15800 Federal Register / Vol. 62, No. 63 / Wednesday, April 2, 1997 / Rules and Regulations

DEPARTMENT OF HOUSING AND

URBAN DEVELOPMENT

24 CFR Parts 50 and 55

[Docket No. FR–2206–F–04]

Protection and Enhancement of

Environmental Quality; Technical and

Clarifying Amendments

AGENCY: Office of the Secretary, HUD.

ACTION: Final rule.

SUMMARY: On September 27, 1996 (61

FR 50914), HUD published a final rule

streamlining and updating 24 CFR part

50 in its entirety. Part 50 describes the

procedures used by HUD to carry out its

responsibilities under the National

Environmental Policy Act of 1969

(NEPA), the NEPA-implementing

regulations of the Council on

Environmental Quality, and the other

NEPA-related Federal environmental

laws and authorities. This final rule

makes several technical and clarifying

amendments to § 50.19 of the September

27, 1996 rule. Section 50.19 lists those

activities which are excluded from the

compliance requirements of the various

environmental authorities. Further, this

rule also makes a correction to the

preamble of the September 27, 1996

final rule. This rule also makes a

necessary conforming amendment to 24

CFR part 55 (Floodplain Management).

EFFECTIVE DATE: May 2, 1997.

FOR FURTHER INFORMATION CONTACT:

Richard H. Broun, Director, Office of

Community Viability, Room 7240,

Department of Housing and Urban

Development, 451 Seventh Street, SW,

Washington, DC 20410–7000. For

telephone communication, contact

Walter Prybyla, Deputy Director for

Policy, Environmental Review Division

at (202) 708–1201. Hearing or speechimpaired individuals may access this

number via TTY by calling the Federal

Information Relay Service number at 1–

800–877–8339. (With the exception of

the ‘‘800’’ number, these telephone

numbers are not toll-free.)

SUPPLEMENTARY INFORMATION:

I. Background

A. The September 27, 1996 Final Rule

On September 27, 1996 (61 FR 50914),

HUD published a final rule streamlining

and updating 24 CFR part 50 in its

entirety. Part 50 describes the

procedures used by HUD to carry out its

responsibilities under the National

Environmental Policy Act of 1969

(NEPA) (42 U.S.C. 4321–4347), the

NEPA-implementing regulations of the

Council on Environmental Quality, and

the other NEPA-related Federal

environmental laws and authorities (see

§ 50.4 of the September 27, 1996 final

rule). The September 27, 1996 final rule

became effective on October 28, 1996.

B. Technical and Clarifying

Amendments to the September 27, 1996

Final Rule

Section 50.19 of the September 27,

1996 rule lists those activities and

approvals of policy documents which

are categorically excluded from the

environmental assessment required by

NEPA (except in extraordinary

circumstances as described in

§ 50.20(b)) and are not subject to the

compliance requirements of the related

environmental laws and authorities

cited at § 50.4. The final rule makes the

following technical and clarifying

changes to this section:

1. Refinancings Under HUD’s Loan

Guarantee Recovery Fund (LGRF)

Program

Currently, § 50.19(b)(21) excludes the

‘‘[r]efinancing of HUD-insured

mortgages that will not allow new

construction or rehabilitation, nor result

in any physical impacts or changes

except for routine maintenance.’’ This

provision is intended to apply solely to

the refinancing of HUD-insured

mortgages on existing properties. Since

publication of the September 27, 1996

final rule, the issue of refinancings

under HUD’s Loan Guarantee Recovery

Fund (LGRF) program (24 CFR part 573)

has arisen for the first time. This final

rule updates 24 CFR part 50 by adding

a new § 50.19(b)(24) which categorically

excludes HUD guarantees under the

LGRF program of loans that refinance

loans and mortgages where the

refinancing will not allow further

construction or rehabilitation, nor result

in any physical impacts or changes

except for routine maintenance.

Compliance with §§ 50.4(b)(1),

50.4(c)(1), and 51.303(a)(3), however, is

required. LGRF refinancings would be

identical or similar to HUD refinancings

of HUD-held mortgages on existing

properties allowed under § 50.19(b)(21)

and the proposed clarification does not

constitute a substantive change to the

current rule. HUD has determined that

such refinancings do not involve

physical development and should be

categorically excluded from

environmental assessment under NEPA

and listed under § 50.19 as not subject

to the compliance requirements of most

of the related environmental laws and

authorities. This determination is based

on the fact that unlike HUD financing of

proposed physical development for

which a full environmental review and

compliance with the related authorities

is required, the refinancing of existing

loans and mortgages would apply only

to already-completed construction and

would not alter physical conditions so

as to trigger compliance with most

environmental laws, since any physical

change would have occurred prior to the

application for a HUD loan guarantee.

Only three of the environmental

requirements listed in § 50.4 would

apply to refinancing under the LGRF

program. These requirements are flood

insurance, protection of coastal barrier

resources, and notification of airport

hazards.

A conforming amendment to 24 CFR

part 55 (Floodplain Management) is

required as a result of the new

categorical exclusion for LGRF

refinancings. Part 55 covers the

proposed acquisition, construction,

improvement, disposition, financing

and use of properties located in a

floodplain for which approval is

required either from HUD or from a

grant recipient subject to 24 CFR part 58

(Environmental Review Procedures for

Entities Assuming HUD Environmental

Responsibilities). Paragraph (b) of

§ 55.12 describes the inapplicability of

24 CFR part 55 to certain categories of

proposed actions. This final rule adds a

new paragraph (b)(4) to § 55.12 for HUD

refinancings of loans and mortgages

under the LGRF program.

2. Lender Insurance Program

Section 427 of the Departments of

Veterans Affairs and Housing and Urban

Development, and Independent

Agencies Appropriations Act, 1997

(Pub. L. 104–204, approved September

26, 1996; 110 Stat. 2874, 2928) (the

Appropriations Act) amended title II of

the National Housing Act (12 U.S.C.

1707 et seq.) to provide that the

Secretary may delegate to Direct

Endorsement (DE) mortgagees the

authority to insure mortgages on one-to

four-family properties. Section

50.19(b)(17) of the September 27, 1996

final rule provides that HUD’s

endorsement of one-to-four family

mortgage insurance under the DE

program is not subject to all of the

individual compliance requirements of

the Federal laws and authorities cited in

§ 50.4; compliance with §§ 50.4(b)(1),

50.4(c)(1), and 51.303(a)(3), however, is

required. Since section 427 allows HUD

to delegate the authority to insure

mortgages to certain eligible DE

mortgagees, this Lender Insurance

process should be similarly excluded

from certain requirements. Therefore,

this final rule amends § 50.19(b)(17) to

include the Lender Insurance program.
Federal Register / Vol. 62, No. 63 / Wednesday, April 2, 1997 / Rules and Regulations 15801

3. Tenant-based Rental Assistance

Currently, § 50.19(b)(11) provides that

tenant-based rental assistance is

categorically excluded from the

assessment required by NEPA except in

extraordinary circumstances

(§ 50.20(b)), and is not subject to the

related laws cited at § 50.4. Regarding

the approval of policy documents for

tenant-based rental assistance, HUD is

adding a parenthetical to clarify that the

term ‘‘leasing’’ as covered in

§ 50.19(c)(1) does not include tenantbased rental assistance. Paragraphs (b)

and (c) of § 50.19 provide a list of

activities and policy documents,

respectively, which are categorically

excluded from the environmental

review requirements described

elsewhere in part 50. The list of policy

documents in § 50.19(c) was intended to

be sufficiently broad to encompass any

rules and notices proposed for

publication in the Federal Register by

HUD to establish the policies and

procedures necessary for the

implementation of a categorically

excluded activity listed in § 50.19(b) on

the condition that such rules and

notices otherwise do not involve real

property transfer, physical development

or standards setting described in

§ 50.19(c)(1).

4. Other Miscellaneous Corrections and

Clarifications to § 50.19

Currently, § 50.19(b)(4) categorically

excludes economic development

activity costs that are not associated

with construction or expansion of

existing operations. This final rule

clarifies the scope of the exclusion by

revising the imprecise phrase

‘‘expansion of existing operations’’ to

refer specifically to ‘‘physical expansion

of existing facilities.’’ Generally,

economic development results in some

kind of expansion. Where expansion

occurs in ways other than expansion of

the physical plant, such as expansion in

sales volume or number of employees,

HUD does not anticipate significant

environmental impact or physical

changes that would trigger

environmental reviews under the

related environmental laws and

authorities.

A new paragraph (c)(5)(ii) is added to

§ 50.19 to clarify that proposed Notices

of Funding Availability (NOFA) are

categorically excluded where an

existing regulation or guideline

pertaining to the NOFA contains no

environmental review provisions

because the regulation or guideline

concerns only activities listed in

§ 50.19(b).

The final rule revises § 50.19(c)(6) to

refer specifically to the establishment

and review of income limits and

exclusions with regard to eligibility for

or calculation of HUD housing

assistance or rental assistance. This

activity does not involve physical

development or standards setting.

C. Corrected Preamble to the September

27, 1996 Final Rule

The preamble to the September 27,

1996 final rule included a list of HUD

programs subject to the requirements of

24 CFR part 50 (61 FR 50915–50916).

HUD wishes to make the following

corrections to this list.

1. The HOPE VI Revitalization

Program is added to the list of programs

administered by the Office of Public and

Indian Housing. This program will

remain subject to part 50 and is not

affected by the October 14, 1996

effective date for the transition to 24

CFR part 58 (Environmental Review

Procedures for Entities Assuming HUD

Environmental Responsibilities) of

activities under title I of the United

States Housing Act of 1937.

2. The Nehemiah Housing

Opportunity Grants Program (NHOP) is

deleted from the list of programs

administered by the Office of Housing.

The Congress is no longer authorizing

new grants under NHOP.

3. Research grants authorized under

sections 1051–53 of the Lead-Based

Paint Hazard Reduction Act of 1992

(LBPHRA) are added to the list of

activities subject to 24 CFR part 50. The

only lead-based paint grants that are

statutorily permitted to be subject to 24

CFR part 58 procedures are the

abatement or hazard reduction grants

that are authorized under section 1011

of the LBPHRA or under the 1992 HUD

appropriations act.

II. Justification for Final Rulemaking

HUD generally publishes a rule for

public comment before issuing a rule for

effect, in accordance with its own

regulations on rulemaking in 24 CFR

part 10. Part 10 provides for exceptions

to the general rule if the agency finds

good cause to omit advance notice and

public participation. The good cause

requirement is satisfied when prior

public procedure is ‘‘impracticable,

unnecessary, or contrary to the public

interest’’ (24 CFR 10.1). HUD finds that

in this case prior public procedure is

unnecessary. This rule does not make

any substantive amendments to the

September 27, 1996 final rule. The rule

clarifies that HUD’s guarantees for the

refinancing of a mortgage or loan under

the LGRF program are categorically

excluded. This amendment will benefit

eligible program participants by

facilitating their ability to secure a lower

interest rate. This rule also clarifies that

since the insurance of mortgages

through the Direct Endorsement process

is categorically excluded, the insurance

of mortgages through the Lender

Insurance process should be similarly

excluded. The other amendments made

by this final rule clarify the policies and

procedures contained in the September

27, 1996 final rule.

III. Findings and Certifications

Environmental Impact

A Finding of No Significant Impact

with respect to the environment has

been made in accordance with HUD

regulations at 24 CFR part 50,

implementing section 102(2)(C) of the

National Environmental Policy Act of

1969 (42 U.S.C. 4332). The Finding of

No Significant Impact is available for

public inspection during business hours

in the Office of the Rules Docket Clerk,

Room 10276, Department of Housing

and Urban Development, 451 Seventh

Street, SW., Washington, DC 20410–

0500.

Executive Order 12612, Federalism

The General Counsel, as the

Designated Official under section 6(a) of

Executive Order 12612, Federalism, has

determined that the policies contained

in this rule have no federalism

implications, and that the policies are

not subject to review under the Order.

This rule is limited to clarifying HUD’s

implementation of its responsibilities

for environmental review and decision

making under the National

Environmental Policy Act and other

related Federal environmental laws and

authorities.

Executive Order 12606, The Family

The General Counsel, as the

Designated Official under Executive

Order 12606, The Family, has

determined that this final rule does not

have potential for significant impact on

family formation, maintenance, and

general well-being, and, thus, is not

subject to review under the Order. This

rule clarifies 24 CFR part 50, which sets

forth HUD’s regulations governing the

protection and enhancement of

environmental quality. No significant

change in existing HUD policies or

programs will result from promulgation

of this rule, as those policies and

programs relate to family concerns.

Regulatory Flexibility Act

The Secretary, in accordance with the

Regulatory Flexibility Act (5 U.S.C.

605(b)) has reviewed and approved this

rule, and in so doing certifies that this
15802 Federal Register / Vol. 62, No. 63 / Wednesday, April 2, 1997 / Rules and Regulations

rule will not have a significant

economic impact on a substantial

number of small entities. This rule

makes several technical and clarifying

changes to the September 27, 1996 final

rule. This final rule will have no

adverse or disproportionate economic

impact on small entities.

Unfunded Mandates Reform Act

The Secretary has reviewed this rule

before publication and by approving it

certifies, in accordance with the

Unfunded Mandates Reform Act of 1995

(2 U.S.C. 1532), that this rule does not

impose a Federal mandate that will

result in the expenditure by State, local,

and tribal governments, in the aggregate,

or by the private sector, of $100 million

or more in any one year.

Catalog of Federal Domestic Assistance

The program numbers are 14.128–

14.900.

List of Subjects

24 CFR Part 50

Environmental quality,

Environmental protection,

Environmental review policy and

procedures, Environmental assessment,

Environmental impact statement,

Compliance record.

24 CFR Part 55

Floodplain management, Floodplains,

Environmental protection.

Accordingly, 24 CFR parts 50 and 55

are amended as follows:

PART 50—PROTECTION AND

ENHANCEMENT OF ENVIRONMENTAL

QUALITY

1. The authority citation for part 50

continues to read as follows:

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

Executive Order 11991, 3 CFR, 1977 Comp.,

p. 123.

2. Section 50.19 is amended by:

a. Revising paragraph (a);

b. Adding a heading to paragraph (b);

c. Revising paragraph (b)(14);

d. Revising paragraph (b)(17);

e. Adding a new paragraph (b)(24);

and

f. Revising paragraph (c), to read as

follows:

§ 50.19 Categorical exclusions not subject

to the Federal laws and authorities cited in

§ 50.4.

(a) General. The activities and related

approvals of policy documents listed in

paragraphs (b) and (c) of this section are

not subject to the individual compliance

requirements of the Federal laws and

authorities cited in § 50.4, unless

otherwise indicated below. These

activities and approvals of policy

documents are also categorically

excluded from the EA required by NEPA

except in extraordinary circumstances

(§ 50.20(b)). HUD approval or

implementation of these categories of

activities and policy documents does

not require environmental review,

because they do not alter physical

conditions in a manner or to an extent

that would require review under NEPA

or the other laws and authorities cited

at § 50.4.

(b) Activities. (1) Environmental and

other studies, resource identification

and the development of plans and

strategies.

* * * * *

(14) Economic development activities,

including but not limited to, equipment

purchase, inventory financing, interest

subsidy, operating expenses and similar

costs not associated with construction

or physical expansion of existing

facilities; however, in the case of

equipment purchase, compliance with

§ 50.4(b)(1) is required.

* * * * *

(17) HUD’s endorsement of one-tofour family mortgage insurance under

the Direct Endorsement program, the

insurance of one-to-four family

mortgages under the Lender Insurance

program, and HUD’s acceptance for

insurance of loans under Title I of the

National Housing Act; however,

compliance with §§ 50.4 (b)(1) and (c)(1)

and 51.303(a)(3) is required.

* * * * *

(24) HUD guarantees under the Loan

Guarantee Recovery Fund Program (24

CFR part 573) of loans that refinance

existing loans and mortgages, where any

new construction or rehabilitation

financed by the existing loan or

mortgage has been completed prior to

the filing of an application under the

program, and the refinancing will not

allow further construction or

rehabilitation, nor result in any physical

impacts or changes except for routine

maintenance; however, compliance with

§§ 50.4 (b)(1) and (c)(1) and 51.303(a) is

required.

(c) Approval of policy documents. (1)

Approval of rules and notices proposed

for publication in the Federal Register

or other policy documents that do not:

(i) Direct, provide for assistance or

loan and mortgage insurance for, or

otherwise govern or regulate, real

property acquisition, disposition,

leasing (other than tenant-based rental

assistance), rehabilitation, alteration,

demolition, or new construction; or

(ii) Establish, revise, or provide for

standards for construction or

construction materials, manufactured

housing, or occupancy.

(2) Approval of policy documents that

amend an existing document where the

existing document as a whole would not

fall within an exclusion in this

paragraph (c) but the amendment by

itself would do so;

(3) Approval of policy documents that

set out fair housing or

nondiscrimination standards or

enforcement procedures or provide for

assistance in promoting or enforcing fair

housing or nondiscrimination;

(4) Approval of handbooks, notices

and other documents that provide

operating instructions and procedures

in connection with activities under a

Federal Register document that has

previously been subject to a required

environmental review.

(5) Approval of a Notice of Funding

Availability (NOFA) that provides

funding under, and does not alter any

environmental requirements of, a

regulation or program guideline that

was previously published in the Federal

Register, provided that

(i) The NOFA specifically refers to the

environmental review provisions of the

regulation or guideline; or

(ii) The regulation or guideline

contains no environmental review

provisions because it concerns only

activities listed in paragraph (b) of this

section.

(6) Statutorily required and/or

discretionary establishment and review

of interest rates, loan limits, building

cost limits, prototype costs, fair market

rent schedules, HUD-determined

prevailing wage rates, income limits and

exclusions with regard to eligibility for

or calculation of HUD housing

assistance or rental assistance, and

similar rate and cost determinations and

related external administrative or fiscal

requirements or procedures which do

not constitute a development decision

that affects the physical condition of

specific project areas or building sites.

PART 55—FLOODPLAIN

MANAGEMENT

3. The authority citation for 24 CFR

part 55 continues to read as follows:

Authority: 42 U.S.C. 3535(d) and 4001–

4128; E.O. 11988, 42 FR 26951, 3 CFR, 1977

Comp., p. 117.

4. Section 55.12 is amended by

revising paragraph (b)(3) and adding a

new paragraph (b)(4) to read as follows:

§ 55.12 Inapplicability of 24 CFR part 55 to

certain categories of proposed actions.

* * * * *

(b) * * *
Federal Register / Vol. 62, No. 63 / Wednesday, April 2, 1997 / Rules and Regulations 15803

(3) HUD actions involving the

disposition of individual HUD-acquired,

one- to four-family properties; and

(4) HUD guarantees under the Loan

Guarantee Recovery Fund Program (24

CFR part 573) of loans that refinance

existing loans and mortgages, where any

new construction or rehabilitation

financed by the existing loan or

mortgage has been completed prior to

the filing of an application under the

program, and the refinancing will not

allow further construction or

rehabilitation, nor result in any physical

impacts or changes except for routine

maintenance.

* * * * *

Dated: March 4, 1997.

Andrew M. Cuomo,

Secretary.

[FR Doc. 97–8291 Filed 4–1–97; 8:45 am]

BILLING CODE 4210–32–P