Environmental Policies and Procedures

DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1794

RIN 0572-AB33

Environmental Policies and Procedures

AGENCY: Rural Utilities Service, USDA.

ACTION: Proposed rule.

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SUMMARY: The Rural Utilities Service (RUS) hereby revises its existing

environmental regulations, Environmental Policies and Procedures, which

have served as RUS' implementation of the National Environmental Policy

Act (NEPA) in compliance with the Council on Environmental Quality

(CEQ) Regulations for Implementing the Procedural Provisions of the

NEPA. Based on new Congressional mandates, changes in the electric

industry, and the agency's experience and review of its existing

procedures, RUS has determined that several changes are necessary for

its environmental review process to operate in a smooth, efficient, and

effective manner.

DATES: Public comments must be received by RUS or bear a postmark or

equivalent, no later than January 23, 1998.

ADDRESSES: Written comments should be sent to Gary J. Morgan, Director,

Engineering and Environmental Staff, Rural Utilities Service, Stop

1571, Room 2242, 1400 Independence Ave., SW., Washington, DC 20250-

1571. This proposed rule and the guidance bulletins in this rule will

be available on the Internet via the RUS home page at www.usda.gov/

rus/.

FOR FURTHER INFORMATION CONTACT: Gary J. Morgan, Director or Lawrence

R. Wolfe, Senior Environmental Protection Specialist, Engineering and

Environmental Staff; Rural Utilities Service, Stop 1571, 1400

Independence Ave., SW., Washington, DC 20250-1571. Telephone (202) 720-

1784. E-mail address ([email protected]) or ([email protected]).

SUPPLEMENTARY INFORMATION:

Classification

This proposed rule has been determined to be significant and was

reviewed by the Office of Management and Budget (OMB) under Executive

Order 12866.

Civil Justice Reform

This proposed rule has been reviewed under Executive Order 12988,

Civil Justice Reform. RUS has determined that this proposed rule meets

the applicable standards provided in Sec. 3. of the Executive Order.

Regulatory Flexibility Act Certification

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

U.S.C. 605(b), RUS certifies that this proposed rule will not have a

significant economic impact on a substantial number of small entities.

If a rule has a significant economic impact on a substantial number of

small entities, the Regulatory Flexibility Act requires agencies to

analyze regulatory options that would minimize any significant impact

of a rule on small entities. The application for financial assistance

under the RUS electric and telecommunications programs and the

application for loans and grants under the RUS water and waste program

are discretionary, regulatory requirements will, therefore, apply only

to those entities which choose to apply for financial assistance or

funding.

Information Collection and Recordkeeping Requirements

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.

Chapter 35, as amended) RUS is requesting comments on the information

collection incorporated in this proposed rule.

Comments on this information collection must be received by January

23, 1998.

Comments are invited in: (a) Whether the proposed collection of

information is necessary for the proper performance of the functions of

the agency, including whether the information will have practical

utility; (b) the accuracy of the agency's estimate of the burden of the

proposed collection of information; (c) ways to enhance the quality,

utility and clarity of the information to be collected; and (d) ways to

minimize the burden of the collection of information on respondents,

including through the use of automated collection techniques of other

forms of information technology.

For further information contact Lawrence R. Wolfe, Senior

Environmental Protection Specialist; Engineering and Environment Staff;

Rural Utilities Service, Stop 1571, 1400 Independence Ave., SW,

Washington, DC 20250-1571. Telephone: (202) 720-1784. E-mail:

([email protected]).

Title: 7 CFR Part 1794, Environmental Policies and Procedures.

OMB Number: 0572-NEW.

Type of Request: New collection.

Abstract: The information collection contained in this rule are

requirements prescribed by the National Environmental Policy Act of

1969 (NEPA), as amended (42 U.S.C. 4321-4346), the Council on

Environmental Quality (CEQ) Regulations for Implementing the Procedural

Provisions of NEPA (40 CFR parts 1500-1508) and certain related Federal

environmental laws, statutes, regulations, and Executive Orders.

The major events which influenced the promulgation of the proposed

revisions to this rule were the 1994 reorganization of the U.S.

Department of Agriculture, which transferred the water and waste

program from the former Farmers Home Administration to RUS, reforms

within the electric and telecommunications programs, and fundamental

changes in RUS' implementation of the CEQ regulations.

The proposed rule will combine all three programs (electric,

telecommunications, and water and waste) under a single environmental

regulation and will eliminate unnecessary and burdensome requirements

previously imposed on applicants seeking financial assistance under the

three programs. The streamlining of the regulation will allow RUS

headquarters and field staff to more expeditiously evaluate the

environmental implications of implementing RUS programs and thus speed

up the delivery of these programs to qualified applicants.

RUS applicants would provide environmental documentation, as

prescribed by the rule, to assure that policy contained in NEPA is

followed.

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The burden will vary depending on the type, size, and location of each

project, which would then prescribe the type of information collection

involved. The collection of information is only that information which

is essential for RUS to provide environmental safeguards and to comply

with NEPA as implemented by the CEQ regulations.

Estimate of Burden: Public reporting burden for this collection of

information is estimated to average 229 hours per response.

Respondents: Business or other for-profit and non-profit

institutions.

Estimated Number of Respondents: 600.

Estimated Number of Responses per Respondents: 3.

Estimated Total Annual Burden on Respondents: 415,000 hours.

Copies of this information collection can be obtained from Dawn

Wolfgang, Program Support and Regulatory Analysis, Rural Utilities

Service. Telephone: (202) 720-0812.

Send comments regarding this information collection requirement to

the Office of Information and Regulatory Affairs, Office of Management

and Budget, ATTN: Desk Officer, USDA, Room 10102, New Executive Office

Building, Washington, DC 20503, and to F. Lamont Heppe, Jr., Director,

Program Support and Regulatory Analysis, Rural Utilities Service, Stop

1522, 1400 Independence Ave., SW., Room 4034, Washington, DC 20250-

1522.

Comments are best assured of having full effect if OMB receives

them within 30 days of publication in the Federal Register. All

comments will become a matter of public record.

National Performance Review

This regulatory action is being taken as part of the National

Performance Review to eliminate unnecessary regulations and improve

those that remain in force.

National Environmental Policy Act Certification

RUS has determined that this proposed rule will not significantly

affect the quality of the human environment as defined by the National

Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). Therefore,

this action does not require an environmental impact statement or

assessment.

Program Affected

The program described by this proposed rule is listed in the

Catalog of Federal Domestic Assistance programs under numbers 10.850,

Rural Electrification Loans and Loan Guarantees, 10.851, Rural

Telephone Loans and Loan Guarantees, 10.760, Water and Waste Disposal

System for Rural Communities, 10.764, Resource Conservation Development

Loans, and 10.765, Watershed Protection and Flood Prevention Loans.

This catalog is available on a subscription basis from the

Superintendent of Documents, the U.S. Government Printing Office,

Washington, DC 20402.

Intergovernmental Review

This program is subject to the provisions of Executive Order 12372

that requires intergovernmental consultation with State and local

officials.

Unfunded Mandate

This rule contains no Federal mandates (under the regulatory

provision of Title II of the Unfunded Mandate Reform Act) for State,

local, and tribal governments of the private sector. Thus today's rule

is not subject to the requirements of section 202 and 205 of the

Unfunded Mandate Reform Act.

Background

On March 13, 1984, the Rural Electrification Administration

(predecessor of RUS) published 7 CFR part 1794, Environmental Policies

and Procedures, as a final rule in the Federal Register (49 FR 9544)

covering the actions of the electric and telecommunications programs.

Based on new Congressional mandates, changes in the electric industry,

and the agency's experience and review of its existing procedures, RUS

has determined that several changes are necessary for its environmental

review process to operate in a smooth, efficient, and effective manner.

The existing 7 CFR part 1794 was designed to process proposals from

RUS' electric and telecommunications programs in addition to the

agency's internal administrative actions. The Federal Crop Insurance

Reform and Department of Agriculture Reorganization Act of 1994 (Pub.

L. 103-354, 108 Stat. 3178), under which RUS became the successor to

the Rural Electrification Administration, transferred the water and

waste program from the former Farmers Home Administration (FmHA) to

RUS. Most changes proposed to 7 CFR part 1794 are the result of the

addition of the water and waste program to RUS. The environmental

review requirements of the water and waste program were previously

contained in 7 CFR part 1940, subpart G. While the environmental review

of electric and telecommunications proposals is entirely managed from

the national office, the environmental review of all but major or

highly controversial water and waste proposals is managed by USDA Rural

Development staff in state, county, or district offices. To avoid

confusion, some sections and subsections are further subdivided to

differentiate among the responsibilities of the three program areas.

Examples of differences in program responsibilities and requirements

can be found in Sec. 1794.5, Responsible Officials and Sec. 1794.13,

Public Involvement.

Due to the requirements of the existing regulation, RUS has

sometimes gone through a lengthy environmental review with no

commensurate benefit to the quality of the human environment.

Consequently, significant time and resources have been expended by RUS

and its applicants when early indications strongly suggest that an

easier and more expeditious procedure would be more prudent. Experience

has shown that several types of minor RUS applicant proposals involve

negligible environmental impact. In a number of instances, such

projects have been delayed as a result of outdated procedures without

any benefit to the quality of the human environment.

To foster clarity, readability, and brevity, this proposed rule

includes changes to the format of the current rule. A list of

definitions has been added to subpart A. Existing subparts B and C have

been combined. The order in which proposals are classified in subpart C

has been arranged from minor to major actions. The arrangement of

subparts D through G mirrors the order of classification in subpart C.

Information originally included in subpart J on Supplemental

Environmental Impact Statements (EIS) has been incorporated into

proposed subpart G.

Appendix A, which displays a flow chart of RUS' EIS process would

be deleted. RUS believes that displaying a flow chart of its EIS

process as part of this regulation had limited value and there is no

benefit to include it in the proposed revision.

For further guidance in the preparation of public notices and

environmental documents, RUS is preparing a series of guidance

bulletins. Three program specific bulletins that will be issued

concurrently with the final rule provide guidance in preparing the

Environmental Report (ER) for proposed actions classified as

categorical exclusions and proposed actions which require an

Environmental Assessment (EA). A fourth bulletin provides applicants

with guidance in

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the preparation of public notices and public involvement activities.

Further information on these bulletins is provided in Sec. 1794.8.

This proposed rule contains a variety of substantive and procedural

changes from the provisions of the current rule. Some of these

revisions are minor or merely intended to clarify existing RUS policy

and procedure, such as Sec. 1794.4 (Trivial Violations) which was

deleted and Sec. 1794.7 which defines some of the terminology specific

to the agency. Other revisions reflect fundamental changes in RUS'

implementation of the CEQ regulations and are outlined below.

The relationship between RUS and its electric and

telecommunications applicants has changed substantially since RUS

issued the final rule in March of 1984. Changes that have occurred in

the last 4 years have been particularly dramatic. Historically, RUS

provided substantially all of its applicants' capital needs and

established a lending relationship reflecting that dominant lending

role. However, because of limited annual loan authorization levels, RUS

no longer serves such a role. Moreover, in a 1993 amendment to section

306E of the Rural Electrification Act of 1936, as amended (7 U.S.C.

936e), Congress required RUS to abandon its close hands-on control of

its applicants and instead follow the practices of private market

lenders. RUS has done so through the development of new forms of loan

agreements and security instruments and the publication of 7 CFR Part

1717, subpart M, Operational Controls, which reduce or eliminate much

of the oversight and control historically exercised by RUS.

Reflecting these changes and reforms, RUS proposes to revise that

section of the regulations identifying actions requiring environmental

review. Environmental reviews will be required in connection with the

approval of financial assistance for applicants and the issuance of

rules, regulations, and bulletins by RUS. No reviews will be required

in connection with approvals provided by RUS pursuant to its loan

contracts and security instruments with applicants such as approvals of

lien accommodations or the use of general funds by applicants. These

approvals are ministerial and are not federal actions subject to

environmental reviews.

The existing regulation states that all RUS prepared environmental

documents will use metric units with non-metric equivalents in

parentheses and that environmental documents prepared by or for the

applicant should follow the same format. RUS proposes to reverse that

format. All RUS prepared environmental documents will use non-metric

equivalents with one of the following two options: metric units in

parentheses immediately following the non-metric equivalents or a

metric conversion table as an appendix. RUS environmental guide

bulletins will recommend that applicants follow the same format.

Within subpart C, a classification system defines the level of

environmental review required for agency and applicant proposed

actions. Sections 1794.21 through 1794.25 are further subdivided when

appropriate to differentiate between actions being proposed by RUS and

actions proposed by electric, telecommunications, and water and waste

program applicants. The purpose of these additional subsections is to

aid program applicants in determining the category in which their

proposed action is classified.

A number of classification changes are being proposed within

subpart C. These proposed reclassifications involve minor actions

proposed by applicants which rarely, if ever, result in significant

environmental impact or public interest. These changes will streamline

environmental review of minor actions, and will allow the agency to

focus its resources on larger projects. RUS believes that the proposed

changes will provide adequate safeguards to identify any unusual

circumstances that may require additional agency scrutiny.

Within Secs. 1794.21(a) and 1794.22(a), RUS proposes to modify the

thresholds for acreage (facility sites), and capacity (generation

facilities). Three categories of proposals that previously required RUS

approval of applicant actions would be deleted, five categories of

proposals would be downgraded to no longer require an Environmental

Report (ER), and six new categories of proposals would be added to

Sec. 1794.21(a). One proposal that previously required an Environmental

Assessment (EA) and two new categories of proposals would be added to

Sec. 1794.22(a).

In addition to modifying the thresholds for acreage and capacity,

RUS proposes to impose different thresholds for construction of

electric generating capacity at new sites versus existing sites and to

add three new categories of proposals within Sec. 1794.23. Proposed

acreage and capacity threshold changes within Sec. 1794.24, and a

proposed capacity threshold change within Sec. 1794.25 reflect changes

that would be made in Secs. 1794.21(a), 1794.22(a), and 1794.23. No

change is proposed for the existing thresholds for transmission line

length, however, the existing thresholds for multiple substations

associated with transmission lines would be eliminated. Capacity

thresholds would also be eliminated for hydroelectric proposals in

Secs. 1794.22 and 1794.23. RUS proposed instead to, in most cases,

adopt the NEPA document prepared by the Federal Energy Regulatory

Commission, the Federal licensing agency of hydroelectric projects in

which RUS applicants participate.

The thresholds for proposed actions in the Water and Waste Program

as defined in 7 CFR part 1940, subpart G, were reclassified in

Secs. 1794.21(b) and 1794.22(b). In 7 CFR part 1940, subpart G, EAs are

classified into two categories, Class I and II; each category

establishing a level of documentation commensurate with the extent of

potential environmental impacts. Class I EAs were classified as routine

minor actions which typically do not justify more extensive

documentation as are necessary for Class II EAs. The Class I EA

includes a checklist to document environmental impacts similar to that

of a categorical exclusion.

Based on historical experience and a survey of the thresholds

established by other agencies who administer similar types of water and

waste programs, RUS is proposing to eliminate the two tiered

classification for EAs and adopt the more traditional classification

scheme as outlined in the CEQ regulations. Because RUS co-funds a

significant portion of its projects with other Federal and State

agencies, a more traditional classification and documentation scheme is

thought to be more conducive to minimizing duplicative environmental

review efforts.

All current thresholds in 7 CFR part 1940, subpart G were re-

evaluated and would be reclassified based on the following parameters.

The primary parameter determining thresholds between categorically

excluded actions and those actions which require the preparation of EAs

would be the volume of water or wastewater, as defined in terms of

equivalent residential dwelling units. The proposed regulation would

require applicants to design categorically excluded proposals to meet

current needs with a modest growth potential and to serve predominantly

residential uses either within the existing service area of a system or

confined to within a one-mile extension beyond current community

boundaries. The proposed regulation would require that proposed actions

not meeting the above conditions warrant a more detailed analysis as

outlined for EAs.

[[Page 62530]]

In addition, specialized criteria would be established for not

classifying a proposed action as a categorical exclusion. These

criteria are consistent conceptually with the U. S. Environmental

Protection Agency's environmental review requirements in 40 CFR 6.505

for Title II of the Clean Water Act, Grants for Construction of

Treatment Works.

Reviewers that disagree with RUS' proposed classifications and or

thresholds are encouraged to cite specific experiences that support

their position on this proposed action.

RUS proposes to modify its procedures in subparts D through G of

this part. In Sec. 1794.32, public notice requirements are established

for proposed actions that impact important land resources (floodplains,

wetlands, and important farmland). Notice of availability requirements

in Sec. 1794.42 would be modified for all three program areas. As

proposed, the EA would be the subject document of the notice, where

previously, the applicant's ER was the subject document. By this change

the notice requirements for all three programs would be consistent for

both EA proposals and EA with scoping proposals. This change will

encourage more public involvement by allowing public review of EA

proposals prior to the issuance of a Finding of No Significant Impact

(FONSI).

RUS would also change its notice requirements for electric program

projects requiring scoping. The timing of RUS' Federal Register notice

for public scoping meetings in Sec. 1794.52 would be reduced from 30

days to 14 days prior to the meeting. RUS has determined that no

appreciable benefit has resulted from an earlier notice requirement.

The existing regulation allows RUS to adopt the applicant's ER as its

EA but requires RUS to prepare its own EA from the applicant's

Environmental Impact Assessment (EIA) where a proposed action requires

scoping. RUS proposes to change this requirement by allowing the EIA to

serve as its EA provided RUS completes an independent evaluation which

certifies the accuracy of the document (see Sec. 1794.53) and thus be

consistent with 40 CFR Sec. 1506.5(a).

RUS would modify its policy regarding the use of contractor

prepared EIS's. Under the existing regulation, RUS was required to use

agency funds when an independent contractor was chosen by RUS to

prepare the EIS. In accordance with the provisions of 7 CFR part 1789,

``Use of Consultants Funded by Applicants'' and Section 759A of the

Federal Agriculture Improvement and Reform Act of 1996, the draft and

final EIS may be prepared by a consultant selected by RUS and funded by

the applicant. A new requirement, publication of a notice of

availability by RUS and the applicant for a Record of Decision would be

established in Sec. 1794.63. Information on Supplemental EIS's would be

included in subpart G of this part.

Any environmental document accepted or prepared by RUS prior to the

effective date of these regulations should be developed in accordance

with the RUS' environmental requirements in effect at the time the

document was accepted or prepared by RUS.

List of Subjects in 7 CFR Part 1794

Environmental impact statements, Reporting and recordkeeping

requirements.

For reasons set forth in the preamble, chapter XVII of title 7 of

the Code of Federal Regulations is proposed to be amended by revising

part 1794 to read as follows:

PART 1794--ENVIRONMENTAL POLICIES AND PROCEDURES

Subpart A--General

Sec.

1794.1 Purpose.

1794.2 Authority

1794.3 Actions requiring environmental review.

1794.4 [Reserved].

1794.5 Metric units

1794.6 Responsible officials.

1794.7 Definitions.

1794.8 Guidance.

1794.9 [Reserved]

Subpart B--Implementation of the National Environmental Policy Act

1794.10 Applicant responsibilities.

1794.11 Apply NEPA early in the planning process.

1794.12 Consideration of alternatives

1794.13 Public involvement.

1794.14 Interagency involvement and coordination.

1794.15 Limitations on actions during the NEPA process.

1794.16 Tiering.

1794.17 Mitigation

1794.18--1794.19 [Reserved]

Subpart C--Classification of Proposals

1794.20 Control.

1794.21 Categorically excluded proposals without an ER.

1794.22 Categorically excluded proposals requiring an ER.

1794.23 Proposals normally requiring an EA.

1794.24 Proposals normally requiring an EA with scoping.

1794.25 Proposals normally requiring an EIS.

1794.26-1794.29 [Reserved]

Subpart D--Procedure for Categorical Exclusions

1794.30 General.

1794.31 Classification.

1794.32 Environmental report.

1794.33 Agency action.

1794.34-1794.39 [Reserved]

Subpart E--Procedure for Environmental Assessments

1794.40 General.

1794.41 Document requirements.

1794.42 Notice of availability.

1794.43 Agency finding.

1794.44 Timing of agency action.

1794.45-1794.49 [Reserved]

Subpart F--Procedure for Environmental Assessments With Scoping

1794.50 Normal sequence.

1794.51 Preparation for scoping.

1794.52 Scoping meetings.

1794.53 Environmental impact analysis.

1794.54 Agency determination.

1794.55--1794.59 [Reserved]

Subpart G--Procedure for Environmental Impact Statement

1794.60 Normal sequence.

1794.61 Environmental impact statement.

1794.62 Supplemental EIS.

1794.63 Record of decision.

1794.64 Timing of agency action.

1794.65--1794.69 [Reserved]

Subpart H--Adoption of Environmental Documents

1794.70 General.

1794.71 Adoption of an EA.

1794.72 Adoption of an EIS.

1794.73 Timing of agency action.

1794.74--1794.79 [Reserved]

Authority: 7 U.S.C. 6941 et seq.; 42 U.S.C. 4321 et seq.; 40 CFR

parts 1500-1508.

Subpart A--General

Sec. 1794.1 Purpose.

(a) This part contains the policies and procedures of the Rural

Utilities Service (RUS) for implementing the requirements of the

National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C.

4321-4346); the Council on Environmental Quality (CEQ) Regulations for

Implementing the Procedural Provisions of NEPA (40 CFR parts 1500-1508)

and certain related Federal environmental laws, statutes, regulations,

and Executive Orders (E.O.) that apply to RUS' programs and

administrative actions.

(b) The policies and procedures contained in this part are intended

to help RUS officials make decisions that are based on an understanding

of environmental consequences, and take actions that protect, restore,

and enhance the environment. In assessing the potential environmental

impacts of its actions, RUS will consult early with appropriate

Federal, State, and local

[[Page 62531]]

agencies and other organizations to provide decision-makers with

information on the issues that are truly significant to the action in

question.

Sec. 1794.2 Authority.

(a) This part derives its authority from and is intended to be

compliant with NEPA, CEQ Regulations for Implementing the Procedural

Provisions of NEPA, and other RUS regulations.

(b) Where practicable, RUS will use NEPA analysis and documents and

review procedures to integrate the requirements of related

environmental statutes, regulations, and orders.

(c) This part integrates the requirements of NEPA with other

planning and environmental review procedures required by law, or by RUS

practice including but not limited to:

(1) Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.);

(2) The National Historic Preservation Act (16 U.S.C. 470 et seq.);

(3) Farmland Protection Policy Act (7 U.S.C. 4201 et seq.);

(4) E.O. 11593, Protection and Enhancement of the Cultural

Environment (3 CFR, 1971 Comp., p. 154);

(5) E.O. 11514, Protection and Enhancement of Environmental Quality

(3 CFR, 1970 Comp., p. 104);

(6) E.O. 11988, Floodplain Management (3 CFR, 1977 Comp., p. 117);

(7) E.O. 11990, Protection of Wetlands (3 CFR, 1977 Comp., p. 121);

and

(8) E.O. 12898, Federal Actions To Address Environmental Justice in

Minority Populations and Low Income Populations (3 CFR, 1994 Comp., p.

859).

(d) Applicants are responsible for ensuring that proposed actions

are in compliance with all appropriate RUS requirements, environmental

statutes, regulations, and E.O.s. Bulletins identified in Sec. 1794.8

contain a list of certain statutes, regulations, and E.Os that may be

applicable to proposed actions for which RUS financial assistance is

provided. Environmental documents submitted by the applicant shall be

prepared under the supervision and guidance of RUS and RUS will

evaluate and be responsible for the accuracy of all information

contained therein.

Sec. 1794.3 Actions requiring environmental review.

The provisions of this part apply to actions by RUS including the

approval of financial assistance pursuant to the Electric,

Telecommunications, and Water and Waste Programs, the disposal of

property held by RUS pursuant to such programs, and the issuance of new

or revised rules, regulations, and bulletins.

Sec. 1794.4 [Reserved]

Sec. 1794.5 Metric units.

RUS normally will prepare environmental documents using non-metric

equivalents with one of the following two options; metric units in

parentheses immediately following the non-metric equivalents or a

metric conversion table as an appendix. Environmental documents

prepared by or for a RUS applicant should follow the same format.

Sec. 1794.6 Responsible officials.

The Administrator of RUS has the responsibility for Agency

compliance with all environmental laws, regulations, and E.O.s that

apply to RUS programs and administrative actions. Responsibility for

ensuring environmental compliance for actions taken by RUS has been

delegated as follows:

(a) Electric and Telecommunications Programs. The appropriate

Assistant Administrator is responsible for ensuring compliance with

this part for the respective programs.

(b) Water and Waste Program. The Assistant Administrator for this

program is responsible for ensuring compliance with this part at the

national level. The State Director is the responsible official for

ensuring compliance with this part for actions taken at the State

Office level.

Sec. 1794.7 Definitions.

The following definitions, as well as the definitions contained in

40 CFR part 1508 of the CEQ regulations, apply to the implementation of

this part:

Applicant. The organization applying for financial assistance or

other approval from either the Electric or Telecommunications Programs

or the organization applying for a loan or grant from the Water and

Waste Program.

Construction Work Plan (CWP). The document required by 7 CFR part

1710.

Emergency situation. The repairs made to return the damaged

facilities of an applicant's system back to service because of a

natural disaster or system failure that may involve an immediate or

imminent threat to public health or safety.

Environmental Impact Analysis (EIA). The document submitted by the

applicant for proposed actions subject to compliance with Sec. 1794.24

and under special circumstances Sec. 1794.25.

Environmental Report (ER). The environmental document and

documentation normally submitted by applicants for proposed actions

subject to compliance with Secs. 1794.22 and 1794.23. An ER for the

Water and Waste Program refers to the environmental review

documentation normally included as part of the Preliminary Engineering

Report.

Environmental review. Any one or all of the levels of environmental

analysis described under subpart C of this part.

Equivalent Dwelling Unit (EDU). Level of water or waste service

provided to a typical rural residential dwelling.

Important Land Resources. Defined pursuant to the U.S. Department

of Agriculture's Departmental Regulation 9500-3, Land Use Policy, as

important farmland, prime forestland, prime rangeland, wetlands, and

floodplains. Copies of the Departmental Regulation are available from

USDA, Rural Utilities Service, Washington, DC 20250.

Loan Design. Document required by 7 CFR part 1737.

Preliminary Engineering Report (PER). Document required by 7 CFR

part 1780 for Water and Waste Programs. A PER is prepared by an

applicant's engineering consultant documenting a proposed action's

preliminary engineering plan and design and the applicable

environmental review activities as required in this part. Upon approval

by RUS, the PER, or a portion thereof, shall serve as the RUS

environmental document.

Supervisory control and data acquisition system (SCADA). Electronic

monitoring and control equipment installed at electric substations and

switching stations.

Third-party consultant. A party selected by RUS to prepare the EIS

for proposed actions listed in Sec. 1794.25 where the applicant

initiating the proposal agrees to fund preparation of the document in

accordance with the provisions of 7 CFR Part 1789, ``Use of Consultants

Funded by Borrowers'' and Section 759A of the Federal Agriculture

Improvement and Reform Act of 1996 (7 U.S.C. 2204b(b)).

Sec. 1794.8 Guidance.

(a) Electric and Telecommunications Programs. For further guidance

in the preparation of public notices and environmental documents, RUS

has prepared a series of program specific guidance bulletins. RUS

Bulletin 1794A-600 provides guidance in preparing the ER for proposed

actions classified as categorical exclusions (CEs) (Sec. 1794.22(a));

RUS Bulletin 1794A-601 provides guidance in preparing the ER for

proposed actions which require EAs (Sec. 1794.23(b)); and RUS Bulletin

1794A-602 provides guidance in the preparation of public notices.

Copies of

[[Page 62532]]

these bulletins are available upon request by contacting Rural

Utilities Service, Publications Office, PSRA, Stop 1522; 1400

Independence Avenue, SW; Washington, D.C. 20250-1522.

(b) Water and Waste Program. RUS Bulletin 1780-26 provides guidance

in preparing the PER for proposed actions classified as CEs

(Sec. 1794.22(b)) and EAs (Sec. 1794.23(c)). A copy of this bulletin is

available upon request by contacting the appropriate State Director.

State Directors may provide supplemental guidance to meet State and

local laws and regulations and to provide for orderly application

procedures and efficient service to applicants. State Directors shall

obtain the Administrator's approval for all supplements to RUS Bulletin

1780-26.

Sec. 1794.9 [Reserved]

Subpart B--Implementation of the National Environmental Policy Act

Sec. 1794.10 Applicant responsibilities.

As described in subpart C of this part, applicants shall, under

RUS' direct guidance and supervision, prepare the applicable

documentation concurrent with a proposed action's engineering,

planning, and design activities. Documentation shall not be considered

complete until all public review periods, as applicable, have expired

and RUS' concurrence, as defined by the appropriate decision document

and associated public notice, has been issued. This section does not in

any way relieve RUS or the applicant of the responsibilities for the

scope, objectivity, and content of the entire environmental document or

compliance with any policy, regulation, EO, or statute.

Sec. 1794.11 Apply NEPA early in the planning process.

The environmental review process requires early coordination with

and involvement of RUS. Applicants should consult with RUS at the

earliest stages of planning for any proposal that may require an RUS

action. For proposed actions that normally require an EIS, applicants

shall consult with RUS prior to obtaining the services of an

environmental consultant.

Sec. 1794.12 Consideration of alternatives.

In determining what are reasonable alternatives, RUS considers a

number of factors. These factors may include, but are not limited to,

the proposed action's size and scope, state of the technology, economic

considerations, legal and socioeconomic concerns, availability of

resources, and the timeframe in which the identified need must be

fulfilled.

Sec. 1794.13 Public involvement.

(a) General. In carrying out its responsibilities under NEPA, RUS

shall make diligent efforts to involve the public in the environmental

review process through public notices and public hearings and meetings.

Specific guidance is found in RUS bulletins. See Sec. 1794.8.

(1) All public notices required by this part shall describe the

nature, location, and extent of the proposed action and indicate the

availability and location of additional information. They shall be

published in newspaper(s) of general circulation within the proposed

action's area of environmental impact and the county(s) in which the

proposed action will take place or such other places as RUS determines.

(2) The number of editions in which the notices should be published

will be established on a project-by-project basis. Alternative forms of

notice may also be necessary to ensure that residents located in the

area affected by the proposed action are notified. The applicant should

consult with RUS prior to the issuance of notices.

(3) A copy of all comments received by the applicant concerning

environmental aspects of the proposed action shall be provided to RUS

in a timely manner. RUS and applicants shall assess and consider public

comments both individually and collectively. Responses to public

comments will be appended to the applicable environmental document.

(4) RUS and applicants shall make available to the public all

environmental documents, comments received, errata sheets and

amendments thereto, public notices, interagency correspondence, and any

applicable reference material. These materials shall be placed in

locations convenient for the public as determined by RUS and the

applicants.

(5) Public hearings or meetings shall be held at reasonable times

and locations concerning environmental aspects of a proposed action in

all cases where, in RUS' opinion, the need for hearings or meetings is

indicated in order to develop adequate information on the environmental

implications of the proposed action. Public hearings or meetings will

be coordinated to the extent practicable with other meetings which may

be required by RUS. Applicants shall, as necessary, participate in all

public hearings or meeting.

(6) Scoping procedures, in accordance with 40 CFR 1501.7, are

required for proposed actions normally requiring an EA with scoping

(Sec. 1794.24) or an EIS (Sec. 1794.25). RUS may require scoping

procedures to be followed for other proposed actions where appropriate

to achieve the purposes of NEPA.

(b) Electric and Telecommunication Programs. RUS shall have public

notices published in the Federal Register and the applicant shall

concurrently have a similar notice published in a newspaper(s) as

described in this section. Applicants shall obtain proof of publication

from the newspaper(s) for inclusion into the applicable environmental

document.

(c) Water and Waste Programs. The applicant shall have public

notices described in this section published in a newspaper(s).

Applicants shall obtain proof of publication from the newspaper(s) for

inclusion into the applicable environmental document. Only where the

proposed actions requires an EIS shall RUS, in addition to applicant

published notices, publish notice in the Federal Register.

Sec. 1794.14 Interagency involvement and coordination.

In an attempt to reduce or eliminate duplication of effort with

State or local procedures, RUS will, to the extent possible and in

accordance with 40 CFR 1506.2, actively participate with any

governmental agency to cooperatively or jointly prepare environmental

documents so that one document will comply with all applicable laws.

Where RUS has agreed to participate as a cooperating agency, in

accordance with 40 CFR 1501.6, RUS may rely upon the lead agency's

procedures for implementing NEPA procedures. In addition, RUS shall

request that:

(a) The lead agency indicate that RUS is a cooperating agency in

all NEPA related notices published for the proposed action;

(b) The scope and content EA or EIS satisfies the statutory and

regulatory requirements applicable to RUS; and

(c) The applicant shall inform RUS in a timely manner of its

involvement in a proposed action where another Federal agency is

preparing an environmental document so as to permit RUS to adequately

fulfill its duties as a cooperating agency.

Sec. 1794.15 Limitations on actions during the NEPA process.

(a) Until RUS concludes its environmental review process, the

applicant shall take no action concerning the proposed action which

would have an adverse environmental impact or limit the choice of

reasonable alternatives being considered in the environmental review

process. See 40 CFR 1506.1.

(b) Electric Program. In determining which applicant activities

related to a

[[Page 62533]]

proposed action can proceed prior to completion of the environmental

review process, RUS must determine, among other matters that:

(1) The activity shall not have an adverse environmental impact and

shall not preclude the search for other alternatives. For example,

purchase of water rights, optioning or transfer of land title, or

continued use of land as historically employed will not have an adverse

environmental impact. However, site preparation or construction at or

near the proposed site (e.g. rail spur) or development of a related

facility (e.g. opening a captive mine) normally will have an adverse

environmental impact.

(2) Expenditures are minimal. To be minimal the expenditure must

not exceed the amount of loss which the applicant could absorb without

jeopardizing the Government's security interest in the event the

proposed action is not approved by the Administrator, and must not

compromise the objectivity of RUS' environmental review.

Notwithstanding other considerations, expenditures equivalent to up to

10 percent of the proposed action's cost normally will not compromise

RUS' objectivity. Expenditures for the purpose of producing

documentation required for RUS' environmental review are excluded from

this limitation.

Sec. 1794.16 Tiering.

It is the policy of RUS to prepare programmatic level analysis in

order to tier an EIS and an EA where it is practicable, and there will

be a reduction of delay and paperwork, or where better decision making

will be fostered. This policy is in compliance with the requirements of

40 CFR 1502.20.

Sec. 1794.17 Mitigation.

(a) General. In addition to complying with the requirements of 40

CFR 1502.14(f), it is RUS policy that a discussion of mitigative

measures essential to render the impacts of the proposed action not

significant will be included in or referenced in the Finding of No

Significant Impact (FONSI) and the Record of Decision (ROD).

(b) Water and Waste Program. (1) Mitigation measures which involve

protective measures for environmental resources cited in this part or

restrictions or limitations on real property located in the service

areas of the proposed action shall be negotiated with applicants and

any relevant regulatory agency so as to be enforceable. All mitigation

measures incorporating land use issues shall recognize the rights and

responsibilities of landholders in making private land use decisions

and recognize the responsibility of governments in influencing how land

may be used to meet public needs.

(2) Mitigation measures shall be included in the letter of

conditions.

(3) RUS has the responsibility for the post approval construction

or security inspections or monitoring to ensure that all mitigation

measures included in the environmental documents have been implemented

as specified in the letter of conditions.

Secs. 1794.18-1794.19 [Reserved]

Subpart C--Classification of Proposals

Sec. 1794.20 Control.

Electric and Telecommunications Programs. For environmental review

purposes, RUS has identified and established categories of proposed

actions (Secs. 1794.21 through 1794.25). An applicant may propose to

participate with other parties in the ownership of a project where the

applicant(s) does not have sufficient control to alter the development

of the project. In such a case, RUS shall determine whether the

applicant participants have sufficient control and responsibility to

alter the development of the proposal prior to determining its

classification. Where the applicant proposes to participate with other

parties in the ownership of a proposal and all applicants cumulatively

own:

(a) Five percent or less of a project, the proposed action will not

be considered a Federal action subject to this part;

(b) Thirty three and one-third percent or more of a project, the

proposed action shall be treated in its usual category;

(c) More than five percent but less than 33\1/3\ percent of a

project, RUS shall determine whether the applicant participants have

sufficient control and responsibility to alter the development of the

proposal. Consideration shall be given to such factors as:

(1) Whether construction would be completed regardless of RUS

financial assistance or approval;

(2) The stage of planning and construction;

(3) Total applicant participation;

(4) Participation percentage of each utility; and

(5) Managerial arrangements and contractual provisions.

Sec. 1794.21 Categorically excluded proposals without an ER.

(a) General. Certain types of action taken by RUS do not normally

require an ER. Proposed actions within this classification are:

(1) The issuance of bulletins and information publications that do

not concern environmental matters or substantial facility design,

construction, or maintenance practices;

(2) Procurement activities related to the operation of RUS; and

(3) Personnel and administrative actions.

(b) Electric and Telecommunications Programs. Applications for

financial assistance for the types of proposed actions listed below,

normally do not require the submission of an ER. These types of actions

are subject to the requirements of Sec. 1794.31. Applicants shall

sufficiently describe all proposed actions so their proper

classification can be determined. Detailed description shall be

provided for those proposed actions so noted. Proposed actions within

this classification are:

(1) Purchase of land where use shall remain unchanged, or the

purchase of existing water rights where no associated construction is

involved;

(2) Additional or substitute financial assistance for proposed

actions which have previously received environmental review and

approval from the RUS, provided the scope of the proposal and

environmental considerations have not changed;

(3) Rehabilitation or reconstruction of transportation facilities

within existing rights-of-way (ROW) or generating facility sites where

there is no substantial increase in use. A description of the

rehabilitation or reconstruction shall be provided to RUS;

(4) Changes or additions to microwave sites, substations, switching

stations, telecommunications switching or multiplexing centers,

buildings, or small structures requiring new physical disturbance or

fencing of less than one acre (0.4 hectare). A description of the

additions or changes and the area to be impacted by the expansion shall

be provided to RUS;

(5) Internal modifications or equipment additions (e.g., computer

facilities, relocating interior walls) to structures or buildings;

(6) Internal or minor external changes to electric generating or

fuel processing facilities and related support structures where there

is negligible impact on the outside environment. A description of the

changes shall be provided to RUS;

(7) Ordinary maintenance or replacement of equipment or small

structures (e.g., line support structures, line transformers, microwave

facilities, telecommunications remote switching and multiplexing

sites);

[[Page 62534]]

(8) The construction of telecommunications facilities within the

fenced area of an existing substation, switching station, or within the

boundaries of an existing electric generating facility site;

(9) SCADA and energy management systems involving no new external

construction;

(10) Testing or monitoring work (e.g., soil or rock core sampling,

monitoring wells, air monitoring;

(11) Studies and engineering undertaken to define proposed actions

or alternatives sufficiently so that environmental effects can be

assessed;

(12) Construction of electric power lines within the fenced area of

an existing substation, switching station, or within the boundaries of

an electric generating facility site. A description of the facilities

to be constructed shall be provided to RUS;

(13) Contracts for certain items of equipment which are part of a

proposed action for which RUS is preparing an EA or EIS, and which meet

the limitations on actions during the NEPA process as established in 40

CFR 1506.1(d) and contained in Sec. 1794.17 (e.g., long lead time items

such as turbines, boilers, or substation transformers);

(14) Rebuilding of power lines or telecommunications cables where

road or highway reconstruction requires the applicant to relocate the

lines either within or adjacent to the new road or highway easement or

right-of-way. A description of the facilities to be constructed shall

be provided to RUS;

(15) Phase or voltage conversions, reconductoring or upgrading of

existing electric distribution lines, or telecommunication facilities.

A description of the facilities to be constructed shall be provided to

RUS;

(16) Construction of new power lines, substations, or

telecommunications facilities on previously disturbed industrial or

commercial, where the applicant has no control over the location of the

new facilities. Related off-site facilities would be treated in their

normal category. A description of the facilities to be constructed

shall be provided to RUS;

(17) Participation by an applicant(s) in any proposed action where

total applicant financial participation will be five percent or less;

(18) Purchase of existing facilities or a portion thereof where use

or operation will remain unchanged and which presently are in

compliance with environmental laws and regulations. A description of

the facilities to be purchased along with a certification from the

utility owner that the facilities are in compliance with applicable

environmental laws and regulations shall be provided to RUS;

(19) Additional bulk commodity storage (e.g., coal, fuel oil,

limestone) within existing generating station boundaries. A

certification attesting to the current state of compliance of the

existing facilities and a description of the facilities to be added

shall be provided to RUS;

(20) Proposals designed to reduce the amount of pollutants released

into the environment (e.g., precipitators, baghouse or scrubber

installations, coal washing equipment) which will have no other

environmental impact outside the existing facility site. A description

of the facilities to be constructed shall be provided to RUS;

(21) Construction of standby diesel electric generators one

megawatt or less and associated facilities, for the primary purpose of

providing emergency power, at an existing applicant headquarters or

district office, telecommunications switching or multiplexing site, or

an industrial facility served by the applicant. A description of the

facilities to be constructed shall be provided to RUS;

(22) Construction of onsite facilities designed for the transfer of

ash, scrubber wastes, and other byproducts from coal-fired electric

generating stations for recycling or storage at an existing coal mine

(surface or underground). A description of the facilities to be

constructed shall be provided to RUS;

(23) Changes or additions to an existing water well system,

including new water supply wells and associated pipelines within the

boundaries of an existing well field or generating station site. A

description of the changes or additions shall be provided; and

(24) Repowering or uprating of an existing unit(s) at a fossil-

fueled generating station that does not include the substitution of one

fuel combustion technology with another.

(c) Water and Waste Program. Applications for financial assistance

for certain proposed actions do not normally require the submission of

an ER. These types of actions are subject to the classification

requirements of Sec. 1794.31. Proposed actions within this

classification are:

(1) Management actions relating to invitation for bids, contract

award, and the actual physical commencement of construction activities;

(2) Proposed actions that primarily involve the purchase and

installation of office equipment or motorized vehicles;

(3) The award of financial assistance for technical assistance,

planning purposes, environmental analysis, management studies, or

feasibility studies; and

(4) Loan closing and service activities that do not alter the

purpose, operation, location, or design of the proposal as originally

approved, such as subordinations, and amendments and revisions to

approved actions, and the provision of additional financial assistance

for cost overruns.

Sec. 1794.22 Categorically excluded proposals requiring an ER.

(a) Electric and Telecommunications Programs. Applications for

financial assistance for the types of proposed actions listed herein

normally require the submission of an ER and are subject to the

requirements of Sec. 1794.32. In order to provide for extraordinary

circumstances, RUS may require development of an ER for proposals

listed in Sec. 1794.21(b). Proposed actions within this classification

are:

(1) Construction of electric power lines and associated facilities

designed for or capable of operation at a nominal voltage of either:

(i) Less that 69 kilovolts (kV);

(ii) Less than 230 kV if no more than 25 miles (40.2 kilometers) of

line are involved; or

(iii) 230 kV or greater involving no more than three miles (4.8

kilometers) of line;

(2) Construction of buried and aerial telecommunications lines,

cables, and related facilities;

(3) Construction of microwave facilities, SCADA, and energy

management systems involving no more than five acres (2 hectares) of

physical disturbance at any single site;

(4) Construction of cooperative or company headquarters,

maintenance facilities, or other buildings involving no more than 10

acres (4 hectares) of physical disturbance or fenced property;

(5) Changes to existing transmission lines that involve less than

20 percent pole replacement, or the complete rebuilding of existing

distribution lines within the same right-of-way (ROW). Changes to

existing transmission lines that require 20 percent or greater pole

replacement will be considered the same as new construction;

(6) Changes or additions to existing substations, switching

stations, telecommunications switching or multiplexing centers, or

external changes to buildings or small structures requiring one acre

(0.4 hectare) or more but no more than five acres (2 hectares) of new

physically disturbed land or fenced property;

(7) Construction of substations, switching stations, or

telecommunications switching or

[[Page 62535]]

multiplexing centers requiring no more than five acres (2 hectares) of

new physically disturbed land or fenced property;

(8) Construction of diesel electric generating facilities of five

megawatts (MW) (nameplate rating) or less either at an existing

generation or substation site. This category also applies to a diesel

electric generating facility of five MW or less that is located at or

adjacent to an existing landfill site and supplied with refuse derived

fuel. All new associated facilities and related electric power lines

shall be covered in the ER;

(9) Additions to or the replacement of existing generating units at

a hydroelectric facility or dam which will result in no change in the

normal maximum surface area or normal maximum surface elevation of the

existing impoundment. All new associated facilities and related

electric power lines shall be covered in the ER;

(10) Construction of a battery energy storage system at an existing

generating station or substation site;

(11) Proposals designed or associated with facilities that will

reduce the amount of pollutants released into the environment which

will not have significant environmental impacts outside of the existing

facility site; and

(12) Construction of new water supply wells and associated

pipelines not located within the boundaries of an existing well field

or generating station site.

(b) Water and Waste Program. For certain proposed actions,

applications for financial assistance normally require the submittal of

an ER as part of the PER. These types of actions are subject to the

requirements of Sec. 1794.32. Proposed actions within this

classification are:

(1) Rehabilitation of existing facilities, functional replacement

or rehabilitation of equipment, or the construction of new ancillary

facilities adjacent or appurtenant to existing facilities, including

but not limited to, replacement of utilities such as water or sewer

lines and appurtenances for existing users with modest or moderate

growth potential, reconstruction of curbs and sidewalks, street

repaving, and building modifications, renovations, and improvements;

(2) Facility improvements to meet current needs with a modest

change in use, size, capacity, purpose or location from the original

facility. The proposed action must be designed for predominantly

residential use with other new or expanded users being small-scale,

commercial enterprises having limited secondary impacts;

(3) Construction of new facilities that are designed to serve

populations less than 500 EDU in size with modest growth potential. The

proposed action must be designed for predominantly residential use with

other new or expanded users being small-scale, commercial enterprises

having limited secondary impacts and must be located within the

existing service area of the facility;

(4) The extension, enlargement or construction of interceptors,

collection, transmission or distribution lines within a one-mile (1.6

kilometer) limit from existing service areas estimated from any

boundary listed as follows:

(i) The corporate limits of the community being served;

(ii) If there are developed areas immediately contiguous to the

corporate limits of a community, the limits of these developed areas;

or

(iii) If an unincorporated area is to be served, the limits of the

developed areas;

(5) Actions described in Sec. 1794.21(c)(4) which alter the

purpose, operation, location, or design of the proposed action as

originally approved;

(6) Installation of new water supply wells or water storage

facilities that are required by a regulatory authority or standard

engineering practice as a backup to existing production well(s) or as

reserve for fire protection; and

(7) The lease or disposal of real property by RUS which may result

in a change in use of the real property in the reasonably foreseeable

future and such change is equivalent in magnitude or type as described

above.

(c) Specialized criteria for not granting a CE for Water and Waste

Projects. An EA must be prepared if a proposed action normally

classified as a CE meets any of the following:

(1) The facilities to be provided will either create a new or

relocate an existing discharge to surface or ground waters;

(2) The facilities will result in substantial increases in the

volume of discharge or the loading of pollutants from an existing

source or from new facilities to receiving waters; or

(3) The facilities would provide capacity to serve a population

greater than 500 EDUs or a 30 percent increase in the existing

population whichever is larger.

Sec. 1794.23 Proposals normally requiring an EA.

RUS will normally prepare an EA for all proposed actions which are

neither categorical exclusions (Secs. 1794.21 and 1794.22) nor normally

requiring an EIS (Sec. 1794.25). For certain actions within this class,

scoping and document procedures contained in Secs. 1794.50 through

1794.54 shall be followed (see Sec. 1794.24). The following are

proposed actions which normally require an EA and shall be subject to

the requirements of Secs. 1794.40 through 1794.44.

(a) General. Issuance or modification of RUS regulations concerning

environmental matters.

(b) Telecommunications and Water and Waste Programs. An EA shall be

prepared for applications for financial assistance for all proposed

actions not specifically defined as a CE or otherwise specifically

categorized by the Administrator on a case-by-case basis.

(c) Electric Program. Applications for financial assistance for

certain proposed actions normally require the preparation of an EA.

Proposed actions falling within this classification are:

(1) Construction of combustion turbine or diesel generating

facilities of 50 MW (nameplate rating) or less at a new site (no

existing generating capacity) except for items covered by

Sec. 1794.22(a)(8). All new associated facilities and related electric

power lines shall be covered in the EA;

(2) Construction of combustion turbine or diesel generating

facilities of 100 MW (nameplate rating) or less at an existing

generating site, except for items covered by Sec. 1794.22(a)(8). All

new associated facilities and related electric power lines shall be

covered in the EA;

(3) Construction of any other type of new electric generating

facilities of 10 MW (nameplate rating) or less. All new associated

facilities and related electric power lines shall be covered in the EA;

(4) Repowering or uprating of an existing unit(s) at a fossil-

fueled generating station where the existing fuel combustion technology

of the affected unit(s) is substituted for another (e.g., coal or oil-

fired boiler is converted to a fluidized bed boiler or replaced with a

combustion turbine unit);

(5) Installation of new generating units at an existing

hydroelectric facility or dam, or the replacement of existing

generating units at a hydroelectric facility or dam which will result

in a change in the normal maximum surface area or normal maximum

surface elevation of the existing impoundment. All new associated

facilities and related electric power lines shall be covered in the EA;

(6) A new drilling operation or the expansion of a mining or

drilling operation;

(7) Purchase of existing facilities or a portion thereof which are

presently in violation of Federal, State, or local environmental laws

or regulations;

[[Page 62536]]

(8) Construction of cooperative headquarters, maintenance, and

equipment storage facilities involving more than 10 acres (4 hectares)

of physical disturbance or fenced property;

(9) The construction of electric power lines and related facilities

designed for and capable of operation at a nominal voltage of 230 kV or

more involving more than three miles (4.8 kilometers) but not more than

25 miles (40 kilometers) of line;

(10) The construction of electric power lines and related

facilities designed for or capable of operation at a nominal voltage of

69 kV or more but less than 230 kV where more than 25 miles (40

kilometers) of power line are involved;

(11) The construction of substations or switching stations

requiring greater than five acres (2 hectares) but not more than 10

acres (4 hectares) of new physical disturbance at a single site; and

(12) Construction of facilities designed for the transfer and

storage of ash, scrubber wastes, and other byproducts from coal-fired

electric generating stations that will be located beyond the existing

facility site boundaries.

Sec. 1794.24 Proposals normally requiring an EA with scoping.

(a) Electric Program. Applications for financial assistance for

certain proposed actions require the use of a scoping procedure in the

development of the EA. These types of actions are subject to the

requirements of Secs. 1794.50--1794.54. Proposed actions falling within

this classification are:

(1) The construction of electric power lines and related facilities

designed for and capable of operation at a nominal voltage of 230 kV or

more where more than 25 miles (40 kilometers) of power line are

involved;

(2) The construction of substations and switching stations require

new physical disturbance or fencing of more than 10 acres (4 hectares)

at any one site; and

(3) Construction of combustion turbines and diesel generators of

more than 50 MW at a new site or more than 100 MW at an existing site;

and the construction of any other type of electric generating facility

of more than 10 MW but not more than 50 MW (nameplate rating). All new

associated facilities and related electric power lines shall be covered

in any EA or EIS that is prepared.

(b) Telecommunications and Water and Waste Programs. There are no

actions normally falling within this classification.

Sec. 1794.25 Proposals normally requiring an EIS.

Applications for financial assistance for certain proposed actions

that may significantly affect the quality of the human environment

shall require the preparation of an EIS.

(a) Electric Program. An EIS will normally be required in

connection with proposed actions involving the following types of

facilities:

(1) New electric generating facilities of more than 50 MW

(nameplate rating) other than diesel generators or combustion turbines.

All new associated facilities and related electric power lines shall be

covered in the EIS; and

(2) A new mining operation when the applicants have effective

control (e.g., dedicated mine or purchase of a substantial portion of

the mining equipment).

(b) Proposals listed above are subject to the requirements of

Secs. 1794.60, 1794.61, 1794.63, and 1794.64. Preparation of a

supplemental draft or final EIS in accordance with 40 CFR 1502.9 shall

be subject to the requirements of Secs. 1794.62 and 1794.64.

(c) Telecommunications and Water and Waste Programs. No groups or

sets of proposed actions normally require the preparation of an EIS.

The environmental review process, as described in this part, shall be

used to identify those proposed actions for which the preparation of an

EIS is necessary. If an EIS is required, RUS shall proceed directly to

its preparation. Prior completion of an EA is not mandatory.

Secs. 1794.26-1794.29 [Reserved]

Subpart D--Procedure for Categorical Exclusions

Sec. 1794.30 General.

The procedures of this subpart which apply to proposed actions

classified as CE's in Secs. 1794.21 and 1794.22 provide RUS with

information necessary to determine if the proposed action meets the

criteria for a CE. Where, because of extraordinary circumstances, a

proposed action may have a significant effect on the quality of the

human environment, RUS may require additional environmental

documentation.

Sec. 1794.31 Classification.

(a) Electric and Telecommunications Programs. RUS will normally

determine the proper environmental classification of projects based on

its evaluation of the project description set forth in the construction

work plan or loan design which the applicant is required to submit with

its application for financial assistance. Each project must be

sufficiently described to ensure its proper classification. RUS may

require the applicant to develop detailed descriptions where

appropriate.

(b) Water and Waste Program. RUS will normally determine the proper

environmental classification for projects based on its evaluation of

the preliminary planning and design information. This information is

developed by the applicant under the guidance and supervision of the

State Environmental Coordinator.

Sec. 1794.32 Environmental report.

(a) For proposed actions listed in Secs. 1794.21(a) and 1794.21(b),

the applicant is normally not required to submit an ER.

(b) For proposed actions listed in Secs. 1794.22(a) and 1794.22(b),

the applicant shall normally submit an ER or its equivalent. The

applicant may be required to publish public notices and provide

evidence of such with its ER if the proposed action is located in,

impacts on, or converts important land resources.

Sec. 1794.33 Agency action.

RUS may act on an application for financial assistance upon

determining, based on the review of documents as set forth above and

such additional information as RUS deems necessary, that the project is

categorically excluded.

Secs. 1794.34-1794.39 [Reserved]

Subpart E--Procedure for Environmental Assessments

Sec. 1794.40 General.

This subpart applies to proposed actions described in Sec. 1794.23.

Where appropriate to carry out the purposes of NEPA, RUS may impose, on

a case-by-case basis, additional requirements associated with the

preparation of an EA. If at any point in the preparation of an EA, RUS

determines that the proposed action will have a significant impact on

the environment, the preparation of an EIS shall be required and the

procedures in subpart G of this part shall be followed.

Sec. 1794.41 Document requirements.

Applicants will provide an ER in accordance with the appropriate

guidance documents referenced in Sec. 1794.8. After RUS has evaluated

the ER and has determined the ER adequately addresses all applicable

environmental issues, the ER will normally serve as RUS' EA. RUS will

take responsibility for the scope and content of an EA.

[[Page 62537]]

Sec. 1794.42 Notice of availability.

(a) Prior to RUS making a finding in accordance with Sec. 1794.43

and upon RUS' authorization and guidance, the applicant shall have a

notice published which announces the availability of the EA and

solicits public comments on the EA.

(b) Electric and Telecommunications Programs. RUS shall have a

notice published in the Federal Register which announces the

availability of the EA and solicits public comments on the EA.

Sec. 1794.43 Agency finding.

(a) If RUS finds, based on an EA that the proposed action will not

have a significant impact on the human environment, RUS will prepare a

FONSI. Upon authorization of RUS, the applicant shall have a notice

published which informs the public of the RUS' finding and the

availability of the EA and FONSI. The notice shall be prepared and

published in accordance with RUS guidance.

(b) Electric and Telecommunications Programs. RUS shall have a

notice published in the Federal Register that announces the

availability of the EA and FONSI.

Sec. 1794.44 Timing of agency action.

RUS may take its final action on proposed actions requiring an EA

(Sec. 1794.23) at any time after publication of the RUS and applicant

notices that a FONSI has been made.

Secs. 1794.45-1794.49 [Reserved]

Subpart F--Procedure for Environmental Assessments With Scoping

Sec. 1794.50 Normal sequence.

For proposed actions covered by Sec. 1794.24 and other actions

determined by the Administrator to require an EA with Scoping, RUS and

the applicant will follow the same procedures for scoping and the

requirements for notices and documents as for proposed actions normally

requiring an EIS through the point at which the Environmental Impact

Assessment (EIA) is submitted (see Sec. 1794.54). After the EIA has

been submitted, RUS will make a judgment to utilize the EIA as its EA

and issue a FONSI or prepare an EIS.

Sec. 1794.51 Preparation for scoping.

(a) As soon as practicable after RUS and the applicant have

developed a schedule for the environmental review process, RUS will

have its notice of intent to prepare an EA or EIS published in the

Federal Register (see 40 CFR 1508.22). The applicant shall have

published, in a timely manner, a notice similar to RUS' notice.

(b) As part of the early planning, the applicant should consult

with appropriate Federal, State, and local agencies to inform them of

the proposed action, identify permits and approvals which must be

obtained, and administrative procedures which must be followed.

(c) Before formal scoping is initiated, RUS will require the

applicant to submit an Alternative Evaluation Study and either a Siting

Study (generation) or a Macro-Corridor Study (transmission lines).

(d) The applicant is encouraged to hold public information meetings

in the general location of the proposed action and any reasonable

alternatives when such applicant meetings will make the scoping process

more meaningful. A written summary of the comments made at such

meetings must be submitted to RUS as soon as practicable after the

meetings.

Sec. 1794.52 Scoping meetings.

(a) Both RUS and the applicant shall have a notice published which

announces a public scoping meeting is to be conducted, either in

conjunction with the notice of intent or as a separate notice.

(b) The RUS notice shall be published in the Federal Register at

least 14 days prior to the meeting(s). The applicant's notice shall be

published in a newspaper at least 10 days prior to the meeting(s).

Other forms of media may also be used by the applicant to notice the

meetings.

(c) Where an environmental document is the subject of the hearing

or meeting, that document will be made available to the public at least

10 days in advance of the meeting.

(d) The scoping meeting(s) will be held in the area of the proposed

action at such places as RUS determines will best afford an opportunity

for public involvement. Any person or representative of an

organization, or government body desiring to make a statement at the

meeting may make such statement in writing or orally. The format of the

meeting may be one of two styles. It can either be of the traditional

style which features formal presentations followed by a comment period,

or the open house style in which attendees are able to individually

obtain information on topics or issues of interest within an

established time period. A transcript will be made of the scoping

meeting.

(e) As soon as practicable after the scoping meeting(s), RUS, as

lead agency, shall determine the significant issues to be analyzed in

depth and identify and eliminate from detailed study the issues which

are not significant or which have been covered by prior environmental

review. RUS will develop a proposed scope for further environmental

study and review. RUS will send a copy of this proposed scope to

cooperating agencies and the applicant, and allow recipients 30 days to

comment on the scope's adequacy and emphasis. After expiration of the

30 day period, RUS shall provide written guidance to the applicant

concerning the scope of environmental study to be performed and

information to be gathered.

Sec. 1794.53 Environmental impact analysis.

(a) After scoping procedures have been completed, RUS will require

the applicant to develop and submit an EIA. The EIA shall be prepared

under the supervision and guidance of the RUS staff and RUS will

evaluate and be responsible for the accuracy of all information

contained therein.

(b) The EIA will normally serve as the RUS EA. The EIA can also

serve as the basis for an EIS, and under such circumstances will be

made an appendix to the EIS. After RUS has reviewed and found the EIA

to be satisfactory, the applicant shall provide RUS with a sufficient

number of copies of the EIA to satisfy RUS' distribution plan.

(c) The EIA shall include a summary of the construction and

operation monitoring and mitigation measures for the proposed action.

These measures may be revised as appropriate in response to comments

and other information. and shall be incorporated by summary or

reference into the FONSI or ROD.

Sec. 1794.54 Agency determination.

Following the scoping process and the development of a satisfactory

EA, RUS shall make a judgment as to whether or not the proposed action

is a major Federal action significantly affecting the quality of the

human environment. If a significant effect is evident, RUS will

continue with the procedures in subpart G of this part. If a

significant effect is not evident, RUS will proceed in accordance with

Secs. 1794.42 through 1794.44.

Secs. 1794.55-1794.59 [Reserved]

Subpart G--Procedure for Environmental Impact Statements

Sec. 1794.60 Normal sequence.

For proposed actions requiring an EIS (see Sec. 1794.25), the NEPA

process shall proceed in the same manner as for proposed actions

requiring an EA with

[[Page 62538]]

scoping through the point at which the scoping process is completed

(see Sec. 1794.52).

Sec. 1794.61 Environmental impact statement.

(a) General. An EIS shall be prepared in accordance with 40 CFR

part 1502. The draft and final EIS may be prepared by a third-party

consultant selected by RUS and funded by the applicant.

(1) After a draft or final EIS has been prepared, RUS and the

applicant shall concurrently have a notice of availability for the

document published. The time period allowed for review will be a

minimum of 45 days for a draft EIS and 30 days for a final EIS. This

period is measured from the date that the U.S. Environmental Protection

Agency (EPA) publishes a notice in the Federal Register in accordance

with 40 CFR 1506.10.

(2) In addition to circulation required by 40 CFR 1502.19, the

draft and final EIS (or summaries thereof, at RUS' discretion) shall be

circulated to the appropriate state, regional, and metropolitan

clearinghouses.

(3) Where a final EIS does not require substantial changes from the

draft EIS, RUS may document required changes through errata sheets,

insertion pages, and revised sections to be incorporated into the draft

EIS. In such cases, RUS shall circulate such changes together with

comments on the draft EIS, responses to comments, and other appropriate

information as its final EIS. RUS will not circulate the draft EIS

again, although the draft EIS will be provided if requested within 30

days of publication of notice of availability of the final EIS.

(b) Electric Program. Where an EIA has been prepared by the

applicant or its consultant, RUS will develop its draft and final EIS

from the EIA. An EIA will not be required if the draft and final EIS is

prepared by a third-party consultant.

Sec. 1794.62 Supplemental EIS.

(a) A supplement to a draft or final EIS shall be prepared,

circulated, and given notice by RUS and the applicant in the same

manner (exclusive of scoping) as a draft and final EIS (see

Sec. 1794.61).

(b) Normally RUS and the applicant will have published notices of

intent to prepare a supplement to a final EIS in those cases where a

ROD has already been issued.

(c) RUS, at its discretion, may issue an information supplement to

a final EIS where RUS determines that the purposes of NEPA are

furthered by doing so even though such supplement is not required by 40

CFR 1502.9(c)(1). RUS and the applicant shall concurrently have a

notice of availability published. The notice requirements shall be the

same as for a final EIS and the information supplement shall be

circulated in the same manner as a final EIS. RUS shall take no final

action on any proposed modification discussed in the information

supplement until 30 days after the RUS notice of availability or the

applicant's notice is published, whichever occurs later.

Sec. 1794.63 Record of decision.

(a) Upon completion of the review period for a final EIS, RUS will

have its ROD published in accordance with 40 CFR 1505.2 and 1506.10.

(b) Separate RUS and applicant notices shall be published

concurrently. The notices shall summarize the RUS decision and announce

the availability of the ROD. Copies of the ROD will be made available

upon request from the point of contact identified in the notice.

Sec. 1794.64 Timing of agency action.

(a) RUS may take its final action or execute commitments on

proposed actions requiring an EIS or Supplemental EIS at any time after

the ROD has been published.

(b) For budgetary purposes some financial assistance may be

approved conditionally with a stipulation that no funds shall be

advanced until a ROD has been prepared .

Secs. 1794.65-1794.69 [Reserved]

Subpart H--Adoption of Environmental Documents.

Sec. 1794.70 General.

This subpart covers the adoption of environmental documents

prepared by other Federal agencies. Where applicants participate in

proposed actions for which an EA or EIS has been prepared by or for

another Federal agency, RUS may adopt the existing EA or EIS in

accordance with 40 CFR 1506.3.

Sec. 1794.71 Adoption of an EA.

RUS may adopt a Federal EA or EIS or a portion thereof as its EA.

RUS shall make the EA available and assure that notice is provided in

the same manner as if RUS had prepared the EA.

Sec. 1794.72 Adoption of an EIS.

(a) Where RUS determines that an existing Federal EIS requires

additional information to meet the standards for an adequate statement

for RUS' proposed action, RUS may adopt all or a portion of the EIS as

a part of its draft EIS. The circulation and notice provisions for a

draft and final EIS (see Sec. 1794.61) apply.

(b) If RUS was not a cooperating agency but determines that another

Federal agency's EIS is adequate, RUS shall adopt the EIS as its final

EIS. RUS and the applicant shall have separate notices published

advising of RUS' adoption of the EIS and independent determination of

its adequacy.

(c) If the adopted EIS is generally available and meets the

Agency's standards, RUS shall have a public notice published informing

the public of its action and availability of the EIS to interested

parties upon request. If the adopted EIS is not generally available,

RUS shall have a public notice published as above and will circulate

copies in accordance with 40 CFR 1502.19 and 1506.3.

Sec. 1794.73 Timing of agency action.

Where RUS has adopted another agency's environmental documents, the

timing of the action shall be subject to the same requirements as if

RUS had prepared the required EA or EIS.

Secs. 1794.74-1794.79 [Reserved]

Dated: November 12, 1997.

Inga Smulkstys,

Deputy Under Secretary, Rural Development.

[FR Doc. 97-30341 Filed 11-21-97; 8:45 am]

BILLING CODE 3410-15-P