Protection and Enhancement of Environmental Quality

SUMMARY: This rule finalizes the policies and procedures set forth in

HUD's April 5, 1996 proposed rule. Additionally, this rule makes

several clarifying and technical amendments to the proposed rule. The

final rule simplifies, improves, and updates HUD's implementation of

responsibilities for environmental review and decision making under the

National Environmental Policy Act and the other related Federal

environmental laws and authorities. This final rule replaces HUD's

current regulations at 24 CFR part 50.

EFFECTIVE DATE: October 28, 1996.

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

Community Viability, Room 7240, Department of Housing and Urban

Development, 451 Seventh Street SW., Washington, DC 20410-7000. For

telephone communication, contact Walter Prybyla, Deputy Director for

Policy, Environmental Review Division at (202) 708-1201. (This number

is not toll-free.) Hearing or speech-impaired individuals may access

this number via TTY by calling the toll-free Federal Information Relay

Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

I. The April 5, 1996 Proposed Rule

On April 5, 1996 (61 FR 15340), HUD published a rule for public

comment proposing to amend 24 CFR part 50 in its entirety. Part 50

describes the procedures used by HUD to carry out its responsibilities

under the National Environmental Policy Act (NEPA) of 1969 (42 U.S.C.

4321-4347), the NEPA implementing regulations of the Council on

Environmental Quality, and the other NEPA-related Federal environmental

laws and authorities (See Sec. 50.4 of this final rule). The April 5,

1996 rule proposed to simplify, improve, and update these regulations.

HUD decided to completely revise 24 CFR part 50 due to the

implementation of a series of innovative initiatives which have

improved the way HUD delivers services to the public. As detailed in

the preamble to the April 5, 1996 proposed rule, these initiatives

include: (1) HUD's regulatory reinvention efforts; (2) the

reorganization of HUD field offices; (3) Presidential Executive Order

12898 on Environmental Justice; and (4) the need to update 24 part 50

as a result of program experience and the evolving nature of HUD's

programs.

This rule finalizes the policies and procedures set forth in the

April 5, 1996 proposed rule and makes several technical and clarifying

amendments to the proposed regulation. The April 5, 1996 proposed rule

discussed in detail the amendments to 24 CFR part 50.

II. This Final Rule

The public comment period on the April 5, 1996 proposed rule

expired on June 4, 1996. No comments were received. Although no changes

are being made in response to public comment, HUD is making certain

technical and clarifying amendments to the proposed rule at the final

rule stage. This section of the preamble describes the amendments made

by this final rule to the April 5, 1996 proposed rule.

A. Clarification to 24 CFR 50.3(i)(1): Use of properties affected

by hazardous materials. Paragraph (i)(1) of Sec. 50.3 concerned the use

of properties affected by hazardous materials. The proposed use of such

a property will be important with respect to its suitability for

approval of HUD assistance. For example, properties which will be used

for housing, hospitals, or nursing homes must be free of hazardous

materials. In contrast, properties designated for industrial or

commercial purposes, as may be the case with ``brownfield'' locations

proposed for new uses, are permitted to be hazard-managed sites.

Proposed 24 CFR 50.3(i)(1) required that a site be hazard-free if a

``hazard could affect the health and safety of occupants or the

utilization of the property.'' This broad language could be

misinterpreted to mean that only hazard-free sites will be approved for

HUD assistance. The final rule amends 24 CFR 50.3(i)(1) to clarify that

a site must be free of hazardous materials if a ``hazard could affect

the health and safety of occupants or conflict with the intended

utilization of the property.''

B. Section 50.17: Decision points for the hospital mortgage

insurance and loan guarantee recovery fund programs. HUD's regulation

at 24 CFR 50.17 lists the environmental ``decision points'' for the

various HUD programs. A Finding of No Significant Impact (FONSI) with

respect to the environment or an Environmental Impact Statement (EIS)

must be completed before the applicable decision point. This final rule

amends the April 5, 1996 proposed rule by making two changes to

Sec. 50.17.

The April 5, 1996 proposed rule would have removed from Sec. 50.17

the reference to the decision point for HUD's hospital mortgage

insurance program. The Department of Health and Human Services (HHS) is

the lead Federal agency responsible for hospital related environmental

review and decisionmaking. Accordingly, the preamble to the April 5,

1996 rule explained that HUD, for purposes of its hospital mortgage

insurance program, would rely on an HHS certification that HHS had

complied with the applicable environmental requirements. Subsequent to

publication of the April 5, 1996 proposed rule, HUD decided to continue

being responsible for the environmental reviews related to its hospital

mortgage insurance program. HUD, therefore, will continue to list the

decision point for this program in Sec. 50.17. This final rule

continues to require that the FONSI or EIS be completed before issuance

of the Site Appraisal and Market Analysis (SAMA) Letter, or initial

equivalent indication of HUD approval of a specific site. In the case

of hospital mortgage insurance, this decision point is HUD's issuance

of a conditional commitment.

This final rule also updates Sec. 50.17 by adding the decision

point for HUD's loan guarantee recovery fund program. This program,

which is codified at new 24 CFR part 573, was established subsequent to

publication of the April 5, 1996 proposed rule. Part 573 implements

section 4 of the Church Arson Prevention Act of 1996 (Pub. L. 104-155,

approved July 3, 1996). This final rule adds a new Sec. 50.17(a)(3)

which states that the decision point for loans guaranteed under part

573 is HUD's issuance of a commitment letter or initial equivalent

indication of HUD approval.

C. New Paragraphs (b) (21), (22), and (23) to Sec. 50.19:

Additional categorical exclusions. Section 50.19 lists those activities

which are excluded from the compliance requirements of the various

environmental authorities. HUD omitted to list several exclusions in

the April 5, 1996 proposed rule. This final rule corrects the

oversight.

1. Refinancing of HUD-insured mortgages. This final rule adds a new

paragraph (b)(21) to Sec. 5.19, which excludes any refinancing of HUD-

insured mortgages that will not allow new construction or

rehabilitation, nor result in any physical impacts or changes except

for routine maintenance. Such actions are excluded from NEPA as well as

the related laws and

[[Page 50915]]

authorities listed in Sec. 50.4, except that compliance with 24 CFR

50.4(b)(1), which relates to flood insurance requirements, is required

for buildings located in special flood hazard areas.

2. Sale of HUD-held mortgages. This final rule adds a new paragraph

(b)(22) to Sec. 50.19, which excludes the sale of a HUD-held mortgage

on an existing property. In these cases, there is no physical impact

and the property is not owned by HUD; the mortgage will be held by a

new mortgagee, but the ownership of the real property does not change.

3. Foreclosure sales of properties with HUD-held mortgages. This

final rule also excludes the foreclosure sale of a property with a HUD-

held mortgage. Appropriate restrictions, however, will be imposed to

protect historic properties. As is true with the exclusion listed in

new 24 CFR 50.19(b)(22), HUD does not own the property in these cases.

HUD, therefore, does not dispose of the property, but causes the

property to be sold to satisfy HUD's lien. HUD has long viewed

foreclosure sales as in the nature of civil enforcement actions (which

are not considered Federal actions under the NEPA regulations published

by the Council on Environmental Quality). This final rule adds a new 24

CFR 50.19(b)(23) to clarify that these foreclosure sales are

categorically excluded from compliance with NEPA and the other

environmental authorities.

D. Intergovernmental review. An error concerning intergovernmental

review appeared in the preamble to the April 5, 1996 proposed rule.

HUD's regulations at 24 CFR part 52 govern the intergovernmental review

of HUD programs and activities. The preamble to the proposed rule

mistakenly stated that 24 CFR part 52 is no longer in active use (61 FR

15340, 15341). Accordingly, the April 5, 1996 rule proposed to remove

all references to part 52 from 24 CFR part 50. Part 52 remains current

and in effect. This rule, however, finalizes the removal of the

references to 24 CFR part 52. The provisions of 24 CFR part 52 apply to

HUD programs notwithstanding any specific reference in part 50. It is

unnecessary for 24 CFR part 50 to cite these regulatory requirements.

E. Section 50.23: Public participation notices. The final rule

clarifies that notices pertaining to an EIS, an amendment to an EIS,

and any FONSI subject to Sec. 50.34 (Time delays for exceptional

circumstances), will be provided to the public, in accordance with

HUD's longstanding policy to provide notices to the affected public and

to those who have requested them. This final rule provides that the

local HUD field office may be contacted by persons who wish to review a

FONSI which is not subject to Sec. 50.34.

HUD also assures public participation in other ways. For example,

many HUD programs have public participation elements. To enhance

citizen participation and access to information on HUD-supported

projects, HUD has placed on the Internet the executive summaries of

Consolidated Plans for over 900 major cities and counties. HUD

regulations, handbooks, legislation and related documents are also

available to the public on the Internet.

III. HUD Programs Subject to 24 CFR Part 50

This final rule, which replaces the current provisions of 24 CFR

part 50, applies to all HUD activities and programs, except those for

which specific statutory authority exists to assign the environmental

review responsibilities to recipients and other responsible entities

that are States, units of general local government, Indian Tribes or

other entities subject to 24 CFR part 58.

The following is a list of those HUD programs that lack specific

authority for assigning the Federal environmental review

responsibilities to recipients and other responsible entities.

Generally, the list covers all HUD programs other than those identified

at 24 CFR 58.1(b). In addition to the programs listed below, part 50

applies to certain projects and activities carried out by recipients

subject to the environmental policy and procedures of 24 CFR part 58

(see 24 CFR 50.1(d)).

The following may not be an exhaustive list, but contains the

principal HUD assistance programs subject to 24 CFR part 50. The number

in brackets represents the part or section of title 24 in which the

program regulations can be found. The number, if any following the

brackets, represents the Catalog Number of Federal Domestic Assistance.

Office of Community Planning and Development

HOPE for Homeownership of Single Family Homes: HOPE 3

[572] 14.240.

Housing Opportunities for Persons with AIDS [574] 14.241.

Emergency Shelter Grants Program: Stewart B. McKinney

Homeless Assistance Act [576] [Part 50 applies only to applicants that

are private nonprofit organizations and to governmental entities with

special or limited purpose powers] 14.231.

Supportive Housing Program [583] [Part 50 applies only to

applicants that are private nonprofit organizations and to governmental

entities with special or limited purpose powers] 14.235.

Shelter Plus Care [582] [Part 50 applies to applications

from Public Housing Agency applicants, except that Part 58 applies to

the Section 8 Moderate Rehabilitation for Single Room Occupancy (SRO)

Dwellings component of the Shelter Plus Care program] 14.238.

Opportunities for Youth: Youthbuild [585] 14.243.

John Heinz Neighborhood Development Program [594] 14.242.

Special Purpose Grants for Historically-Black Colleges and

Universities [570.404] 14.237.

Base Closure Community Redevelopment and Homeless

Assistance [586] 14.227.

Loan Guarantee Recovery Fund Program [573].

Office of Housing: Single Family Housing Programs

HUD-Acquired Single Family Property Disposition [291].

Office of Housing: Multifamily Housing Programs

Multifamily Rental Housing for Moderate-Income Families:

Section 221(d)(3) and (4) [221] 14.135.

Existing Multifamily Rental Housing: Section 223(f)

[207.32a] 14.155.

Supportive Housing for the Elderly: Section 202 [889]

14.157.

Supportive Housing for Persons with Disabilities: Section

811 [890] 14.181.

Mortgage Insurance for Single Room Occupancy Projects:

Section 221(d) pursuant to Section 223(g) [221.565] 14.135.

Mortgage Insurance for Nursing Homes, Intermediate Care

Facilities, Board and Care Homes, and Assisted Living Facilities:

Section 232 [232] 14.129.

Supplementary Financing for Multifamily Projects: Section

241 [241] 14.151.

HOPE for Homeownership of Multifamily Units: HOPE 2

[Appendix B to Subtitle A of 24 CFR] 14.185.

Low-Income Housing Preservation and Resident

Homeownership: Title VI [248 subpart B] 14.187.

Emergency Low-Income Housing Preservation: Title II [248

subpart C] 14.187.

Flexible Subsidy Program for Troubled Projects: Section

201 [219] 14.164.

Manufactured Home Parks: Section 207 Land development

[207.33] 14.127.

[[Page 50916]]

Disposition of Multifamily Projects and Sale of HUD-held

Multifamily Mortgages [290].

Mortgage Insurance for Housing for the Elderly: Section

231 [231] 14.138 [Not used. Instead Sections 221 (d)(3) and (d)(4) are

used.]

Cooperative Housing: Section 213 [213] 14.126 [Authorized

but not used. New construction and substantial rehabilitation

cooperative projects are currently insured under Section 221(d)(3).]

Multifamily Rental Housing: Section 207 [207] 14.134 [Not

used. Instead Sections 221 (d)(3) and (d)(4) are used.]

Mortgage Insurance and Insured Improvement Loans for Urban

Renewal and Concentrated Development Areas: Section 220 [220] 14.139

[Not frequently used.]

Group Practice Medical Facilities: Title XI [244] 14.116

[Not used in recent years.]

Nehemiah Housing Opportunity Grants Program [280] [No

current funding.]

Office of Public and Indian Housing

HOPE for Public and Indian Housing Homeownership Program

[Appendix A to Subtitle A of 24 CFR] 14.858.

Public and Indian Housing Youth Sports Program [proposed

961.50] 14.863.

Public and Indian Housing Drug Elimination Program [761]

14.854.

Part 50 continues to be used for the following public

housing programs until October 14, 1996, when the programs will become

subject to environmental review procedures under 24 CFR part 58:

Public Housing Development [941] 14.850 and 14.851.

Public Housing Modernization [968] 14.852 and 14.859.

Demolition or Disposition of Public Housing Projects [970]

14.850.

Office of Policy Development and Research

CDBG Joint Community Development Program [570.411] [Part

50 applies only to applicants (e.g. to universities) that are not a

State or unit of general local government.]

IV. Findings and Certifications

Environmental Impact

A Finding of No Significant Impact with respect to the environment

has been made in accordance with HUD regulations at 24 CFR part 50,

implementing section 102(2)(C) of the National Environmental Policy Act

of 1969 (42 U.S.C. 4332) at the time of the development of the proposed

rule. The Finding of No Significant Impact remains applicable to this

final rule and is available for public inspection during business hours

in the Office of the Rules Docket Clerk, Room 10276, Department of

Housing and Urban Development, 451 Seventh Street, SW., Washington, DC

20410-0500.

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 rule have no federalism implications, and that the

policies are not subject to review under the Order. This rule is

limited to updating HUD's implementation of its responsibilities for

environmental review and decision making under the National

Environmental Policy Act and other related Federal environmental laws

and authorities.

Executive Order 12606, The Family

The General Counsel, as the Designated Official under Executive

Order 12606, The Family, has determined that this final 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. This rule updates and streamlines 24 CFR part 50, which sets

forth HUD's regulations governing the protection and enhancement of

environmental quality. No significant change in existing HUD policies

or programs will result from promulgation of this rule, as those

policies and programs relate to family concerns.

Regulatory Flexibility Act

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

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

certifies that this rule will not have a significant economic impact on

a substantial number of small entities. This rule, which revises 24 CFR

part 50 in its entirety, finalizes the policies and procedures set

forth in the April 5, 1996 proposed rule. Specifically, the rule

simplifies, improves, and updates HUD's implementation of

responsibilities for environmental review and decision making under the

National Environmental Policy Act and the other related Federal

environmental laws and authorities. This final rule will have no

adverse or disproportionate economic impact on small entities.

Unfunded Mandates Reform Act

The Secretary has reviewed this rule before publication and by

approving it certifies, in accordance with the Unfunded Mandates Reform

Act of 1995 (2 U.S.C. 1532), that this rule does not impose a Federal

mandate that will result in the expenditure by State, local, and tribal

governments, in the aggregate, or by the private sector, of $100

million or more in any one year.

Catalog of Federal Domestic Assistance

The program numbers are 14.128-14.900. Also see section III. of

this preamble.

List of Subjects in 24 CFR Part 50

Environmental quality, Environmental protection, Environmental

review policy and procedures, Environmental assessment, Environmental

impact statement, Compliance record.

Accordingly, 24 CFR part 50 is revised to read as follows:

PART 50--PROTECTION AND ENHANCEMENT OF ENVIRONMENTAL QUALITY

Subpart A--General: Federal Laws and Authorities

Sec.

50.1 Purpose, authority, and applicability.

50.2 Terms and abbreviations.

50.3 Environmental policy.

50.4 Related Federal laws and authorities.

Subpart B--General Policy: Responsibilities and Program Coverage

50.10 Basic environmental responsibility.

50.11 Responsibility of the HUD approving official.

Subpart C--General Policy: Decision Points

50.16 Decision points for policy actions.

50.17 Decision points for projects.

Subpart D--General Policy: Environmental Review Procedures

50.18 General.

50.19 Categorical exclusions not subject to the Federal laws and

authorities cited in Sec. 50.4.

50.20 Categorical exclusions subject to the Federal laws and

authorities cited in Sec. 50.4.

50.21 Aggregation.

50.22 Environmental management and monitoring.

50.23 Public participation.

50.24 HUD review of another agency's EIS.

Subpart E--Environmental Assessments and Related Reviews

50.31 The EA.

50.32 Responsibility for environmental processing.

50.33 Action resulting from the EA.

50.34 Time delays for exceptional circumstances.

[[Page 50917]]

50.35 Use of prior environmental assessments.

50.36 Updating environmental reviews.

Subpart F--Environmental Impact Statements

50.41 EIS policy.

50.42 Cases when an EIS is required.

50.43 Emergencies.

Authority: 42 U.S.C. 3535(d) and 4332; and Executive Order

11991, 3 CFR, 1977 Comp., p. 123.

Subpart A--General: Federal Laws and Authorities

Sec. 50.1 Purpose, authority, and applicability.

(a) This part implements the policies of the National Environmental

Policy Act (NEPA) and other environmental requirements (as specified in

Sec. 50.4).

(b) NEPA (42 U.S.C. 4321 et seq.), establishes national policy,

goals and procedures for protecting, restoring and enhancing

environmental quality. NEPA is implemented by Executive Order 11514 of

March 5, 1970, (3 CFR, 1966--1970 Comp., p. 902) as amended by

Executive Order 11991 of May 24, 1977, (3 CFR, 1977 Comp., p. 123) and

by the Council on Environmental Quality (CEQ) Regulations, 40 CFR parts

1500-1508.

(c) The regulations issued by CEQ at 40 CFR parts 1500-1508

establish the basic procedural requirements for compliance with NEPA.

These procedures are to be followed by all Federal agencies and are

incorporated by reference into this part. This part, therefore,

provides supplemental instructions to reflect the particular nature of

HUD programs, and is to be used in tandem with 40 CFR parts 1500-1508

and regulations that implement authorities cited at Sec. 50.4.

(d) These regulations apply to all HUD policy actions (as defined

in Sec. 50.16), and to all HUD project actions (see Sec. 50.2(a)(2)).

Also, they apply to projects and activities carried out by recipients

subject to environmental policy and procedures of 24 CFR part 58, when

the recipient that is regulated under 24 CFR part 58 claims the lack of

legal capacity to assume the Secretary's environmental review

responsibilities and the claim is approved by HUD or when HUD

determines to conduct an environmental review itself in place of a

nonrecipient responsible entity. For programs, activities or actions

not specifically identified or when there are questions regarding the

applicability of this part, the Assistant Secretary for Community

Planning and Development shall be consulted.

Sec. 50.2 Terms and abbreviations.

(a) The definitions for most of the key terms or phrases contained

in this part appear in 40 CFR part 1508 and in the authorities cited in

Sec. 50.4.

The following definitions also apply to this part:

Environmental review means a process for complying with NEPA

(through an EA or EIS) and/or with the laws and authorities cited in

Sec. 50.4.

HUD approving official means the HUD official authorized to make

the approval decision for any proposed policy or project subject to

this part.

Project means an activity, or a group of integrally-related

activities, undertaken directly by HUD or proposed for HUD assistance

or insurance.

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

AS/CPD--Assistant Secretary for Community Planning and Development.

CEQ--Council on Environmental Quality

EA--Environmental Assessment

EIS--Environmental Impact Statement

FONSI--Finding of No Significant Impact

HUD--Department of Housing and Urban Development

NEPA--National Environmental Policy Act

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

Statement

Sec. 50.3 Environmental policy.

(a) It is the policy of the Department to reject proposals which

have significant adverse environmental impacts and to encourage the

modification of projects in order to enhance environmental quality and

minimize environmental harm.

(b) The HUD approving official shall consider environmental and

other Departmental objectives in the decisionmaking process.

(c) When EA's or EIS's or reviews under Sec. 50.4 reveal conditions

or safeguards that should be implemented once a proposal is approved in

order to protect and enhance environmental quality or minimize adverse

environmental impacts, such conditions or safeguards must be included

in agreements or other relevant documents.

(d) A systematic, interdisciplinary approach shall be used to

assure the integrated use of the natural and social sciences and the

environmental design arts in making decisions.

(e) Environmental impacts shall be evaluated on as comprehensive a

scale as is practicable.

(f) HUD offices shall begin the environmental review process at the

earliest possible time so that potential conflicts between program

procedures and environmental requirements are identified at an early

stage.

(g) Applicants for HUD assistance shall be advised of environmental

requirements and consultation with governmental agencies and

individuals shall take place at the earliest time feasible.

(h) For HUD grant programs in which the funding approval for an

applicant's program must occur before the applicant's selection of

properties, the application shall contain an assurance that the

applicant agrees to assist HUD to comply with this part and that the

applicant shall:

(1) Supply HUD with all available, relevant information necessary

for HUD to perform for each property any environmental review required

by this part;

(2) Carry out mitigating measures required by HUD or select

alternate eligible property; and

(3) Not acquire, rehabilitate, convert, lease, repair or construct

property, nor commit or expend HUD or local funds for these program

activities with respect to any eligible property, until HUD approval of

the property is received.

(i)(1) It is HUD policy that all property proposed for use in HUD

programs be free of hazardous materials, contamination, toxic chemicals

and gasses, and radioactive substances, where a hazard could affect the

health and safety of occupants or conflict with the intended

utilization of the property.

(2) HUD environmental review of multifamily and non-residential

properties shall include evaluation of previous uses of the site and

other evidence of contamination on or near the site, to assure that

occupants of proposed sites are not adversely affected by the hazards

listed in paragraph (i)(1) of this section.

(3) Particular attention should be given to any proposed site on or

in the general proximity of such areas as dumps, landfills, industrial

sites or other locations that contain hazardous wastes.

(4) HUD shall require the use of current techniques by qualified

professionals to undertake investigations determined necessary.

Sec. 50.4 Related Federal laws and authorities.

HUD and/or applicants must comply, where applicable, with all

environmental requirements, guidelines and statutory obligations under

the following authorities and HUD standards:

[[Page 50918]]

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

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

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

Cultural Environment, May 13, 1971 (3 CFR, 1971--1975 Comp., p. 559).

(3) The Archaeological and Historic Preservation Act of 1974, which

amends the Reservoir Salvage Act of 1960 (16 U.S.C. 469 et seq.).

(4) Procedures for the Protection of Historic and Cultural

Properties (Advisory Council on Historic Preservation--36 CFR part

800).

(b) Flood insurance, floodplain management and wetland protection:

(1) Flood Disaster Protection Act of 1973 (42 U.S.C. 4001-4128) and the

National Flood Insurance Reform Act of 1994 (Pub.L. 103-325, 108 Stat.

2160).

(2) HUD Procedure for the Implementation of Executive Order 11988

(3 CFR, 1977 Comp., p. 117)--24 CFR part 55, Floodplain Management.

(3) Executive Order 11990 (Protection of Wetlands), (3 CFR, 1977

Comp., p. 121).

(c) Coastal areas protection and management. (1) The Coastal

Barrier Resources Act, as amended by the Coastal Barrier Improvement

Act of 1990 (16 U.S.C. 3501 et seq.).

(2) The Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et

seq.), as amended.

(d) Sole source aquifers. The Safe Drinking Water Act of 1974 (42

U.S.C. 201, 300 et seq., and 21 U.S.C. 349), as amended. (See 40 CFR

part 149.)

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

U.S.C. 1531 et seq.), as amended. (See 50 CFR part 402.)

(f) Wild and scenic rivers. The Wild and Scenic Rivers Act (16

U.S.C 1271 et seq.), as amended.

(g) Water quality. The Federal Water Pollution Control Act, as

amended by the Federal Water Pollution Control Act Amendments of 1972

(33 U.S.C. 1251 et seq.), and later enactments.

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

amended. (See 40 CFR parts 6, 51, and 93.)

(i) Solid waste management. (1) The Solid Waste Disposal Act, as

amended by the Resource Conservation and Recovery Act of 1976 (42

U.S.C. 6901 et seq.), and later enactments.

(2) The Comprehensive Environmental Response, Compensation, and

Liability Act of 1980 (42 U.S.C. 9601 et seq.), as amended.

(j) Farmlands protection. The Farmland Protection Policy Act of

1981 (7 U.S.C. 4201 et seq.), as amended. (See 7 CFR part 658.)

(k) HUD environmental standards. Applicable criteria and standards

specified in HUD environmental regulations (24 CFR part 51).

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

to Address Environmental Justice in Minority Populations and Low-Income

Populations (3 CFR, 1994 Comp., p. 859).

Subpart B--General Policy: Responsibilities and Program Coverage

Sec. 50.10 Basic environmental responsibility.

(a) It is the responsibility of all Assistant Secretaries, the

General Counsel, and the HUD approving official to assure that the

requirements of this part are implemented.

(b) The Assistant Secretary for Community Planning and Development

(A/S CPD), represented by the Office of Community Viability, whose

Director shall serve as the Departmental Environmental Clearance

Officer (DECO), is assigned the overall Departmental responsibility for

environmental policies and procedures for compliance with NEPA and the

related laws and authorities. To the extent permitted by applicable

laws and the CEQ regulations, the A/S CPD shall approve waivers and

exceptions or establish criteria for exceptions from the requirements

of this part.

Sec. 50.11 Responsibility of the HUD approving official.

(a) The HUD approving official shall make an independent evaluation

of the environmental issues, take responsibility for the scope and

content of the compliance finding, EA or EIS, and make the

environmental finding, where applicable. (Also, see Sec. 50.32.)

(b) Copies of environmental reviews and findings shall be

maintained in the project file for projects, in the rules docket files

for Federal Register publications, and in program files for non-Federal

Register policy documents.

Subpart C--General Policy: Decision Points

Sec. 50.16 Decision points for policy actions.

Either an EA and FONSI or an EIS on all policy actions not meeting

the criteria of Sec. 50.19 shall be completed prior to the approval

action. Policy actions include all proposed Federal Register policy

documents and other policy-related Federal actions (40 CFR 1508.18).

The decision as to whether a proposed policy action is categorically

excluded from an EA shall be made by the Program Environmental

Clearance Officer (PECO) in Headquarters as early as possible. Where

the PECO has any doubt as to whether a proposed action qualifies for

exclusion, the PECO shall request a determination by the AS/CPD. The EA

and FONSI may be combined into a single document.

Sec. 50.17 Decision points for projects.

Either an EA and FONSI or an EIS for individual projects shall be

completed before the applicable program decision points below for

projects not meeting the criteria of Sec. 50.20. Compliance with

applicable authorities cited in Sec. 50.4 shall be completed before the

applicable program decision points below unless the project meets the

criteria for exclusion under Sec. 50.19.

(a) New Construction. (1) Project mortgage insurance or other

financial assistance for multifamily housing projects (including

sections 202 and 811), nursing homes, hospitals, group practice

facilities and manufactured home parks: Issuance of Site Appraisal and

Market Analysis (SAMA) Letter or initial equivalent indication of HUD

approval of a specific site;

(2) Public Housing: HUD approval of the proposal.

(3) Loan Guarantee Recovery Fund Program (24 CFR part 573). HUD

issuance of a letter of commitment or initial equivalent indication of

HUD approval.

(b) Rehabilitation projects. Use the decision points under ``new

construction'' for HUD programs cited in paragraph (a) of this section;

otherwise the decision point is the HUD project approval.

(c) Public housing modernization programs. HUD approval of the

modernization grants.

(d) Property Disposition. Multifamily structures, college housing,

nursing homes, manufactured homes and parks, group practice facilities,

vacant land and one to four family structures: HUD approval of the

Disposition Program.

(e) HUD programs subject to 24 CFR part 58. For cases in which HUD

exercises environmental responsibility under this part where a

recipient lacks legal capacity to do so or HUD determines to do so in

place of a nonrecipient responsible entity under 24 CFR part 58 (see

Sec. 50.1(d)), the decision point is: HUD's execution of an agreement

or contract, whichever comes first, or in the case of Section 8

Project-Based Certificate Assistance and Moderate Rehabilitation, HUD

notification to the Public Housing Agency to proceed with execution of

an Agreement to Enter into Housing Assistance Payments (HAP) Contract.

[[Page 50919]]

(f) Section 50.3(h). Notwithstanding the other paragraphs of this

section, the decision point for grant programs in which HUD approval of

funding for an applicant's program must occur before the applicant's

selection of properties for use in its program is: HUD approval of

specific properties.

(g) Stewart B. McKinney Homeless Assistance Act Programs. Where the

recipients are nonprofit organizations or governmental entities with

special or limited purpose powers, the decision point is: HUD project

approval.

(h) Programs not specifically covered in this section. Consult with

the AS/CPD for decision points.

Subpart D--General Policy: Environmental Review Procedures

Sec. 50.18 General.

HUD may, from time to time, complete programmatic reviews that

further avoid the necessity of complying with the laws and authorities

in Sec. 50.4 on a property-by-property basis.

Sec. 50.19 Categorical exclusions not subject to the Federal laws and

authorities cited in Sec. 50.4.

(a) The activities listed below are not subject to the individual

compliance requirements of the Federal laws and authorities cited in

Sec. 50.4, unless otherwise indicated below. These activities are also

categorically excluded from the EA required by NEPA except in

extraordinary circumstances (Sec. 50.20(b)). HUD approval or

implementation of these categories of activities and related policy

actions does not require environmental review, because they do not

alter physical conditions in a manner or to an extent that would

require review under NEPA or the other laws and authorities cited at

Sec. 50.4.

(b)(1) Environmental and other studies, resource identification and

the development of plans and strategies.

(2) Information and financial advisory services.

(3) Administrative and management expenses.

(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 temporary or 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 or imminent threats to public safety including those

resulting from physical deterioration.

(11) Tenant-based rental assistance.

(12) 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.

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

utilities, furnishings, equipment, supplies, staff training and

recruitment and other incidental costs; however, in the case of

equipment, compliance with Sec. 50.4(b)(1) is required.

(14) 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; however, in the case of equipment

purchase, compliance with Sec. 50.4(b)(1) is required.

(15) 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; however, compliance with Secs. 50.4 (b)(1) and

(c)(1) and 51.303(a)(3) is required.

(16) Housing pre-development costs including legal, consulting,

developer and other costs related to site options, project financing,

administrative costs and fees for loan commitments, zoning approvals,

and other related activities which do not have a physical impact.

(17) HUD's endorsement of one-to-four family mortgage insurance

under the Direct Endorsement program and HUD's acceptance for insurance

of loans under Title I of the National Housing Act; however, compliance

with Secs. 50.4 (b)(1) and (c)(1) and 51.303(a)(3) is required.

(18) HUD's endorsement of one-to-four family mortgage insurance for

proposed construction under Improved Area processing; however, the

Appraiser/Review Appraiser Checksheet (Form HUD-54891) must be

completed.

(19) Activities of the Government National Mortgage Association

under Title III of the National Housing Act (12 U.S.C. 1716 et seq.).

(20) Activities under the Interstate Land Sales Full Disclosure Act

(15 U.S.C. 1701 et seq.).

(21) Refinancing of HUD-insured mortgages that will not allow new

construction or rehabilitation, nor result in any physical impacts or

changes except for routine maintenance; however, compliance with

Sec. 50.4(b)(1) is required.

(22) Approval of the sale of a HUD-held mortgage.

(23) Approval of the foreclosure sale of a property with a HUD-held

mortgage; however, appropriate restrictions will be imposed to protect

historic properties.

(c)(1) Approval of policy documents that do not direct, provide for

assistance or loan and mortgage insurance for, or otherwise govern or

regulate property acquisition, disposition, lease, rehabilitation,

alteration, demolition, or new construction, or set out or provide for

standards for construction or construction materials, manufactured

housing, or occupancy;

(2) Approval of policy documents that amend a previous document

where the underlying document as a whole would not fall within the

exclusion but the amendment by itself would do so;

(3) Approval of policy documents that set out fair housing or

nondiscrimination standards or provide for assistance in promoting or

enforcing fair housing or nondiscrimination;

(4) Approval of handbooks, notices and other documents that provide

operating instructions and procedures in connection with activities

under a Federal Register document that has previously been subject to a

required environmental review.

(5) Approval of a Notice of Funding Availability (NOFA) that

provides funding under, and does not alter environmental requirements

of, a regulation or program guideline that was previously published in

the Federal Register, provided that the NOFA specifically refers to the

environmental review provisions of the regulation or guideline.

(6) Statutorily required and/or discretionary establishment and

review of interest rates, loan limits, building cost limits, prototype

costs, fair market rent schedules, HUD-determined prevailing wage

rates, and similar rate and cost determinations and related external

administrative or fiscal requirements or procedures which do not

constitute a development decision that affects the physical condition

of specific project areas or building sites.

[[Page 50920]]

Sec. 50.20 Categorical exclusions subject to the Federal laws and

authorities cited in Sec. 50.4.

(a) The following actions, activities and programs are

categorically excluded from the NEPA requirements of this part. They

are not excluded from individual compliance requirements of other

environmental statutes, Executive orders and HUD standards cited in

Sec. 50.4, where appropriate. Form HUD-4128 shall be used to document

compliance. Where the responsible official determines that any item

identified below may have an environmental effect because of

extraordinary circumstances (40 CFR 1508.4), the requirements of NEPA

shall apply (see paragraph (b) of this section).

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

architectural barriers that restrict the mobility of and accessibility

to elderly and persons with disabilities.

(2) Rehabilitation of structures when the following conditions are

met:

(i) In the case of residential buildings, the unit density is not

changed more than 20 percent;

(ii) The project does not involve changes in land use (from non-

residential to residential or from residential to non-residential); and

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

of the total estimated cost of replacement after rehabilitation.

(3) 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.

(4) Acquisition or disposition of, or equity loans on, an existing

structure.

(5) Purchased or refinanced housing and medical facilities under

section 223(f) of the National Housing Act (12 U.S.C. 1715n).

(6) Mortgage prepayments or plans of action (including incentives)

under 24 CFR part 248.

(b) For categorical exclusions having the potential for significant

impact because of extraordinary circumstances, HUD must prepare an EA

in accordance with subpart E. If it is evident without preparing an EA

that an EIS is required pursuant to Sec. 50.42, HUD should proceed

directly to the preparation of an EIS in accordance with subpart F.

Sec. 50.21 Aggregation.

Activities which are geographically related and are logical parts

of a composite of contemplated HUD projects shall be evaluated

together.

Sec. 50.22 Environmental management and monitoring.

An Environmental Management and Monitoring Program shall be

established prior to project approval when it is deemed necessary by

the HUD approving official. The program shall be part of the approval

document and must:

(a) Be concurred in by the Field Environmental Clearance Officer

(FECO) (in the absence of a FECO, by the Program Environmental

Clearance Officer in Headquarters) and any cooperating agencies;

(b) Contain specific standards, safeguards and commitments to be

completed during project implementation;

(c) Identify the staff who will be responsible for the post-

approval inspection; and

(d) Specify the time periods for conducting the evaluation and

monitoring the applicant's compliance with the project agreements.

Sec. 50.23 Public participation.

HUD shall inform the affected public about NEPA-related hearings,

public meetings, and the availability of environmental documents (see

40 CFR 1506.6(b)) in accordance with this section. Where project

actions result in a FONSI, the FONSI will be available in the project

file. The local HUD field office may be contacted by persons who wish

to review the FONSI. In all cases, HUD shall mail notices to those who

have requested them. Additional efforts for involving the public in

specific notice or compliance requirements shall be made in accord with

the implementing procedures of the laws and authorities cited in

Sec. 50.4. Notices pertaining to an EIS or an amendment to an EIS or a

FONSI subject to Sec. 50.34 shall be given to the public in accordance

with paragraphs (a) through (d) of this section.

(a) A NOI/EIS shall be forwarded to the AS/CPD to the attention of

the Departmental Environmental Clearance Officer for publication in the

Federal Register.

(b) Notices will be bilingual if the affected public includes a

significant portion of non-English speaking persons and will identify a

date when the official public involvement element of the proposed

action is to be completed and HUD internal processing is to continue.

(c) All required notices shall be published in an appropriate local

printed news medium, and sent to individuals and groups known to be

interested in the proposed action.

(d) All notices shall inform the public where additional

information may be obtained.

Sec. 50.24 HUD review of another agency's EIS.

Where another agency's EIS is referred to the HUD Field Office in

whose jurisdiction the project is located, the Field Environmental

Clearance Officer shall determine whether HUD has an interest in the

EIS and, if so, will review and comment. Any EIS received from another

Federal agency requesting comment on legislative proposals,

regulations, or other policy documents shall be sent to the AS/CPD for

comment, and the AS/CPD shall provide the General Counsel the

opportunity for comment.

Subpart E--Environmental Assessments and Related Reviews

Sec. 50.31 The EA.

(a) Form HUD-4128--Environmental Assessment and Compliance Findings

for the Related Laws--is the EA form to be used for analysis and

documentation by HUD for projects and activities under subpart E. The

Departmental Environmental Clearance Officer shall approve the issuance

of equivalent formats, if Form HUD-4128 does not meet specific program

needs.

(b) The program representative shall obtain interdisciplinary

assistance from professional experts and other HUD staff as needed.

Additional information may also be requested of the sponsor/applicant.

HUD is responsible for assessing and documenting the extent of the

environmental impact.

Sec. 50.32 Responsibility for environmental processing.

The program staff in the HUD office responsible for processing the

project application or recommending a policy action is responsible for

conducting the compliance finding, EA, or EIS. The collection of data

and studies as part of the information contained in the environmental

review may be done by an applicant or the applicant's contractor. The

HUD program staff may use any information supplied by the applicant or

contractor, provided HUD independently evaluates the information, will

be responsible for its accuracy, supplements the information, if

necessary, to conform to the requirements of this part, and prepares

the environmental finding. Assessments for projects over 200 lots/

dwelling units or beds shall be sent to the Field Environmental

Clearance Officer (FECO) or, in the absence of a FECO, to the Program

Environmental Clearance

[[Page 50921]]

Officer in Headquarters for review and comment.

Sec. 50.33 Action resulting from the assessment.

(a) A proposal may be accepted without modifications if the EA

indicates that the proposal will not significantly (see 40 CFR 1508.27)

affect the quality of the human environment and a FONSI is prepared.

(b) A proposal may be accepted with modifications provided that:

(1) Changes have been made that would reduce adverse environmental

impact to acceptable and insignificant levels; and

(2) An Environmental Management and Monitoring Program is developed

in accordance with Sec. 50.22 when it is deemed necessary by the HUD

approving official.

(c) A proposal should be rejected if significant and unavoidable

adverse environmental impacts would still exist after modifications

have been made to the proposal and an EIS is not prepared.

(d) A proposal (if not rejected) shall require an EIS if the EA

indicates that significant environmental impacts would result.

Sec. 50.34 Time delays for exceptional circumstances.

(a) Under the circumstances described in this section, the FONSI

must be made available for public review for 30 calendar days before a

final decision is made whether to prepare an EIS and before the HUD

action is taken. The circumstances are:

(1) When the proposed action is, or is closely similar to, one

which normally requires the preparation of an EIS pursuant to

Sec. 50.42(b) but it is determined, as a result of an EA or in the

course of preparation of a draft EIS, that the proposed action will not

have a significant impact on the human environment; or

(2) When the nature of the proposed action is without precedent and

does not appear to require more than an assessment.

(b) In such cases, the FONSI must be concurred in by the AS/CPD and

the Program Environmental Clearance Officer. Notice of the availability

of the FONSI shall be given to the public in accordance with paragraphs

(a) through (d) of Sec. 50.23.

Sec. 50.35 Use of prior environmental assessments.

When other Federal, State, or local agencies have prepared an EA or

other environmental analysis for a proposed HUD project, these

documents should be requested and used to the extent possible. HUD

must, however, conduct the environmental analysis and prepare the EA

and be responsible for the required environmental finding.

Sec. 50.36 Updating of environmental reviews.

The environmental review must be re-evaluated and updated when the

basis for the original environmental or compliance findings is affected

by a major change requiring HUD approval in the nature, magnitude or

extent of a project and the project is not yet complete. A change only

in the amount of financing or mortgage insurance involved does not

normally require the environmental review to be re-evaluated or

updated.

Subpart F--Environmental Impact Statements

Sec. 50.41 EIS policy.

EIS's will be prepared and considered in program determinations

pursuant to the general environmental policy stated in Sec. 50.3 and 40

CFR 1505.2 (b) and (c).

Sec. 50.42 Cases when an EIS is required.

(a) An EIS is required if the proposal is determined to have a

significant impact on the human environment pursuant to subpart E.

(b) An EIS will normally be required if the proposal:

(1) Would provide a site or sites for hospitals or nursing homes

containing a total of 2,500 or more beds; or

(2) Would remove, demolish, convert, or substantially rehabilitate

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

projects categorically excluded under Sec. 50.20), or which would

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

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

(c) When the environmental concerns of one or more Federal

authorities cited in Sec. 50.4 will be affected by the proposal, the

cumulative impact of all such effects should be assessed to determine

whether an EIS is required. Where all of the affected authorities

provide alternative procedures for resolution, those procedures should

be used in lieu of an EIS.

Sec. 50.43 Emergencies.

In cases of national emergency and disasters or cases of imminent

threat to health and safety or other emergency which require the taking

of an action with significant environmental impact, the provisions of

40 CFR 1506.11 and of any applicable Sec. 50.4 authorities which

provide for emergencies shall apply.

Dated: September 19, 1996.

Henry G. Cisneros,

Secretary.

[FR Doc. 96-24660 Filed 9-26-96; 8:45 am]

BILLING CODE 4210-32-P