federal register

Friday

December 11, 1998

Part VI

Department of

Agriculture

Rural Utilities Service

7 CFR Part 1780 and 1794

Environmental Policies and Procedures;

Final Rule
68648 Federal Register / Vol. 63, No. 238 / Friday, December 11, 1998 /Rules and Regulations

DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Parts 1780 and 1794

RIN 0572–AB33

Environmental Policies and

Procedures

AGENCY: Rural Utilities Service, USDA.

ACTION: Final rule.

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) (42

U.S.C. 4321 et seq.) 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

RUS 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 implementation of this rule has

required that certain changes be made to

7 CFR part 1780 regarding

environmental compliance. The

amendments published in this

document consist of those necessary to

make the provisions of Part 1780 subject

to the environmental requirements of

this rule.

EFFECTIVE DATE: December 11, 1998.

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 gmorgan@rus.usda.gov or

lwolfe@rus.usda.gov.

This rule and the guidance bulletins

described in this rule will be available

on the Internet via the RUS home page

at www.usda.gov/rus/.

SUPPLEMENTARY INFORMATION:

Classification

This 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 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.

In accordance with the Executive

Order and the rule; (1) all state and local

laws and regulations that are in conflict

with this rule will be preempted; (2) no

retro-active effect will be given to the

rule; and (3) administrative proceedings

are required to be exhausted prior to

initial litigation against the Department

(7 U.S.C. 6912).

Regulatory Flexibility Act Certification

Pursuant to section 605(b) of the

Regulatory Flexibility Act, 5 U.S.C.

605(b), RUS certifies that this 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

The recordkeeping and reporting

burdens contained in this rule were

approved by the Office of Management

and Budget (OMB) pursuant to the

Paperwork Reduction Act of 1995 (44

U.S.C. chapter 35,) under control

number 0572–0117.

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.

Environmental Justice

This rule is subject to the

requirements of Executive Order 12898,

Federal Actions to Address

Environmental Justice in Minority

Populations and Low-Income

Populations. Implementation of these

requirements will occur at the time of

actions performed hereunder.

National Environmental Policy Act

Certification

The Administrator of RUS has

determined that this 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.

Catalog of Federal Domestic Assistance

The programs described by this

proposed rule are 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 rule excludes the Electric and

Telecommunications Programs from the

scope of Executive Order 12372,

Intergovernmental Consultation, which

may require consultation with State and

local officials. A final rule related notice

entitled, ‘‘Department Program and

Activities Excluded from Executive

Order 12372,’’ (50 FR 47034)

determined that RUS loans and loan

guarantees, and RTB bank loans, were

not covered by Executive Order 12372.

The Water and Waste Program is subject

to the provisions of Executive Order

12372. Consultation will be completed

at the time of actions performed

hereunder.

Unfunded Mandates

This rule contains no Federal

mandates (under the regulatory

provision of Title II of the Unfunded

Mandates Reform Act) for State, local,

and tribal governments or the private

sector. Thus this rule is not subject to

the requirements of section 202 and 205

of the Unfunded Mandates 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

RUS 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.
Federal Register / Vol. 63, No. 238 / Friday, December 11, 1998 /Rules and Regulations 68649

The existing 7 CFR part 1794 was

designed to implement the requirements

of NEPA and the CEQ regulations for

RUS Electric and Telecommunications

programs. As a result of the Federal

Crop Insurance Reform and Department

of Agriculture Reorganization Act of

1994 (Pub. L. 103–354, 108 Stat. 3178),

the programs of the Rural Electrification

Administration, were combined with

the Water and Waste program from the

former Farmers Home Administration

(FmHA) into RUS. Most changes

proposed to 7 CFR part 1794 result from

the addition of the Water and Waste

program to RUS.

For further guidance in the

preparation of public notices and

environmental documents, RUS has

prepared a series of guidance bulletins.

Three program specific bulletins are

available which provide guidance in

preparing the Environmental Report

(ER) for proposed actions classified as

categorical exclusions and proposed

actions which require an Environmental

Assessment (EA). Further information

on these bulletins is provided in

§ 1794.7.

This final rule contains a variety of

substantive and procedural changes

from the provisions of the current rule.

Some of these revisions are minor

(§ 1794.4, Trivial Violations was

deleted) or are merely intended to

clarify existing RUS policies and

procedures (§ 1794.6, Definitions, was

added). Other revisions reflect changes

in RUS implementation of the CEQ

regulations as 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 (RE Act), 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

over its Electric applicants.

Reflecting these changes and reforms,

RUS has revised § 1794.3 of the rule.

Environmental reviews will continue to

be required in connection with the

approval of financial assistance for

applicants and the issuance of rules,

regulations, and bulletins by RUS.

However, 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 not major Federal actions

significantly affecting the quality of the

human environment.

Within subpart C of this rule, a

classification system defines the level of

environmental review required for RUS

and applicant proposed actions. In

Section 1794.20 RUS has clarified its

position for determining circumstances

under which an applicant’s

participation in a project results in a

Federal action. Sections 1794.21

through 1794.25 of this subpart 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.

A number of classification changes

have been made within subpart C of this

rule. These reclassifications involve

minor actions proposed by applicants

which rarely, if ever, result in

significant environmental impact or

public interest. RUS believes this rule

includes adequate safeguards to identify

any unusual circumstances that may

require additional agency scrutiny.

RUS has modified the thresholds for

acreage (facility sites), and capacity

(generation facilities) within

§ 1794.22(a). In addition to modifying

the thresholds for acreage and capacity,

RUS has imposed different thresholds

for construction of electric generating

capacity at new sites versus existing

sites within § 1794.23(c). Acreage and

capacity threshold changes within

§ 1794.24, and a capacity threshold

change within § 1794.25 reflect changes

that have been made in §§ 1794.22(a),

and 1794.23(c). No changes were made

to the existing thresholds for

transmission line length. Capacity

thresholds have been eliminated for

hydroelectric proposals in §§ 1794.22

and 1794.23. RUS will normally adopt

the NEPA document prepared by the

Federal licensing agency of

hydroelectric projects in which RUS

applicants participate.

The thresholds for proposed actions

in the Water and Waste program are

classified in §§ 1794.21(c) and

1794.22(b). Based on historical

experience and a survey of the

thresholds established by the

Environmental Protection Agency

which administers similar programs,

RUS has eliminated the two tiered

classification for EAs that is contained

in 7 CFR Part 1940, Subpart G, the

environmental regulation of the former

FmHA, and adopted the more

traditional classification scheme as

outlined in 40 CFR 1508.9. 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.

RUS has modified its procedures in

subparts D through G of this part. The

EA will be the subject document of the

notice of availability requirements in

§ 1794.42, where previously, the

applicant’s ER was the subject

document. By this change, the notice

requirements for all three programs will

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 has also changed its notice

requirements for Electric program

projects requiring scoping. The timing

of RUS Federal Register notice for

public scoping meetings in § 1794.52(b)

has been reduced from 30 days to 14

days prior to the meeting. No

appreciable benefit 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 Analysis

(EVAL) where a proposed action

requires scoping. RUS has changed this

requirement by allowing the EVAL to

serve as its EA (see § 1794.53) consistent

with 40 CFR § 1506.5(b).

RUS has modified its policy regarding

the use of contractor prepared EISs.

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 is established in § 1794.63.
68650 Federal Register / Vol. 63, No. 238 / Friday, December 11, 1998 /Rules and Regulations

Preparation of the Rulemaking

The proposed rule (7 CFR part 1794)

was published in the Federal Register

on November 24, 1997 (62 FR 62527).

Public comment was invited for a 60-

day period, ending on January 23, 1998.

Eighty-nine written comments were

received representing 32 specific

organizations and individuals. These

included two Federal agencies, eight

Federal agency state offices, one

regional commission, two electric

cooperative associations, and seventeen

rural electric cooperatives. All

comments were fully considered when

revising the proposed rule for

publication as a final rulemaking.

Every effort has been made to respond

in detail in the preamble to every

question raised or suggestion offered.

Where commenters pointed out errors in

spelling, syntax, and minor technical

errors these errors were corrected and

not mentioned further in the preamble.

In addition, many commenters made

similar suggestions or raised similar

issues. In the interest of clarity,

comments that were similar in nature

were grouped and discussed in the most

relevant section in the preamble. Some

comments pointed out vague and

unclear language. Clarifying and

explanatory language was added to the

rule and preamble as appropriate. The

discussion under General Comments

responds to general comments and

clarification of misunderstandings as to

RUS’s intent. The statements under

Comments on Specific Sections address

the more significant comments received

on particular provisions and how RUS

responded to them.

General Comments

Several comments focused on the

background discussion of the preamble

to the proposed rule regarding the

proposed renumbered § 1794.3, entitled

‘‘Actions requiring environmental

review.’’ The background discussion

explained that, because of changes in

law and reforms in the Electric and

Telecommunications industry, RUS

proposed to revise that section to reflect

that RUS would no longer treat as

Federal actions subject to environmental

reviews, approvals provided by RUS

pursuant to its loan contracts and

security instruments. The preamble

explained that these approvals are

‘‘ministerial’’ and not major Federal

actions for the purposes of NEPA. The

commenters, who uniformly supported

the proposed revision, asked that RUS

identify all approvals that would no

longer be subject to environmental

review or clarify that only the approval

of loans and loan guarantees will

require an environmental review.

Agency Response: The proposed

revision to § 1794.3 deletes reference to

‘‘lien accommodations, and approvals

provided pursuant to loan contracts and

security instruments (e.g., approvals of

the use of general funds).’’ In pertinent

part, the revised section identifies as

actions requiring environmental review,

‘‘the approval of financial assistance

pursuant to the Electric,

Telecommunications, and Water and

Waste Programs.’’ In response to the

comments, RUS has added a clarifying

sentence to § 1794.3 stating that,

‘‘Approvals provided by RUS pursuant

to loan contracts and security

instruments, including approvals of lien

accommodations, are not actions for the

purpose of this part and the provisions

of this part shall not apply to the

exercise of such approvals.’’ RUS

believes that, while it is principally the

approvals of loans and loan guarantees

to which environmental reviews attach,

it is possible that other types of

discretionary financial assistance could

be available under the RUS program,

which would trigger environmental

reviews. Examples include lien

subordinations under § 306 of the RE

Act (7 U.S.C. 936). The regulatory text

should not limit those actions requiring

environmental review to the approval of

loans and loan guarantees.

Consequently, no other change has been

made in response to the comments.

Ten commenters expressed concern

about the two-tier classification that was

created for ‘‘categorically excluded’’

proposals in §§ 1794.21 and 1794.22,

which they believe is overly

burdensome and confusing. They

further believe that many of the size,

voltage, distance, and acreage

thresholds have been arbitrarily

determined and need to be reevaluated.

Agency Response: RUS established

the two-tier classification system for

categorically excluded proposals

specifically to reduce the burden on

applicants without compromising the

requirements of NEPA and the CEQ

regulations. Categorically excluded

proposals listed in § 1794.21 normally

do not significantly impact the quality

of the human environment. Therefore

the submittal of an ER is not required.

An ER is required for categorically

excluded proposals listed in § 1794.22

to provide for circumstances in which a

normally excluded action may have a

significant impact (see 40 CFR 1508.4).

Prior to issuing the proposed rule, RUS

reevaluated the thresholds established

in the existing regulation and

determined that the revised thresholds

included in the proposed rule represent

a reasonable delineation consistent with

40 CFR 1508.4.

The commenters also questioned why

an environmental report should be

required for a proposal that is normally

categorically excluded and recommend

that where appropriate, proposals listed

in § 1794.22 be incorporated into

§ 1794.21.

Agency Response: The changes

proposed by these comments are not

consistent with the definition of

categorical exclusion in 40 CFR 1508.4.

In order to ensure that a proposed action

does not significantly affect the quality

of the human environment, RUS must

conduct an environmental review. The

two-tiered classification system for

Categorical Exclusions establishes the

level of information that must be

provided by the applicant for proposals

listed in each tier. This information is

necessary so RUS can identify

extraordinary circumstances in which a

normally excluded action may have

significant environmental effects.

One commenter recommended

incorporating language into § 1794.21 by

which RUS could increase the level of

environmental review for any

categorically excluded project, which

had a significant environmental effect.

Other commenters point out that

proposals in these two categories

already must meet the requirements of

§ 1794.31. Therefore a safeguard already

exists whereby RUS can evaluate each

project and determine if further

environmental review is appropriate.

Agency Response: This rule includes

a requirement in § 1794.22(a) by which

RUS reserves the right to request

environmental documentation for

proposals listed in § 1794.21(b) and (c)

if significant environmental effects

result from the implementation of the

proposal. RUS believes that determining

whether an ER should be prepared for

all categorically excluded proposals on

a case-by-case basis would be

inconsistent with the CEQ regulations

(40 CFR 1508.4) and would extend the

RUS environmental review process.

Three commenters assert that the

thresholds established to differentiate

between projects that require an

environmental assessment (EA) with

and without scoping (§§ 1794.23 and

1794.24) were also arbitrarily

determined and point out that a 1 MW

increase in capacity can increase the

level of review. The commenters

recommend that all § 1794.24 proposals

which normally require scoping be

incorporated into § 1794.23 and that

RUS adopt language allowing the

agency to require scoping for projects

which are expected to have significant

impacts.
Federal Register / Vol. 63, No. 238 / Friday, December 11, 1998 /Rules and Regulations 68651

Agency Response: RUS has

reevaluated the thresholds that were

established in the existing regulation for

proposed actions listed in §§ 1794.23

and 1794.24. The thresholds accurately

delineate the difference between

proposed actions which can be

adequately reviewed with an EA and

those actions which have a higher

potential for needing an EIS. The latter

required the preparation of an EVAL by

the applicant. The EVAL will serve as

the RUS EA, (40 CFR 1506.5(b)). Instead

of establishing a single classification

system for actions normally requiring an

EA and determining the need for

scoping on an individual basis, RUS

agrees some flexibility is needed and

has included a provision to modify or

waive scoping requirements in

§ 1794.52 for actions that normally

require an EA with scoping.

Two commenters expressed concern

with the provisions of the proposed rule

that allow the applicant or its consultant

to prepare the environmental report (ER)

which normally serves as RUS’’ EA for

Water and Waste proposals. These

commenters assert that there may be an

appearance of a conflict of interest.

Agency Response: Agency

responsibility is addressed in 40 CFR

1506.5. The CEQ regulations allow an

agency to require an applicant to submit

environmental information for possible

use by that agency (40 CFR 1506.5(a)).

The agency should assist the applicant

by outlining the types of information

required. The agency shall

independently evaluate the information

provided by the applicant and accept

responsible for its accuracy. RUS has

developed guidance Bulletin 1794A–

602 for that purpose. An agency can

permit an applicant to prepare an EA

provided the agency makes its own

evaluation of the environmental issues

and takes responsibility for the scope

and content of the EA (40 CFR

1506.5(b)).

One commenter recommends that the

procedures defined in 7 CFR 1940–G

under which RUS reviews information

submitted by the applicant and

completes the assessment should be

used for Water and Waste proposals.

Agency Response: This rule provides

for an agency-prepared EA. Section

1794.41 states that the ER will normally

serve as the RUS EA. The decision of

whether RUS uses the applicant’s ER as

its EA or prepares the EA from

information provided in the ER will be

made by the State Environmental

Coordinator (SEC).

Another commenter noted that by not

allowing RUS employees to complete

EAs, the agency is limiting the ability of

its employees to provide technical

assistance to rural areas.

Agency Response: RUS does not agree

with this statement. By improving the

efficiency of document preparation,

Rural Development staff will have more

time to provide meaningful guidance

and technical assistance to applicants.

Comments on Specific Sections

Background: One commenter

requested clarification of paragraph 9 of

the proposed rules Background section

that discusses exempting from review

approvals provided by RUS pursuant to

its loan contracts and security

instruments.

Agency Response: This comment is

addressed in the response to the first

general comment.

Section 1794.2: One commenter

questioned whether the item (d) in this

section correctly characterized the roles

RUS and the applicant play under

NEPA and the CEQ regulations. He

asserts that the applicant should be

responsible for the accuracy of the

information contained in environmental

documents and the agency should be

responsible for compliance with

appropriate regulations.

Agency Response: RUS agrees. The

text of item (d) has been changed to

clarify the role of the applicant. RUS is

responsible for compliance with NEPA,

including verifying the accuracy of the

information it uses in its environmental

review (40 CFR 1506.5). The applicant

is responsible for compliance with all

applicable RUS requirements.

Section 1794.3: Six commenters

recommended that this section clearly

state that the rule applies only to direct

loans and loan guarantee approvals.

Agency Response: This comment is

addressed in the response to the first

general comment.

Section 1794.5 (now § 1794.4): Two

commenters support the proposed

format of placing metric units in

parentheses following the non-metric

equivalents which is the reverse of the

current format. Another commenter

questioned whether the change in

metric system format would be contrary

to the national effort to convert to the

metric system and not in compliance

with Executive Order 12770.

Agency Response: It has been RUS

experience that the current format in

which metric units are followed by the

non-metric equivalents in parentheses

has been impractical and has confused

readers. This rule’s provisions for the

use of metric units comply with

Executive Order 12770.

Section 1794.7 (now § 1794.6): One

commenter suggested adding ‘‘the

environment’’ to the definition of

Emergency Situation to account for

threats to the environment and

including a definition of ‘‘multiplexing

sites.’’

Agency Response: The words ‘‘or to

the human environment’’ have been

added to the end of the definition of

Emergency Situation and a definition

has been included in this section for

multiplexing sites.

Another commenter suggested

deleting the words ‘‘document and’’

from the definition of ER.

Agency Response: RUS recognizes

that the amount of documentation that

can be included in an ER can vary for

the types of proposals listed in

§§ 1794.22 and 1794.23 from a few

pages to 100 pages or more. Since the

word ‘‘document’’ does not add any

significance to the definition of ER, the

word has been deleted.

A third commenter thought that the

terms ER, EA and Environmental Impact

Assessment were confusing and needed

further explanation.

Agency Response: RUS agrees and has

reverted to the terminology used in the

existing rule. RUS has in the past and

proposes to continue to differentiate

between the documentation submitted

by the applicant for proposals that

normally require an EA (§ 1794.23) and

proposals that normally require an EA

with scoping (§ 1794. 24) by titling the

former an ER and the later an EVAL.

The agency prepared document for

proposals listed in §§ 1794.23 and

1794.24 is still titled an EA (40 CFR

1508.9).

One commenter requested that this

section be modified so the ER and EA

can be stand-alone documents and not

a mandatory part of the Preliminary

Engineering Report (PER) for Water and

Waste proposals. This commenter

asserts that such a restriction precludes

the use of other resources to complete

the preparation of the environmental

documentation.

Agency Response: Although RUS

intends for the ER to be submitted with

the PER for Water and Waste proposals,

there is no requirement that the ER be

prepared exclusively by the engineering

consultant that prepares the PER. The

key issue is that environmental

concerns be considered at the earliest

planning stage of a proposal to ensure

that environmental values are given

appropriate consideration. The earliest

planning stage of a proposal is the PER.

Section 1794.8 (now § 1794.7): Two

commenters noted that RUS Bulletin

1780–26 already has been designated for

guidance for another purpose.

Agency Response: The designations

for the guidance documents referenced

in this section have been corrected.
68652 Federal Register / Vol. 63, No. 238 / Friday, December 11, 1998 /Rules and Regulations

One commenter recommended that a

standard format be developed for

applicants to follow in the preparation

of an ER or EA.

Agency Response: The appropriate

bulletins referenced in this section will

contain a standard format for preparing

an ER; the applicant does not prepare an

EA.

The same commenter further

recommended that State Directors be

able to issue supplements with less than

approval by the Administrator.

Agency Response: State Directors

have the ability to issue supplements.

However, to ensure compliance with

environmental laws and regulations and

maintain uniformity with neighboring

states and within a region, requires

Administrator review and approval of

supplements.

Six commenters urged RUS to consult

with interested parties regarding the

referenced electric and

telecommunications guidance

documents prior to taking final action

on this rule.

Agency Response: RUS has

considered all comments received on

the current versions of Bulletins 1794A–

600 and 1794A–601 in preparing the

revisions to these two Bulletins. Both

Bulletins will be made available to

applicants via the Internet prior to the

effective date of this final rule.

Two commenters believe that the

referenced Water and Waste bulletin

(RUS Bulletin 1794A–602) should be

published for comment and one

commenter requested a 60-day

extension to the comment period on the

proposed rule following the release of

that draft bulletin.

Agency Response: RUS Bulletin

1794A–602 was reviewed by Rural

Development staff prior to the effective

date of this final rule. RUS does not

agree that the comment period on the

proposed rule should be extended

subject to the release of the draft

bulletin.

Section 1794.10: One commenter

recommended replacing ‘‘under RUS

direct guidance and supervision’’ with

‘‘with advise from RUS’’ instead.

Agency Response: The referenced

language has been revised. RUS will

assist applicants by outlining the types

of information required and provide

guidance and oversight in the

development of the documentation (40

CFR 1506.5).

This commenter also recommended

that the language in §§ 1794.10 and

1794.31(b) be consistent and refer to the

SEC or neither.

Agency Response: The language in

§ 1794.10 applies to all three RUS

programs. Therefore, a specific agency

official is only identified in

§ 1794.31(b), which is specific to the

Water and Waste program.

Section 1794.13: One commenter

recommended that in (a)(3) all

comments on Water and Waste

proposals be sent directly to the RUS

State Office instead of through the

applicant.

Agency Response: Applicant notices

must state that comments should be sent

to the RUS appropriate office for Water

and Waste proposals and to the

Washington, DC, office for Electric and

Telecommunications proposals.

However, RUS recognizes that both

verbal and written comments on a

proposal are sometimes directed to the

applicant. This subsection accounts for

this possibility by requiring the

applicant to submit comments to RUS.

Seven commenters were concerned

that the requirement in § 1794.13(a)(4)

making all environmental documents

and documentation related to the

proposed action available in specific

locations was too broad and created an

overly burdensome and onerous

responsibility for the applicant. They

recommended that RUS narrow the

scope of information that the applicant

is required to make available in a public

setting and require the applicant to

designate a contact person to respond to

requests for additional and supporting

information.

Agency Response: RUS agrees that the

requirement making all environmental

documents and documentation available

in specific locations creates an overly

burdensome and onerous responsibility

for the applicant and does not enhance

public participation in the

environmental process. The language in

§ 1794.13(a)(4) has been revised. RUS

will determine which project related

environmental documents will be made

available for review at locations

convenient for the public. To ensure full

public disclosure, a list of all documents

not provided for public review will be

included. Documents not provided will

be available for inspection through a

designated RUS or applicant contact

person.

Two commenters requested that

§ 1794.13(a)(5) be expanded to note that

public hearings are to be confined to the

environmental aspects of a proposed

action.

Agency Response: RUS believes that

the purpose of the public hearings or

meetings has been adequately identified

in this section.

One commenter requested that RUS

coordinate its meetings with meetings,

hearings, and environmental reviews,

which may be held and/or required by

others.

Agency Response: RUS agrees with

this comment and has revised

§ 1794.13(a)(5) to include coordination

of its meetings with the requirements of

other interested agencies and groups.

Six commenters questioned why RUS

has established differing thresholds for

publication of notices in the Federal

Register with respect to the Electric and

Telecommunications programs in

§ 1794.13(b) and the Water and Waste

program in § 1794.13(c). They

recommended that the language in

§ 1794.13(c) be consistent for all three

programs.

Agency Response: RUS agrees and has

decided to revise the language in

§§ 1794.13(b) and 1794.42(b) thereby

making the thresholds for publication of

notices consistent for all three programs.

RUS will provide interested agencies

with notification of its FONSI

determinations through direct mailings

or, at its option, the Federal Register,

when appropriate.

Section 1794.14: One commenter

endorsed the flexibility provided in this

section and recommended that this

flexibility be more clearly stated. The

commenter also suggested that the

duties of a cooperating agency are

unclear and a brief list should be

included.

Agency Response: The duties of a

cooperating agency are described in 40

CFR 1501.6 and are incorporated by

reference.

Section 1794.17: One commenter

questioned whether the mitigative

measures would be discussed in the

FONSI memo to the file in addition to

the FONSI public notice. Two

commenters noted that the provisions of

(b)(3) appear to expand the

responsibilities of field staff beyond that

of development specialists. One

commenter suggested that a better role

for the agency would be to notify the

appropriate regulatory agency to enforce

the mitigative measures.

Agency Response: Mitigation

measures shall be discussed in both the

FONSI memo and public notice. The

responsibilities of field staff have not

been expanded. In the routine process of

checking on-site conditions for

compliance with relevant loan or grant

provisions, it is appropriate for staff to

document the applicant’s compliance

status with regard to mitigation

measures that were agreed upon as part

of the conditions for the loan/grant. If

discrepancies are noted, the agency may

need to notify the appropriate regulatory

agency for action.

Section 1794.21(a): Six commenters

recommended that in addition to

defining ‘‘emergency situation’’ this
Federal Register / Vol. 63, No. 238 / Friday, December 11, 1998 /Rules and Regulations 68653

section be expanded to account for such

situations.

Agency Response: RUS has added

action (4) to account for emergency

situations.

Section 1794.21(b): One commenter

questioned why a ‘‘detailed

description’’ was required for 12 actions

in this category when all actions in this

category had to be sufficiently

described. That commenter

recommended this requirement be

deleted.

Agency Response: RUS has

determined through experience that the

types of proposals contained in this

section normally do not significantly

affect the quality of the human

environment. Thus the submission of an

ER is not normally required. However,

in order to waive the ER requirement for

the 12 actions in this category so

designated, the RUS reviewer must have

a complete description of what is being

proposed, how it will be constructed,

and the setting in which the proposed

project will be located. Evaluating these

12 actions on a case-by-case basis is

more effective than uniformly requiring

the mandatory submittal of an ER.

Another commenter was concerned

that the submittal of an environmental

document was not required for

proposed actions described in

§ 1794.21(b) (4), (8), (14), (15) and (16),

which could under certain

circumstances provide a hazard to birds.

Agency Response: RUS agrees that

under certain circumstances actions

described in § 1794.21(b) (4), (8), (14),

(15), and (16) could result in significant

effects to the human environment, such

as presenting a hazard to birds. The

description of the facilities to be

constructed that must be provided for

these actions and others so noted in

§ 1794.21(b) is used by RUS to

determine whether the current level of

review is adequate or a higher level of

review is warranted.

One commenter expressed concern

over the provision in action

§ 1794.21(b)(18) which require the

applicant obtain certification from the

utility owner that the facilities to be

purchased are in compliance with

applicable environmental laws and

regulations. This commenter believes

that the normal environmental review

process should be sufficient to identify

and resolve issues that may be

encountered.

Agency Response: RUS agrees that

obtaining a certification of compliance

for the purchase of existing facilities is

not the appropriate form of

documentation. Upon further review,

RUS has determined that establishing

two separate levels of review for the

purchase of existing facilities,

specifically action (18) in § 1794.21(b)

and action (7) in § 1794.23(b), is not

warranted. Both references to these

actions have been deleted from the final

rule and replaced by new action (11) in

§ 1794.22(a). Under the new

requirement applicants will have the

option of submitting an ER or the results

of a facility environmental audit. A

higher level of review may be required

before RUS approves an applicant’s

purchase of facilities that are

determined to be in violation of Federal,

state, or local environmental laws or

regulations.

One commenter recommended that

the threshold for action described in

§ 1794.21(b)(21), standby diesel

generators, be increased from 1

megawatt (MW) to 2 MW and also be

utilized for load management purposes

in addition to emergency power.

Agency Response: RUS does not

agree. The purpose of this category is to

exclude standby diesel generators that

would be subject to limited use (i.e.

emergency outages). Utilizing such

facilities for load management purposes

increases the hours of usage and thus

increase potential effects to the quality

of the human environment.

A commenter asserts that the action

described in § 1794.21(b)(24) could

create a major change in local air

quality.

Agency Response: RUS agrees that

wording describing action (24) could be

misinterpreted and has added the

following statement: ‘‘Repowering or

uprating that results in an increased fuel

consumption or the substitution of one

fuel combustion technology with

another is excluded from this

classification.’’ Because this action does

not include an increase in fuel

consumption, no change in local air

quality is anticipated.

This commenter further

recommended that the type of customer

facilities covered in § 1794.21(b)(24)

include commercial and agricultural.

Agency Response: RUS agrees to add

commercial and agriculture facilities to

item (24).

Section 1794.22: Three commenters

noted that proposals identified in

§ 1794.22(a)(11) and § 1794.21(b)(20)

which discuss facilities that will reduce

the amount of pollutants released into

the environment are redundant and the

reference in § 1794.22 should be

deleted.

Agency Response: RUS agrees that the

requirements of § 1794.22(a)(11) and

§ 1794.21(b)(20) are redundant.

Accordingly, action #11 in § 1794.22(a)

of the proposed rule has been deleted.

One commenter asserted that

proposals listed in § 1794.22(b)(3) and

(4) have the potential to impact

important resources but will be

excluded from environmental review.

Agency Response: Applicants are

required to prepare and submit an ER

for all proposed actions listed in

§ 1794.22(b). RUS will review the ER to

determine whether a normally

categorically excluded action may have

a significant environmental effect (40

CFR 1508.4).

One commenter suggested that

§ 1794.22(c) belongs in § 1794.23 which

describes EA proposals.

Agency Response: Proposals listed in

§ 1794.22(c) were so designated to

parallel the level of documentation

required by the EPA in 40 CFR 6.505(c)

for similar proposals. Agencies with

similar programs are encouraged by

CEQ to consult with each other to

coordinate their procedures, especially

for programs requesting similar

information from applicants (40 CFR

1507.3(a)). RUS believes that these

actions are correctly described in

§ 1794.22(c).

One commenter noted that

§ 1794.22(c)(1) and (2) only apply to

discharges and need to be expanded to

include water withdrawals.

Agency Response: RUS agrees and has

expanded the discussion in § 1794.22(c)

to clarify this issue.

Two commenters requested that

‘‘substantial increases’’ in § 1794.22

(c)(2) be defined and one commenter

also questioned how this term applied

to a new facility.

Agency Response: The term

‘‘substantial increases’’ has not been

defined because its interpretation

depends on local conditions and

regulatory requirements. RUS agrees

that this action should not include new

facilities and has revised the language

accordingly.

One commenter noted that § 1794.22

(c)(3) stipulates no greater than a 30

percent growth factor whereas § 1794.22

(b)(3) stipulates a modest growth

potential and requests consistency

within the rule.

Agency Response: The 30 percent

growth factor is an established

threshold, whereas the term ‘‘modest

growth’’ applies to local conditions and

regulatory requirements.

Another commenter asserts that the

thresholds in § 1794.22(c)(3) need to be

changed because it appears that a small

system (20–30 EDU’s) could be

expanded up to 500 EDU’s and still be

a categorically excluded proposal.

Agency Response: RUS believes the

capacity criteria as stated is sufficient

for the purposes of classifying an action
68654 Federal Register / Vol. 63, No. 238 / Friday, December 11, 1998 /Rules and Regulations

as a categorical exclusion. Two other

provisions may be applicable to the

commenter’s point. First, the ER would

provide sufficient information to

determine if there are any extraordinary

circumstances in which a normally

categorically excluded action may have

a significant environmental effect (see

40 CFR 1508.4). Second, under

§ 1794.22(b)(2), RUS could determine

that the facility improvements are not

modest in use, size, capacity, purpose,

or location and would require an EA.

Section 1794.23: One commenter

recommended that for consistency, this

section be titled ‘‘Proposals normally

requiring an EA without scoping.’’

Agency Response: RUS disagrees.

Early public involvement may be

appropriate for any level of

environmental review and should not be

explicitly dismissed by excluding

scoping for certain thresholds.

Section 1794.31: One commenter

stated that RUS should not be

supervising or giving direct guidance to

the applicant. He suggested modifying

the wording in (b) to ‘‘with advice from

RUS.’’

Agency Response: This issue is

addressed in the response to the

comment on § 1794.10.

Another commenter noted that the

SEC would be unable to devote the time

necessary to supervise all applicants.

Agency Response: High volume states

have been provided additional

environmental specialist positions in

anticipation of the increased workload.

Section 1794.32: One commenter

wanted clarification in (b) on the criteria

used to determine when public notice

would be required if important land

resources are affected. Another

commenter suggested that in (b)

reference should be made to § 1794.7 or

the RUS Bulletin 1794A–602.

Agency Response: RUS agrees with

this suggestion and has referenced the

two bulletins that provide guidance in

preparing an ER.

Section 1794.33: One commenter

noted that this section allows RUS to act

on an application without any

environmental review.

Agency Response: The commenter’s

interpretation of § 1794.33 is incorrect.

RUS shall conduct an environmental

review for all proposed actions covered

by this section. Proposals listed in

§ 1794.21(b) and (c) normally require

the submittal of a project description.

Whereas, proposals listed in

§ 1794.22(a) and (b) normally require

the submittal of an ER. RUS reserves the

right to require additional

environmental information on any

proposal the agency believes may have

significant effects on the quality of the

human environment (§ 1794.30).

Section 1794.41: One commenter

noted that the typical applicant would

need assistance from their consulting

engineer in preparing the ER, resulting

in a fee increase to the applicant. If the

SEC retains approval authority for the

ER, another layer of review is added

before the ER is accepted.

Agency Response: RUS anticipates

that the applicant’s engineer will

prepare the ER at the same time that

project planning is done. RUS further

anticipates that any increase in the

engineering fee should be modest since

the engineer in most projects has been

preparing the applicant’s environmental

information for the agency. The SEC

should be the only agency approval

official for the ER.

Section 1794.44: Two commenters

noted that it appears RUS will take final

action on proposals covered by this

section without waiting for public

input.

Agency Response: Actions listed in

§ 1794.23 are subject to public input

when the EA is made available for

review through applicant notice.

Normally there is no provision for

additional public input when RUS

makes a FONSI determination for

actions listed in § 1794.23.

These commenters also noted that

draft RUS Bulletin 1794A–602 calls for

a 15-day review period if significant

comments are received on the draft EA.

Agency Response: The reference to

the 15-day review period was

inadvertently omitted from the

proposed rule. Section 1794.44 has been

modified to include an opportunity for

the public to review the RUS FONSI

determination if substantive comments

are received on the EA.

Section 1794.51: One commenter

noted that no mention is made in (a)

where the applicant’s notice will be

published.

Agency Response: The commenter is

correct that § 1794.51 does not state

where the applicant’s notice will be

published. That information is provided

in § 1794.13(a)(1) and (2).

Section 1794.61: Two commenters

asserted that the cost of an EIS would

be prohibitive for nearly all Water and

Waste applicants which could result in

even high priority projects being

canceled due to the inability of the

applicant to fund the EIS.

Agency Response: RUS agrees that an

EIS can be an expensive document to

prepare and has identified certain

methods of funding an EIS in

§ 1794.61(a).

Section 1794.70: One commenter

recommends that this section be

expanded to allow the adoption of

environmental documents prepared by

state or local agencies or other parties in

accordance with the provisions of

§ 1794.84 of the existing regulation.

Agency Response: The CEQ

regulations in 40 CFR 1506.3 only

permit a Federal agency to adopt

documents prepared by or for another

Federal Agency. In 40 CFR 1506.2,

Federal agencies are required to

cooperate with state and local agencies

to the fullest extent possible to reduce

duplication between NEPA and state

and local requirements by jointly

preparing EAs and EISs. RUS

acknowledges that its policy on the

incorporation of environmental

documents prepared by others was

omitted from the proposed rule. This

omission has been corrected with the

addition of § 1794.74.

One commenter suggested that RUS

be more flexible in its adoption

procedures and not duplicate another

agency’s public notice and comment

period.

Agency Response: RUS believes that

its decisions must be subject to public

notification regardless of who prepares

the environmental documentation. The

preferred strategy to avoid duplication

of effort would be for RUS to participate

with other agencies in the preparation of

the initial environmental documents as

stated in § 1794.14.

This commenter also recommended

that RUS accept environmental

documents prepared by states under the

State Revolving Fund (SRF) programs as

its own documents or at a minimum

adopt the subject documents.

Agency Response: RUS may adopt

environmental documents prepared by

state agencies administering SRF

programs under the Clean Water Act (32

U.S.C. 1251) and the Safe Drinking

Water Act (42 U.S.C. 300). Where

appropriate, the State Director will enter

into an agreement with appropriate state

agencies to establish the necessary

procedures.

Any environmental document

accepted or prepared by RUS prior to

the effective date of these regulations

may be developed in accordance with

RUS environmental requirements in

effect at the time the document was

accepted or prepared by RUS.

List of Subjects in 7 CFR Part 1780

Business and industry, Community

development, Community facilities,

Grant programs—housing and

community development, Reporting and

recordkeeping requirements, Rural

areas, Waste treatment and disposal,

Water supply, Watersheds.
Federal Register / Vol. 63, No. 238 / Friday, December 11, 1998 /Rules and Regulations 68655

List of Subjects in 7 CFR Part 1794

Environmental impact statements,

Reporting and recordkeeping

requirements.

Therefore RUS amends chapter XVII

of title 7 of the Code of Federal

Regulations as follows:

PART 1780—WATER AND WASTE

LOANS AND GRANTS

Subpart B—Loan and Grant

Application Processing

1. Section 1780.31 is amended by

revising paragraph (e) to read as follows:

§ 1780.31 General.

* * * * *

(e) Starting with the earliest

discussion with prospective applicants,

the State Environmental Coordinator

shall discuss with prospective

applicants and be available for

consultation during the application

process the environmental review

requirements for evaluating the

potential environmental consequences

of the project. Pursuant to 7 CFR part

1794 and guidance in RUS Bulletin

1794A–602, the environmental review

requirements shall be performed by the

applicant simultaneously and

concurrently with the project’s

engineering planning and design. This

should provide flexibility to consider

reasonable alternatives to the project

and development methods to mitigate

identified adverse environmental

effects. Mitigation measures necessary

to avoid or minimize any adverse

environmental effects must be

integrated into project design.

2. Section 1780.33 is amended by

revising paragraphs (c)(3), and (f) to read

as follows:

§ 1780.33 Application requirements.

* * * * *

(c) * * *

(3) The State staff engineer will

consult with the applicant’s engineer as

appropriate to resolve any questions

concerning the PER. Written comments

will be provided by the State staff

engineer to the processing office to meet

eligibility determination time lines.

* * * * *

(f) Environmental Report. For those

actions listed in §§ 1794.22(b) and

1794.23(b), the applicant shall submit,

in accordance with RUS Bulletin

1794A–602, two copies of the

completed Environmental Report.

(1) Upon receipt of the Environmental

Report, the processing office shall

forward one copy of the report with

comments and recommendation to the

State Environmental Coordinator for

review.

(2) The State Environmental

Coordinator will consult with the

applicant as appropriate to resolve any

environmental concerns. Written

comments will be provided by the State

Environmental Coordinator to the

processing office to meet eligibility

determination time lines.

* * * * *

3. Section 1780.39 is amended by

revising paragraph (b) introductory text

and removing and revising paragraph

(h).

§ 1780.39 Application processing.

* * * * *

(b) Professional services and contracts

related to the facility. Fees provided for

in contracts or agreements shall be

reasonable. The Agency shall consider

fees to be reasonable if they are not in

excess of those ordinarily charged by

the profession as a whole for similar

work when RUS financing is not

involved. Applicants will be responsible

for providing the services necessary to

plan projects including design of

facilities, environmental review and

documentation requirements,

preparation of cost and income

estimates, development of proposals for

organization and financing, and overall

operation and maintenance of the

facility. Applicants should negotiate for

procurement of professional services,

whereby competitors’ qualifications are

evaluated and the most qualified

competitor is selected, subject to

negotiations of fair and reasonable

compensation. Contracts or other forms

of agreement between the applicant and

its professional and technical

representatives are required and are

subject to RUS concurrence.

* * * * *

4. Section 1780.41 is amended by

revising paragraph (a)(8) to read as

follows:

§ 1780.41 Loan or grant approval.

(a) * * *

(8) Completed environmental review

documents including copies of public

notices and appropriate proof of

publication, if applicable; and

* * * * *

SUBPART C—PLANNING, DESIGN,

BIDDING, CONTRACTING,

CONSTRUCTING AND INSPECTIONS

5. Section 1780.55 is revised to read

as follows:

§ 1780.55 Preliminary engineering reports.

Preliminary engineering reports and

Environmental Reports. Preliminary

engineering reports (PERs) must

conform to customary professional

standards. PER guidelines for water,

sanitary sewer, solid waste, and storm

sewer are available from the Agency.

Environmental Reports must meet the

policies and intent of the National

Environmental Policy Act and RUS

procedures. Guidelines for preparing

Environmental Reports are available in

RUS Bulletin 1794A–602.

6. Section 1780.57 is amended by

revising paragraph (a) to read as follows:

§ 1780.57 Design policies.

* * * * *

(a) Environmental review. Facilities

financed by the Agency must undergo

an environmental impact analysis in

accordance with the National

Environmental Policy Act and RUS

procedures. Facility planning and

design must not only be responsive to

the owner’s needs but must consider the

environmental consequences of the

proposed project. Facility design shall

incorporate and integrate, where

practicable, mitigation measures that

avoid or minimize adverse

environmental impacts. Environmental

reviews serve as a means of assessing

environmental impacts of project

proposals, rather than justifying

decisions already made. Applicants may

not take any action on a project proposal

that will have an adverse environmental

impact or limit the choice of reasonable

project alternatives being reviewed prior

to the completion of the Agency’s

environmental review.

* * * * *

7. Part 1794 is revised 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 Metric units.

1794.5 Responsible officials.

1794.6 Definitions.

1794.7 Guidance.

1794.8–1794.9 [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.
68656 Federal Register / Vol. 63, No. 238 / Friday, December 11, 1998 /Rules and Regulations

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 analysis.

1794.54 Agency determination.

1794.55–1794.59 [Reserved]

Subpart G—Procedure for Environmental

Impact Statements

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 Incorporation of environmental

materials.

1794.75–1794.79 [Reserved]

Authority: 7 U.S.C. 6941 et seq., 42 U.S.C.

4321 et seq.; 40 CFR Parts 1500–1508.

Subpart A—General

§ 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 through

1508) and certain related Federal

environmental laws, statutes,

regulations, and Executive Orders (EO)

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

agencies and other organizations to

provide decision-makers with

information on the issues that are truly

significant to the action in question.

§ 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

documents submitted by the applicant

shall be prepared under the oversight

and guidance of RUS. RUS will evaluate

and be responsible for the accuracy of

all information contained therein.

§ 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. Approvals provided by RUS

pursuant to loan contracts and security

instruments, including approvals of lien

accommodations, are not actions for the

purposes of this part and the provisions

of this part shall not apply to the

exercise of such approvals.

§ 1794.4 Metric units.

RUS normally will prepare

environmental documents using nonmetric 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.

§ 1794.5 Responsible officials.

The Administrator of RUS has the

responsibility for Agency compliance

with all environmental laws,

regulations, and EOs 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.

§ 1794.6 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. A natural

disaster or system failure that may
Federal Register / Vol. 63, No. 238 / Friday, December 11, 1998 /Rules and Regulations 68657

involve an immediate or imminent

threat to public health, safety, or the

human environment.

Environmental Analysis (EVAL). The

document submitted by the applicant

for proposed actions subject to

compliance with § 1794.24 and under

special circumstances § 1794.25.

Environmental Report (ER). The

environmental documentation normally

submitted by applicants for proposed

actions subject to compliance with

§§ 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 this Departmental Regulation

are available from USDA, Rural Utilities

Service, Washington, DC 20250.

Loan Design. Document required by 7

CFR part 1737.

Multiplexing Center. A field site

where a telecommunications provider

houses a device that combines

individual subscriber circuits onto a

single system for economical connection

with a switching center. The combiner,

or ‘‘multiplexer,’’ may be mounted on a

pole, on a concrete pad, or in a partial

or full enclosure such as a shelter, or

small building.

Natural Resource Management Guide.

Inventory of natural resources, land

uses, and environmental factors

specified by Federal, State, and local

authorities as deserving some degree of

protection or special consideration. The

guide describes the standards or types of

protection that apply.

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 described in § 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)).

§ 1794.7 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)

(§ 1794.22(a)) and RUS Bulletin 1794A–

601 provides guidance in preparing the

ER for proposed actions which require

EAs (§ 1794.23(b) Telecommunications

only and (c));. Copies of these bulletins

are available upon request by contacting

Rural Utilities Service, Publications

Office, PDRA, Stop 1522; 1400

Independence Avenue, SW;

Washington, DC 20250–1522.

(b) Water and Waste Program. RUS

Bulletin 1794A–602 provides guidance

in preparing the ER for proposed actions

classified as CEs (§ 1794.22(b)) and EAs

(§ 1794.23(b)). 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 1794A–

602. Each State Office shall maintain an

updated Natural Resource Management

Guide and provide applicants with

pertinent sections or a copy of the

current edition thereof.

§§ 1794.8–1794.9 [Reserved]

Subpart B—Implementation of the

National Environmental Policy Act

§ 1794.10 Applicant responsibilities.

As described in subpart C of this part,

applicants shall prepare the applicable

environmental documentation

concurrent with a proposed action’s

engineering, planning, and design

activities. RUS shall assist applicants by

outlining the types of information

required and shall provide guidance and

oversight in the development of the

documentation. Documentation shall

not be considered complete until all

public review periods, as applicable,

have expired and RUS concurrence, as

set forth in the appropriate decision

document and associated public notice,

has been issued.

§ 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 RUS action. For proposed

actions that normally require an EIS,

applicants shall consult with RUS prior

to obtaining the services of an

environmental consultant.

§ 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.

§ 1794.13 Public involvement.

(a) 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.

(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

specified in the Bulletins referenced in

§ 1794.7 or established on a project-byproject 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 not publish notices for

compliance with this part until so

notified by RUS.

(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.
68658 Federal Register / Vol. 63, No. 238 / Friday, December 11, 1998 /Rules and Regulations

(4) RUS and applicants shall make

available to the public those project

related environmental documents that

RUS determines will enhance public

participation in the environmental

process. These materials shall be placed

in locations convenient for the public as

determined by RUS in consultation with

applicants. Included with the

documentation shall be a list of other

project-related information that shall be

available for inspection through a

designated RUS or applicant contact

person.

(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 the opinion of RUS, 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 conducted by RUS will be

coordinated to the extent practicable

with other meetings, hearings, and

environmental reviews which may be

held or required by other Federal, state

and local agencies. Applicants shall, as

necessary, participate in all RUS

conducted 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 (§ 1794.24) or an EIS

(§ 1794.25). RUS may require scoping

procedures to be followed for other

proposed actions where appropriate to

achieve the purposes of NEPA.

(b) 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.

Where the proposed action requires an

EIS RUS shall, in addition to applicant

published notices, publish notice in the

Federal Register. In all cases, RUS may

publish notices in the Federal Register

as appropriate.

§ 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 indicates that

RUS is a cooperating agency in all

NEPA-related notices published for the

proposed action;

(b) The scope and content of the 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.

§ 1794.15 Limitations on actions during

the NEPA process.

(a) General. 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 (40 CFR

1506.1).

(b) Electric Program. In determining

which applicant activities related to a

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. Not withstanding 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.

§ 1794.16 Tiering.

It is the policy of RUS to prepare

programmatic level analysis in order to

tier an EIS and an EA where:

(a) It is practicable, and

(b) There will be a reduction of delay

and paperwork, or where better decision

making will be fostered (40 CFR

1502.20).

§ 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.

§§ 1794.18–1794.19 [Reserved]

Subpart C—Classification of Proposals

§ 1794.20 Control.

Electric and Telecommunications

Programs. For environmental review

purposes, RUS has identified and

established categories of proposed

actions (§§ 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 proposed project

prior to determining its classification.

Where the applicant proposes to

participate with other parties in the
Federal Register / Vol. 63, No. 238 / Friday, December 11, 1998 /Rules and Regulations 68659

ownership of a proposed project and all

applicants cumulatively own:

(a) Five percent or less of a project is

not considered a Federal action subject

to this part;

(b) Thirty-three and one-third percent

or more of a project shall be treated in

its usual category;

(c) More than five percent but less

than 331⁄3 percent of a project, RUS shall

determine whether the applicant

participants have sufficient control and

responsibility to alter the development

of the proposal such that RUS’s action

will be considered a Federal action

subject to this part. 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 participation of the

applicant;

(4) Participation percentage of each

utility; and

(5) Managerial arrangements and

contractual provisions.

§ 1794.21 Categorically excluded

proposals without an ER.

(a) General. Certain types of actions

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;

(3) Personnel and administrative

actions; and

(4) Repairs made because of an

emergency situation to return to service

damaged facilities of an applicant’s

system.

(b) Electric and Telecommunications

Programs. Applications for financial

assistance for the types of proposed

actions listed in this paragraph (b)

normally do not require the submission

of an ER. These types of actions are

subject to the requirements of § 1794.31.

Applicants shall sufficiently identify all

proposed actions so their proper

classification can be determined.

Detailed descriptions shall be provided

for each proposal noted in this section.

RUS normally requires additional

information in addition to a description

of what is being proposed, to ensure that

proposals are properly classified. In

order to provide for extraordinary

circumstances, RUS may require

development of an ER for proposals

listed in this section. 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 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. 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);

(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. A description of

the facilities to be constructed shall be

provided to RUS;

(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;

(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

§ 1794.15(b)(2);

(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 industrial or commercial

sites, 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) Construction of a battery energy

storage system at an existing generating

station or substation site. A description

of the facilities to be constructed 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, and

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

total capacity) 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 at an industrial,

commercial or agricultural 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-
68660 Federal Register / Vol. 63, No. 238 / Friday, December 11, 1998 /Rules and Regulations

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 in order to improve

the efficiency or the energy output of

the facility. Repowering or uprating that

results in increased fuel consumption or

the substitution of one fuel combustion

technology with another is excluded

from this classification.

(c) Water and Waste Program.

Applications for financial assistance for

certain proposed actions do not

normally require the submission of an

ER. Applicants shall sufficiently

identify all proposed actions so their

proper classification can be determined.

These types of actions are subject to the

requirements of § 1794.31. In order to

provide for extraordinary

circumstances, RUS may require

development of an ER for proposals

listed in this section. Proposed actions

within this classification are:

(1) Management actions relating to

invitation for bids, award of contracts,

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 servicing

activities that do not alter the purpose,

operation, location, or design of the

proposal as originally approved, such as

subordinations, amendments and

revisions to approved actions, and the

provision of additional financial

assistance for cost overruns.

§ 1794.22 Categorically excluded

proposals requiring an ER.

(a) Electric and Telecommunications

Programs. Applications for financial

assistance for the types of proposed

actions listed in this section normally

require the submission of an ER and are

subject to the requirements of § 1794.32.

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 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

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

sites. 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

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 new water supply

wells and associated pipelines not

located within the boundaries of an

existing well field or generating station

site; and

(11) Purchase of existing facilities or

a portion thereof where use or operation

will remain unchanged. The results of a

facility environmental audit can be

substituted for the ER.

(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 § 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 not more than 500

EDUs and with modest growth

potential. The proposed action must be

designed for predominantly residential

use with other users being small-scale,

commercial enterprises having limited

secondary impacts;

(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) 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;

(6) Actions described in

§ 1794.21(c)(4) which alter the purpose,
Federal Register / Vol. 63, No. 238 / Friday, December 11, 1998 /Rules and Regulations 68661

operation, location, or design of the

proposed action as originally approved,

and such alteration is equivalent in

magnitude or type as described in

paragraphs (b)(1) through (b)(5) of this

section; 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 in paragraphs (b)(1)

through (b)(5).

(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) Will either create a new or relocate

an existing discharge to or a withdrawal

from surface or ground waters;

(2) Will result in substantial increases

in the volume or the loading of

pollutants from an existing discharge to

receiving waters;

(3) Will cause a substantial increase in

the volume of withdrawal from surface

or ground waters at an existing site; or

(4) Would provide capacity to serve

more than 500 EDUs or a 30 percent

increase in the existing population

whichever is larger.

§ 1794.23 Proposals normally requiring an

EA.

RUS will normally prepare an EA for

all proposed actions which are neither

categorical exclusions (§§ 1794.21 and

1794.22) nor normally requiring an EIS

(§ 1794.25). For certain actions within

this class, scoping and document

procedures contained in §§ 1794.50

through 1794.54 shall be followed (see

§ 1794.24). The following are proposed

actions which normally require an EA

and shall be subject to the requirements

of §§ 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

§ 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 § 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) Construction of cooperative

headquarters, maintenance, and

equipment storage facilities involving

more than 10 acres (4 hectares) of

physical disturbance or fenced property;

(8) 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;

(9) 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;

(10) The construction of substations

or switching stations requiring greater

than five acres (2 hectares) of new

physical disturbance at a single site; and

(11) 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.

§ 1794.24 Proposals normally requiring an

EA with scoping.

(a) General. 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 §§ 1794.50 through

1794.54. RUS has the discretion to

modify or waive the requirements listed

in § 1794.52 for a proposed action in

this category.

(b) Electric Program. 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) 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.

(c) Telecommunications and Water

and Waste Programs. There are no

actions normally falling within this

classification.

§ 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 §§ 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 §§ 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
68662 Federal Register / Vol. 63, No. 238 / Friday, December 11, 1998 /Rules and Regulations

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.

§§ 1794.26–1794.29 [Reserved]

Subpart D—Procedure for Categorical

Exclusions

§ 1794.30 General.

The procedures of this subpart which

apply to proposed actions classified as

CEs in §§ 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 normally

categorically excluded action may have

a significant effect on the quality of the

human environment, RUS may require

additional environmental

documentation.

§ 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 provide additional

information on a project 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.

§ 1794.32 Environmental report.

(a) For proposed actions listed in

§ 1794.21(b) and (c), the applicant is

normally not required to submit an ER.

(b) For proposed actions listed in

§ 1794.22(a) and (b), the applicant shall

normally submit an ER. Guidance in

preparing the ER for Electric and

Telecommunication proposals is

contained in RUS Bulletin 1794A–600.

Guidance in preparing the ER for Water

and Waste proposals is contained in

RUS Bulletin 1794A–602. The applicant

may be required to publish public

notices and provide evidence of such if

the proposed action is located in,

impacts, or converts important land

resources.

§ 1794.33 Agency action.

RUS may act on an application for

financial assistance upon determining,

based on the review of documents as set

forth in § 1794.32 and such additional

information as RUS deems necessary,

that the project is categorically

excluded.

§§ 1794.34–1794.39 [Reserved]

Subpart E—Procedure for

Environmental Assessments

§ 1794.40 General.

This subpart applies to proposed

actions described in § 1794.23. Where

appropriate to carry out the purposes of

NEPA, RUS may impose, on a case-bycase 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

effect on the quality of the human

environment, the preparation of an EIS

shall be required and the procedures in

subpart G of this part shall be followed.

§ 1794.41 Document requirements.

Applicants will provide an ER in

accordance with the appropriate

guidance documents referenced in

§ 1794.7. 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. However,

RUS reserves the right to prepare its

own EA from the information provided

in the ER. RUS will take responsibility

for the scope and content of an EA.

§ 1794.42 Notice of availability.

Prior to RUS making a finding in

accordance with § 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.

§ 1794.43 Agency finding.

(a) General. If RUS finds, based on an

EA that the proposed action will not

have a significant effect on the quality

of 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.

§ 1794.44 Timing of agency action.

RUS may take its final action on

proposed actions requiring an EA

(§ 1794.23) at any time after publication

of the RUS and applicant notices that a

FONSI has been made and any required

review period has expired. When

substantive comments are received on

the EA, RUS may provide an additional

period (15 days) for public review

following the publication of its FONSI

determination. Final action shall not be

taken until this review period has

expired.

§§ 1794.45–1794.49 [Reserved]

Subpart F—Procedure for

Environmental Assessments With

Scoping

§ 1794.50 Normal sequence.

For proposed actions covered by

§ 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 Analysis (EVAL) is

submitted (see § 1794.54). After the

EVAL has been submitted, RUS will

make a judgment to utilize the EVAL as

its EA and issue a FONSI or prepare an

EIS.

§ 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 shall have its notice of

intent to prepare an EA or EIS

(§ 1794.13) 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
Federal Register / Vol. 63, No. 238 / Friday, December 11, 1998 /Rules and Regulations 68663

at such meetings must be submitted to

RUS as soon as practicable after the

meetings.

§ 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 place(s) 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 shall 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.

§ 1794.53 Environmental analysis.

(a) After scoping procedures have

been completed, RUS shall require the

applicant to develop and submit an

EVAL. The EVAL shall be prepared

under the supervision and guidance of

RUS staff and RUS shall evaluate and be

responsible for the accuracy of all

information contained therein.

(b) The EVAL will normally serve as

the RUS EA. The EVAL 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 EVAL to be

satisfactory, the applicant shall provide

RUS with a sufficient number of copies

of the EVAL to satisfy the RUS

distribution plan.

(c) The EVAL 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.

§ 1794.54 Agency determination.

Following the scoping process and the

development of a satisfactory EA, RUS

shall determine whether the proposed

action is a major Federal action

significantly affecting the quality of the

human environment. If RUS determines

the action is significant, RUS will

continue with the procedures in subpart

G of this part. If RUS determines the

action is not significant, RUS will

proceed in accordance with §§ 1794.42

through 1794.44.

§§ 1794.55–1794.59 [Reserved]

Subpart G—Procedure for

Environmental Impact Statements

§ 1794.60 Normal sequence.

For proposed actions requiring an EIS

(see § 1794.25), the NEPA process shall

proceed in the same manner as for

proposed actions requiring an EA with

scoping through the point at which the

scoping process is completed (see

§ 1794.52).

§ 1794.61 Environmental impact

statement.

(a) General. An EIS shall be prepared

in accordance with 40 CFR part 1502.

Funding, in whole or in part, for an EIS

can be obtained from any lawful source

(e.g., cooperative agreements developed

in accordance with Section 759A,

Federal Agricultural Improvement and

Reform Act of 1996, Pub. L. 104–127

and 31 U.S.C. 6301). A third-party

consultant selected by RUS and funded

by the applicant (7 CFR part 1789) may

prepare the EIS.

(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 RUS will provide the

draft EIS if requested within 30 days of

publication of notice of availability of

the final EIS.

(b) Electric Program. Where the

applicant or its consultant has prepared

an EVAL, RUS will develop its draft and

final EIS from the EVAL. An EVAL will

not be required if a third-party

consultant prepares the draft and final

EIS.

§ 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

§ 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.
68664 Federal Register / Vol. 63, No. 238 / Friday, December 11, 1998 /Rules and Regulations

§ 1794.63 Record of decision.

(a) Upon completion of the review

period for a final EIS, RUS will have its

ROD prepared in accordance with 40

CFR 1505.2.

(b) Separate RUS and applicant

notices of availability 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.

§ 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.

§§ 1794.65–1794.69 [Reserved]

Subpart H—Adoption of Environmental

Documents

§ 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.

§ 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.

§ 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 § 1794.61) apply.

(b) If RUS was not a cooperating

agency but determines that another

Federal agency’s EIS is adequate, RUS

shall adopt that agency’s 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 RUS 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 informing the public of its

action and will circulate copies of the

EIS in accordance with 40 CFR 1502.19

and 40 CFR 1506.3.

§ 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.

§ 1794.74 Incorporation of environmental

materials.

RUS may incorporate into its

environmental documents,

environmental documents or portions

thereof prepared by state, or local

agencies or other parties for purposes

other than compliance with the

requirements of NEPA. RUS will

circulate the incorporated documents as

a part of its EA or draft and final EIS in

the same manner as if prepared by RUS.

§ 1794.75–1794.79 [Reserved]

Dated: December 7, 1998.

Jill Long Thompson,

Under Secretary, Rural Development.

[FR Doc. 98–32882 Filed 12–10–98; 8:45 am]

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