenters to submit their comments to both HUD and

the responsible entity issuing the notice to assure that these comments

will receive full consideration.

Sec. 58.34 Exempt activities.

(a) A responsible entity does not have to comply with the

environmental requirements of this part or undertake any environmental

review, consultation or other action under NEPA and the other

provisions of law or authorities cited in Sec. 58.5 for the activities

exempt by this section or projects consisting solely of the following

exempt activities:

(1) Environmental and other studies, resource identification and

the development of plans and strategies;

(2) Information and financial services;

(3) Administrative and management activities;

(4) Public services that will not have a physical impact or result

in any physical changes, including but not limited to services

concerned with employment, crime prevention, child care, health, drug

abuse, education, counseling, energy conservation and welfare or

recreational needs;

(5) Inspections and testing of properties for hazards or defects;

(6) Purchase of insurance;

(7) Purchase of tools;

(8) Engineering or design costs;

(9) Technical assistance and training;

(10) Assistance for any temporary improvements or for permanent

improvements that do not alter environmental conditions and are limited

to protection, repair or restoration activities necessary only to

control or arrest the effects from disasters, imminent threats or

physical deterioration;

(11) Any of the categorical exclusions listed in Sec. 58.35(a)

provided that there

[[Page 49474]]

are no circumstances which require compliance with any other Federal

laws and authorities cited in Sec. 58.5.

(b) A recipient does not have to submit an RROF and certification,

and no further approval from HUD or the State will be needed by the

recipient for the drawdown of funds to carry out exempt activities and

projects. However, the responsible entity must document in writing its

determination that each activity or project is exempt and meets the

conditions specified for such exemption under this section.

Sec. 58.35 Categorical exclusions.

Categorical exclusion refers to a category of activities for which

no environmental impact statement or environmental assessment and

finding of no significant impact under NEPA is required, except in

extraordinary circumstances (see Sec. 58.2(a)(3)) in which a normally

excluded activity may have a significant impact. Compliance with the

other applicable Federal environmental laws and authorities listed in

Sec. 58.5 is required for any categorical exclusion listed in paragraph

(a) of this section.

(a) Categorical exclusions subject to Sec. 58.5. The following

activities are categorically excluded under NEPA, but may be subject to

review under authorities listed in Sec. 58.5:

(1) Acquisition, repair, reconstruction, or rehabilitation of

public facilities and improvements (other than buildings) when the

facilities and improvements are in place and will be retained in the

same use without change in size or capacity of more than 20 percent

(e.g., replacement of water or sewer lines, reconstruction of curbs and

sidewalks, repaving of streets).

(2) Special projects directed to the removal of material and

architectural barriers that restrict the mobility of and accessibility

to elderly and handicapped persons.

(3) Rehabilitation of buildings and improvements when the following

conditions are met;

(i) In the case of multifamily residential buildings:

(A) Unit density is not changed more than 20 percent;

(B) The project does not involve changes in land use (from

residential to non-residential); and

(C) The estimated cost of rehabilitation is less than 75 percent of

the total estimated cost of replacement after rehabilitation.

(ii) In the case of non-residential structures, including

commercial, industrial, and public buildings:

(A) The facilities and improvements are in place and will not be

changed in size or capacity by more than 20 percent; and

(B) The activity does not involve a change in land use, such as

from non-residential to residential, commercial to industrial, or from

one industrial use to another.

(4) An individual action on a one - to four-family dwelling or an

individual action on a project of five or more units developed on

scattered sites when the sites are more than 2,000 feet apart and there

are not more than four units on any one site.

(5) Acquisition or disposition of an existing structure or

acquisition of vacant land provided that the structure or land acquired

or disposed of will be retained for the same use.

(b) Categorical exclusions not subject to Sec. 58.5. The Department

has determined that the following categorically excluded activities

would not alter any conditions that would require a review or

compliance determination under the Federal laws and authorities cited

in Sec. 58.5. When the following kinds of activities are undertaken,

the responsible entity does not have to publish a NOI/RROF or execute a

certification and the recipient does not have to submit a RROF to HUD

(or the State) except in the circumstances described in paragraph (c)

of this section. Following the award of the assistance, no further

approval from HUD or the State will be needed with respect to

environmental requirements, except where paragraph (c) of this section

applies. The recipient remains responsible for carrying out any

applicable requirements under Sec. 58.6.

(1) Tenant-based rental assistance;

(2) Supportive services including, but not limited to, health care,

housing services, permanent housing placement, day care, nutritional

services, short-term payments for rent/mortgage/utility costs, and

assistance in gaining access to local, State, and Federal government

benefits and services;

(3) Operating costs including maintenance, security, operation,

utilities, furnishings, equipment, supplies, staff training and

recruitment and other incidental costs;

(4) Economic development activities, including but not limited to,

equipment purchase, inventory financing, interest subsidy, operating

expenses and similar costs not associated with construction or

expansion of existing operations;

(5) Activities to assist homeownership of existing dwelling units,

including closing costs and down payment assistance to home buyers,

interest buydowns and similar activities that result in the transfer of

title to a property;

(6) Affordable housing pre-development costs including legal,

consulting, developer and other costs related to obtaining site

control, project financing, loan commitments, zoning approvals, and

other related activities which do not have a physical impact.

(c) Circumstances requiring NEPA review. If a responsible entity

determines that an activity or project identified in paragraph (a) or

(b) of this section, because of extraordinary circumstances and

conditions at or affecting the location of the activity or project, may

have a significant environmental effect, it shall comply with all the

requirements of this part.

(d) The Environmental Review Record (ERR) must contain a well

organized written record of the process and determinations made under

this section.

Sec. 58.36 Environmental assessments.

If a project is not exempt or categorically excluded under

Secs. 58.34 and 58.35, the responsible entity must prepare an EA in

accordance with subpart E of this part. If it is evident without

preparing an EA that an EIS is required under Sec. 58.37, the

responsible entity should proceed directly to an EIS.

Sec. 58.37 Environmental impact statement determinations.

(a) An EIS is required when the project is determined to have a

potentially significant impact on the human environment.

(b) An EIS is required under any of the following circumstances,

except as provided in paragraph (c) of this section:

(1) The project would provide a site or sites for, or result in the

construction of, hospitals or nursing homes containing a total of 2,500

or more beds.

(2) The project would remove, demolish, convert or substantially

rehabilitate 2,500 or more existing housing units (but not including

rehabilitation projects categorically excluded under Sec. 58.35), or

would result in the construction or installation of 2,500 or more

housing units, or would provide sites for 2,500 or more housing units.

(3) The project would provide enough additional water and sewer

capacity to support 2,500 or more additional housing units. The project

does not have to be specifically intended for residential use nor does

it have to be totally new construction. If the project is designed to

provide upgraded service to existing development as well as to serve

new development, only that portion of the increased capacity which is

intended to serve new development should be counted.

[[Page 49475]]

(c) If, on the basis of an EA, a responsible entity determines that

the thresholds in paragraph (b) of this section are the sole reason for

the EIS, the responsible entity may prepare a FONSI pursuant to 40 CFR

1501.4. In such cases, the FONSI must be made available for public

review for at least 30 days before the responsible entity makes the

final determination whether to prepare an EIS.

(d) Notwithstanding paragraphs (a) through (c) of this section, an

EIS is not required where Sec. 58.53 is applicable.

(e) Recommended EIS Format. The responsible entity must use the EIS

format recommended by the CEQ regulations (40 CFR 1502.10) unless a

determination is made on a particular project that there is a

compelling reason to do otherwise. In such a case, the EIS format must

meet the minimum requirements prescribed in 40 CFR 1502.10.

Sec. 58.38 Environmental review record.

The responsible entity must maintain a written record of the

environmental review undertaken under this part for each project. This

document will be designated the ``Environmental Review Record'' (ERR),

and shall be available for public review. The responsible entity must

use the current HUD-recommended formats or develop equivalent formats.

(a) ERR Documents. The ERR shall contain all the environmental

review documents, public notices and written determinations or

environmental findings required by this part as evidence of review,

decisionmaking and actions pertaining to a particular project of a

recipient. The document shall:

(1) Describe the project and the activities that the recipient has

determined to be part of the project;

(2) Evaluate the effects of the project or the activities on the

human environment;

(3) Document compliance with applicable statutes and authorities,

in particular those cited in Sec. 58.5 and 58.6; and

(4) Record the written determinations and other review findings

required by this part (e.g., exempt and categorically excluded projects

determinations, findings of no significant impact).

(b) Other documents and information. The ERR shall also contain

verifiable source documents and relevant base data used or cited in

EAs, EISs or other project review documents. These documents may be

incorporated by reference into the ERR provided that each source

document is identified and available for inspection by interested

parties. Proprietary material and special studies prepared for the

recipient that are not otherwise generally available for public review

shall not be incorporated by reference but shall be included in the

ERR.

Sec. 58.39 [Reserved].

Subpart E--Environmental Review Process: Environmental Assessments

(EA's)

Sec. 58.40 Preparing the environmental assessment.

The responsible entity may prepare the EA using the HUD recommended

format. In preparing an EA for a particular project, the responsible

entity must:

(a) Determine existing conditions and describe the character,

features and resources of the project area and its surroundings;

identify the trends that are likely to continue in the absence of the

project.

(b) Identify all potential environmental impacts, whether

beneficial or adverse, and the conditions that would change as a result

of the project.

(c) Identify, analyze and evaluate all impacts to determine the

significance of their effects on the human environment and whether the

project will require further compliance under related laws and

authorities cited in Sec. 58.5 and Sec. 58.6.

(d) Examine and recommend feasible ways in which the project or

external factors relating to the project could be modified in order to

eliminate or minimize adverse environmental impacts.

(e) Examine alternatives to the project itself, if appropriate,

including the alternative of no action.

(f) Complete all environmental review requirements necessary for

the project's compliance with applicable authorities cited in

Secs. 58.5 and 58.6.

(g) Based on steps set forth in paragraph (a) through (f) of this

section, make one of the following findings:

(1) A Finding of No Significant Impact (FONSI), in which the

responsible entity determines that the project is not an action that

will result in a significant impact on the quality of the human

environment. The responsible entity may then proceed to Sec. 58.43.

(2) A finding of significant impact, in which the project is deemed

to be an action which may significantly affect the quality of the human

environment. The responsible entity must then proceed with its

environmental review under subparts F or G of this part.

Sec. 58.41-58.42 [Reserved].

Sec. 58.43 Dissemination and/or publication of the findings of no

significant impact.

(a) If the responsible entity makes a finding of no significant

impact, it must prepare a FONSI notice, using the current HUD-

recommended format or an equivalent format. As a minimum, the

responsible entity must send the FONSI notice to individuals and groups

known to be interested in the activities, to the local news media, to

appropriate tribal, local, State and Federal agencies; to the Regional

Offices of the Environmental Protection Agency having jurisdiction and

to the HUD Field Offices. The responsible entity may also publish the

FONSI notice in a newspaper of general circulation in the affected

community. If the notice is not published, it must also be prominently

displayed in public buildings, such as the local Post Office and within

the project area or in accordance with procedures established as part

of the affected community's citizen participation process.

(b) The responsible entity may disseminate or publish a FONSI

notice at the same time it disseminates or publishes the NOI/RROF

required by Sec. 58.70. If the notices are released as a combined

notice, the combined notice shall:

(1) Clearly indicate that it is intended to meet two separate

procedural requirements; and

(2) Advise the public to specify in their comments which ``notice''

their comments address.

(c) The responsible entity must consider the comments and make

modifications, if appropriate, in response to the comments, before it

completes its environmental certification and before the recipient

submits its RROF. In Presidentially declared disaster areas,

modifications resulting from public comment, if appropriate, must be

made before proceeding with the expenditure of funds.

Sec. 58.44 [Reserved].

Sec. 58.45 Public comment periods.

(a) Notice of finding of no significant impact: 15 days from date

of publication or if no publication, 18 days from the date of mailing

and posting.

(b) Notice of intent to request release of funds: 7 days from date

of publication or if no publication, 10 days from date of mailing and

posting.

(c) Concurrent or Combined notices: Same as FONSI notice.

[[Page 49476]]

Sec. 58.46 Time delays for exceptional circumstances.

The responsible entity must make the FONSI available for public

comments for 30 days before the recipient files the RROF when:

(a) There is a considerable interest or controversy concerning the

project;

(b) The proposed project is similar to other projects that normally

require the preparation of an EIS; or

(c) The project is unique and without precedent.

Sec. 58.47 Re-evaluation of assessment findings.

(a) A responsible entity must re-evaluate the EA findings when:

(1) The recipient proposes substantial changes in the nature,

magnitude or extent of the project, including adding new activities not

anticipated in the original scope of the project and its cost estimate;

(2) There are new circumstances and environmental conditions which

may affect the project or have a bearing on its impact, such as

concealed or unexpected conditions discovered during the implementation

of the project or activity which is proposed to be continued; or

(3) The recipient proposes the selection of an alternative not

considered in the original EA.

(b) The purpose of the responsible entity's re-evaluation of the EA

is to determine if the FONSI is still valid. If the FONSI is still

valid but the data or conditions upon which it was based have changed,

the responsible entity must amend the original assessment and update

its ERR by including this re-evaluation and its determination based on

its findings. If the responsible entity determines that the FONSI is no

longer valid, it must prepare an EA or an EIS if its evaluation

indicates potentially significant impacts. Where the recipient is not

the responsible entity, the recipient must inform the responsible

entity promptly of any proposed substantial changes under paragraph

(a)(1) of this section, new circumstances or environmental conditions

under paragraph (a)(2) of this section, or any proposals to select a

different alternative under paragraph (a)(3) of this section, and must

then permit the responsible entity to re-evaluate the EA before

proceeding.

Secs. 58.48-58.51 [Reserved].

Subpart F--Environmental Review Process: Environmental Impact

Statement Determinations

Sec. 58.52 Adoption of other agencies' EISs.

The responsible entity may adopt a draft or final EIS prepared by

another agency provided that the EIS was prepared in accordance with 40

CFR parts 1500 through 1508. If the responsible entity adopts an EIS

prepared by another agency, the procedure in 40 CFR 1506.3 shall be

followed. An adopted EIS may have to be revised and modified to adapt

it to the particular environmental conditions and circumstances of the

project if these are different from the project reviewed in the EIS. In

such cases the responsible entity must prepare, circulate, and file a

supplemental draft EIS in the manner prescribed in Sec. 58.64 and

otherwise comply with the clearance and time requirements of the EIS

process, except that scoping requirements under 40 CFR 1501.7 shall not

apply. The agency that prepared the original EIS should be informed

that the responsible entity intends to amend and adopt the EIS. The

responsible entity may adopt an EIS when it acts as a cooperating

agency in its preparation under 40 CFR 1506.3. The responsible entity

is not required to re-circulate or file the EIS, but must complete the

clearance process for the RROF. The decision to adopt an EIS shall be

made a part of the project ERR.

Sec. 58.53 Use of prior environmental impact statements.

Where any final EIS has been listed in the Federal Register for a

project pursuant to this part, or where an areawide or similar broad

scale final EIS has been issued and the EIS anticipated a subsequent

project requiring an environmental clearance, then no new EIS is

required for the subsequent project if all the following conditions are

met:

(a) The ERR contains a decision based on a finding pursuant to

Sec. 58.40 that the proposed project is not a new major Federal action

significantly affecting the quality of the human environment. The

decision shall include:

(1) References to the prior EIS and its evaluation of the

environmental factors affecting the proposed subsequent action subject

to NEPA;

(2) An evaluation of any environmental factors which may not have

been previously assessed, or which may have significantly changed;

(3) An analysis showing that the proposed project is consistent

with the location, use, and density assumptions for the site and with

the timing and capacity of the circulation, utility, and other

supporting infrastructure assumptions in the prior EIS;

(4) Documentation showing that where the previous EIS called for

mitigating measures or other corrective action, these are completed to

the extent reasonable given the current state of development.

(b) The prior final EIS has been filed within five (5) years, and

updated as follows:

(1) The EIS has been updated to reflect any significant revisions

made to the assumptions under which the original EIS was prepared;

(2) The EIS has been updated to reflect new environmental issues

and data or legislation and implementing regulations which may have

significant environmental impact on the project area covered by the

prior EIS.

(c) There is no litigation pending in connection with the prior

EIS, and no final judicial finding of inadequacy of the prior EIS has

been made.

Sec. 58.54 [Reserved]

Subpart G--Environmental Review Process: Procedures for Draft,

Final and Supplemental Environmental Impact Statements

Sec. 58.55 Notice of intent to prepare an EIS.

As soon as practicable after the responsible entity decides to

prepare an EIS, it must publish a NOI/EIS, using the HUD recommended

format and disseminate it in the same manner as required by 40 CFR

parts 1500 through 1508.

Sec. 58.56 Scoping process.

The determination on whether or not to hold a scoping meeting will

depend on the same circumstances and factors as for the holding of

public hearings under Sec. 58.59. The responsible entity must wait at

least 15 days after publishing the NOI/EIS before holding a scoping

meeting.

Sec. 58.57 Lead agency designation.

If there are several agencies ready to assume the lead role, the

responsible entity must make its decision based on the criteria in 40

CFR 1501.5(c). If the responsible entity and a Federal agency are

unable to reach agreement, then the responsible entity must notify HUD

(or the State, where applicable). HUD (or the State) will assist in

obtaining a determination based on the procedure set forth in 40 CFR

1501.5(e).

[[Page 49477]]

Sec. 58.58 [Reserved]

Sec. 58.59 Public hearings and meetings.

(a) Factors to consider. In determining whether or not to hold

public hearings in accordance with 40 CFR 1506.6, the responsible

entity must consider the following factors:

(1) The magnitude of the project in terms of economic costs, the

geographic area involved, and the uniqueness or size of commitment of

resources involved.

(2) The degree of interest in or controversy concerning the

project.

(3) The complexity of the issues and the likelihood that

information will be presented at the hearing which will be of

assistance to the responsible entity.

(4) The extent to which public involvement has been achieved

through other means.

(b) Procedure. All public hearings must be preceded by a notice of

public hearing, which must be published and disseminated in the same

manner as the FONSI Notice (See Sec. 58.43). The public hearing notice

must be published at least 15 days before the hearing date. The Notice

must:

(1) State the date, time, place, and purpose of the hearing or

meeting.

(2) Describe the project, its estimated costs, and the project

area.

(3) State that persons desiring to be heard on environmental issues

will be afforded the opportunity to be heard.

(4) State the responsible entity's name and address and the name

and address of its Certifying Officer.

(5) State what documents are available, where they can be obtained,

and any charges that may apply.

Sec. 58.60 Preparation and filing of environmental impact statements.

(a) The responsible entity must prepare the draft environmental

impact statement (DEIS) and the final environmental impact statements

(FEIS) using the current HUD recommended format or its equivalent.

(b) The responsible entity must file and distribute the (DEIS) and

the (FEIS) in the following manner:

(1) Five copies to EPA Headquarters;

(2) Five copies to EPA Regional Office;

(3) Copies made available in the responsible entity's and the

recipient's office;

(4) Copies or summaries made available to persons who request them;

and

(5) FEIS only--one copy to State, HUD Field Office, and HUD

Headquarters library.

Secs. 58.61-58.69 [Reserved]

Subpart H--Release of Funds for Particular Projects

Sec. 58.70 Notice of intent to request release of funds.

The NOI/RROF must be disseminated and/or published in the manner

prescribed by Sec. 58.43 and Sec. 58.45 before the certification is

signed by the responsible entity.

Sec. 58.71 Request for release of funds and certification.

(a) The RROF and certification shall be sent to the appropriate HUD

Field Office (or the State, if applicable), except as provided in

paragraph (b) of this section. This request shall be executed by the

Certifying Officer. The request shall describe the specific project and

activities covered by the request and contain the certification

required under the applicable statute cited in Sec. 58.1(b). The RROF

and certification must be in a form specified by HUD.

(b) When the responsible entity is conducting an environmental

review on behalf of a recipient, as provided for in Sec. 58.10, the

recipient must provide the responsible entity with all available

project and environmental information and refrain from undertaking any

physical activities or choice limiting actions until HUD (or the State,

if applicable), has approved its request for release of funds. The

certification form executed by the responsible entity's certifying

officer shall be sent to the recipient that is to receive the

assistance along with a description of any special environmental

conditions that must be adhered to in carrying out the project. The

recipient is to submit the RROF and the certification of the

responsible entity to HUD (or the State, if applicable) requesting the

release of funds. The recipient must agree to abide by the special

conditions, procedures and requirements of the environmental review,

and to advise the responsible entity of any proposed change in the

scope of the project or any change in environmental conditions.

(c) If the responsible entity determines that some of the

activities are exempt under applicable provisions of this part, the

responsible entity shall advise the recipient that it may incur costs

on these activities as soon as programmatic authorization is received.

This finding shall be documented in the ERR maintained by the

responsible entity and in the recipient's project files.

Sec. 58.72 HUD or State Actions on RROFs and Certifications.

The actions which HUD (or a State) may take with respect to a

recipient's environmental certification and RROF are as follows:

(a) In the absence of any receipt of objection to the contrary,

except as provided in paragraph (b) of this section, HUD (or the State)

will assume the validity of the certification and RROF and will approve

these documents after expiration of the 15-day period prescribed by

statute.

(b) HUD (or the State) may disapprove a certification and RROF if

it has knowledge that the responsible entity has not complied with the

items in Sec. 58.75, or that the RROF and certification are inaccurate.

(c) In cases in which HUD has approved a certification and RROF but

subsequently learns (e.g., through monitoring) that the recipient

violated Sec. 58.22 or the recipient or responsible entity otherwise

failed to comply with a clearly applicable environmental authority, HUD

shall impose appropriate remedies and sanctions in accord with the law

and regulations for the program under which the violation was found.

Sec. 58.73 Objections to release of funds.

HUD (or the State) will not approve the ROF for any project before

15 calendar days have elapsed from the time of receipt of the RROF and

the certification or from the time specified in the notice published

pursuant to Sec. 58.70, whichever is later. Any person or agency may

object to a recipient's RROF and the related certification. However,

the objections must meet the conditions and procedures set forth in

this subpart H. HUD (or the State) can refuse the RROF and

certification on any grounds set forth in Sec. 58.75. All decisions by

HUD (or the State) regarding the RROF and the certification shall be

final.

Sec. 58.74 Time for objecting.

All objections must be received by HUD (or the State) within 15

days from the time HUD (or the State) receives the recipient's RROF and

the related certification, or within the time period specified in the

notice, whichever is later.

Sec. 58.75 Permissible bases for objections.

HUD (or the State), will consider objections claiming a responsible

entity's noncompliance with this part based only on any of the

following grounds:

(a) The certification was not in fact executed by the responsible

entity's Certifying Officer.

[[Page 49478]]

(b) The responsible entity has failed to make one of the two

findings pursuant to Sec. 58.40 or to make the written determination

required by Secs. 58.35, 58.47 or 58.53 for the project, as applicable.

(c) The responsible entity has omitted one or more of the steps set

forth at subpart E for the preparation, publication and completion of

an EA.

(d) The responsible entity has omitted one or more of the steps set

forth at subparts F and G of this part for the conduct, preparation,

publication and completion of an EIS.

(e) The recipient has committed funds or incurred costs not

authorized by this part before release of funds and approval of the

environmental certification by HUD or the State.

(f) Another Federal agency acting pursuant to 40 CFR part 1504 has

submitted a written finding that the project is unsatisfactory from the

standpoint of environmental quality.

Sec. 58.76 Procedure for objections.

A person or agency objecting to a responsible entity's RROF and

certification shall submit objections in writing to HUD (or the State).

The objections shall:

(a) Include the name, address and telephone number of the persons

or agency submitting the objection, and be signed by the person or

authorized official of an agency.

(b) Be dated when signed.

(c) Describe the basis for objection and the facts or legal

authority supporting the objection.

(d) State when a copy of the objection was mailed or delivered to

the responsible entity's Certifying Officer.

Sec. 58.77 Effect of approval of certification.

(a) Responsibilities of HUD and States. HUD's (or, where

applicable, the State's) approval of the certification shall be deemed

to satisfy the responsibilities of the Secretary under NEPA and related

provisions of law cited at Sec. 58.5 insofar as those responsibilities

relate to the release of funds as authorized by the applicable

provisions of law cited in Sec. 58.1(b).

(b) Public and agency redress. Persons and agencies seeking redress

in relation to environmental reviews covered by an approved

certification shall deal with the responsible entity and not with HUD.

It shall be HUD's policy to refer all inquiries and complaints to the

responsible entity and its Certifying Officer. Similarly, the State

(where applicable) may direct persons and agencies seeking redress in

relation to environmental reviews covered by an approved certification

to deal with the responsible entity, and not the State, and may refer

inquiries and complaints to the responsible entity and its Certifying

Officer. Remedies for noncompliance are set forth in program

regulations.

(c) Implementation of environmental review decisions. Projects of a

recipient will require post-review monitoring and other inspection and

enforcement actions by the recipient and the State or HUD (using

procedures provided for in program regulations) to assure that

decisions adopted through the environmental review process are carried

out during project development and implementation.

(d) Responsibility for monitoring and training. (1) At least once

every three years, HUD Field Office intends to conduct in-depth

monitoring and exercise quality control (through training and

consultation) over the environmental activities performed by

responsible entities under this part. Limited monitoring of these

environmental activities will be conducted during each program

monitoring site visit. If through limited or in-depth monitoring of

these environmental activities or by other means, HUD becomes aware of

any environmental deficiencies, HUD may take one or more of the

following actions:

(i) In the case of problems found during limited monitoring, HUD

may schedule in-depth monitoring at an earlier date or may schedule in-

depth monitoring more frequently;

(ii) HUD may require attendance by staff of the responsible entity

at HUD-sponsored or approved training, which will be provided

periodically at various locations around the country;

(iii) HUD may refuse to accept the certifications of environmental

compliance on subsequent grants;

(iv) HUD may suspend or terminate the responsible entity's

assumption of the environmental review responsibility;

(v) HUD may initiate sanctions, corrective actions, or other

remedies specified in program regulations or agreements or contracts

with the recipient.

(2) HUD's responsibilities and action under paragraph (d)(1) of

this section shall not be construed to limit or reduce any

responsibility assumed by a responsible entity with respect to any

particular release of funds under this part. Whether or not HUD takes

action under paragraph (d)(1) of this section, the Certifying Officer

remains the responsible Federal official under Sec. 58.13 with respect

to projects and activities for which the Certifying Officer has

submitted a certification under this part.

Secs. 58.78-58.79 [Reserved].

Dated: August 30, 1995.

Henry G. Cisneros,

Secretary.

[FR Doc. 95-23645 Filed 9-22-95; 8:45 am]

BILLING CODE 4210-32-P