Floodplain Management and Protection of Wetlands

SUMMARY: This proposed rule would adopt procedures implementing

Executive Order 11990, Protection of Wetlands. The rule proposes to

codify policies and procedures to avoid the long and short term adverse

impacts associated with the destruction or modification of wetlands and

to avoid direct or indirect support of new construction in wetlands

wherever there is a practicable alternative. The procedures would apply

to HUD and certain State and local responsible entities before their

respective decisions to approve a proposed action that involves HUD

financial assistance and that would affect a wetland. The wetland

procedures would be incorporated into HUD's existing floodplain

management regulations.

The rule proposes several other changes to HUD's regulations that

govern floodplain management and that would also govern the protection

of wetlands. These include, among others, broadening the use of the

abbreviated four-step decision making process used by HUD and

responsible entities when considering the impact on floodplains in

connection with the repair of existing structures. Specifically, the

rule proposes to authorize the use of the abbreviated process for all

of HUD's rehabilitation programs, not just for repairs financed under

its mortgage insurance programs. This rule would also add a requirement

that, for residential new construction in a 100-year floodplain, an

applicant must secure a final Letter of Map Amendment or final Letter

of Map Revision as a condition for approval of HUD financial

assistance.

DATES: Comment due date: August 3, 1998.

ADDRESSES: Interested persons are invited to submit comments regarding

this proposed rule to the Regulations Division, Office of the General

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

Seventh Street, SW, Washington, DC 20410-0500. Comments should refer to

the above docket number and title. Facsimile (FAX) comments are not

acceptable. A copy of each communication submitted will be available

for public inspection and copying during regular business hours (7:30

a.m. to 5:30 p.m. Eastern time) at the above address.

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

Community Viability, Office of Community Planning and Development,

Department of Housing and Urban Development, Room 7240, 451 Seventh

Street, SW, Washington, DC 20410-7000. For inquiry by phone or e-mail:

contact Walter Prybyla, Deputy Director for Policy, Environmental

Review Division at (202) 708-1201, Ext. 4466 or e-mail:

Walter__P[email protected]. This phone number is not toll-free. Hearing or

speech-impaired individuals may access this number via TTY by calling

the toll-free Federal Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Discussion

Wetland-Related Amendments

This rule proposes to codify the procedures for complying with

Executive Order 11990, Protection of Wetlands (42 FR 26961, May 25,

1977). The Executive Order directs each agency to provide leadership

and take action to minimize the destruction, loss or degradation of

wetlands, and to preserve and enhance the natural and beneficial values

of wetlands in carrying out the agency's responsibilities for (1)

acquiring, managing, and disposing of Federal lands and facilities; (2)

providing Federally undertaken, financed, or assisted construction and

improvements; and (3) conducting Federal activities and programs

affecting land use, including but not limited to water and related land

resources planning, regulating, and licensing activities.

The Department published a proposed rule on January 4, 1990 (55 FR

396) to implement Executive Order 11990 and also Executive Order 11988,

Floodplain Management (42 FR 26951, May 25, 1977). The January 4, 1990

rule proposed to codify HUD's policies and procedures implementing

these Executive Orders in a new 24 CFR part 55. Because the wetland

policies were under review by the Administration, the part 55 final

rule (59 FR 19100, April 21, 1994) implemented only the floodplain

management Executive Order. The Department advised the public (59 FR at

19100) that it would continue to follow outstanding instructions in

implementing the wetlands Executive Order.

This proposed rule would amend 24 CFR part 55 to implement the

requirements of Executive Order 11990. The proposed rule generally

reflects HUD's current practices for complying with the Executive

Order.

The rule would amend Sec. 55.2 (Terminology) by adding a definition

of the term ``wetlands'' (Sec. 55.2(b)(9)). The proposed definition

provides that wetlands are designated wetland areas identified or

delineated on maps issued by the Fish and Wildlife Service of the U.S.

Department of the Interior as areas that are inundated by surface or

ground water with a frequency sufficient to support, and under normal

circumstances do or would support, a prevalence of vegetative or

aquatic life that requires saturated or seasonally saturated soil

conditions for growth or reproduction. This definition would encompass,

but not be limited to, swamps, marshes, bogs, and similar areas such as

sloughs, potholes, wet meadows, river overflows, mud flats, and natural

ponds.

The proposed rule would also make several conforming amendments to

24 CFR part 55 to reflect the implementation of Executive Order 11990.

For example, Sec. 55.1, which describes the purpose of 24 CFR part 55,

would be amended to state that part 55 implements the requirements of

Executive Order 11990. The proposed rule would also make conforming

amendments to HUD's environmental regulations at 24 CFR part 50

(Protection and Enhancement of Environmental Quality) and 24 CFR part

58 (Environmental Review Procedures for Entities Assuming HUD

Environmental Responsibilities) to reflect the amendments made to 24

CFR part 55.

Other Amendments

Abbreviated decision making process. HUD's current regulations at

Sec. 55.12(a) authorize HUD or the responsible entity (as applicable)

to use an abbreviated decision making process when considering the

impact on floodplain management in connection with several listed

categories of actions. The steps currently include identifying

floodplain location (and wetland location under this proposed rule),

determining impact, considering minimization of impact, reevaluating

the proposed action, and deciding on the action.

This rule proposes two changes to this procedure. The first

proposed revision is a clarification. As Sec. 55.12(a) is currently

drafted, step 6 (Sec. 55.20(f)), reevaluate proposed action, is part of

the abbreviated process. A major component of that reevaluation,

however, is to reconsider alternatives to

[[Page 30047]]

locating the proposed action in the floodplain or wetland that had been

addressed under step 3 (Sec. 55.20(c)). The reference to step 3 in the

context of the abbreviated process is confusing because step 3 is not a

part of the abbreviated process. The rule, accordingly, would add step

6 to the list of steps in Sec. 55.12(a) that do not apply under the

abbreviated process.

For proposed actions covered by the abbreviated decision making

process, the balance of reevaluation described in step 6

(Sec. 55.20(f)(1)) can be addressed in considering minimization of

impact in step 5. Therefore, step 5 (Sec. 55.20(e)) would be revised to

provide that actions covered by Sec. 55.12(a) must be rejected if the

proposed minimization is financially or physically unworkable.

The second proposed revision concerns Sec. 55.12(a)(3), which

currently applies the abbreviated decision making process to HUD

mortgage insurance actions for the repair, rehabilitation,

modernization or improvement of existing multifamily housing projects.

This procedure has proven to be efficient and effective for the covered

programs. The Department, therefore, proposes to include all of its

programs that involve repair, rehabilitation, modernization or

improvement of existing multifamily housing projects.

The proposed rule also would add a reference to Sec. 55.12(a) in

the introductory text of Sec. 55.20 to make it clearer that not all

actions are subject to all eight steps in the decision making process.

The rule also would revise paragraph (b) of Sec. 55.12 to exclude

the leasing of not more than a total of four units of existing housing

located in a building in a 100-year floodplain (or the 500-year

floodplain for Critical Actions) from the floodplain management

decision making process at Sec. 55.20. For example, such exclusion

would occur under HUD's programs providing assistance to the homeless.

This exclusion would cover leasing of not more than four units in a

building under the circumstances described in Sec. 582.100(c) for

sponsor-based rental assistance under the Shelter Plus Care Program

regulations as well as in Sec. 583.115 for grants for leasing under the

Supportive Housing Program regulations. Under Sec. 582.100(c), a

sponsor, itself, may lease from an owner the housing in which the

program participants will reside. The exclusion would not apply,

however, if the sponsor owned the project. Under Sec. 583.115, HUD may

provide grants to support the recipient's cost of leasing structures or

a portion of a structure that is to be used to provide the supportive

housing or supportive services.

This exclusion from the floodplain management decision making

process at Sec. 55.20 would apply only if the existing housing is

located outside the floodway or coastal high hazard area, the community

is participating and in good standing in the Regular Program of the

National Flood Insurance Program (NFIP) and the financial assistance

does not pay for repair or rehabilitation. Leasing of four units or

less under these conditions should have minimal impacts (if any) for

which the floodplain management decision making process at Sec. 55.20

would be warranted.

Obsolete Provisions. This proposed rule would remove

Secs. 55.12(c)(9) and 55.12(c)(10). Paragraph (c)(9) currently provides

that part 55 does not apply to HUD's acceptance of a housing

subdivision approval action by the Department of Veterans Affairs (DVA)

or Farmers Home Administration (now the Rural Housing and Community

Development Service (RHCDS)). The Department is removing the paragraph

because neither the DVA nor the RHCDS currently approves subdivisions.

Paragraph (c)(10) provides guidance on the effect of part 55 on

actions pending on May 23, 1994, the effective date of the part 55

final rule published on April 21, 1994 at 59 FR 19100. The paragraph

would be removed as unnecessary. Its removal would not substantively

alter the requirements of the part.

Revisions to step 3 for multifamily insurance projects. HUD

proposes to revise Sec. 55.20(c), Step 3, to add a new paragraph (c)(2)

to address the consideration of practicable alternatives to floodplains

and wetlands projects proposed by third parties that involve

multifamily mortgage insurance. In these cases, HUD's consideration of

practicable alternatives is limited to a particular site identified in

the application. HUD cannot require applicants to develop another site

that is beyond the floodplain or wetland. In such cases, HUD's option

in reviewing practicable alternatives is limited to proceeding to the

next step in the decision making process. This includes either

considering design modifications under Step 5 or rejecting the

application.

Residential new construction in 100-year floodplain. This proposed

rule would add a requirement that HUD financial assistance involving

residential new construction in a 100-year floodplain may not be

approved unless the applicant secures a final Letter of Map Amendment

(LOMA) or final Letter of Map Revision (LOMR). These are letters issued

by the Federal Emergency Management Agency (FEMA) indicating that the

property is not, or is no longer, located within the special flood

hazard area (100-year floodplain). The proposed rule would similarly

amend Sec. 55.20(g), step 7 of the decision making process, to require

whenever a reevaluation of proposed residential new construction

results in a determination that there is no practicable alternative to

locating the proposal in the 100-year floodplain, a statement that a

final Letter of Map Amendment (LOMA) or a final Letter of Map Revision

(LOMR) will be secured by the applicant.

The reasons for this change are to encourage: (i) public safety, in

that the potential threat to the loss of life from flooding would be

diminished for prospective residents and visitors; (ii) site selection

and planning, which avoids encroachment on the floodplain;\1\ (iii)

early coordination between the HUD applicant and FEMA for the purpose

of obtaining a LOMA or LOMR in that FEMA has jurisdiction both by law

for designation of special flood hazard areas (SFHA) and by Executive

Order 11988 for advising Federal agencies on implementation of the

Order; and (iv) cost savings that result once the LOMA or LOMR excludes

the property from the SFHA and eliminates the applicant's legal

obligation to obtain and maintain flood insurance coverage for the term

of the loan or life of the building being proposed for HUD financial

assistance. The savings may make the property more affordable for low-

and moderate-income housing.

---------------------------------------------------------------------------

\1\ Even if avoiding encroachment is impracticable, the change

requires increasing the elevation to minimize potential financial

loss due to flooding damage for uninsurable elements under the

National Flood Insurance Program (NFIP), which include outdoor

playgrounds and recreational amenities, vehicular parking and

freight access areas, public plazas and walkways, landscaping, and

the land itself.

---------------------------------------------------------------------------

Other amendments. This proposed rule would make several other

amendments to conform to earlier amendments to 24 CFR parts 50 and 58.

The rule would replace ``grant recipient'' with ``responsible entity''

in several places where the term occurs in part 55. Section 55.3,

Assignment of responsibilities, would be revised to specify the

respective responsibilities of responsible entities and recipients.

These amendments would conform part 55 to the change in terminology

adopted in the final rule that revised 24 CFR part 58 (61 FR 19122,

April 30, 1996).

Section 55.12(c) describes the categories of activities that are

not subject to part 55. This proposed rule would revise paragraph (c)

to conform

[[Page 30048]]

to amendments to parts 50 and 55. Paragraph (c)(1) would be revised to

reflect the fact that the activities that are not subject to review

under environmental authorities such as Executive Orders 11988 and

11990 include activities listed in 24 CFR 58.35(b) as well as those

listed in Sec. 58.34. A new paragraph (c)(2) would be added to include

the activities described in 24 CFR 50.19 (which was revised by a final

rule published at 61 FR 50914 on September 27, 1996). Section 50.19

lists those activities that are categorically excluded from the

environmental assessment required by NEPA and are not subject to the

individual compliance requirements of the related laws and authorities

referred to in Sec. 50.4.

A new paragraph (c)(12) (which is similar to Sec. 50.20(a)(1))

would be added to provide that special projects directed to the removal

of material and architectural barriers that restrict the mobility of

and accessibility to elderly and persons with disabilities are not

subject to part 55.

Finally, the proposed rule would add an exclusion from the

requirements of the part for the approval of financial assistance for

acquisition, leasing, construction, rehabilitation, repair,

maintenance, or operation of ships and other water-borne vessels that

will be used for transportation or cruises and will not be permanently

moored.

II. Findings and Certifications

Paperwork Reduction Act Statement

The proposed information collection requirements contained at

Secs. 55.21, 55.22 and 55.27 of this rule have been submitted to the

Office of Management and Budget (OMB) for review, under section 3507(d)

of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). An

agency may not conduct or sponsor, and a person is not required to

respond to, a collection of information unless the collection displays

a valid control number.

The public reporting burden for each of these collections of

information is estimated to include the time for reviewing

instructions, searching existing data sources, gathering and

maintaining the data needed, and completing and reviewing the

collection of information. Information on the estimated public

reporting burden is provided in the following table.

Floodplain Management and Protection of Wetlands

----------------------------------------------------------------------------------------------------------------

Responses Total

Information collection Number of per annual Hours per Total hours Regulatory

respondents respondent responses response reference

----------------------------------------------------------------------------------------------------------------

Notification of floodplain hazard. 300 1 300 1 300 55.21

Owner notice to tenants concerning

Critical Action flood hazard..... 1 50 50 \1/20\ 2.5 55.22

Documentation of compliance..... 300 1 300 8 2,400 55.27

-----------------------------------------------------------------------------

Total Annual Burden......... ........... ........... ........... ........... 2,702

----------------------------------------------------------------------------------------------------------------

In accordance with 5 CFR 1320.8(d)(1), the Department is soliciting

comments from members of the public and affected agencies concerning

the proposed collection of information to:

(1) Evaluate 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;

(2) Evaluate the accuracy of the agency's estimate of the burden of

the proposed collection of information;

(3) Enhance the quality, utility, and clarity of the information to

be collected; and

(4) Minimize the burden of the collection of information on those

who are to respond; including through the use of appropriate automated

collection techniques or other forms of information technology, e.g.,

permitting electronic submission of responses.

Interested persons are invited to submit comments regarding the

information collection requirements in this proposal. Comments must be

received within sixty (60) days from the date of this proposal.

Comments must refer to the proposal by name and docket number (FR-3447)

and must be sent to: Joseph F. Lackey, Jr., HUD Desk Officer, Office of

Management and Budget, New Executive Office Building, Washington, DC

20503.

Environmental Impact

A Finding of No Significant Impact with respect to the environment

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

which implement section 102(2)(C) of the National Environmental Policy

Act of 1969. The Finding of No Significant Impact is available for

public inspection between 7:30 a.m. and 5:30 p.m. weekdays in the

Office of the Rules Docket Clerk at the above address.

Regulatory Planning and Review

This rule has been reviewed in accordance with Executive Order

12866, issued by the President on September 30, 1993 (58 FR 51735,

October 4, 1993). Any changes to the rule resulting from this review

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

weekdays in the Office of the Rules Docket Clerk.

Regulatory Flexibility Act

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

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

doing certifies that this proposed rule would not have a significant

economic impact on a substantial number of small entities. The proposed

rule would codify HUD's policies and procedures implementing Executive

Order 11990, Protection of Wetlands. The goal of the Executive Order is

to prevent the adverse impacts associated with the destruction or

modification of wetlands. Executive Order 11990 establishes a uniform

set of requirements designed to meet this goal, and which are

applicable to both large and small entities. However, in developing the

proposed rule HUD has attempted to minimize the regulatory burden

placed on responsible entities. For example, the proposed rule would

broaden the use of the abbreviated decision making process used by HUD

and responsible entities when considering the impact on floodplains in

connection with the repair of existing structures. Specifically, the

rule proposes to authorize the use of the abbreviated process for all

of HUD's rehabilitation programs. The current regulations limit the use

of the abbreviated decision making process to repairs financed under

HUD's mortgage insurance programs.

[[Page 30049]]

Notwithstanding HUD's determination that this rule would not have a

significant economic impact on a substantial number of small entities,

HUD specifically invites comment regarding any less burdensome

alternatives to this rule that will meet HUD's objectives as described

in this preamble.

Unfunded Mandates Reform Act

The Secretary has reviewed this rule before publication and by

approving it certifies, in accordance with the Unfunded Mandates Reform

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

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

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

million or more in any one year.

Federalism

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

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

contained in this rule will not have substantial direct effects on

States or their political subdivisions, on the relationship between the

Federal Government and the States, or on the distribution of power and

responsibilities among the various levels of government. HUD's

regulations at 24 CFR part 58, implementing section 104(g) of the HCD

Act of 1974 and other similar statutory provisions, have long provided

for State and local governmental assumption of NEPA, Executive Order,

and other environmental review responsibilities. State and local

governments thus already have been assuming and carrying out these

responsibilities for many years. These amendments to part 55 merely

describe and codify more specifically the implementing policies and

procedures under Executive Order 11990.

Catalog of Federal Domestic Assistance Number

The programs affected by this rule are listed in the Catalog of

Federal Domestic Assistance under program numbers 14.108 through

14.900.

List of Subjects

24 CFR Part 50

Environmental assessments, Environmental impact statements,

Environmental policies and review procedures.

24 CFR Part 55

Environmental impact statements, Flood plains, Wetlands.

24 CFR Part 58

Community development block grants, Environmental impact

statements, Grant programs--housing and community development,

Reporting and recordkeeping requirements.

Accordingly, 24 CFR parts 50, 55, and 58 are proposed to be amended

as follows:

PART 50--PROTECTION AND ENHANCEMENT OF ENVIRONMENTAL QUALITY

1. The authority citation for part 50 continues to read as follows:

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

11991, 3 CFR, 1997 Comp., p. 123.

2. In Sec. 50.4, paragraph (b)(2) is revised and paragraph (b)(3)

is removed and reserved, to read as follows:

Sec. 50.4 Related Federal laws and authorities.

* * * * *

(b) * * *

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

(Floodplain Management) (3 CFR, 1977 Comp., p. 117) and Executive Order

11990 (Protection of Wetlands) (3 CFR, 1977 Comp., p. 121)--24 CFR part

55, Floodplain Management and Protection of Wetlands.

* * * * *

PART 55--FLOODPLAIN MANAGEMENT AND PROTECTION OF WETLANDS

3. The heading for part 55 is revised to read as set forth above.

4. The authority citation for part 55 is revised to read as

follows:

Authority: 42 U.S.C. 3535(d), 4001-4128 and 5154a; E.O. 11988,

42 FR 26951, 3 CFR, 1977 Comp., p. 117; E.O. 11990, 42 FR 26961, 3

CFR, 1977 Comp., p 121.

5. Section 55.1 is amended by revising paragraph (a), redesignating

paragraph (b) as paragraph (b)(1), adding a new paragraph (b)(2), and

adding a new paragraph (d), to read as follows:

Sec. 55.1 Purpose and basic responsibility.

(a) This part implements the requirements of Executive Order 11988,

Floodplain Management (3 CFR, 1977 Comp., p. 117), and Executive Order

11990, Protection of Wetlands (3 CFR, 1977 Comp., p. 121), and employs

the principles of the Unified National Program for Floodplain

Management. It covers the proposed acquisition, construction,

improvement, disposition, financing and use of properties located in a

floodplain or a wetland for which approval is required either from HUD

under any applicable HUD program or from a responsible entity subject

to 24 CFR part 58. This part does not prohibit approval of such actions

(except for certain actions in high hazard areas), but provides a

consistent means for implementing the Department's interpretation of

the executive orders in the project approval decision making processes

of HUD and of responsible entities subject to 24 CFR part 58. The

implementation of Executive Orders 11988 and 11990 under this part

shall be conducted by HUD for Department-administered programs subject

to environmental review under 24 CFR part 50 and by responsible

entities for financial assistance subject to environmental review under

24 CFR part 58.

(b)(1) * * *

(2) Under section 582 of the National Flood Insurance Reform Act of

1994, 42 U.S.C. 5154a, HUD disaster assistance that is made available

in a special flood hazard area may not be used to make a payment

(including any loan assistance payment) to a person for repair,

replacement or restoration of damage to any personal, residential or

commercial property if:

(i) The person had previously received Federal flood disaster

assistance conditioned on obtaining and maintaining flood insurance;

and

(ii) The person failed to obtain and maintain the flood insurance.

* * * * *

(d) No HUD financial assistance (including mortgage insurance) may

be approved for residential new construction in a 100-year floodplain

unless a final Letter of Map Amendment (LOMA) or final Letter of Map

Revision (LOMR) will be secured by the applicant as a condition of

HUD's or the responsible entity's approval of the assistance.

6. Section 55.2 is amended by revising paragraph (a); revising the

introductory text of paragraph (b); removing, in paragraph (b)(1), the

term ``(Sec. 55.2(b)(8))'' and adding in its place the term

``(Sec. 55.2(b)(7))'', and adding a new paragraph (b)(9), to read as

follows:

Sec. 55.2 Terminology.

(a) With the exception of those terms defined in paragraph (b) of

this section, the terms used in this part shall follow the definitions

contained in section 6 of Executive Order 11988, in section 7 of

Executive Order 11990, and in the Floodplain Management Guidelines for

Implementing Executive Order 11988 issued by the Water Resources

Council (copies of the Guidelines are available from the Environmental

Review Division, Department of Housing and

[[Page 30050]]

Urban Development, 451 Seventh Street, SW, Washington, DC 20410); and

the terms ``special flood hazard area,'' ``criteria'' and ``Regular

Program'' shall follow the definitions contained in FEMA regulations at

44 CFR 59.1.

(b) The definitions of the following terms in Executive Order

11988, Executive Order 11990, and related documents affecting this part

are modified for purposes of this part:

* * * * *

(9) Wetlands means only those designated wetland areas identified

or delineated on maps issued by the Fish and Wildlife Service of the

U.S. Department of the Interior as areas that are inundated by surface

or ground water with a frequency sufficient to support, and under

normal circumstances do or would support, a prevalence of vegetative or

aquatic life that requires saturated or seasonally saturated soil

conditions for growth or reproduction. They are the areas subject to

coverage under this part.

7. Section 55.3 is amended by revising paragraphs (a)(1)(i),

(a)(1)(ii), (b)(1), (b)(2), and (c) and adding a new paragraph (d), to

read as follows:

Sec. 55.3 Assignment of responsibilities.

(a)(1) * * *

(i) The Department's implementation of the orders and this part in

all HUD programs; and

(ii) The implementation activities of HUD program managers and, for

HUD financial assistance subject to 24 CFR part 58, of grant recipients

and responsible entities.

* * * * *

(b) * * *

(1) Ensure compliance with this part for all actions under their

jurisdiction that are proposed to be conducted, supported, or permitted

in a floodplain or wetland;

(2) Ensure that actions approved by HUD or responsible entities are

monitored and that any prescribed mitigation is implemented;

* * * * *

(c) Responsible entity Certifying Officer. Certifying Officers of

responsible entities administering or reviewing activities subject to

24 CFR part 58 shall comply with this part 55 in carrying out HUD-

assisted programs.

(d) Recipient. Recipients subject to 24 CFR part 58 shall monitor

approved actions and ensure that any prescribed mitigation is

implemented.

8. The heading for subpart B is revised to read as follows:

Subpart B--Application of Executive Orders on Floodplain Management

and Protection of Wetlands

9. Section 55.10 is revised to read as follows:

Sec. 55.10 Environmental review procedures under 24 CFR parts 50 and

58.

(a) Where an environmental review is required under the National

Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4332, and 24 CFR

part 50 or part 58, compliance with this part shall be completed before

the completion of an environmental assessment (EA) including a finding

of no significant environmental impact (FONSI), or an environmental

impact statement (EIS), in accordance with the decision points listed

in 24 CFR 50.17(a)-(h), or before the preparation of an EA under 24 CFR

58.40 or an EIS under 24 CFR 58.37. For types of proposed actions that

are categorically excluded from National Environmental Policy Act

(NEPA) requirements under 24 CFR part 50 or part 58, compliance with

this part shall be completed before the Department's initial approval

(or approval by a responsible entity subject to 24 CFR part 58) of

proposed actions in a floodplain or wetland.

(b) The categorical exclusion of certain proposed actions from

environmental review requirements under NEPA and 24 CFR parts 50 and 58

(see 24 CFR 50.20 and 58.35(a)) does not exclude those actions from

compliance with this part.

10. Section 55.11 is revised to read as follows:

Sec. 55.11 Applicability of Subpart C decision making process.

(a) Before reaching the decision points described in Sec. 55.10(a),

HUD (for Department-administered programs) or the responsible entity

(for HUD financial assistance subject to 24 CFR part 58) shall

determine whether Executive Order 11988 or 11990 and this part apply to

the proposed action.

(b) If Executive Order 11988 or 11990 applies, the approval of a

proposed action or initial commitment shall be made in accordance with

this part. The primary purpose of Executive Order 11988 is to ``avoid

direct or indirect support of floodplain development.'' Consistent with

section 2 of Executive Order 11990, the decision making process in

Sec. 55.20 only applies to Federal assistance for new construction in

wetland locations.

(c) The following table indicates the applicability, by location

and type of action, of the decision making process for implementing

Executive Orders 11988 and 11990 under subpart C of this part:

Table 1

----------------------------------------------------------------------------------------------------------------

Type of proposed action

-------------------------------------------------------------------------------

Type of proposed action (new Wetland or 100- Non-wetland area

reviewable action or an Coastal high year floodplain between 100-year

amendment) \1\ Floodways hazard areas outside high and 500-year

hazard area floodplain

----------------------------------------------------------------------------------------------------------------

Critical actions as defined in Critical actions Critical actions Allowed if the Allowed if the

Sec. 55.12(b)(2). not allowed. not allowed. proposed critical proposed critical

action is action is

processed under processed under

Sec. 55.20.2. Sec. 55.20.\2\

Non-critical actions not Allowed only if Allowed only if Allowed if the Any non-critical

excluded under Sec. 55.12(b) the proposed non- the proposed non- proposed non- action is allowed

or (c). critical action critical action: critical action without

is a functionally (1) Is either (a) is processed processing under

dependent use and designed for under Sec. this part.

processed under location in a 55.20.\2\

Sec. 55.20.2.\2\ high hazard area

or (b) a

functionally

dependent use;

and (2) is

processed under

Sec. 55.20.\2\

----------------------------------------------------------------------------------------------------------------

\1\ Under Executive Order 11990, the decision making process in Sec. 55.20 only applies to Federal assistance

for new construction in wetland locations.

\2\ Or those paragraphs of Sec. 55.20 that are applicable to an action listed in Sec. 55.12(a).

[[Page 30051]]

11. Section 55.12 is amended by:

a. Revising the introductory text to paragraph (a);

b. Revising paragraph (a)(3);

c. Removing ``and'' at the end of paragraph (b)(3);

d. Removing the period at the end of paragraph (b)(4) and adding

``; and'' in its place;

e. Adding a new paragraph (b)(5);

f. Revising paragraph (c)(1);

g. Removing paragraphs (c)(9) and (c)(10);

h. Redesignating paragraphs (c)(2), (c)(3), (c)(4), (c)(5), (c)(6),

(c)(7), (c)(8), (c)(11), and (c)(12) as paragraphs (c)(3), (c)(4),

(c)(5), (c)(6), (c)(7), (c)(8), (c)(9), (c)(10), and (c)(11),

respectively;

i. Adding a new paragraph (c)(2);

j. Revising newly redesignated paragraphs (c)(6) and (c)(7);

k. Revising the introductory text to newly redesignated paragraph

(c)(9);

l. Removing ``and'' at the end of newly redesignated paragraph

(c)(10);

m. Removing the period at the end of newly redesignated paragraph

(c)(11) and adding a semicolon in its place; and

n. Adding new paragraphs (c)(12) and (c)(13), to read as follows:

Sec. 55.12 Inapplicability of this part 55 to certain categories of

proposed actions.

(a) The decision making steps in Sec. 55.20(b), (c), (f), and (g)

(steps 2, 3, 6, and 7) do not apply to the following categories of

proposed actions:

* * * * *

(3) HUD actions under any HUD program involving the repair,

rehabilitation, modernization or improvement of existing multifamily

housing projects (including nursing homes, board and care facilities

and intermediate care facilities) and existing one-to four-family

properties, in communities that are in the Regular Program of the NFIP

and are in good standing, provided that the number of units is not

increased more than 20 percent, the action does not involve a

conversion from nonresidential to residential land use, and the

footprint of the structure and paved areas is not significantly

increased.

(b) * * *

(5) The approval of financial assistance to lease not more than a

total of four units of existing housing in a building located within

the 100-year floodplain (or the 500-year floodplain for Critical

Actions), but only if--

(i) The housing is located outside the floodway or coastal high

hazard area, and is in a community that is in the Regular Program of

the National Flood Insurance Program (NFIP) and in good standing (i.e.,

not suspended from program eligibility or placed on probation under 44

CFR 59.24);

(ii) The leasing is in a structure insured under the NFIP; and

(iii) The financial assistance does not pay for repair or

rehabilitation.

(c) * * *

(1) HUD-assisted activities described in 24 CFR 58.34 and 58.35(b);

(2) HUD-assisted activities described in 24 CFR 50.19, except as

otherwise indicated in Sec. 50.19;

* * * * *

(6) A minor amendment to a previously approved action with no

additional adverse impact on or from a floodplain or wetland;

(7) HUD's approval of a project site, an incidental portion of

which is situated in an adjacent floodplain or wetland, but only if:

(i) The proposed construction and landscaping activities (except

for minor grubbing, clearing of debris, pruning, sodding, seeding, or

other similar activities) do not occupy or modify the 100-year

floodplain (or the 500-year floodplain for Critical Actions) or the

wetland;

(ii) Appropriate provision is made for site drainage; and

(iii) A covenant or comparable restriction is placed on the

property's continued use to preserve the floodplain or wetland;

* * * * *

(9) HUD's approval of financial assistance for a project on any

non-wetland site in a floodplain for which FEMA has issued:

* * * * *

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

architectural barriers that restrict the mobility of and accessibility

to elderly and persons with disabilities; and

(13) The approval of financial assistance for acquisition, leasing,

construction, rehabilitation, repair, maintenance, or operation of

ships and other water-borne vessels that will be used for

transportation or cruises and will not be permanently moored.

12. The heading for subpart C is revised to read as follows:

Subpart C--Procedures For Making Determinations on Floodplain

Management and Protection of Wetlands

13. Section 55.20 is amended by revising the introductory text;

revising paragraph (a); revising the introductory text of paragraph

(b); revising paragraph (b)(3); revising paragraph (c); revising

paragraph (d); revising the introductory text of paragraph (e);

revising paragraph (f)(1); revising paragraph (g); and revising

paragraph (h), to read as follows:

Sec. 55.20 Decision making process.

Except for actions covered by Sec. 55.12(a), the decision making

process for compliance with this part contains eight steps, including

public notices and an examination of practicable alternatives. The

steps to be followed in the decision making process are:

(a) Step 1. Determine whether the proposed action is located in a

100-year floodplain (or a 500-year floodplain for a Critical Action) or

a wetland. If the proposed action would not be conducted in one of

those locations, then no further compliance with this part is required.

(b) Step 2. Notify the public at the earliest possible time of a

proposal to consider an action in a 100-year floodplain (or a 500-year

floodplain for a Critical Action) or a wetland and involve the affected

and interested public in the decision making process.

* * * * *

(3) A notice under this paragraph (b) shall state: the name,

proposed location and description of the activity; the total number of

acres of floodplain or wetland involved; and the HUD official and phone

number to contact for information. The notice shall indicate the hours

and the HUD office or responsible entity's office at which a full

description of the proposed action may be reviewed.

(c) Step 3. Identify and evaluate practicable alternatives to

locating the proposed action in a 100-year floodplain (or a 500-year

floodplain for a Critical Action) or wetland. The evaluation shall

focus on the potential impacts inside and outside the floodplain or

wetland area as such impacts relate to the protection of human life,

real property, and the natural and beneficial values served by the

floodplain or wetland.

(1) Except as provided in paragraph (c)(2) of this section, HUD's

or the responsible entity's consideration of practicable alternatives

to the sites which they select for a project should include:

(i) Locations outside the 100-year floodplain (or the 500-year

floodplain for a Critical Action) or wetland;

(ii) Alternative methods to serve the identical project objective

including feasible technological alternatives; and

(iii) A determination not to approve any action.

(2) For multifamily projects involving HUD mortgage insurance that

are initiated by third parties, HUD's or the responsible entity's

consideration of practicable alternatives should include a

determination not to approve the request.

(d) Step 4. Identify and evaluate the potential direct and indirect

impacts

[[Page 30052]]

associated with the occupancy or modification of the 100-year

floodplain (or the 500-year floodplain for a Critical Action) or the

wetland.

(e) Step 5. Where practicable, design or modify the proposed action

to minimize the potential adverse impacts within the 100-year

floodplain (or the 500-year floodplain for a Critical Action) or the

wetland and to restore and preserve its natural and beneficial values.

Actions covered by Sec. 55.12(a) must be rejected if the proposed

minimization is financially or physically unworkable. All critical

actions in the 500-year floodplain shall be designed and built at or

above the 100-year floodplain (in the case of new construction) and

modified to include:

* * * * *

(f) * * *

(1) Whether it is still practicable in light of its exposure to

flood hazards in the floodplain or its possible adverse impact on the

floodplain or wetland, the extent to which it will aggravate the

current hazards to other floodplains or wetlands, and its potential to

disrupt floodplain or wetland values; and

* * * * *

(g) Step 7. If the reevaluation results in a determination that

there is no practicable alternative to locating the proposal in the

100-year floodplain (or the 500-year floodplain for a Critical Action)

or the wetland, publish a final notice that includes:

(1) The reasons why the proposal must be located in the floodplain

or wetland;

(2) A list of the alternatives considered;

(3) All mitigation measures to be taken to minimize adverse impacts

and to restore and preserve natural and beneficial values; and

(4) For residential new construction in a 100-year floodplain, a

statement that a final Letter of Map Amendment (LOMA) or final Letter

of Map Revision (LOMR) will be secured by the applicant as a condition

of HUD's or the responsible entity's approval of floodplain

development.

(h) Step 8. Upon completion of the decision making process in Steps

1 through 7, implement the proposed action. There is a continuing

responsibility on HUD and the recipient to ensure that the mitigating

measures identified in Step 7 are implemented and, where applicable,

that the LOMA or LOMR is secured.

14. In Sec. 55.22, the introductory text to paragraph (a) and

paragraph (a)(1) are revised to read as follows:

Sec. 55.22 Conveyance restrictions for the disposition of multifamily

real property.

(a) In the disposition (including leasing) of multifamily

properties acquired by HUD that are located in a 100-year floodplain

(or a 500-year floodplain for a Critical Action) or a wetland, the

documents used for the conveyance must:

(1) Refer to those uses that are restricted under identified

federal, state, or local floodplain or wetland regulations; and

* * * * *

15. Section 55.24 is revised to read as follows:

Sec. 55.24 Aggregation.

Where two or more actions have been proposed, require compliance

with this subpart, affect the same floodplain or wetland, and are

currently under review by the Department (or by a responsible entity

subject to 24 CFR part 58), individual or aggregated approvals may be

issued. A single compliance review and approval under this section is

subject to compliance with the decision making process in Sec. 55.20.

16. Section 55.25 is amended by removing the period at the end of

paragraph (d)(3)(iii) and adding a semicolon in its place; by removing

the period at the end of paragraph (d)(6) and adding ``; and'' in its

place; and by revising paragraphs (a), (b), (d)(4) and (d)(5), to read

as follows:

Sec. 55.25 Areawide compliance.

(a) A HUD-approved areawide compliance process may be substituted

for individual compliance or aggregated compliance under Sec. 55.24

where a series of individual actions is proposed or contemplated in a

pertinent area for HUD's examination of floodplain hazards or the

protection of wetlands. In areawide compliances, the area for

examination may include a sector of, or the entire, floodplain or

wetland--as relevant to the proposed or anticipated actions. The

areawide compliance process shall be in accord with the decision making

process under Sec. 55.20.

(b) The areawide compliance process shall address the relevant

executive orders and shall consider local land use planning and

development controls (e.g., those enforced by the community for

purposes of floodplain management under the National Flood Insurance

Program (NFIP)) and applicable state programs for floodplain management

and wetland protection. The process shall include the development and

publication of a strategy that identifies the range of development and

mitigation measures under which the proposed HUD assistance may be

approved and that indicates the types of actions that will not be

approved in the floodplain or wetland.

* * * * *

(d) * * *

(4) An open scoping process (in accordance with 40 CFR 1501.7)

shall be used for determining the scope of issues to be addressed and

for identifying significant issues related to housing and community

development for the floodplain or wetland;

(5) Federal, state and local agencies with expertise in floodplain

management, wetland protection, flood evacuation preparedness, land use

planning and building regulation, or soil and natural resource

conservation shall be invited to participate in the scoping process and

to provide advice and comments;

* * * * *

17. Section 55.26 is amended by revising the introductory text and

paragraph (a), to read as follows:

Sec. 55.26 Adoption of another agency's review under the executive

orders.

If a proposed action covered under this part is already covered in

a prior review performed under the executive orders by another agency,

that review may be adopted by HUD or by a responsible entity authorized

under 24 CFR part 58, provided that:

(a) There is no pending litigation relating to the other agency's

review for floodplain management and wetland protection;

* * * * *

18. Section 55.27 is amended by revising the introductory text to

paragraph (a) and paragraph (a)(1) to read as follows:

Sec. 55.27 Documentation.

(a) For purposes of compliance with Sec. 50.20, the responsible HUD

official who would approve the proposed action (or Certifying Officer

for a responsible entity subject to 24 CFR part 58) shall require that

the following actions be documented:

(1) When required by Sec. 55.20(c), practicable alternative sites

have been considered outside the floodplain or wetland, but within the

local housing market area, the local public utility service area, or

the jurisdictional boundaries of a recipient unit of general local

government, whichever geographic area is more appropriate to the

proposed HUD action. Actual sites under review must be identified and

the reasons for the non-selection of those sites as practicable

alternatives must be described; and

* * * * *

[[Page 30053]]

Secs. 55.21, 55.25, and 55.27 [Amended]

19. In addition to the amendments set forth above, in 24 CFR part

55:

a. Remove the words ``grant recipient'' and add, in their place,

the words ``responsible entity'' in the following places:

i. Section 55.21;

ii. Section 55.25(c); and

iii. Section 55.27(b); and

b. Remove the words ``grant recipients'' and add, in their place,

the words ``responsible entities'' in the following places:

i. Section 55.25(d)(2); and

ii. Section 55.27(c).

PART 58--ENVIRONMENTAL REVIEW PROCEDURES FOR ENTITIES ASSUMING HUD

ENVIRONMENTAL RESPONSIBILITIES

20. The authority citation for part 58 continues to read as

follows:

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

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

11514, 3 CFR, 1966-1970, Comp., p. 902, as amended by E.O. 11991, 3

CFR, 1977 Comp., p.123.

21. In Sec. 58.5, paragraph (b)(2) is revised to read as follows:

Sec. 58.5 Related Federal laws and authorities.

* * * * *

(b) * * *

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

FR 26961), 3 CFR, 1977 Comp., p. 121, as interpreted in HUD regulations

at 24 CFR part 55, particularly sections 2 and 5 of the order.

* * * * *

Dated: April 27, 1998.

Andrew Cuomo,

Secretary.

[FR Doc. 98-14245 Filed 6-1-98; 8:45 am]

BILLING CODE 4210-32-P