Technical Amendments to HUD's Regulations Governing Environmental Review Procedures for Entities Assuming HUD Environmental Responsibilities

SUMMARY: On April 30, 1996 (61 FR 19120), HUD published a final rule

streamlining and updating 24 CFR part 58 in its entirety. Part 58

provides instructions and guidance to recipients of HUD assistance and

other responsible entities for conducting environmental reviews in

accordance with: the National Environmental Policy Act of 1969 (NEPA);

the NEPA implementing regulations of the Council on Environmental

Quality; and other NEPA related Federal laws and authorities. This

final rule makes several technical and clarifying amendments to the

April 30, 1996 final rule.

DATES: Effective Date: April 29, 1998.

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

Community Viability, Room 7240, Department of Housing and Urban

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

telephone communication, contact Fred Regetz, Environmental Review

Division at (202) 708-1201, extension 4465. (This telephone number is

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

telephone number via TTY by calling the Federal Information Relay

Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

I. The April 30, 1996 Final Rule

On April 30, 1996 (61 FR 19120), HUD published a final rule

revising 24 CFR part 58 in its entirety. Part 58 provides instructions

and guidance to recipients of HUD assistance and other responsible

entities for conducting environmental reviews in accordance with: (1)

the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4347)

(NEPA); (2) the NEPA implementing regulations of the Council on

Environmental Quality; and (3) other NEPA related Federal laws and

authorities. The April 30, 1996 final rule streamlined, updated, and

improved these regulations. With the exception of Secs. 58.1(b)(6)(i)

and 58.2(a)(5)(v)(A), the April 30, 1996 final rule became effective on

May 30, 1996. These two paragraphs, which pertain to public housing

development and modernization programs, became effective on October 14,

1996. The April 30, 1996 final rule described in detail the amendments

to 24 CFR part 58.

II. This Final Rule

This final rule makes several technical and clarifying changes to

the April 30, 1996 final rule. These revisions are as follows:

1. This final rule revises the heading to Sec. 58.1 so that it will

more accurately reflect the subject matter of the section.

2. The final rule amends Sec. 58.6 (Other requirements) by

correcting a typographical error. Section 58.6 erroneously cites the

requirements of Sec. 58.34(a)(11). This rule corrects the error by

properly citing Sec. 58.34(a)(12). Sections 58.6(a)(1)(ii) and

58.6(a)(2) are revised to indicate that the requirement to purchase

flood insurance in a special flood hazard area applies where a

community is participating in the National Flood Insurance Program.

While community participation and the purchase of flood insurance is a

requirement generally, a community's participation in the flood

insurance program is not a condition of Federal assistance during the

first year after the Federal Emergency Management Agency notifies the

community that it contains special flood hazard areas. During this

limited period, HUD assistance may be approved for the properties in a

special flood insurance area despite the community's initial

nonparticipation in the program and the resulting unavailability of

flood insurance. A new paragraph (b) is added to state explicitly the

limitations on use of HUD disaster assistance that are imposed by

section 582 of the National Flood Insurance Reform Act of 1994 when a

person who had previously received Federal disaster assistance fails to

obtain or maintain flood insurance.

3. The rule removes the last sentence of Sec. 58.10, which

redundantly states that the ``provisions of the CEQ [Council on

Environmental Quality] regulations in 40 CFR parts 1500 through 1508

are applicable to'' part 58.

4. Section 58.14 currently permits State, Federal and local

agencies to participate or act in a joint lead or cooperating agency

capacity in preparing joint environmental impact statements. This final

rule provides permissive authority to prepare joint environmental

assessments.

5. Section 58.34(a)(10) is revised to clarify that the imminent

threats that would trigger the exemption are imminent threats to public

safety including those resulting from physical deterioration.

6. Section 58.35(b)(5) is revised to replace an erroneous reference

to new dwelling units with a reference to dwelling units under

construction. New units not already under construction were never

intended to be covered under this categorical exclusion.

7. Sections 58.47(a) and (b) have been revised for clarity. Section

58.47(b)(1) makes clear that, if the stated circumstances are met and a

FONSI has already been published, then no further FONSI notice is

required to be published.

8. The April 30, 1996 final rule removed several obsolete or

unnecessarily codified sections from 24 CFR part 58. For example,

several of these sections did not set forth any regulatory

requirements, but were merely being held in reserve. The removal of

these provisions, however, resulted in the discontinuous numbering of

the sections comprising part 58. Since publication of the April 30,

1996 final rule, HUD has received several questions regarding the

status of the missing sections. HUD wishes to clarify that 24 CFR part

58 (as amended by this final rule) describes all the regulatory

requirements for entities assuming HUD environmental responsibilities.

III. Justification for Final Rulemaking

HUD generally publishes a rule for public comment before issuing a

rule for effect, in accordance with its own regulations on rulemaking

in 24 CFR part 10. Part 10 provides for exceptions to the general rule

if the agency finds good cause to omit advance notice and public

participation. The good cause requirement is satisfied when prior

public procedure is ``impracticable, unnecessary, or contrary to the

public interest'' (24 CFR 10.1). In addition, part 10 permits

publishing an interpretative rule for effect without prior public

procedure.

HUD finds that in this case prior public procedure is unnecessary.

In general, the amendments made by this final rule update and clarify

the policies and procedures contained in the April 30, 1996 final rule.

As noted above, Sec. 58.14 has been revised to permit the same type of

joint effort among Federal, State, and local agencies in preparing

environmental assessments as currently exists in preparing

environmental impact statements. Prior public comment is unnecessary

for this change because it is clearly consistent with the underlying

policy of the current section to further cooperation among these

agencies and it is permissive authority.

[[Page 15271]]

The new Sec. 58.6(b) is an interpretative rule which explains a

limitation imposed by section 582 of the National Flood Insurance

Reform Act of 1994 on the use of HUD disaster assistance in a special

flood hazard area.

IV. Findings and Certifications

Environmental Impact

A Finding of No Significant Impact with respect to the environment

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

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.

Executive Order 12612, Federalism

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

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

contained in this final rule will not have substantial direct effects

on States or their political subdivisions, or the relationship between

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

and responsibilities among the various levels of government. This rule

is concerned solely with the review procedures of entities assuming HUD

environmental responsibilities. It effects no changes in the current

relationships between the Federal government, the States and their

political subdivisions.

Regulatory Flexibility Act

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

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

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

a substantial number of small entities. This rule makes several

technical and clarifying changes to the April 30, 1996 final rule. This

final rule will have no adverse or disproportionate economic impact on

small entities.

Unfunded Mandates Reform Act

The Secretary has reviewed this rule before publication and by

approving it certifies, in accordance with the Unfunded Mandates Reform

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

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

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

million or more in any one year.

List of Subjects in 24 CFR Part 58

Environmental protection, Community development block grants,

Environmental impact statements, Grant programs--housing and community

development, Reporting and recordkeeping requirements.

Accordingly, 24 CFR part 58 is amended as follows:

PART 58--ENVIRONMENTAL REVIEW PROCEDURES FOR ENTITIES ASSUMING HUD

ENVIRONMENTAL RESPONSIBILITIES

1. The authority citation for 24 CFR 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.

2. In Sec. 58.1, revise the section heading to read as follows:

Sec. 58.1 Purpose and applicability.

* * * * *

3. Amend Sec. 58.6 as follows:

a. In the introductory text, remove the term ``Sec. 58.34(a)(11)''

and add, in its place, the term ``Sec. 58.34(a)(12)'';

b. Revise paragraph (a)(1)(ii);

c. Revise paragraph (a)(2);

d. Redesignate paragraph (b) and (c) as paragraphs (c) and (d),

respectively; and

e. Add a new paragraph (b).

Sec. 58.6 Other requirements.

* * * * *

(a) * * *

(1) * * *

(ii) Where the community is participating in the National Flood

Insurance Program, flood insurance protection is to be obtained as a

condition of the approval of financial assistance to the property

owner.

(2) Where the community is participating in the National Flood

Insurance Program and the recipient provides financial assistance for

acquisition or construction purposes (including rehabilitation) for

property located in an area identified by FEMA as having special flood

hazards, the responsible entity is responsible for assuring that flood

insurance under the National Flood Insurance Program is obtained and

maintained.

* * * * *

(b) 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 for flood damage to any personal,

residential or commercial property if:

(1) The person had previously received Federal flood disaster

assistance conditioned on obtaining and maintaining flood insurance;

and

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

* * * * *

4. Revise Sec. 58.10 to read as follows:

Sec. 58.10 Basic environmental responsibility.

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

responsible entity must assume the environmental responsibilities for

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

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

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

this part. This includes responsibility for compliance with the

applicable provisions and requirements of the Federal laws and

authorities specified in Sec. 58.5.

5. Revise Sec. 58.14 to read as follows:

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

A responsible entity shall consult with appropriate environmental

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

preparation of an EIS, EA or other environmental reviews undertaken

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

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

agencies to reduce duplication between NEPA and comparable

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

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

they comply with the environmental review requirements of both Federal

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

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

cooperating agency capacity in the preparation of joint EISs or joint

environmental assessments (see 40 CFR 1501.5(b) and 1501.6). A single

EIS or EA may be prepared and adopted by multiple users to the extent

that the review addresses the relevant environmental issues and there

is a written agreement between the cooperating agencies which sets

forth the coordinated and overall responsibilities.

6. Revise paragraph (a)(10) of Sec. 58.34 to read as follows:

Sec. 58.34 Exempt activities.

(a) * * *

[[Page 15272]]

(10) Assistance for temporary or permanent improvements that do not

alter environmental conditions and are limited to protection, repair,

or restoration activities necessary only to control or arrest the

effects from disasters or imminent threats to public safety including

those resulting from physical deterioration;

* * * * *

7. Revise paragraph (b)(5) of Sec. 58.35 to read as follows:

Sec. 58.35 Categorical exclusions.

* * * * *

(b) * * *

(5) Activities to assist homebuyers to purchase existing dwelling

units or dwelling units under construction, including closing costs and

down payment assistance, interest buydowns, and similar activities that

result in the transfer of title.

* * * * *

8. In Sec. 58.47, revise the introductory text of paragraph (a) and

paragraph (b) to read as follows:

Sec. 58.47 Re-evaluation of environmental assessments and other

environmental findings.

(a) A responsible entity must re-evaluate its environmental,

findings to determine if the original findings are still valid, when:

* * * * *

(b)(1) If the original findings are still valid but the data or

conditions upon which they were based have changed, the responsible

entity must affirm the original findings and update its ERR by

including this re-evaluation and its determination based on its

findings. Under these circumstances, if a FONSI notice has already been

published, no further publication of a FONSI notice is required.

(2) If the responsible entity determines that the original findings

are no longer valid, it must prepare an EA or an EIS if its evaluation

indicates potentially significant impacts.

(3) Where the recipient is not the responsible entity, the

recipient must inform the responsible entity promptly of any proposed

substantial changes under paragraph (a)(1) of this section, new

circumstances or environmental conditions under paragraph (a)(2) of

this section, or any proposals to select a different alternative under

paragraph (a)(3) of this section, and must then permit the responsible

entity to re-evaluate the findings before proceeding.

Sec. 58.60 [Amended]

9. In Sec. 58.60(e), remove the term ``1502.2'' and add, in its

place, the term ``1505.2''.

Dated: March 13, 1998.

Andrew M. Cuomo,

Secretary.

[FR Doc. 98-8221 Filed 3-27-98; 8:45 am]

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