[Federal Register Volume 63, Number 105 (Tuesday, June 2, 1998)]
[Proposed Rules]
[Pages 30046-30053]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-14245]



[[Page 30045]]

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Part III





Department of Housing and Urban Development





_______________________________________________________________________



24 CFR Parts 50, 55 and 58



_______________________________________________________________________



Floodplain Management and Protection of Wetlands; Proposed Rule

Federal Register / Vol. 63, No. 105 / Tuesday, June 2, 1998 / 
Proposed Rules

[[Page 30046]]



DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 50, 55 and 58

[Docket No. FR-4142-P-01]
RIN 2501-AC33


Floodplain Management and Protection of Wetlands

AGENCY: Office of the Secretary, HUD.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would adopt procedures implementing 
Executive Order 11990, Protection of Wetlands. The rule proposes to 
codify policies and procedures to avoid the long and short term adverse 
impacts associated with the destruction or modification of wetlands and 
to avoid direct or indirect support of new construction in wetlands 
wherever there is a practicable alternative. The procedures would apply 
to HUD and certain State and local responsible entities before their 
respective decisions to approve a proposed action that involves HUD 
financial assistance and that would affect a wetland. The wetland 
procedures would be incorporated into HUD's existing floodplain 
management regulations.
    The rule proposes several other changes to HUD's regulations that 
govern floodplain management and that would also govern the protection 
of wetlands. These include, among others, broadening the use of the 
abbreviated four-step decision making process used by HUD and 
responsible entities when considering the impact on floodplains in 
connection with the repair of existing structures. Specifically, the 
rule proposes to authorize the use of the abbreviated process for all 
of HUD's rehabilitation programs, not just for repairs financed under 
its mortgage insurance programs. This rule would also add a requirement 
that, for residential new construction in a 100-year floodplain, an 
applicant must secure a final Letter of Map Amendment or final Letter 
of Map Revision as a condition for approval of HUD financial 
assistance.

DATES: Comment due date: August 3, 1998.

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposed rule to the Regulations Division, Office of the General 
Counsel, Room 10276, Department of Housing and Urban Development, 451 
Seventh Street, SW, Washington, DC 20410-0500. Comments should refer to 
the above docket number and title. Facsimile (FAX) comments are not 
acceptable. A copy of each communication submitted will be available 
for public inspection and copying during regular business hours (7:30 
a.m. to 5:30 p.m. Eastern time) at the above address.

FOR FURTHER INFORMATION CONTACT: Richard H. Broun, Director, Office of 
Community Viability, Office of Community Planning and Development, 
Department of Housing and Urban Development, Room 7240, 451 Seventh 
Street, SW, Washington, DC 20410-7000. For inquiry by phone or e-mail: 
contact Walter Prybyla, Deputy Director for Policy, Environmental 
Review Division at (202) 708-1201, Ext. 4466 or e-mail: 
Walter__P<a href="/cdn-cgi/l/email-protection#67151e051e0b06270f120349000811"><span class="__cf_email__" data-cfemail="16646f746f7a77567e637238717960">[email protected]</span></a>. This phone number is not toll-free. Hearing or 
speech-impaired individuals may access this number via TTY by calling 
the toll-free Federal Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Discussion

Wetland-Related Amendments

    This rule proposes to codify the procedures for complying with 
Executive Order 11990, Protection of Wetlands (42 FR 26961, May 25, 
1977). The Executive Order directs each agency to provide leadership 
and take action to minimize the destruction, loss or degradation of 
wetlands, and to preserve and enhance the natural and beneficial values 
of wetlands in carrying out the agency's responsibilities for (1) 
acquiring, managing, and disposing of Federal lands and facilities; (2) 
providing Federally undertaken, financed, or assisted construction and 
improvements; and (3) conducting Federal activities and programs 
affecting land use, including but not limited to water and related land 
resources planning, regulating, and licensing activities.
    The Department published a proposed rule on January 4, 1990 (55 FR 
396) to implement Executive Order 11990 and also Executive Order 11988, 
Floodplain Management (42 FR 26951, May 25, 1977). The January 4, 1990 
rule proposed to codify HUD's policies and procedures implementing 
these Executive Orders in a new 24 CFR part 55. Because the wetland 
policies were under review by the Administration, the part 55 final 
rule (59 FR 19100, April 21, 1994) implemented only the floodplain 
management Executive Order. The Department advised the public (59 FR at 
19100) that it would continue to follow outstanding instructions in 
implementing the wetlands Executive Order.
    This proposed rule would amend 24 CFR part 55 to implement the 
requirements of Executive Order 11990. The proposed rule generally 
reflects HUD's current practices for complying with the Executive 
Order.
    The rule would amend Sec. 55.2 (Terminology) by adding a definition 
of the term ``wetlands'' (Sec. 55.2(b)(9)). The proposed definition 
provides that wetlands are designated wetland areas identified or 
delineated on maps issued by the Fish and Wildlife Service of the U.S. 
Department of the Interior as areas that are inundated by surface or 
ground water with a frequency sufficient to support, and under normal 
circumstances do or would support, a prevalence of vegetative or 
aquatic life that requires saturated or seasonally saturated soil 
conditions for growth or reproduction. This definition would encompass, 
but not be limited to, swamps, marshes, bogs, and similar areas such as 
sloughs, potholes, wet meadows, river overflows, mud flats, and natural 
ponds.
    The proposed rule would also make several conforming amendments to 
24 CFR part 55 to reflect the implementation of Executive Order 11990. 
For example, Sec. 55.1, which describes the purpose of 24 CFR part 55, 
would be amended to state that part 55 implements the requirements of 
Executive Order 11990. The proposed rule would also make conforming 
amendments to HUD's environmental regulations at 24 CFR part 50 
(Protection and Enhancement of Environmental Quality) and 24 CFR part 
58 (Environmental Review Procedures for Entities Assuming HUD 
Environmental Responsibilities) to reflect the amendments made to 24 
CFR part 55.

Other Amendments

    Abbreviated decision making process. HUD's current regulations at 
Sec. 55.12(a) authorize HUD or the responsible entity (as applicable) 
to use an abbreviated decision making process when considering the 
impact on floodplain management in connection with several listed 
categories of actions. The steps currently include identifying 
floodplain location (and wetland location under this proposed rule), 
determining impact, considering minimization of impact, reevaluating 
the proposed action, and deciding on the action.
    This rule proposes two changes to this procedure. The first 
proposed revision is a clarification. As Sec. 55.12(a) is currently 
drafted, step 6 (Sec. 55.20(f)), reevaluate proposed action, is part of 
the abbreviated process. A major component of that reevaluation, 
however, is to reconsider alternatives to

[[Page 30047]]

locating the proposed action in the floodplain or wetland that had been 
addressed under step 3 (Sec. 55.20(c)). The reference to step 3 in the 
context of the abbreviated process is confusing because step 3 is not a 
part of the abbreviated process. The rule, accordingly, would add step 
6 to the list of steps in Sec. 55.12(a) that do not apply under the 
abbreviated process.
    For proposed actions covered by the abbreviated decision making 
process, the balance of reevaluation described in step 6 
(Sec. 55.20(f)(1)) can be addressed in considering minimization of 
impact in step 5. Therefore, step 5 (Sec. 55.20(e)) would be revised to 
provide that actions covered by Sec. 55.12(a) must be rejected if the 
proposed minimization is financially or physically unworkable.
    The second proposed revision concerns Sec. 55.12(a)(3), which 
currently applies the abbreviated decision making process to HUD 
mortgage insurance actions for the repair, rehabilitation, 
modernization or improvement of existing multifamily housing projects. 
This procedure has proven to be efficient and effective for the covered 
programs. The Department, therefore, proposes to include all of its 
programs that involve repair, rehabilitation, modernization or 
improvement of existing multifamily housing projects.
    The proposed rule also would add a reference to Sec. 55.12(a) in 
the introductory text of Sec. 55.20 to make it clearer that not all 
actions are subject to all eight steps in the decision making process.
    The rule also would revise paragraph (b) of Sec. 55.12 to exclude 
the leasing of not more than a total of four units of existing housing 
located in a building in a 100-year floodplain (or the 500-year 
floodplain for Critical Actions) from the floodplain management 
decision making process at Sec. 55.20. For example, such exclusion 
would occur under HUD's programs providing assistance to the homeless. 
This exclusion would cover leasing of not more than four units in a 
building under the circumstances described in Sec. 582.100(c) for 
sponsor-based rental assistance under the Shelter Plus Care Program 
regulations as well as in Sec. 583.115 for grants for leasing under the 
Supportive Housing Program regulations. Under Sec. 582.100(c), a 
sponsor, itself, may lease from an owner the housing in which the 
program participants will reside. The exclusion would not apply, 
however, if the sponsor owned the project. Under Sec. 583.115, HUD may 
provide grants to support the recipient's cost of leasing structures or 
a portion of a structure that is to be used to provide the supportive 
housing or supportive services.
    This exclusion from the floodplain management decision making 
process at Sec. 55.20 would apply only if the existing housing is 
located outside the floodway or coastal high hazard area, the community 
is participating and in good standing in the Regular Program of the 
National Flood Insurance Program (NFIP) and the financial assistance 
does not pay for repair or rehabilitation. Leasing of four units or 
less under these conditions should have minimal impacts (if any) for 
which the floodplain management decision making process at Sec. 55.20 
would be warranted.
    Obsolete Provisions. This proposed rule would remove 
Secs. 55.12(c)(9) and 55.12(c)(10). Paragraph (c)(9) currently provides 
that part 55 does not apply to HUD's acceptance of a housing 
subdivision approval action by the Department of Veterans Affairs (DVA) 
or Farmers Home Administration (now the Rural Housing and Community 
Development Service (RHCDS)). The Department is removing the paragraph 
because neither the DVA nor the RHCDS currently approves subdivisions.
    Paragraph (c)(10) provides guidance on the effect of part 55 on 
actions pending on May 23, 1994, the effective date of the part 55 
final rule published on April 21, 1994 at 59 FR 19100. The paragraph 
would be removed as unnecessary. Its removal would not substantively 
alter the requirements of the part.
    Revisions to step 3 for multifamily insurance projects. HUD 
proposes to revise Sec. 55.20(c), Step 3, to add a new paragraph (c)(2) 
to address the consideration of practicable alternatives to floodplains 
and wetlands projects proposed by third parties that involve 
multifamily mortgage insurance. In these cases, HUD's consideration of 
practicable alternatives is limited to a particular site identified in 
the application. HUD cannot require applicants to develop another site 
that is beyond the floodplain or wetland. In such cases, HUD's option 
in reviewing practicable alternatives is limited to proceeding to the 
next step in the decision making process. This includes either 
considering design modifications under Step 5 or rejecting the 
application.
    Residential new construction in 100-year floodplain. This proposed 
rule would add a requirement that HUD financial assistance involving 
residential new construction in a 100-year floodplain may not be 
approved unless the applicant secures a final Letter of Map Amendment 
(LOMA) or final Letter of Map Revision (LOMR). These are letters issued 
by the Federal Emergency Management Agency (FEMA) indicating that the 
property is not, or is no longer, located within the special flood 
hazard area (100-year floodplain). The proposed rule would similarly 
amend Sec. 55.20(g), step 7 of the decision making process, to require 
whenever a reevaluation of proposed residential new construction 
results in a determination that there is no practicable alternative to 
locating the proposal in the 100-year floodplain, a statement that a 
final Letter of Map Amendment (LOMA) or a final Letter of Map Revision 
(LOMR) will be secured by the applicant.
    The reasons for this change are to encourage: (i) public safety, in 
that the potential threat to the loss of life from flooding would be 
diminished for prospective residents and visitors; (ii) site selection 
and planning, which avoids encroachment on the floodplain;\1\ (iii) 
early coordination between the HUD applicant and FEMA for the purpose 
of obtaining a LOMA or LOMR in that FEMA has jurisdiction both by law 
for designation of special flood hazard areas (SFHA) and by Executive 
Order 11988 for advising Federal agencies on implementation of the 
Order; and (iv) cost savings that result once the LOMA or LOMR excludes 
the property from the SFHA and eliminates the applicant's legal 
obligation to obtain and maintain flood insurance coverage for the term 
of the loan or life of the building being proposed for HUD financial 
assistance. The savings may make the property more affordable for low- 
and moderate-income housing.
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    \1\ Even if avoiding encroachment is impracticable, the change 
requires increasing the elevation to minimize potential financial 
loss due to flooding damage for uninsurable elements under the 
National Flood Insurance Program (NFIP), which include outdoor 
playgrounds and recreational amenities, vehicular parking and 
freight access areas, public plazas and walkways, landscaping, and 
the land itself.
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    Other amendments. This proposed rule would make several other 
amendments to conform to earlier amendments to 24 CFR parts 50 and 58. 
The rule would replace ``grant recipient'' with ``responsible entity'' 
in several places where the term occurs in part 55. Section 55.3, 
Assignment of responsibilities, would be revised to specify the 
respective responsibilities of responsible entities and recipients. 
These amendments would conform part 55 to the change in terminology 
adopted in the final rule that revised 24 CFR part 58 (61 FR 19122, 
April 30, 1996).
    Section 55.12(c) describes the categories of activities that are 
not subject to part 55. This proposed rule would revise paragraph (c) 
to conform

[[Page 30048]]

to amendments to parts 50 and 55. Paragraph (c)(1) would be revised to 
reflect the fact that the activities that are not subject to review 
under environmental authorities such as Executive Orders 11988 and 
11990 include activities listed in 24 CFR 58.35(b) as well as those 
listed in Sec. 58.34. A new paragraph (c)(2) would be added to include 
the activities described in 24 CFR 50.19 (which was revised by a final 
rule published at 61 FR 50914 on September 27, 1996). Section 50.19 
lists those activities that are categorically excluded from the 
environmental assessment required by NEPA and are not subject to the 
individual compliance requirements of the related laws and authorities 
referred to in Sec. 50.4.
    A new paragraph (c)(12) (which is similar to Sec. 50.20(a)(1)) 
would be added to provide that special projects directed to the removal 
of material and architectural barriers that restrict the mobility of 
and accessibility to elderly and persons with disabilities are not 
subject to part 55.
    Finally, the proposed rule would add an exclusion from the 
requirements of the part for the approval of financial assistance for 
acquisition, leasing, construction, rehabilitation, repair, 
maintenance, or operation of ships and other water-borne vessels that 
will be used for transportation or cruises and will not be permanently 
moored.

II. Findings and Certifications

Paperwork Reduction Act Statement

    The proposed information collection requirements contained at 
Secs. 55.21, 55.22 and 55.27 of this rule have been submitted to the 
Office of Management and Budget (OMB) for review, under section 3507(d) 
of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). An 
agency may not conduct or sponsor, and a person is not required to 
respond to, a collection of information unless the collection displays 
a valid control number.
    The public reporting burden for each of these collections of 
information is estimated to include the time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. Information on the estimated public 
reporting burden is provided in the following table.

                                Floodplain Management and Protection of Wetlands                                
----------------------------------------------------------------------------------------------------------------
                                                  Responses      Total                                          
      Information collection         Number of       per         annual     Hours per   Total hours   Regulatory
                                    respondents   respondent   responses     response                 reference 
----------------------------------------------------------------------------------------------------------------
Notification of floodplain hazard.          300            1          300            1          300        55.21
Owner notice to tenants concerning                                                                              
 Critical Action flood hazard.....            1           50           50       \1/20\          2.5        55.22
  Documentation of compliance.....          300            1          300            8        2,400        55.27
                                   -----------------------------------------------------------------------------
      Total Annual Burden.........  ...........  ...........  ...........  ...........        2,702             
----------------------------------------------------------------------------------------------------------------

    In accordance with 5 CFR 1320.8(d)(1), the Department is soliciting 
comments from members of the public and affected agencies concerning 
the proposed collection of information to:
    (1) Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
    (2) Evaluate the accuracy of the agency's estimate of the burden of 
the proposed collection of information;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of the collection of information on those 
who are to respond; including through the use of appropriate automated 
collection techniques or other forms of information technology, e.g., 
permitting electronic submission of responses.
    Interested persons are invited to submit comments regarding the 
information collection requirements in this proposal. Comments must be 
received within sixty (60) days from the date of this proposal. 
Comments must refer to the proposal by name and docket number (FR-3447) 
and must be sent to: Joseph F. Lackey, Jr., HUD Desk Officer, Office of 
Management and Budget, New Executive Office Building, Washington, DC 
20503.

Environmental Impact

    A Finding of No Significant Impact with respect to the environment 
has been made in accordance with HUD regulations at 24 CFR part 50, 
which implement section 102(2)(C) of the National Environmental Policy 
Act of 1969. The Finding of No Significant Impact is available for 
public inspection between 7:30 a.m. and 5:30 p.m. weekdays in the 
Office of the Rules Docket Clerk at the above address.

Regulatory Planning and Review

    This rule has been reviewed in accordance with Executive Order 
12866, issued by the President on September 30, 1993 (58 FR 51735, 
October 4, 1993). Any changes to the rule resulting from this review 
are available for public inspection between 7:30 a.m. and 5:30 p.m. 
weekdays in the Office of the Rules Docket Clerk.

Regulatory Flexibility Act

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed and approved this proposed rule, and in so 
doing certifies that this proposed rule would not have a significant 
economic impact on a substantial number of small entities. The proposed 
rule would codify HUD's policies and procedures implementing Executive 
Order 11990, Protection of Wetlands. The goal of the Executive Order is 
to prevent the adverse impacts associated with the destruction or 
modification of wetlands. Executive Order 11990 establishes a uniform 
set of requirements designed to meet this goal, and which are 
applicable to both large and small entities. However, in developing the 
proposed rule HUD has attempted to minimize the regulatory burden 
placed on responsible entities. For example, the proposed rule would 
broaden the use of the abbreviated decision making process used by HUD 
and responsible entities when considering the impact on floodplains in 
connection with the repair of existing structures. Specifically, the 
rule proposes to authorize the use of the abbreviated process for all 
of HUD's rehabilitation programs. The current regulations limit the use 
of the abbreviated decision making process to repairs financed under 
HUD's mortgage insurance programs.

[[Page 30049]]

    Notwithstanding HUD's determination that this rule would not have a 
significant economic impact on a substantial number of small entities, 
HUD specifically invites comment regarding any less burdensome 
alternatives to this rule that will meet HUD's objectives as described 
in this preamble.

Unfunded Mandates Reform Act

    The Secretary has reviewed this rule before publication and by 
approving it certifies, in accordance with the Unfunded Mandates Reform 
Act of 1995 (2 U.S.C. 1532), that this rule does not impose a Federal 
mandate that will result in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more in any one year.

Federalism

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that the policies 
contained in this rule will not have substantial direct effects on 
States or their political subdivisions, on the relationship between the 
Federal Government and the States, or on the distribution of power and 
responsibilities among the various levels of government. HUD's 
regulations at 24 CFR part 58, implementing section 104(g) of the HCD 
Act of 1974 and other similar statutory provisions, have long provided 
for State and local governmental assumption of NEPA, Executive Order, 
and other environmental review responsibilities. State and local 
governments thus already have been assuming and carrying out these 
responsibilities for many years. These amendments to part 55 merely 
describe and codify more specifically the implementing policies and 
procedures under Executive Order 11990.

Catalog of Federal Domestic Assistance Number

    The programs affected by this rule are listed in the Catalog of 
Federal Domestic Assistance under program numbers 14.108 through 
14.900.

List of Subjects

24 CFR Part 50

    Environmental assessments, Environmental impact statements, 
Environmental policies and review procedures.

24 CFR Part 55

    Environmental impact statements, Flood plains, Wetlands.

24 CFR Part 58

    Community development block grants, Environmental impact 
statements, Grant programs--housing and community development, 
Reporting and recordkeeping requirements.

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

PART 50--PROTECTION AND ENHANCEMENT OF ENVIRONMENTAL QUALITY

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

    Authority: 42 U.S.C. 3535(d) and 4332; and Executive Order 
11991, 3 CFR, 1997 Comp., p. 123.

    2. In Sec. 50.4, paragraph (b)(2) is revised and paragraph (b)(3) 
is removed and reserved, to read as follows:


Sec. 50.4  Related Federal laws and authorities.

* * * * *
    (b) * * *
    (2) HUD Procedure for the Implementation of Executive Order 11988 
(Floodplain Management) (3 CFR, 1977 Comp., p. 117) and Executive Order 
11990 (Protection of Wetlands) (3 CFR, 1977 Comp., p. 121)--24 CFR part 
55, Floodplain Management and Protection of Wetlands.
* * * * *

PART 55--FLOODPLAIN MANAGEMENT AND PROTECTION OF WETLANDS

    3. The heading for part 55 is revised to read as set forth above.
    4. The authority citation for part 55 is revised to read as 
follows:

    Authority: 42 U.S.C. 3535(d), 4001-4128 and 5154a; E.O. 11988, 
42 FR 26951, 3 CFR, 1977 Comp., p. 117; E.O. 11990, 42 FR 26961, 3 
CFR, 1977 Comp., p 121.

    5. Section 55.1 is amended by revising paragraph (a), redesignating 
paragraph (b) as paragraph (b)(1), adding a new paragraph (b)(2), and 
adding a new paragraph (d), to read as follows:


Sec. 55.1  Purpose and basic responsibility.

    (a) This part implements the requirements of Executive Order 11988, 
Floodplain Management (3 CFR, 1977 Comp., p. 117), and Executive Order 
11990, Protection of Wetlands (3 CFR, 1977 Comp., p. 121), and employs 
the principles of the Unified National Program for Floodplain 
Management. It covers the proposed acquisition, construction, 
improvement, disposition, financing and use of properties located in a 
floodplain or a wetland for which approval is required either from HUD 
under any applicable HUD program or from a responsible entity subject 
to 24 CFR part 58. This part does not prohibit approval of such actions 
(except for certain actions in high hazard areas), but provides a 
consistent means for implementing the Department's interpretation of 
the executive orders in the project approval decision making processes 
of HUD and of responsible entities subject to 24 CFR part 58. The 
implementation of Executive Orders 11988 and 11990 under this part 
shall be conducted by HUD for Department-administered programs subject 
to environmental review under 24 CFR part 50 and by responsible 
entities for financial assistance subject to environmental review under 
24 CFR part 58.
    (b)(1) * * *
    (2) Under section 582 of the National Flood Insurance Reform Act of 
1994, 42 U.S.C. 5154a, HUD disaster assistance that is made available 
in a special flood hazard area may not be used to make a payment 
(including any loan assistance payment) to a person for repair, 
replacement or restoration of damage to any personal, residential or 
commercial property if:
    (i) The person had previously received Federal flood disaster 
assistance conditioned on obtaining and maintaining flood insurance; 
and
    (ii) The person failed to obtain and maintain the flood insurance.
* * * * *
    (d) No HUD financial assistance (including mortgage insurance) may 
be approved for residential new construction in a 100-year floodplain 
unless a final Letter of Map Amendment (LOMA) or final Letter of Map 
Revision (LOMR) will be secured by the applicant as a condition of 
HUD's or the responsible entity's approval of the assistance.
    6. Section 55.2 is amended by revising paragraph (a); revising the 
introductory text of paragraph (b); removing, in paragraph (b)(1), the 
term ``(Sec. 55.2(b)(8))'' and adding in its place the term 
``(Sec. 55.2(b)(7))'', and adding a new paragraph (b)(9), to read as 
follows:


Sec. 55.2  Terminology.

    (a) With the exception of those terms defined in paragraph (b) of 
this section, the terms used in this part shall follow the definitions 
contained in section 6 of Executive Order 11988, in section 7 of 
Executive Order 11990, and in the Floodplain Management Guidelines for 
Implementing Executive Order 11988 issued by the Water Resources 
Council (copies of the Guidelines are available from the Environmental 
Review Division, Department of Housing and

[[Page 30050]]

Urban Development, 451 Seventh Street, SW, Washington, DC 20410); and 
the terms ``special flood hazard area,'' ``criteria'' and ``Regular 
Program'' shall follow the definitions contained in FEMA regulations at 
44 CFR 59.1.
    (b) The definitions of the following terms in Executive Order 
11988, Executive Order 11990, and related documents affecting this part 
are modified for purposes of this part:
* * * * *
    (9) Wetlands means only those designated wetland areas identified 
or delineated on maps issued by the Fish and Wildlife Service of the 
U.S. Department of the Interior as areas that are inundated by surface 
or ground water with a frequency sufficient to support, and under 
normal circumstances do or would support, a prevalence of vegetative or 
aquatic life that requires saturated or seasonally saturated soil 
conditions for growth or reproduction. They are the areas subject to 
coverage under this part.
    7. Section 55.3 is amended by revising paragraphs (a)(1)(i), 
(a)(1)(ii), (b)(1), (b)(2), and (c) and adding a new paragraph (d), to 
read as follows:


Sec. 55.3  Assignment of responsibilities.

    (a)(1) * * *
    (i) The Department's implementation of the orders and this part in 
all HUD programs; and
    (ii) The implementation activities of HUD program managers and, for 
HUD financial assistance subject to 24 CFR part 58, of grant recipients 
and responsible entities.
* * * * *
    (b) * * *
    (1) Ensure compliance with this part for all actions under their 
jurisdiction that are proposed to be conducted, supported, or permitted 
in a floodplain or wetland;
    (2) Ensure that actions approved by HUD or responsible entities are 
monitored and that any prescribed mitigation is implemented;
* * * * *
    (c) Responsible entity Certifying Officer. Certifying Officers of 
responsible entities administering or reviewing activities subject to 
24 CFR part 58 shall comply with this part 55 in carrying out HUD-
assisted programs.
    (d) Recipient. Recipients subject to 24 CFR part 58 shall monitor 
approved actions and ensure that any prescribed mitigation is 
implemented.
    8. The heading for subpart B is revised to read as follows:

Subpart B--Application of Executive Orders on Floodplain Management 
and Protection of Wetlands

    9. Section 55.10 is revised to read as follows:


Sec. 55.10  Environmental review procedures under 24 CFR parts 50 and 
58.

    (a) Where an environmental review is required under the National 
Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4332, and 24 CFR 
part 50 or part 58, compliance with this part shall be completed before 
the completion of an environmental assessment (EA) including a finding 
of no significant environmental impact (FONSI), or an environmental 
impact statement (EIS), in accordance with the decision points listed 
in 24 CFR 50.17(a)-(h), or before the preparation of an EA under 24 CFR 
58.40 or an EIS under 24 CFR 58.37. For types of proposed actions that 
are categorically excluded from National Environmental Policy Act 
(NEPA) requirements under 24 CFR part 50 or part 58, compliance with 
this part shall be completed before the Department's initial approval 
(or approval by a responsible entity subject to 24 CFR part 58) of 
proposed actions in a floodplain or wetland.
    (b) The categorical exclusion of certain proposed actions from 
environmental review requirements under NEPA and 24 CFR parts 50 and 58 
(see 24 CFR 50.20 and 58.35(a)) does not exclude those actions from 
compliance with this part.
    10. Section 55.11 is revised to read as follows:


Sec. 55.11  Applicability of Subpart C decision making process.

    (a) Before reaching the decision points described in Sec. 55.10(a), 
HUD (for Department-administered programs) or the responsible entity 
(for HUD financial assistance subject to 24 CFR part 58) shall 
determine whether Executive Order 11988 or 11990 and this part apply to 
the proposed action.
    (b) If Executive Order 11988 or 11990 applies, the approval of a 
proposed action or initial commitment shall be made in accordance with 
this part. The primary purpose of Executive Order 11988 is to ``avoid 
direct or indirect support of floodplain development.'' Consistent with 
section 2 of Executive Order 11990, the decision making process in 
Sec. 55.20 only applies to Federal assistance for new construction in 
wetland locations.
    (c) The following table indicates the applicability, by location 
and type of action, of the decision making process for implementing 
Executive Orders 11988 and 11990 under subpart C of this part:

                                                     Table 1                                                    
----------------------------------------------------------------------------------------------------------------
                                                              Type of proposed action                           
                                 -------------------------------------------------------------------------------
  Type of proposed action (new                                              Wetland or 100-    Non-wetland area 
     reviewable action or an                             Coastal high       year floodplain    between 100-year 
         amendment) \1\                Floodways         hazard areas        outside high        and 500-year   
                                                                              hazard area         floodplain    
----------------------------------------------------------------------------------------------------------------
Critical actions as defined in    Critical actions    Critical actions    Allowed if the      Allowed if the    
 Sec.  55.12(b)(2).                not allowed.        not allowed.        proposed critical   proposed critical
                                                                           action is           action is        
                                                                           processed under     processed under  
                                                                           Sec.  55.20.2.      Sec.  55.20.\2\  
Non-critical actions not          Allowed only if     Allowed only if     Allowed if the      Any non-critical  
 excluded under Sec.  55.12(b)     the proposed non-   the proposed non-   proposed non-       action is allowed
 or (c).                           critical action     critical action:    critical action     without          
                                   is a functionally   (1) Is either (a)   is processed        processing under 
                                   dependent use and   designed for        under Sec.          this part.       
                                   processed under     location in a       55.20.\2\                            
                                   Sec.  55.20.2.\2\   high hazard area                                         
                                                       or (b) a                                                 
                                                       functionally                                             
                                                       dependent use;                                           
                                                       and (2) is                                               
                                                       processed under                                          
                                                       Sec.  55.20.\2\                                          
----------------------------------------------------------------------------------------------------------------
\1\ Under Executive Order 11990, the decision making process in Sec.  55.20 only applies to Federal assistance  
  for new construction in wetland locations.                                                                    
\2\ Or those paragraphs of Sec.  55.20 that are applicable to an action listed in Sec.  55.12(a).               


[[Page 30051]]

    11. Section 55.12 is amended by:
    a. Revising the introductory text to paragraph (a);
    b. Revising paragraph (a)(3);
    c. Removing ``and'' at the end of paragraph (b)(3);
    d. Removing the period at the end of paragraph (b)(4) and adding 
``; and'' in its place;
    e. Adding a new paragraph (b)(5);
    f. Revising paragraph (c)(1);
    g. Removing paragraphs (c)(9) and (c)(10);
    h. Redesignating paragraphs (c)(2), (c)(3), (c)(4), (c)(5), (c)(6), 
(c)(7), (c)(8), (c)(11), and (c)(12) as paragraphs (c)(3), (c)(4), 
(c)(5), (c)(6), (c)(7), (c)(8), (c)(9), (c)(10), and (c)(11), 
respectively;
    i. Adding a new paragraph (c)(2);
    j. Revising newly redesignated paragraphs (c)(6) and (c)(7);
    k. Revising the introductory text to newly redesignated paragraph 
(c)(9);
    l. Removing ``and'' at the end of newly redesignated paragraph 
(c)(10);
    m. Removing the period at the end of newly redesignated paragraph 
(c)(11) and adding a semicolon in its place; and
    n. Adding new paragraphs (c)(12) and (c)(13), to read as follows:


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

    (a) The decision making steps in Sec. 55.20(b), (c), (f), and (g) 
(steps 2, 3, 6, and 7) do not apply to the following categories of 
proposed actions:
* * * * *
    (3) HUD actions under any HUD program involving the repair, 
rehabilitation, modernization or improvement of existing multifamily 
housing projects (including nursing homes, board and care facilities 
and intermediate care facilities) and existing one-to four-family 
properties, in communities that are in the Regular Program of the NFIP 
and are in good standing, provided that the number of units is not 
increased more than 20 percent, the action does not involve a 
conversion from nonresidential to residential land use, and the 
footprint of the structure and paved areas is not significantly 
increased.
    (b) * * *
    (5) The approval of financial assistance to lease not more than a 
total of four units of existing housing in a building located within 
the 100-year floodplain (or the 500-year floodplain for Critical 
Actions), but only if--
    (i) The housing is located outside the floodway or coastal high 
hazard area, and is in a community that is in the Regular Program of 
the National Flood Insurance Program (NFIP) and in good standing (i.e., 
not suspended from program eligibility or placed on probation under 44 
CFR 59.24);
    (ii) The leasing is in a structure insured under the NFIP; and
    (iii) The financial assistance does not pay for repair or 
rehabilitation.
    (c) * * *
    (1) HUD-assisted activities described in 24 CFR 58.34 and 58.35(b);
    (2) HUD-assisted activities described in 24 CFR 50.19, except as 
otherwise indicated in Sec. 50.19;
* * * * *
    (6) A minor amendment to a previously approved action with no 
additional adverse impact on or from a floodplain or wetland;
    (7) HUD's approval of a project site, an incidental portion of 
which is situated in an adjacent floodplain or wetland, but only if:
    (i) The proposed construction and landscaping activities (except 
for minor grubbing, clearing of debris, pruning, sodding, seeding, or 
other similar activities) do not occupy or modify the 100-year 
floodplain (or the 500-year floodplain for Critical Actions) or the 
wetland;
    (ii) Appropriate provision is made for site drainage; and
    (iii) A covenant or comparable restriction is placed on the 
property's continued use to preserve the floodplain or wetland;
* * * * *
    (9) HUD's approval of financial assistance for a project on any 
non-wetland site in a floodplain for which FEMA has issued:
* * * * *
    (12) Special projects directed to the removal of material and 
architectural barriers that restrict the mobility of and accessibility 
to elderly and persons with disabilities; and
    (13) The approval of financial assistance for acquisition, leasing, 
construction, rehabilitation, repair, maintenance, or operation of 
ships and other water-borne vessels that will be used for 
transportation or cruises and will not be permanently moored.
    12. The heading for subpart C is revised to read as follows:

Subpart C--Procedures For Making Determinations on Floodplain 
Management and Protection of Wetlands

    13. Section 55.20 is amended by revising the introductory text; 
revising paragraph (a); revising the introductory text of paragraph 
(b); revising paragraph (b)(3); revising paragraph (c); revising 
paragraph (d); revising the introductory text of paragraph (e); 
revising paragraph (f)(1); revising paragraph (g); and revising 
paragraph (h), to read as follows:


Sec. 55.20  Decision making process.

    Except for actions covered by Sec. 55.12(a), the decision making 
process for compliance with this part contains eight steps, including 
public notices and an examination of practicable alternatives. The 
steps to be followed in the decision making process are:
    (a) Step 1. Determine whether the proposed action is located in a 
100-year floodplain (or a 500-year floodplain for a Critical Action) or 
a wetland. If the proposed action would not be conducted in one of 
those locations, then no further compliance with this part is required.
    (b) Step 2. Notify the public at the earliest possible time of a 
proposal to consider an action in a 100-year floodplain (or a 500-year 
floodplain for a Critical Action) or a wetland and involve the affected 
and interested public in the decision making process.
* * * * *
    (3) A notice under this paragraph (b) shall state: the name, 
proposed location and description of the activity; the total number of 
acres of floodplain or wetland involved; and the HUD official and phone 
number to contact for information. The notice shall indicate the hours 
and the HUD office or responsible entity's office at which a full 
description of the proposed action may be reviewed.
    (c) Step 3. Identify and evaluate practicable alternatives to 
locating the proposed action in a 100-year floodplain (or a 500-year 
floodplain for a Critical Action) or wetland. The evaluation shall 
focus on the potential impacts inside and outside the floodplain or 
wetland area as such impacts relate to the protection of human life, 
real property, and the natural and beneficial values served by the 
floodplain or wetland.
    (1) Except as provided in paragraph (c)(2) of this section, HUD's 
or the responsible entity's consideration of practicable alternatives 
to the sites which they select for a project should include:
    (i) Locations outside the 100-year floodplain (or the 500-year 
floodplain for a Critical Action) or wetland;
    (ii) Alternative methods to serve the identical project objective 
including feasible technological alternatives; and
    (iii) A determination not to approve any action.
    (2) For multifamily projects involving HUD mortgage insurance that 
are initiated by third parties, HUD's or the responsible entity's 
consideration of practicable alternatives should include a 
determination not to approve the request.
    (d) Step 4. Identify and evaluate the potential direct and indirect 
impacts

[[Page 30052]]

associated with the occupancy or modification of the 100-year 
floodplain (or the 500-year floodplain for a Critical Action) or the 
wetland.
    (e) Step 5. Where practicable, design or modify the proposed action 
to minimize the potential adverse impacts within the 100-year 
floodplain (or the 500-year floodplain for a Critical Action) or the 
wetland and to restore and preserve its natural and beneficial values. 
Actions covered by Sec. 55.12(a) must be rejected if the proposed 
minimization is financially or physically unworkable. All critical 
actions in the 500-year floodplain shall be designed and built at or 
above the 100-year floodplain (in the case of new construction) and 
modified to include:
* * * * *
    (f) * * *
    (1) Whether it is still practicable in light of its exposure to 
flood hazards in the floodplain or its possible adverse impact on the 
floodplain or wetland, the extent to which it will aggravate the 
current hazards to other floodplains or wetlands, and its potential to 
disrupt floodplain or wetland values; and
* * * * *
    (g) Step 7. If the reevaluation results in a determination that 
there is no practicable alternative to locating the proposal in the 
100-year floodplain (or the 500-year floodplain for a Critical Action) 
or the wetland, publish a final notice that includes:
    (1) The reasons why the proposal must be located in the floodplain 
or wetland;
    (2) A list of the alternatives considered;
    (3) All mitigation measures to be taken to minimize adverse impacts 
and to restore and preserve natural and beneficial values; and
    (4) For residential new construction in a 100-year floodplain, a 
statement that a final Letter of Map Amendment (LOMA) or final Letter 
of Map Revision (LOMR) will be secured by the applicant as a condition 
of HUD's or the responsible entity's approval of floodplain 
development.
    (h) Step 8. Upon completion of the decision making process in Steps 
1 through 7, implement the proposed action. There is a continuing 
responsibility on HUD and the recipient to ensure that the mitigating 
measures identified in Step 7 are implemented and, where applicable, 
that the LOMA or LOMR is secured.
    14. In Sec. 55.22, the introductory text to paragraph (a) and 
paragraph (a)(1) are revised to read as follows:


Sec. 55.22  Conveyance restrictions for the disposition of multifamily 
real property.

    (a) In the disposition (including leasing) of multifamily 
properties acquired by HUD that are located in a 100-year floodplain 
(or a 500-year floodplain for a Critical Action) or a wetland, the 
documents used for the conveyance must:
    (1) Refer to those uses that are restricted under identified 
federal, state, or local floodplain or wetland regulations; and
* * * * *
    15. Section 55.24 is revised to read as follows:


Sec. 55.24  Aggregation.

    Where two or more actions have been proposed, require compliance 
with this subpart, affect the same floodplain or wetland, and are 
currently under review by the Department (or by a responsible entity 
subject to 24 CFR part 58), individual or aggregated approvals may be 
issued. A single compliance review and approval under this section is 
subject to compliance with the decision making process in Sec. 55.20.
    16. Section 55.25 is amended by removing the period at the end of 
paragraph (d)(3)(iii) and adding a semicolon in its place; by removing 
the period at the end of paragraph (d)(6) and adding ``; and'' in its 
place; and by revising paragraphs (a), (b), (d)(4) and (d)(5), to read 
as follows:


Sec. 55.25  Areawide compliance.

    (a) A HUD-approved areawide compliance process may be substituted 
for individual compliance or aggregated compliance under Sec. 55.24 
where a series of individual actions is proposed or contemplated in a 
pertinent area for HUD's examination of floodplain hazards or the 
protection of wetlands. In areawide compliances, the area for 
examination may include a sector of, or the entire, floodplain or 
wetland--as relevant to the proposed or anticipated actions. The 
areawide compliance process shall be in accord with the decision making 
process under Sec. 55.20.
    (b) The areawide compliance process shall address the relevant 
executive orders and shall consider local land use planning and 
development controls (e.g., those enforced by the community for 
purposes of floodplain management under the National Flood Insurance 
Program (NFIP)) and applicable state programs for floodplain management 
and wetland protection. The process shall include the development and 
publication of a strategy that identifies the range of development and 
mitigation measures under which the proposed HUD assistance may be 
approved and that indicates the types of actions that will not be 
approved in the floodplain or wetland.
* * * * *
    (d) * * *
    (4) An open scoping process (in accordance with 40 CFR 1501.7) 
shall be used for determining the scope of issues to be addressed and 
for identifying significant issues related to housing and community 
development for the floodplain or wetland;
    (5) Federal, state and local agencies with expertise in floodplain 
management, wetland protection, flood evacuation preparedness, land use 
planning and building regulation, or soil and natural resource 
conservation shall be invited to participate in the scoping process and 
to provide advice and comments;
* * * * *
    17. Section 55.26 is amended by revising the introductory text and 
paragraph (a), to read as follows:


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

    If a proposed action covered under this part is already covered in 
a prior review performed under the executive orders by another agency, 
that review may be adopted by HUD or by a responsible entity authorized 
under 24 CFR part 58, provided that:
    (a) There is no pending litigation relating to the other agency's 
review for floodplain management and wetland protection;
* * * * *
    18. Section 55.27 is amended by revising the introductory text to 
paragraph (a) and paragraph (a)(1) to read as follows:


Sec. 55.27  Documentation.

    (a) For purposes of compliance with Sec. 50.20, the responsible HUD 
official who would approve the proposed action (or Certifying Officer 
for a responsible entity subject to 24 CFR part 58) shall require that 
the following actions be documented:
    (1) When required by Sec. 55.20(c), practicable alternative sites 
have been considered outside the floodplain or wetland, but within the 
local housing market area, the local public utility service area, or 
the jurisdictional boundaries of a recipient unit of general local 
government, whichever geographic area is more appropriate to the 
proposed HUD action. Actual sites under review must be identified and 
the reasons for the non-selection of those sites as practicable 
alternatives must be described; and
* * * * *

[[Page 30053]]

Secs. 55.21, 55.25, and 55.27  [Amended]

    19. In addition to the amendments set forth above, in 24 CFR part 
55:
    a. Remove the words ``grant recipient'' and add, in their place, 
the words ``responsible entity'' in the following places:
    i. Section 55.21;
    ii. Section 55.25(c); and
    iii. Section 55.27(b); and
    b. Remove the words ``grant recipients'' and add, in their place, 
the words ``responsible entities'' in the following places:
    i. Section 55.25(d)(2); and
    ii. Section 55.27(c).

PART 58--ENVIRONMENTAL REVIEW PROCEDURES FOR ENTITIES ASSUMING HUD 
ENVIRONMENTAL RESPONSIBILITIES

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

    Authority: 12 U.S.C. 1707 note; 42 U.S.C. 1437o(i)(1) and (2), 
1437x, 3535(d), 3547, 4332, 4852, 5304(g), 11402, and 12838; E.O. 
11514, 3 CFR, 1966-1970, Comp., p. 902, as amended by E.O. 11991, 3 
CFR, 1977 Comp., p.123.

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


Sec. 58.5  Related Federal laws and authorities.

* * * * *
    (b) * * *
    (2) Executive Order 11990, Protection of Wetlands, May 24, 1977 (42 
FR 26961), 3 CFR, 1977 Comp., p. 121, as interpreted in HUD regulations 
at 24 CFR part 55, particularly sections 2 and 5 of the order.
* * * * *
    Dated: April 27, 1998.
Andrew Cuomo,
Secretary.
[FR Doc. 98-14245 Filed 6-1-98; 8:45 am]
BILLING CODE 4210-32-P


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