Planning and Performing Construction and Other Development

DEPARTMENT OF AGRICULTURE

Rural Housing Service

Rural Business-Cooperative Service

Rural Utilities Service

Farm Service Agency

7 CFR Parts 1924, 1942, 1948, and 1980

RIN 0575-AB59

Planning and Performing Construction and Other Development

AGENCIES: Rural Housing Service, Rural Business-Cooperative Service,

Rural Utilities Service, and Farm Service Agency, USDA.

ACTION: Final rule.

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SUMMARY: The Rural Housing Service (RHS), Rural Business- Cooperative

Service (RBS), Rural Utilities Service (RUS) and Farm Service Agency

(FSA) are amending their regulations regarding construction and other

development for farm, housing, community and business programs. This

action provides RHS, RBS, RUS and FSA borrowers, grant recipients and

the public with rules for compliance with seismic safety requirements

for new building construction using RHS, RBS, RUS and FSA loan, grant

and guaranteed funds. This action is necessary to set forth the

Agencies' policies and requirements to meet the implementation

requirements of Executive Order 12699, ``Seismic Safety of Federal and

Federally Assisted or Regulated New Building Construction,'' 55 FR 835

(January 5, 1990). This Executive Order addresses compliance with the

building safety provisions of the Earthquake Hazards Reduction Act of

1977, as amended.

EFFECTIVE DATE: January 10, 1997.

FOR FURTHER INFORMATION CONTACT: Samuel J. Hodges III, Architect,

Program Support Staff, Rural Housing Service, U.S. Department of

Agriculture, STOP 0761, 1400 Independence Ave., SW., Washington, DC

20250-0761, Telephone: (202) 720-9653.

SUPPLEMENTARY INFORMATION:

Classification

This rule has been determined to be not significant for the

purposes of Executive Order 12866 and therefore has not been reviewed

by the Office of Management and Budget (OMB).

Paperwork Reduction Act

The information collection requirements contained in these

regulations have been previously approved by OMB under the provisions

of 44 U.S.C. chapter 35 and have been assigned OMB control numbers

0575-0042, 0575-0015, 0575-0130, and 0575-0024, in accordance with the

Paperwork Reduction Act of 1980 (44 U.S.C. 3507). This final rule does

not revise or impose any new information collection or recordkeeping

requirements from those approved by OMB.

Environmental Impact Statement

This document has been reviewed in accordance with 7 CFR part 1940,

subpart G, ``Environmental Program.'' It is the determination of the

issuing agencies that this action does not constitute a major Federal

action significantly affecting the quality of the human environment, in

accordance with the National Environmental Policy Act of 1969, Public

Law 91-190, an Environmental Impact Statement is not required.

Regulatory Flexibility Act

Pursuant to section 605(b) of the Regulatory Flexibility Act, 5

U.S.C. 605(b), the head of the Agencies certify that this rule will not

have a significant economic impact on a substantial number of small

entities.

The undersigned have determined that this action will not have a

significant economic impact on a substantial number of small entities

because the regulatory changes affect processing of loans and

eligibility for the programs.

[[Page 65154]]

Unfunded Mandate Reform Act of 1995

Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Public

Law 104-4, establishes requirements for Federal agencies to assess the

effects of their regulatory actions on State, local, and tribal

governments and the private sector. Under section 202 of the UMRA, the

affected Agencies generally must prepare a written statement, including

a cost-benefit analysis, for proposed and final rules with ``Federal

mandates'' that may result in expenditures to State, local, or tribal

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

million or more in any one year. When such a statement is needed for a

rule, section 205 of the UMRA generally requires the affected Agencies

to identify and consider a reasonable number of regulatory alternatives

and adopt the least costly, more cost-effective or least burdensome

alternative that achieves the objectives of the rule.

This rule contains no Federal mandates (under the regulatory

provisions of Title II of the UMRA) for State, local, and tribal

governments or the private sector. Thus, today's rule is not subject to

the requirements of sections 202 and 205 of the UMRA.

Civil Justice Reform

This final rule has been reviewed under Executive Order 12778,

Civil Justice Reform. In accordance with this rule: (1) All state and

local laws and regulations that are in conflict with this rule will be

preempted; (2) No retroactive effect will be given to this rule; and

(3) Administrative proceedings in accordance with 7 CFR part 11 must be

exhausted before bringing suit in court challenging action taken under

this rule unless those regulations specifically allow bringing suit at

an earlier time.

Intergovernmental Review

This action affects the following programs as listed in the Catalog

of Federal Domestic Assistance:

10.405 Farm Labor Housing Loans and Grants

10.407 Farm Ownership Loans

10.410 Low Income Housing Loans

10.415 Rural Rental Housing Loans

10.420 Rural Self-Help Housing Technical Assistance

10.433 Housing Preservation Grants

10.766 Community Facilities Loans

10.767 Intermediary Relending Program

10.768 Business and Industrial Loans

10.770 Water and Waste Disposal Loans and Grants

All of the affected programs, except 10.410 Low Income Housing

Loans, are subject to the provisions of Executive Order 12372 that

requires intergovernmental consultation with State and local officials.

Background

General

The affected Agencies make grants, loans, and loan guarantees for

the planning and performing of construction and other development work

in rural areas. The Agencies require borrowers and grant recipients to

meet applicable requirements mandated by Federal statutes, regulations,

and executive orders to obtain Agency financing. One such requirement

is compliance with Executive Order 12699, which implements the building

safety provisions of the Earthquake Hazards Reduction Act of 1977, as

amended (42 U.S.C. 7701 et seq.).

Therefore, the Agencies are amending their regulations regarding

construction and other development for farm credit housing, community

facilities and business programs to address the requirements of

Executive Order 12699. This action clarifies the seismic requirements

applicable to RHS, RBS, RUS, and FSA programs; informs architects,

engineers and contractors retained by borrowers and grant recipients of

the seismic safety requirements applicable to new building construction

projects; and facilitates understanding of and compliance with the

requirements.

Seismic Introduction

The Earthquake Hazards Reduction Act of 1977 (the Act), as

amended, was enacted to reduce risks to life and property from future

earthquakes in the United States through establishment and maintenance

of an effective earthquake hazards reduction program. The Act also

directs the President ``to establish and maintain an effective

earthquake hazards reduction program'' (the National Earthquake Hazards

Reduction Program or NEHRP). The Federal Emergency Management Agency

(FEMA) is the designated agency with primary responsibilities to plan

and coordinate NEHRP. The objectives of NEHRP include the development

of technologically and economically feasible design and construction

methods to make structures earthquake resistant; the development and

promotion of improved understanding and capability with respect to

seismic risk; the education of the public as to earthquake phenomena;

and other areas of seismic research.

Executive Order 12699 requires that measures to assure seismic

safety be imposed on federally assisted new building construction to

the extent permitted by law. The Executive Order requires each Federal

agency assisting in the financing through Federal grants or loans, or

guaranteeing the financing through loan or mortgage insurance programs

of newly constructed buildings to initiate a plan to assure appropriate

consideration of seismic safety.

To support the implementation of Executive Order 12699, the

Interagency Committee on Seismic Safety in Construction (ICSSC),

composed of members representing Federal agencies involved with

construction or responsible for governmental assistance for

construction, recommends the use of seismic codes and standards which

are substantially equivalent to the ``NEHRP Recommended Provisions for

the Development of Seismic Regulations for New Buildings.'' This

guideline that represents the state-of-the-art in seismic design, has

been widely reviewed, and is currently incorporated into national

standards and most model codes that can be adopted by state and local

building codes.

Seismic Design

Unlike hurricanes, earthquakes cannot be predicted; they strike

without warning with great destructive forces. Most casualties occur

when ground shaking causes buildings and other structures to collapse

and objects to fall upon people. For these reasons, buildings and other

structures need to be designed to resist earthquake forces.

Structural performance in earthquakes indicates that severe damage

to and collapse of buildings almost always are the consequence of

inadequate design or construction. The successful performance of

buildings designed and constructed in accordance with seismic standards

shows that effects of severe earthquakes can be resisted economically.

In order to reduce hazards from earthquakes, buildings should be

designed according to appropriate seismic standards and codes.

Executive Order 12699 requires the use of and conformance to seismic

standards and codes for all new federally assisted buildings to the

extent permitted by law. The Federal government has established NEHRP

to reduce the hazard due to earthquakes and ICSSC to assist Federal

agencies with earthquake hazard reduction implementation measures.

ICSSC has identified standards and model building codes that meet the

requirements of the Executive Order and recommends their use.

Therefore, the Agencies are requiring that new construction

[[Page 65155]]

financed by programs deriving their statutory from the Consolidated

Farm and Rural Development Act, 7 U.S.C. 1921, et seq., comply with the

seismic requirements of these model building codes and recommending

that the construction and housing under programs authorized by title V

of the Housing Act of 1949, as amended, 42 U.S.C. 1491, et seq.,

scomply with the seismic requirements of these model building codes.

Discussion of Comments

A proposed rule was published in the Federal Register (60 FR 44283)

on August 25, 1995, providing for a 60-day comment period. The rule

proposed that RHS, RBS, RUS and FSA amend their regulations regarding

construction and other development in order to meet the implementation

requirements of Executive Order 12699.

Interested persons were afforded an opportunity to comment and

participate in the making of this rule. Due consideration has been

given to the 5 letters received commenting on the various aspects in

the proposed rule.

Three comments suggested that development work be designed and

constructed in accordance with the seismic requirements of the most

recently adopted model building code. After review of the May 95

National Institute of Standards and Technology (NIST) report,

Comparison of the Seismic Provisions of Model Building Codes and

Standards to the 1991 NEHRP Recommended Provisions, this regulation

provides for the use of the most recently adopted model building code

in the final rule. The following editions of the model codes are

referenced in the final rule as the baseline or minimum for providing a

level of seismic safety substantially equivalent to that provided by

NEHRP Recommended Provisions:

--1991 ICBO Uniform Building Code

--1993 BOCA National Building Code

--1992 SBCCI Standard Building Code

One comment recommended the Agency recognize the Council of

American Building Officials (CABO) One and Two Family Dwelling Code

with amendments for the purpose of compliance with seismic requirements

in addition to the three model building codes. Comparison of the CABO

Code with the 1991 NEHRP provisions in the NIST report found that

conventional light frame dwellings of two stories or 35 feet in height

maximum, constructed under the 1992 CABO One and Two Family Dwelling

Code provide the same level of seismic safety as those designed using

the 1991 NEHRP provisions. However, townhouses where the Av

0.05 will not meet the level of safety prescribed by the NEHRP

provisions. Also, dwellings of masonry designed using the CABO One and

Two Family Dwelling Code will not provide a similar level of seismic

safety except where Av < 0.05. The CABO seismic requirements for

townhouses and masonry construction are not comparable to those in the

NEHRP recommended provisions. Therefore, ICSSC recommendation of model

codes appropriate for use does not include the CABO code.

The Agency recognizes that the CABO code is not completely in

compliance with the NEHRP recommended provisions. However, section

509(a) of the Housing Act of 1949, 49 U.S.C. 1479(a), requires the

Secretary to approve a residential building for financing under title V

of the Housing Act of 1949 if the building is constructed in accordance

with the standards contained in any of the voluntary national model

building codes. The Housing Act of 1949 requires the Agency to finance

decent, safe and sanitary housing, and section 4(b) of the Executive

Order requires the Agency to amend its regulations to comply with NEHRP

only ``to the extent permitted by law'' to reduce the hazards from

earthquakes. The Agency cannot disregard the requirements contained in

the Housing Act and must continue to finance dwellings constructed in

accordance with CABO, even though present CABO standards do not comply

with NEHRP. However, it is important to design buildings according to

appropriate seismic standards and codes. Therefore, the Agency

recommends, but cannot require, that all townhouses and masonry

dwellings financed by the Rural Housing Service housing programs meet

the seismic requirements of one of the voluntary national model codes

that provide a level of safety substantially equivalent to that

intended by the NEHRP recommended provisions. This will ensure that the

Agency provides decent, safe and sanitary housing for its borrowers and

meet the intent of the Executive Order.

The proposed rule contained the Agency's seismic requirements for

single family housing in exhibit N, of 7 CFR part 1924, subpart A. This

exhibit has been eliminated from the final rule and the single family

housing seismic requirements are included in the body of 7 CFR part

1924, subpart A.

One comment suggested that regulations should reference the 1994

NEHRP Maps that delineate by counties geographic areas that are

affected by the Av threshold criteria. The ICSSC recommendation of

appropriate codes specifically states that codes which are

substantially equivalent to the most recent or immediately preceding

edition of the NEHRP recommended provisions may be considered adequate.

The Agency used the 1991 NEHRP Maps for the proposed rule. However, for

the final rule the Agency used the 1994 NEHRP Maps. There is no

difference in the 1991 and 1994 Av Maps.

One comment requested a definition of the term ``earthquake

resistant'' in light of the 1994 NEHRP recommended provisions that

state ``prevention of damage even in an earthquake event with a

reasonable probability of occurrence cannot be achieved economically

for most buildings.'' The point of this statement is that the seismic

safety provisions of our building codes are intended to prevent

fatalities; they do not claim to be able to prevent property damage. A

building constructed to meet modern code requirements is considered a

success if, after the earthquake, no one has been killed by collapse or

partial collapse of the building. The building will likely be damaged

to some extent and may, in some cases, be so badly damaged that it is

not economically feasible to repair. Therefore, in terms of earthquake

resistance, the successful performance of buildings designed and

constructed in accordance with seismic standards shows that the life-

threatening effects of a severe earthquake can be resisted

economically. The level of earthquake resistance provided by up-to-date

seismic design codes and practices is intended to protect human life,

not to prevent damage to the building.

Finally, one comment suggested that the proposed rule would drive

up the cost of new construction in the face of dwindling development

resources and make new construction more difficult to finance. This

commenter also suggested an alternative, as he stated, ``to dumping

large sums of both private and public money into housing projects that

could be shaken into rubble by an earthquake.'' This alternative

suggestion would promote the development of housing that uses

alternative building materials that are less expensive to replace and

more durable than today's building materials. The Agency does not

believe that this rule will drive up the cost of housing and therefore,

did not change the final rule nor adopt the suggested alternative as a

result of this comment.

[[Page 65156]]

List of Subjects

7 CFR Part 1924

Agriculture, Construction and repair, Construction management,

Energy conservation, Housing, Loan programs--Agriculture, Low and

moderate income housing.

7 CFR Part 1942

Community development, Community facilities, Loan programs--Housing

and community development, Loan security, Rural areas, Waste treatment

and disposal--Domestic, Water supply--Domestic.

7 CFR Part 1948

Business and Industry, Credit, Economic development, Rural areas.

7 CFR Part 1980

Loan programs--Agriculture, Loan programs--Business and industry--

Rural development assistance, Loan programs--Housing and community

development, Loan programs--Community programs--Rural development

assistance.

Therefore, chapter XVIII, title 7, Code of Federal Regulations is

amended as follows:

PART 1924--CONSTRUCTION AND REPAIR

1. The authority citation for part 1924 is revised to read as

follows:

Authority: 5 U.S.C. 301; 7 U.S.C 1989; 42 U.S.C 1480.

Subpart A--Planning and Performing Construction And Other

Development

2. Section 1924.5 is amended by adding paragraph (d)(4) to read as

follows:

Sec. 1924.5 Planning development work.

* * * * *

(d) * * *

(4) Except as provided in paragraphs (d)(4)(i) through (iii) of

this section, new building construction and additions shall be designed

and constructed in accordance with the earthquake (seismic)

requirements of the applicable Agency's development standard (building

code). The analysis and design of structural systems and components

shall be in accordance with applicable requirements of an acceptable

model building code.

(i) Agricultural buildings that are not intended for human

habitation are exempt from these earthquake (seismic) requirements.

(ii) Single family conventional light wood frame dwellings of two

stories or 35 feet in height maximum shall be designed and constructed

in accordance with the 1992 Council of American Building Officials

(CABO) One and Two Family Dwelling Code or the latest edition.

(iii) Single family housing of masonry design and townhouses of

wood frame construction and additions financed (either directly or

through a guarantee) under title V of the Housing Act of 1949 are

recommended to be designed and constructed in accordance with the

earthquake (seismic) requirements of one of the building codes that

provides an equivalent level of safety to that contained in the latest

edition of the National Earthquake Hazard Reduction Program's (NEHRP)

Recommended Provisions for the Development of Seismic Regulations for

New Building (NEHRP Provisions).

(iv) Acknowledgment of compliance with the applicable seismic

safety requirements for new construction will be contained in the

certification of final plans and specification on the appropriate

Agency Form.

* * * * *

PART 1942--ASSOCIATIONS

3. The authority citation for part 1942 is revised to read as

follows:

Authority: 5 U.S.C. 301; 7 U.S.C. 1989; 16 U.S.C. 1005.

Subpart A--Community Facility Loans

4. Section 1942.18 is amended by adding paragraph (d)(17) to read

as follows:

Sec. 1942.18 Community Facilities--Planning, Bidding, Contracting,

Constructing.

* * * * *

(d) * * *

(17) Seismic safety. (i) All new building construction shall be

designed and constructed in accordance with the seismic provisions of

one of the following model building codes or the latest edition of that

code providing an equivalent level of safety to that contained in

latest edition of the National Earthquake Hazard Reduction Program's

(NEHRP) Recommended Provisions for the Development of Seismic

Regulations for New Building (NEHRP Provisions):

(A) 1991 International Conference of Building Officials (ICBO)

Uniform Building Code;

(B) 1993 Building Officials and Code Administrators International,

Inc. (BOCA) National Building Code; or

(C) 1992 Amendments to the Southern Building Code Congress

International (SBCCI) Standard Building Code.

(ii) The date, signature, and seal of a registered architect or

engineer and the identification and date of the model building code on

the plans and specifications will be evidence of compliance with the

seismic requirements of the appropriate building code.

* * * * *

PART 1948--RURAL DEVELOPMENT

5. The authority citation for part 1948 is revised to read as

follows:

Authority: 7 U.S.C. 1989.

Subpart C--Intermediary Relending Program (IRP)

6. Section 1948.117 is amended by adding paragraph (d) to read as

follows:

Sec. 1948.117 Other regulatory requirements.

* * * * *

(d) Seismic safety of new building construction. (1) The

Intermediary Relending Program is subject to the provisions of

Executive Order 12699 that requires each Federal agency assisting in

the financing, through Federal grants or loans, or guaranteeing the

financing, through loan or mortgage insurance programs, of newly

constructed buildings to assure appropriate consideration of seismic

safety.

(2) All new buildings shall be designed and constructed in

accordance with the seismic provisions of one of the following model

building codes or the latest edition of that code providing an

equivalent level of safety to that contained in the latest edition of

the National Earthquake Hazard Reduction Program's (NEHRP) Recommended

Provisions for the Development of Seismic Regulations for New Building

(NEHRP Provisions):

(i) 1991 International Conference of Building Officials (ICBO)

Uniform Building Code;

(ii) 1993 Building Officials and Code Administrators International,

Inc. (BOCA) National Building Code; or

(iii) 1992 Amendments to the Southern Building Code Congress

International (SBCCI) Standard Building Code.

(3) The date, signature, and seal of a registered architect or

engineer and the identification and date of the model building code on

the plans and specifications will be evidence of compliance with the

seismic requirements of the appropriate building code.

PART 1980--GENERAL

7. The authority citation for part 1980 is revised to read as

follows:

[[Page 65157]]

Authority: 5 U.S.C. 301; 7 U.S.C. 1989; 7 U.S.C. 4201 note; 42

U.S.C. 1480.

Subpart A--General

8. Section 1980.48 is added to read as follows:

Sec. 1980.48 Seismic safety of new building construction.

(a) The guaranteed loan programs are subject to the provisions of

Executive Order 12699 which requires each Federal agency assisting in

the financing, through Federal grants or loans, or guaranteeing the

financing, through loan or mortgage insurance programs, of newly

constructed buildings to assure appropriate consideration of seismic

safety.

(b) All new buildings shall be designed and constructed in

accordance with the seismic provisions of one of the following model

building codes or the latest edition of that code providing an

equivalent level of safety to that contained in the latest edition of

the National Earthquake Hazard Reduction Program's (NEHRP) Recommended

Provisions for the Development of Seismic Regulations for New Building

(NEHRP Provisions):

(1) 1991 International Conference of Building Officials (ICBO)

Uniform Building Code;

(2) 1993 Building Officials and Code Administrators International,

Inc. (BOCA) National Building Code; or

(3) 1992 Amendments to the Southern Building Code Congress

International (SBCCI) Standard Building Code.

(c) The date, signature, and seal of a registered architect or

engineer and the identification and date of the model building code on

the plans and specifications will be evidence of compliance with the

seismic requirements of the appropriate building code.

Dated: October 21, 1996.

Jill Long Thompson,

Under Secretary, Rural Development.

Dated: October 15, 1996.

Eugene Moos,

Under Secretary, Farm and Foreign Agricultural Services.

[FR Doc. 96-31426 Filed 12-10-96; 8:45 am]

BILLING CODE 3410-XV-U