[Federal Register Volume 76, Number 238 (Monday, December 12, 2011)]
[Proposed Rules]
[Pages 77162-77175]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-31629]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 50, 55, and 58
[Docket No. FR-5423-P-01]
RIN 2501-AD51
Floodplain Management and Protection of Wetlands
AGENCY: Office of the Secretary, HUD.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would update and modify HUD's regulations
governing the protection of wetlands and floodplains. With respect to
wetlands, the proposed rule would codify existing procedures for
Executive Order 11990 (E.O. 11990), Protection of Wetlands. HUD's
current policy is to require the use of E.O. 11990's 8 Step Process for
floodplains for actions performed by the Department or actions
performed with HUD financial assistance. This rule will codify this
policy and thereby improve consistency and increase transparency by
placing the E.O. requirements in regulation. In certain instances, the
new wetlands procedures will allow recipients of HUD assistance to use
permits issued under section 404 of the Clean Water Act in lieu of five
steps of the E.O. 11990's 8 Step Process, thereby streamlining the
wetlands decision-making processes. With respect to floodplains, the
proposed rule would prohibit HUD funding (e.g., Community Development
Block Grants, HOME Investment Partnerships Program, Choice
Neighborhoods, etc.) or Federal Housing Administration (FHA) mortgage
insurance for the construction of new structures in Coastal High Hazard
Areas. The current regulations allow for such new construction so long
as the construction, is in accordance with certain standards. This
change is anticipated to have minimal effect, since HUD receives few
requests to fund or insure mortgages for new construction in these
areas.
The proposal would also make several other changes to HUD's
floodplain and wetland regulations; the changes are designed to
streamline floodplain and wetland environmental procedures and avoid
unnecessary delays in processing. The procedures proposed by this rule
would apply to HUD and to state, tribal, and local governments when
they are responsible for environmental reviews under HUD programs.
DATES: Comment Due Date: February 10, 2012.
ADDRESSES: Interested persons are invited to submit comments regarding
this proposed rule to the Regulations Division, Office of General
Counsel, Department of Housing and Urban Development, 451 7th Street
SW., Room 10276, Washington, DC 20410-0500. Communications must refer
to the above docket number and title. There are two methods for
submitting public comments. All submissions must refer to the above
docket number and title.
1. Submission of Comments by Mail. Comments may be submitted by
mail to the Regulations Division, Office of General Counsel, Department
of Housing and Urban Development, 451 7th Street SW., Room 10276,
Washington, DC 20410-0500.
2. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
http://www.regulations.gov. HUD strongly encourages commenters to
submit comments electronically. Electronic submission of comments
allows the commenter maximum time to prepare and submit a comment,
ensures timely receipt by HUD, and enables HUD to make them immediately
available to the public. Comments submitted electronically through the
http://www.regulations.gov Web site can be viewed by other commenters
and interested members of the public. Commenters should follow the
instructions provided on that site to submit comments electronically.
Note: To receive consideration as public comments, comments must
be submitted through one of the two methods specified above. Again,
all submissions must refer to the docket number and title of the
rule.
No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
Public Inspection of Public Comments. All properly submitted
comments and communications submitted to HUD will be available for
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the
above address. Due to security measures at the HUD Headquarters
building, an appointment to review the public comments must be
scheduled in advance by calling the Regulations Division at (202) 708-
3055 (this is not a toll-free number). Individuals with speech or
hearing impairments may access this number via TTY by calling the
Federal Relay Service at (800) 877-8339. Copies of all comments
submitted are available for inspection and downloading at http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Charles Bien, Acting Director Office
of Environment and Energy, Office of Community Planning and
Development,
[[Page 77163]]
Department of Housing and Urban Development, 451 7th Street SW., Room
7250, Washington, DC 20410-8000. For inquiry by phone or email, contact
Jerimiah Sanders, Environmental Review Division, Office of Environment
and Energy, Office of Community Planning and Development, at (202) 402-
4571 (this is not a toll-free number), or via email at
Jerimiah.J.Sanders@hud.gov. Persons with hearing or speech impairments
may access this number through TTY by calling the toll-free Federal
Relay Service at (800) 877-8339.
SUPPLEMENTARY INFORMATION:
I. Background
Federal departments and agencies (agencies) are charged by
executive orders with incorporating floodplain management goals and
wetland protection considerations in their respective agency's
planning, regulatory, and decision-making processes. A floodplain
refers to the lowland and relatively flat areas adjoining inland and
coastal waters including flood-prone areas of offshore islands that, at
a minimum, are subject to a one percent or greater chance of flooding
in any given year (often referred to as the ``100-year'' flood).
Wetlands refer to those areas that are inundated by surface or ground
water with a frequency sufficient to support and under normal
circumstances does or would support a prevalence of vegetative or
aquatic life that requires saturated or seasonally saturated soil
conditions for growth and reproduction. Wetlands generally include
swamps, marshes, bogs, and similar areas such as sloughs, potholes, wet
meadows, river overflows, mud flats, and natural ponds.
Executive Order 11988 (E.O. 11988) entitled ``Floodplain
Management,'' dated May 24, 1977 (42 FR 26951), requires each Federal
agency to identify and evaluate practicable alternatives to locating in
the floodplain. If it is not practicable to avoid the floodplain, then
each Federal agency must identify and evaluate the potential effects of
any actions it may take in or affecting a floodplain. The goals of the
Executive Order are: to avoid adversely impacting the natural functions
of floodplains wherever possible; to ensure that the agency's planning
programs and budget requests reflect consideration of flood hazards and
floodplain management, including the restoration and preservation of
such land areas as natural undeveloped floodplains; and to prescribe
procedures to implement the policies and procedures of this Executive
Order.
Executive Order 11990 (E.O. 11990), entitled ``Protection of
Wetlands,'' dated May 24, 1977, (42 FR 26961) directs each agency to
provide leadership and take action to minimize the destruction, loss,
or degradation of wetlands. E.O. 11990 also directs each agency 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 or
improvements; and (3) conducting Federal activities and programs
affecting land use.
Although HUD has regulations on floodplain management at 24 CFR
part 55, these regulations do not codify procedures for implementing
E.O. 11990. Consistent with the intent of the executive orders, as
noted above, HUD has relied to date on existing procedures established
for floodplain management under 24 CFR part 55 to guide wetland
protection considerations in planning, regulatory, and decision making
processes. This rule proposes to codify in 24 CFR part 55 the
procedures applicable to wetlands and authorized by E.O. 11990.
Additionally, the hurricanes of 2005, particularly Hurricane Katrina,
emphasized the need to review existing procedures on the protection of
wetlands to determine how such procedures may be made more effective.
II. This Proposed Rule
Proposed Changes--Basis for Proposed Changes
First, this rule proposes to codify procedures authorized by E.O.
11990. As noted in the preceding section of this preamble, HUD has not
promulgated regulations to reflect E.O. 11990. E.O. 11990 was issued in
furtherance of the National Environmental Policy Act of 1969 (NEPA) as
amended (42 U.S.C. 4321 et seq.). Through this rule, HUD proposes to
adopt in regulation the procedures of E.O. 11990, in order to aid in
the consistent application of policy and to increase compliance with
it, by making the policy readily available in HUD's environmental
regulations.
The wetland procedures authorized by E.O. 11990 require the
completion of an eight-step process, referred to below as the ``8 Step
Process.'' The 8 Step Process is administered by HUD, state
governments, or units of local or tribal governments. Step 1 requires a
determination of whether or not the proposed project to be developed
with HUD financial assistance will be in a wetland. If so, Step 2
requires that a public notice be issued to inform interested parties
that a proposal to consider an action in a wetland has been made.
Following this notice, Step 3 requires the identification and
evaluation of practicable alternatives to avoid locating the project in
a wetland. Such an evaluation of alternatives shall include, for
example, alternative locations outside the floodplain, feasible
technological alternatives, and social values such as aesthetics,
historic and cultural values, and land use patterns. Step 4 requires
the identification and evaluation of the potential direct and indirect
impacts associated with the occupancy or modification of wetlands. Step
4 also requires the identification of the potential direct and indirect
support of floodplain and wetlands development that could result from
the proposed action. Direct support consists of projects located in the
floodplain such as housing, public service structures, or office
buildings that require additional investment such as food service or
parking. Indirect support for floodplain or wetland development can be
caused by infrastructure that can induce further development due to
proximity to the floodplain or wetland. Examples of indirect support
include water and waste water systems, power supplies, roads, airports,
and mass transit systems. Step 5 requires an analysis of practicable
modifications and changes to the proposal to minimize adverse impacts
to the wetlands and to the project as a result of its proposed location
in wetlands. Under Step 6, the alternatives and the proposed wetland
site are then reevaluated. If it is determined that there is no
practicable alternative to the proposed wetland development, Step 7
requires a second notice to be issued to the public stating that the
decision has been made and providing details associated with the
decision. After this second notice, Step 8 implements the action,
including any mitigating measures that were established during the
decision-making process. This evaluation process requires the same
eight steps as E.O. 11988, Floodplain Management, which is currently
being implemented by HUD and other Federal agencies.
The rule also proposes to require appropriate and practicable
compensatory mitigation for adverse impacts to more than one acre of
wetlands. Compensatory mitigation resulting from other Federal, state,
or local governmental requirements can be used to fulfill this
requirement. Compensatory mitigation approaches include permittee-
responsible mitigation, mitigation banking, in-lieu
[[Page 77164]]
fee mitigation, the use of preservation easements or protective
covenants, and any form promoted and approved by the authority of the
state governments or the Federal Government. In certain situations,
compensatory mitigation may not be practicable or appropriate due to
the cost of compensatory mitigation in a state or watershed, a lack of
funds within the project, or other reasons that make compensatory
mitigation impossible. One example would be an Alaska Native village
that is mainly in a wetland and is surrounded by Federal and state
land. The cost in this situation could make compensatory mitigation
inappropriate or impracticable.
Second, this rule proposes to allow HUD and HUD's recipients of
assistance to use permits issued under section 404 of the Clean Water
Act (33 U.S.C. 1344) (Section 404) in lieu of performing the first five
steps of the 8 Step Process. This streamlined option will reduce costs
and the processing time for complying with parts of the 8 Step Process
for which adhering to the standard process affords minimal substantive
benefit. The Clean Water Act establishes the basic structure for
regulating discharges of pollutants into the waters of the United
States and regulating water quality standards for surface waters.\1\
Section 404 of the Clean Water Act requires a landowner to obtain a
permit from the U.S. Army Corps of Engineers (USACE) prior to beginning
any nonexempt activity involving the placement of dredged or fill
material in waters of the United States, including wetlands.
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\1\ The Federal Water Pollution Control Act enacted in 1948 was
significantly reorganized and expanded in 1972. ``Clean Water Act''
became the Act's common name with amendments in 1977.
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If the applicant has obtained an individual USACE Section 404
permit and submits the permit with its application for a HUD program,
then HUD or the responsible entity will be required to complete only
the last three steps of the 8 Step Process, and thus will be able to
skip Sec. 55.20(a) through (e). The last three steps include the
publication of a single public notice, which will fulfill the early
notice requirement of E.O. 11990 and thereby avoid the requirement
under the usual 8 Step Process for the publication of two notices. If
HUD or the responsible entity determines that a reevaluation or repeat
of any of the steps is necessary to comply with E.O. 11990, HUD or the
responsible entity will reevaluate and complete the necessary steps of
the 8 Step Process. None of the 8 steps or any provisions of this rule
should be interpreted as being requirements of the USACE's regulatory
program. USACE has its own regulations, policies, and procedures, none
of which are impacted by this proposed rulemaking.
Although Section 1(b) of E.O. 11990 excludes the issuance of
permits for activities in nonfederal wetlands from coverage under the
Executive Order, reliance on the Section 404 permitting process
fulfills the Executive Order's intent. The exclusion for permits
reflects the use of similar procedures and criteria for approval of a
permitting action, including an initial public notice, consideration of
practicable alternatives, and minimization of harm.
The issuance of a Section 404 permit may not substitute for
processing under the 8 Step Process and compliance with E.O. 11988
where the property is also located in a floodplain. Section 404 of the
Clean Water Act also allows states to administer an individual and
general permit program in lieu of the USACE permit program. Section 404
permits issued by state agencies may be used in lieu of the first five
steps of the E.O. 11990 process under this regulation.
All wetlands subject to Section 404 of the Clean Water Act are
wetlands for the purposes of E.O. 11990. However, the combined process
proposed by this rule will not apply in all instances, because wetlands
not considered waters of the United States under Section 404 of the
Clean Water Act are typically wetlands for the purposes of E.O. 11990.
Wetlands not subject to Section 404 of the Clean Water Act must be
processed under the proposed 8 Step Process.
Third, the proposed rule would broaden the use of the current 5
Step Process for repairs, rehabilitations, and improvements. The 5 Step
Process is an abbreviated 8 Step Process that omits Steps 2, 3, and 7.
Steps 2, 3, and 7 require the publication of two notices and the
consideration of alternative sites. The 5 Step Process is currently
used for a variety of activities specified in 24 CFR 55.12(a), such as
disposition of HUD-owned properties and mortgage insurance for the
purchase, refinancing, or rehabilitation of existing multifamily
structures, which are not subject to certain additional conditions. An
8 Step Process is currently required for financial assistance, other
than mortgage insurance, for rehabilitation of nonresidential or
residential structures with more than four housing units located in
floodplains. Rehabilitations subject to the 5 Step Process are any
repair, reconstruction, modernization, or improvement of a structure
that does not result in a 20 percent increase in the number of dwelling
units or in the average peak number of customers and employees. The
proposed rule will allow these rehabilitations of residential
properties and nonresidential properties, including weatherization, to
forego Steps 2, 3, and 7 of the 8 Step Process. As outlined above,
Steps 2, 3, and 7 are the consideration of alternatives at Step 3 and
the publication of the preliminary and final notice at Steps 2 and 7,
respectively. This change will streamline project approvals and allow
more resources to be devoted toward projects with greater impacts on
floodplains and wetlands.
Fourth, the proposed rule would update a provision in HUD's
regulations to require the use of preliminary flood maps and advisory
base flood elevations in post-disaster situations where the Federal
Emergency Management Agency (FEMA) has determined that existing Flood
Insurance Rate Maps (FIRMs) may not be the ``best available
information'' for floodplain management purposes. Currently, HUD's
regulations at 24 CFR 55.2(b)(1) indicate that FIRMs are the only
source of data for compliance with the 8 Step Process. In the wake of
Hurricane Katrina, FEMA determined that the existing FIRMs may not
reflect actual flood risk and issued Advisory Base Flood Elevations and
Preliminary FIRMs. This change in map usage requirements will bring
HUD's regulations into alignment with the requirement that agencies are
to use the ``best available information'' located at Section 2(a)(1) of
E.O. 11988. In addition, this change will provide greater consistency
with floodplain management activities across HUD and FEMA programs.
Fifth, the proposed rule would exempt certain activities from the 8
Step Process for floodplain management compliance. Exempted activities
include leasing structures insured with the National Flood Insurance
Program (NFIP) \2\ and not located in a floodway or Coastal High Hazard
Area. The exemption for leased structures also
[[Page 77165]]
requires that: (1) The leased structure is an existing structure; and
(2) the structure is insured for its total value or up to the NFIP
maximum as of the commencement of the lease term. If HUD or the grantee
does not want to obtain flood insurance for the leased structure, the
project can proceed by performing the 8 Step Process. Critical actions
(e.g., hospitals, nursing homes, and emergency services) in a 100- or
500-year floodplain are not covered by this exemption. Other exempt
activities include special projects to increase access for those with
special needs, activities involving ships or water-borne vessels, and
activities that restore and preserve natural and beneficial functions
of floodplains and wetlands. These changes will reduce unnecessary
delays.
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\2\ Congress established the National Flood Insurance Program
with the passage of the National Flood Insurance Act of 1968. The
NFIP is a Federal program enabling property owners in participating
communities to purchase insurance as a protection against flood
losses in exchange for state and community floodplain management
regulations that reduce future flood damages. Participation in the
NFIP is based on an agreement between communities and the Federal
Government. If a community adopts and enforces a floodplain
management ordinance to reduce future flood risk to new construction
in floodplains, the Federal Government will make flood insurance
available within the community as a financial protection against
flood losses. This insurance is designed to provide an insurance
alternative to disaster assistance to reduce the escalating costs of
repairing damage to buildings and their contents caused by floods.
See http://www.fema.gov/library/viewRecord.do?id=1480.
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Sixth, the proposed rule would prohibit HUD funding or FHA mortgage
insurance for the construction of new structures in Coastal High Hazard
Areas. This change would not affect existing structures. Existing
structures would be eligible to receive funding, and disaster
assistance would continue to be available for reconstruction of
structures destroyed by a disaster. FHA mortgage insurance would
continue to be available as long as the mortgage insurance is not used
to finance new construction. HUD's current regulations allow new
construction in Coastal High Hazard Areas, if new structures are
constructed to FEMA's standards at 44 CFR 60.3(e) and are not critical
actions. (``Critical action'' refers to any activity for which even a
slight chance of flooding would be too great, because such flooding
might result in loss of life, injury to persons, or damage to property.
See 24 CFR 55.2.) This change will prevent new development in Coastal
High Hazard Areas, which will result in less development in areas of
higher risk to lives and property. However, as discussed later in this
preamble, HUD currently receives few requests to fund new construction
or provide FHA mortgage insurance for new construction in Coastal High
Hazard Areas. The change will also further align HUD's development
standards with those of FEMA grant programs.
Seventh, 24 CFR 55.26 would be amended to make clear that under the
executive orders, HUD or a responsible entity may adopt previous review
processes that were performed by another responsible entity or HUD.
This change will prevent duplicative processing in cases where a
project may have multiple recipients contributing funding or has
funding that may not allow the responsible entity to perform the
review. Nothing in the proposed rule or part is binding or applicable
to the USACE or USACE processes. USACE has its own regulations,
policies, and procedures, which are not impacted by this part.
Finally, the proposed rule will amend 24 CFR 58.35(a)(3)(i) by
modifying the categorical exclusion from environmental review under the
National Environmental Policy Act of 1969 (42 U.S.C. 4321) for minor
rehabilitation of one- to four-unit residential properties, by removing
the qualification that the footprint of the structure may not be
increased in a floodplain or wetland. Currently, four units can be
constructed in a floodplain or wetland as an individual action under
the categorical exclusion in Sec. 58.35(a)(4)(i), but rehabilitated
structures in a floodplain or wetland require a full environmental
assessment. It is logically inconsistent to require a greater review
for minor rehabilitations than for new construction. The proposed rule
resolves this inconsistency but will still require part 55 processing
for construction in floodplains and wetlands. HUD believes that this
change will eliminate needless assessments without contributing to
environmental degradation. HUD is basing its conclusion on a recent
survey of its environmental experts.
Solicitation of Specific Comment
In addition to these proposed changes, HUD is also specifically
soliciting public comment regarding a potential change to Sec.
55.20(e). The change would require that all new construction of
``critical actions'' in the 100- or 500-year floodplain be elevated to
the 500-year base flood elevation. A ``critical action'' is ``any
activity for which even a slight chance of flooding would be too great,
because such flooding might result in loss of life, injury to persons,
or damage to property.'' Examples of critical actions include
hospitals, nursing homes, emergency response centers, and flammable or
explosive materials storage facilities. This potential change would
make HUD's regulations in 24 CFR part 55 more consistent with guidance
documents issued by the Water Resources Council and consistent with
FEMA's E.O. 11988 regulations at 44 CFR 9.11(d)(3). This change would
increase the current elevation standard for critical actions from the
100-year base flood level to the 500-year level.
Specific Regulations Proposed for Amendment
The specific regulatory revisions proposed to be made to HUD's
regulations are as follows:
Protection and Enhancement of Environmental Quality (Part 50)
Section 50.4 of HUD's regulations in 24 CFR part 50, which address
related Federal laws and authorities, would be amended to have Sec.
50.4(b), which addresses flood insurance, floodplain management, and
wetlands protection, reflect the change in the title of 24 CFR part 55
to include ``Protection of Wetlands'' and reflect implementation of
E.O. 11990 in 24 CFR part 55.
Floodplain Management (Part 55)
A. Purpose and Basic Responsibility
Section 55.1, which addresses the purpose and basic
responsibilities of floodplain management, would be updated to better
describe how to evaluate impacts on floodplains and wetlands and to
provide that part 50 now explicitly address procedures on wetland
protection. The mandatory purchase of flood insurance under the Flood
Disaster Protection Act of 1973 (42 U.S.C. 4001-4128) is currently
required for federally funded construction and acquisition in FEMA's
identified special flood hazard areas. The requirements of section 582
of the National Flood Insurance Reform Act of 1994 (42 U.S.C. 5154a),
currently stated in HUD's regulations at 24 CFR 58.6, would be added to
24 CFR part 55 to support compliance with the mandatory purchase of
flood insurance. Finally, the prohibition on floodway activities would
be edited to allow for activities that support beneficial floodplain
functions.
B. Terminology
Section 55.2, which defines terms used in floodplain management,
would be amended to update existing terms in this section and add new
terminology. To the extent that the names of these terms as designated
by FEMA's regulations need to be updated, the proposed amendments would
do so without any change to the basic meaning of these terms. With
respect to new terms, the term ``Compensatory mitigation'' would be
added consistent with the definition of the term promulgated by the
Environmental Protection Agency and the United States Army Corps of
Engineers (USACE) in 2008 (See Compensatory Mitigation for Losses of
Aquatic Resources, 73 FR 19594). The terms ``Wetlands'' and ``New
Construction'' would be added
[[Page 77166]]
consistent with those defined by E.O. 11990. The definition of wetlands
also includes a process for identifying wetlands and utilizing
appropriate wetlands professionals. These are the only new terms added
under the proposed rule.
C. Assignment of Responsibilities
Section 55.3, which delineates floodplain management
responsibilities, would be amended to reflect the existence of
``responsible entities'' under 24 CFR part 58 (Environmental Review
Procedures for Entities Assuming HUD Environmental Responsibilities)
and the addition of E.O. 11990 wetland procedures.
D. Environmental Review Procedures
Section 55.10, which addresses the environmental review procedures
under 24 CFR parts 50 and 58, would be amended to explicitly add
wetland protection and reflect implementation of E.O. 11990 in part 55
as an element of the environmental review process.
Section 55.11, which addresses the applicability of floodplain
management decision making as provided in 24 CFR part 55, subpart C,
would be amended to incorporate the purpose of floodplain management,
as provided in E.O. 11988, and the purpose of wetlands protection, as
provided in E.O. 11990. The proposed rule also amends this section to
adopt the previously explained 8 Step Process for wetlands. This
process will provide a standardized and efficient method for addressing
E.O. 11990. The proposed rule also would address adverse effects to
floodplains and wetlands.
E. Inapplicability
Section 55.12, which addresses the inapplicability of floodplain
management to certain categories of proposed actions, would be amended
to remove HUD programs that no longer exist and add exemptions from the
full process. Financial assistance for weatherizations and
rehabilitations of multifamily structures would be granted the use of a
shortened 5 Step Process that currently applies to mortgage insurance
actions for rehabilitation and improvements. Floodplain and wetland
restoration activities, including demolition, would be exempt from
Sec. 55.20 processing. Leasing of an existing structure would also be
granted an exemption from the 8 Step Process, so long as the structure
is not in a floodway or Coastal High Hazard Area, and the structure is
insured with the National Flood Insurance Program. Additionally, the
leasing exemption does not apply to critical actions in the 100- or
500-year floodplain. An exemption also would be added for special
projects directed to the removal of material and architectural barriers
that restrict the mobility of and accessibility to elderly and persons
with disabilities. Financial assistance for ships and water-borne
vessels would also be exempt from Sec. 55.20 processing. These changes
would reduce unnecessary processing and result in a decreased amount of
analysis for projects that have no or little adverse impact or have
beneficial effects.
F. Decision Making Process
Section 55.20, which currently addresses the decision making
process for floodplain management, would be amended to include the
decision making process for wetlands protection. Step 3 of the 8 Step
Process, which requires the consideration of practicable alternatives,
would also be amended to require that mitigation costs be considered.
G. Conveyance Restrictions
Section 55.22, which addresses conveyance restrictions for the
disposition of multifamily real property, would be amended by adding
the word ``wetland'' in each place where the term floodplains is
addressed by the section.
H. Documentation
Section 55.27, which addresses documentation required in floodplain
management, would add ``wetlands'' and remove a reference to 24 CFR
570.3 to allow for a general definition of ``unit of general local
government.''
I. Responsible Entities
Sections 55.21, 55.25, 55.26, and 55.27, which address notification
of floodplain hazard, areawide compliance, adoption of another agency's
review under the executive orders, and documentation, respectively,
would change the terms ``grant recipient'' to ``responsible entity.''
This would add specificity and consistency to 24 CFR part 55. Section
55.26 will also be edited to make it clear that HUD can adopt a review
performed by a responsible entity, and that a responsible entity may
adopt a review performed by HUD or another responsible entity.
J. Use of Individual Permits Under Section 404 of the Clean Water Act
for EO 11990 Processing
A new Sec. 55.28 would be added to allow for HUD to process
wetlands impacts and for recipients of HUD assistance to use permits
issued under section 404 of the Clean Water Act in lieu of five steps
of the E.O. 11990's eight-step process. Processing under this section
will reduce the time devoted to environmental processes, by allowing an
existing individual Section 404 permit to substitute for the first five
steps of the 8 Step Process for wetlands located outside the
floodplain.
K. Environmental Review Procedures for Entities Assuming HUD
Environmental Responsibilities (Part 58)
Section 58.5 of HUD's regulations, which address related Federal
laws and authorities, would be amended to have Sec. 58.5(b), which
addresses flood insurance, floodplain management, and wetlands
protection, reflect the change in the title of 24 CFR part 55 to
include ``Protection of Wetlands'' and reflect implementation of E.O.
11990 in 24 CFR part 55. This proposed rule would also amend Sec.
58.6, which addresses other requirements, by adding a new paragraph
(a)(4) that would state that flood insurance requirements cannot be
fulfilled by self-insurance except as authorized by law for assistance
to state-owned projects within states approved by the FEMA
Administrator consistent with 44 CFR 75.11. Additionally, HUD also
proposes to amend Sec. 58.35, which addresses Categorical Exclusions,
by revising the categorical exclusion from environmental assessment
under NEPA for minor rehabilitation of one- to four-unit residential
properties by removing in Sec. 58.35(a)(3)(i) the qualification that
the footprint of the structure may not be increased in a floodplain or
wetland.
III. Findings and Certifications
E.O. 12866, Regulatory Planning and Review
The Office of Management and Budget (OMB) reviewed this proposed
rule under E.O. 12866 (entitled ``Regulatory Planning and Review'').
The proposed rule has been determined to be a ``significant regulatory
action,'' as defined in section 3(f) of the Order, but not economically
significant, as provided in section 3(f)(1) of the Order.
The majority of the regulatory changes proposed by this rule will
have minor economic effects. The primary purpose of this rule is to
streamline the existing procedures pertaining to floodplain management
and protection of wetlands that are already in place. However, two
changes proposed by HUD are anticipated to have some economic effect.
These two changes are: (1) HUD's proposal to streamline the approval
process for rehabilitations, repairs, and improvements of HUD-funded
properties in floodplains and wetlands; and (2) HUD's proposal to
prohibit new
[[Page 77167]]
construction that would either be funded by HUD or have mortgages
insured by FHA in Coastal High Hazard Areas. The proposed streamlined
process for rehabilitations will lower costs for projects, which could
induce more improvement activities. The proposal to prohibit new
construction in Coastal High Hazard Areas could affect the siting of
properties, but these projects are rarely proposed or approved even in
the absence of a prohibition.
Streamlined Procedures for Rehabilitations, Repairs, and
Improvements of Multifamily Properties in Floodplains. HUD or
responsible entities reviewing proposals for rehabilitations, repairs,
and improvements to multifamily properties located in floodplains are
required to follow the 8 Step Process to minimize the impact to
floodplains. The proposed change would abbreviate the process for these
proposals, because the process no longer requires public notices or the
consideration of alternatives for floodplain executive order
compliance. The benefits of this proposed change arise from the reduced
compliance costs associated with the eliminated steps. Total labor
compliance costs for the entire 8 Step Process have been estimated at
$320 per project. A more detailed step-by-step cost estimate is not
available. However, if eliminating the three steps saves 10 to 15
percent of the total labor cost of compliance, then each rehabilitation
project would save between $32 and $48. Costs to publish the notices
would be added to this amount for the overall cost of compliance. The
precise number of proposed rehabilitation, repair, and improvement
projects is not available, although the overall number is estimated to
be less than 100 annually. Although the reduced compliance costs could,
on the margin, induce an increase in the requests for funding, that
increase is unlikely considering that the cost of these projects
generally range from thousands to millions of dollars. For this
analysis, HUD estimates an annual total of 100 projects, including the
induced projects. One hundred such projects would produce benefits
ranging from $3,200 and $4,800 plus minimal costs of publication. Since
these assessments rarely lead to a different outcome for
rehabilitation, repair, and improvement projects, the lost benefits of
not conducting a full floodplain assessment--the cost of this
provision--are negligible.
Prohibition on New Construction in Coastal High Hazard Areas.
Prohibiting new construction in Coastal High Hazard Areas would force
developers to locate HUD-funded or FHA-insured properties out of hazard
areas subject to high velocity waters. This prohibition would not
affect developments that are destroyed by floods and that need to be
rebuilt. Existing property owners interested in developing in Coastal
High Hazard Areas would either incur transaction costs from selling the
existing property and purchasing an alternative site, or obtain a more
expensive source of funding/assistance. However, based on HUD's
records, it is extremely rare for HUD to fund, or provide mortgage
insurance for, a new construction proposal in these coastal areas. HUD
found only one project that that been completed in a Coastal High
Hazard Area, and one additional project is currently under review.
These projects were approximately 6 years apart. Thus, HUD believes
that this provision will not have a significant impact.
Accordingly, this proposed rule is expected to create an annual
economic impact ranging from $3,200 to $4,800, which are avoided costs
resulting from a streamlined approval process for rehabilitations of
properties located in floodplains. Thus, the implementation of this
rule will not create an impact exceeding the $100 million threshold
established by E.O. 12866.
The docket file is available for public inspection in the
Regulations Division, Office of General Counsel, Department of Housing
and Urban Development, 451 7th Street SW., Room 10276, Washington, DC
20410-0500. Due to security measures at the HUD Headquarters building,
please schedule an appointment to review the docket file by calling the
Regulations Division at (202) 402-3055 (this is not a toll-free
number). Individuals with speech or hearing impairments may access this
number via TTY by calling the Federal Relay Service at (800) 877-8339.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.)
generally requires an agency to conduct a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking
requirements, unless the agency certifies that the 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 E.O. 11990, Protection of Wetlands. The goal of the
Executive Order is to prevent adverse impacts associated with the
destruction or modification of wetlands. E.O. 11990 establishes a
uniform set of requirements designed to meet this goal and that are
applicable to both large and small entities. The proposed rule would
also broaden the use of the abbreviated 8 Step Process also known as
the 5 Step 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
process to repairs financed under HUD's mortgage insurance programs.
The proposed rule clarifies existing requirements, streamlines
processes, and increases access to expedited approval procedures in
certain circumstances. These changes would decrease burdens on small
entities. Therefore, the undersigned has determined that the proposed
rule will not have a significant economic impact on a substantial
number of small entities. Notwithstanding HUD's determination that this
rule will not have a significant effect on a substantial number of
small entities, HUD specifically invites comments regarding any less
burdensome alternatives to this rule that will meet HUD's objectives as
described in the preamble to this rule.
Environmental Impact
A Finding of No Significant Impact (FONSI) with respect to
environment has been made in accordance with HUD regulations at 24 CFR
part 50, which implement section 102(2)(C) of NEPA (42 U.S.C.
4332(2)(C)). The Finding of No Significant Impact is available for
public inspection between the hours of 8 a.m. and 5 p.m. weekdays in
the Regulations Division, Office of General Counsel, Department of
Housing and Urban Development, 451 7th Street SW., Room 10276,
Washington, DC 20410. Due to security measures at the HUD Headquarters
building, please schedule an appointment to review the FONSI by calling
the Regulations Division at (202) 708-3055 (this is not a toll-free
number). Individuals with speech or hearing impairments may access this
number via TTY by calling the toll-free Federal Relay Service at (800)
877-8339.
E.O. 13132 Federalism
E.O. 13132 (entitled ``Federalism'') prohibits an agency from
publishing any rule that has federalism implications if the rule either
imposes substantial direct compliance costs on state and local
governments and is not required by statute, or preempts state law,
unless the agency meets the consultation and funding requirements of
section 6 of the Order. This rule does not have federalism implications
and would not
[[Page 77168]]
impose substantial direct compliance costs on state and local
governments nor preempt state law within the meaning of the Order.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1531-1538) (UMRA) establishes requirements for Federal agencies to
assess the effects of their regulatory actions on state, local, and
tribal governments, and on the private sector. This rule does not
impose any Federal mandates on any state, local, or tribal governments,
or on the private sector, within the meaning of UMRA.
Paperwork Reduction Act
The information collection requirements contained in this proposed
rule have been submitted to the Office of Management and Budget (OMB)
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). In
accordance with the Paperwork Reduction Act, 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 currently valid OMB
control number.
The burden of the information collections in this proposed rule is
estimated as follows:
Reporting and Recordkeeping Burden
----------------------------------------------------------------------------------------------------------------
Estimated
Number of Number of average time for Estimated annual
Section reference respondents responses per requirement burden (in
respondent (in hours) hours)
----------------------------------------------------------------------------------------------------------------
Sec. 55.20 Decisionmaking process..... 275 1 8 2,200
Sec. 55.21 Notification of floodplain 300 1 1 300
hazard.................................
-----------------------------------------------------------------------
Totals.............................. 575 2 9 2,500
----------------------------------------------------------------------------------------------------------------
In accordance with 5 CFR 1320.8(d)(1), HUD is soliciting comments
from members of the public and affected agencies concerning this
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 rule. Comments must refer
to the proposal by name and docket number (FR-5423-P-01) and be sent
to:
HUD Desk Officer, Office of Management and Budget, New Executive Office
Building, Washington, DC 20503, Fax number: (202) 395-6947, and
Reports Liaison Officer, Office of Community Planning and Development,
Department of Housing and Urban Development, 451 Seventh Street SW.,
Washington, DC 20410-8000.
Interested persons may submit comments regarding the information
collection requirements electronically through the Federal eRulemaking
Portal at http://www.regulations.gov. HUD strongly encourages
commenters to submit comments electronically. Electronic submission of
comments allows the commenter maximum time to prepare and submit
comments, ensures timely receipt by HUD, and enables HUD to make them
immediately available to the public. Comments submitted electronically
through the http://www.regulations.gov Web site can be viewed by other
commenters and interested members of the public. Commenters should
follow the instructions provided on that site to submit comments
electronically.
List of Subjects
24 CFR Part 50
Environmental impact statements.
24 CFR Part 55
Environmental impact statements, Floodplains, Wetlands.
24 CFR Part 58
Community development block grants, Environmental impact
statements, Grant programs--housing and community development,
Reporting and recordkeeping requirements.
Accordingly, for the reasons stated in the preamble above, HUD
proposes to amend 24 CFR parts 50, 55, and 58 as follows:
PART 50--PROTECTION AND ENHANCEMENT OF ENVIRONMENTAL QUALITY
1. The authority citation for part 50 is revised to read as
follows:
Authority: 42 U.S.C. 3535(d) and 4332; and Executive Order
11991, 3 CFR, 1977 Comp., p. 123.
2. Revise Sec. 50.4(b)(2) and (b)(3) to read as follows:
Sec. 50.4 Related federal laws and authorities.
* * * * *
(b) * * *
(2) HUD procedure for the implementation of E.O. 11988 (Floodplain
Management), (3 CFR, 1977 Comp., p. 117)--24 CFR part 55, Floodplain
Management and Protection of Wetlands.
(3) HUD procedure for the implementation of E.O. 11990 (Protection
of Wetlands), (3 CFR, 1977 Comp., p. 121)--24 CFR part 55, Floodplain
Management and Protection of Wetlands.
* * * * *
3. Revise the part heading for part 55 to read as set forth below.
PART 55--FLOODPLAIN MANAGEMENT AND PROTECTION OF WETLANDS
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. Amend Sec. 55.1 as follows:
a. Revise paragraph (a);
b. Redesignate paragraph (b) as paragraph (b)(1);
c. Add a new paragraph (b)(2);
d. Revise paragraphs (c)(1);
e. Revise paragraphs of (c)(3) and (c)(3)(i), to read as follows:
[[Page 77169]]
Sec. 55.1 Purpose and basic responsibility.
(a)(1) The purpose of Executive Order 11988--Floodplain Management
is ``to avoid to the extent possible the long and short-term adverse
impacts associated with the occupancy and modification of floodplains
and to avoid direct or indirect support of floodplain development
wherever there is a practicable alternative.''
(2) The purpose of Executive Order 11990--Protection of Wetlands is
``to avoid to the extent possible 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.''
(3) This part implements the requirements of Executive Order 11988,
Floodplain Management, and Executive Order 11990, Protection of
Wetlands, and employs the principles of the Unified National Program
for Floodplain Management. These regulations apply to all HUD (or
responsible entity) actions that are subject to potential harm by
location in floodplains or wetlands. Covered actions include the
proposed acquisition, construction, demolition, improvement,
disposition, financing, and use of properties located in a floodplain
or wetlands for which approval is required either from HUD under any
applicable HUD program or from a responsible entity authorized by 24
CFR part 58.
(4) 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 authorized responsible entities that
are responsible for environmental review under 24 CFR part 58.
(5) Non-structural alternatives to floodplain development and the
destruction of wetlands are both favored and encouraged to reduce the
loss of life and property caused by floods, and to restore the natural
resource and functions of floodplains and wetlands. Nonstructural
alternatives should be discussed in the decision making where
practicable.
(b) * * *
(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.
(c) * * *
(1) Any action other than a functionally dependent use or
floodplain function restoration activity, located in a floodway;
(2) * * *
(3) Any non-critical action located in a Coastal High Hazard Area,
unless the action is a functionally dependent use, an improvement of an
existing structure, or reconstruction of a structure destroyed by a
disaster. If the action is not a functionally dependent use, the action
must be designed for location in a Coastal High Hazard Area. An action
will be considered designed for a Coastal High Hazard Area if:
(i) In the case of reconstruction or substantial improvement, the
work meets the current standards for V zones in FEMA regulations (44
CFR 60.3(e)) and, if applicable, the Minimum Property Standards for
such construction in 24 CFR 200.926d(c)(4)(iii); or
* * * * *
6. Amend Sec. 55.2 to:
a. Revise paragraph (a);
b. Revise paragraphs (b) and (b)(1);
c. Redesignate existing paragraphs (b)(2), (b)(3), (b)(4), (b)(5),
(b)(6), (b)(7), and (b)(8) as paragraphs (b)(3), (b)(4), (b)(5),
(b)(6), (b)(7), (b)(9), and (b)(10), respectively;
d. Add new paragraphs (b)(2) and (b)(8);
e. Revise newly designated paragraph (b)(9); and
f. Add new paragraph (b)(11) 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 E.O. 11988, section 7 of E.O. 11990, and the
Floodplain Management Guidelines for Implementing Executive Order 11988
(43 FR 6030, February 10, 1978), issued by the Water Resources Council;
the terms ``special flood hazard area,'' ``criteria,'' and ``Regular
Program'' shall follow the definitions contained in FEMA regulations at
44 CFR 59.1; and the terms ``Letter of Map Revision'' and ``Letter of
Map Amendment'' shall refer to letters issued by FEMA as provided in 44
CFR part 65 and 44 CFR part 70, respectively.
(b) For purposes of this part, the following definitions apply:
(1) Coastal high hazard area means the area subject to high
velocity waters, including but not limited to hurricane wave wash or
tsunamis. The area is designated on a Flood Insurance Rate Map (FIRM)
under FEMA regulations. FIRMs are also relied upon for the designation
of ``100-year floodplains'' (Sec. 55.2(b)(9)), ``500-year
floodplains'' (Sec. 55.2(b)(4)), and ``floodways'' (Sec. 55.2(b)(5)).
Where FIRMs are declared by FEMA not to be the ``best available
information'', the latest interim FEMA information, such as an Advisory
Base Flood Elevation (ABFE), shall be used as the source of these
designations. If FEMA information is unavailable or insufficiently
detailed, other Federal, state, or local data may be used as ``best
available information'' in accordance with E.O. 11988. However, a base
flood elevation from an interim or preliminary or non-FEMA source
cannot be used if it is lower than the current FIRM.
(2) Compensatory mitigation means the restoration (re-establishment
or rehabilitation), establishment (creation), enhancement, and/or in
certain circumstances preservation of aquatic resources for the
purposes of offsetting unavoidable adverse impacts that remain after
all appropriate and practicable avoidance and minimization has been
achieved.
Examples include, but are not limited to:
(i) Permittee-Responsible Mitigation: On-site or off-site
mitigation undertaken by the holder of a wetlands permit under Section
404 of the Clean Water Act (or an authorized agent or contractor), for
which the permittee retains full responsibility;
(ii) Mitigation Banking: A permittee's purchase of credits from a
wetlands mitigation bank, comprising wetlands that have been set aside
to compensate for conversions of other wetlands; the mitigation
obligation is transferred to the sponsor of the mitigation bank; and
(iii) In-Lieu Fee Mitigation: A permittee's provision of funds to
an in-lieu fee sponsor (public agency or nonprofit organization) that
builds and maintains a mitigation site, often after the permitted
adverse wetland impacts have occurred; the mitigation obligation is
transferred to the in-lieu fee sponsor.
* * * * *
[[Page 77170]]
(8) New construction includes draining, dredging, channelizing,
filling, diking, impounding, and related activities and any structures
or facilities begun after the effective date of E.O. 11990. (See
Section 7(b) of E.O. 11990.)
(9) 100-year floodplain means the floodplain of concern for this
part and is the area subject to inundation from a flood having a one
percent or greater chance of flooding in any given year. (See Sec.
55.2(b)(1) for appropriate data sources.)
* * * * *
(11) Wetlands means those areas that are inundated by surface or
ground water with a frequency sufficient to support, and under normal
circumstances does or would support, a prevalence of vegetative or
aquatic life that requires saturated or seasonally saturated soil
conditions for growth and reproduction. Wetlands generally include
swamps, marshes, bogs, and similar areas such as sloughs, potholes, wet
meadows, river overflows, mud flats, and natural ponds. This definition
includes those wetlands areas separated from their natural supply of
water as a result of activities such as the construction of structural
flood protection methods or solid-fill road beds and activities such as
mineral extraction and navigation improvements. This definition
includes both wetlands subject to and those not subject to section 404
of the Clean Water Act. The following process shall be followed in
making the wetlands determination:
(i) HUD or, for programs subject to 24 CFR part 58, the responsible
entity, shall make a determination whether the action is new
construction that is located in a wetland. These actions are subject to
processing under the Sec. 55.20 decision-making process for the
protection of wetlands.
(ii) As primary screening, HUD or the responsible entity shall
verify whether the project area is located in proximity to wetlands
identified on the National Wetlands Inventory (NWI). If so, HUD or the
responsible entity should make a reasonable attempt to consult with the
Department of the Interior, Fish and Wildlife Service (FWS) for
information concerning the location, boundaries, scale, and
classification of wetlands within the area. If an NWI map indicates the
presence of wetlands, FWS staff, if available, must find that no
wetland is present in order for the action to proceed without further
processing. Where FWS staff is unavailable to resolve any NWI map
ambiguity or controversy, an appropriate wetlands professional must
find that no wetland is present in order for the action to proceed
without Sec. 55.20 processing.
(iii) As secondary screening used in conjunction with NWI maps, HUD
or the responsible entity is encouraged to use the Department of
Agriculture, Natural Resources Conservation Service (NRCS) National
Soil Survey (NSS) and any state and local information concerning the
location, boundaries, scale, and classification of wetlands within the
action area.
(iv) Any challenges from the public or other interested parties to
the wetlands determinations made under this part must be made in
writing to HUD (or the responsible entity authorized under 24 CFR part
58) during the commenting period and must be substantiated with
verifiable scientific information. Commenters may request a reasonable
extension of the time for the commenting period for the purpose of
substantiating any objections with verifiable scientific information.
HUD or the responsible entity shall consult FWS staff, if available, on
the validity of the challenger's scientific information prior to making
a final wetlands determination.
7. In Sec. 55.3, revise paragraphs (a)(1), (b)(1), (b)(2), and
(c); and add new paragraph (d), to read as follows:
Sec. 55.3 Assignment of responsibilities.
(a)(1) The Assistant Secretary for Community Planning and
Development (CPD) shall oversee:
(i) The Department's implementation of Executive Orders 11988 and
11990 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) Other HUD Assistant Secretaries, the General Counsel, and the
President of the Government National Mortgage Association (Ginnie Mae)
shall:
(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 part 55 in carrying out HUD-assisted
programs. Certifying Officers of responsible entities subject to 24 CFR
part 58 shall monitor approved actions and ensure that any prescribed
mitigation is implemented.
(d) Recipient. Recipients subject to 24 CFR part 58 shall monitor
approved actions and ensure that any prescribed mitigation is
implemented. Recipients shall:
(1) Supply HUD (or the responsible entity authorized by 24 CFR part
58) with all available, relevant information necessary for HUD (or the
responsible entity) to perform the compliance required by this part;
and
(2) Implement mitigating measures required by HUD (or the
responsible entity authorized by 24 CFR part 58) under this part or
select alternate eligible property.
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. Revise Sec. 55.10 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. 4321), 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 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 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
authorized by 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. Revise Sec. 55.11 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
[[Page 77171]]
part 58) shall determine whether E.O. 11988, E.O. 11990, and this part
apply to the proposed action.
(b) If E.O. 11988 or 11990 and this part apply, the approval of a
proposed action or initial commitment shall be made in accordance with
this part. The primary purpose of E.O. 11988 is ``to avoid to the
extent possible the long and short term adverse impacts associated with
the occupancy and modification of floodplains and to avoid direct or
indirect support of floodplain development wherever there is a
practicable alternative.'' The primary purpose of E.O. 11990 is ``to
avoid to the extent possible 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.''
(c) The following table indicates the applicability, by location
and type of action, of the decision making process for implementing
E.O. 11988 and E.O. 11990 under subpart C of this part.
Table 1
----------------------------------------------------------------------------------------------------------------
Type of proposed action
-------------------------------------------------------------------------------
Type of proposed action (new Wetlands or 100- Non-wetlands area
reviewable action or an year floodplain outside of the 100-
amendment) \1\ Floodways Coastal high outside coastal year and within
hazard areas high hazard area the 500-year
and floodways 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 if Any non-critical
excluded under Sec. 55.12(b) the proposed non- proposed non- action is allowed
or (c). critical action critical action without
is a functionally is processed processing under
dependent use and under Sec. this part..
processed under 55.20 \2\.
Sec. 55.20 \2\.
Allowed only if
the proposed non-
critical action:.
(A)(1) Is either..
(a) reconstruction
of a structure
destroyed by a
disaster, or.
(b) an improvement
of an existing
structure;.
(2) is designed
for a Coastal
High Hazard Area
under Sec.
55.1(c)(3); and.
(3) is processed
under Sec.
55.20; \2\ or.
(B) Is a
functionally
dependent use
processed under
Sec. 55.20.
----------------------------------------------------------------------------------------------------------------
\1\ Under E.O. 11990, the decision making process in Sec. 55.20 only applies to Federal assistance for new
construction in wetlands locations.
\2\ Or those paragraphs of Sec. 55.20 that are applicable to an action listed in Sec. 55.12(a).
11. Revise 55.12 to read as follows:
Sec. 55.12 Inapplicability of 24 CFR part 55 to certain categories of
proposed actions.
(a) The decision making steps in Sec. 55.20(b), (c), and (g)
(steps 2, 3, and 7) do not apply to the following categories of
proposed actions:
(1) HUD's or the recipient's actions involving the disposition of
acquired multifamily housing projects or ``bulk sales'' of HUD-acquired
(or under part 58 of recipients') one- to four-family properties in
communities that are in the Regular Program of the National Flood
Insurance Program and in good standing (i.e., not suspended from
program eligibility or placed on probation under 44 CFR 59.24). For
programs subject to part 58, this subsection applies only to
recipients' disposition activities that are subject to review under 24
CFR part 58.
(2) HUD's actions under the National Housing Act (12 U.S.C. 1701)
for the purchase or refinancing of existing multifamily housing
projects, hospitals, nursing homes, assisted living facilities, board
and care facilities, and intermediate care facilities, in communities
that are in good standing under the NFIP.
(3) HUD's or the recipient's actions under any HUD program
involving the repair, rehabilitation, modernization, weatherization, or
improvement of existing multifamily housing projects, hospitals,
nursing homes, assisted living facilities, board and care facilities,
intermediate care facilities, and one- to four-family properties, in
communities that are in the Regular Program of the National Flood
Insurance Program (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.
(4) HUD's (or the recipient's) actions under any HUD program
involving the repair, rehabilitation, modernization, weatherization, or
improvement of existing nonresidential buildings and structures, in
communities that are in the Regular Program of the NFIP and are in good
standing, and provided that the footprint of the structure and paved
areas are not significantly increased.
[[Page 77172]]
(b) The decision making process in Sec. 55.20 shall not apply to
the following categories of proposed actions:
(1) HUD's mortgage insurance actions and other financial assistance
for the purchasing, mortgaging or refinancing of existing one- to four-
family properties in communities that are in the Regular Program of the
NFIP and in good standing (i.e., not suspended from program eligibility
or placed on probation under 44 CFR 59.24), where the action is not a
critical action and the property is not located in a floodway or
Coastal High Hazard Area;
(2) Financial assistance for minor repairs or improvements on one-
to four-family properties that do not meet the thresholds for
``substantial improvement'' under Sec. 55.2(b)(10);
(3) HUD or a recipient's 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.
(5) The approval of financial assistance to lease an existing
structure located within the floodplain, but only if--
(i) The structure is located outside the floodway or Coastal High
Hazard Area, and is in a community that is in the Regular Program of
the NFIP and in good standing (i.e., not suspended from program
eligibility or placed on probation under 44 CFR 59.24);
(ii) The project is not a critical action; and
(iii) The entire structure is or will be fully insured or insured
to the maximum under the NFIP for at least the term of the lease.
(c) This part shall not apply to the following categories of
proposed HUD actions:
(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;
(3) HUD's implementation of the full disclosure and other
registration requirements of the Interstate Land Sales Disclosure Act
(15 U.S.C. 1701-1720);
(4) An action involving a repossession, receivership, foreclosure,
or similar acquisition of property to protect or enforce HUD's
financial interests under previously approved loans, grants, mortgage
insurance, or other HUD assistance;
(5) Policy-level actions described at 24 CFR 50.16 that do not
involve site-based decisions;
(6) A minor amendment to a previously approved action with no
additional adverse impact on or from a floodplain or wetland;
(7) HUD's or the responsible entity's approval of a project site,
an incidental portion of which is situated in an adjacent floodplain,
including the floodway or Coastal High Hazard Area, 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, that would
not have an adverse effect on a wetland; and
(iii) A permanent covenant or comparable restriction is placed on
the property's continued use to preserve the floodplain or wetland;
(8) HUD's or the responsible entity's approval of financial
assistance for a project on any nonwetland site in a floodplain for
which the Federal Emergency Management Agency (FEMA) has issued:
(i) A final Letter of Map Amendment (LOMA), final Letter of Map
Revision (LOMR), or final Letter of Map Revision Based on Fill (LOMR-F)
that removed the property from a FEMA-designated floodplain location;
or
(ii) A conditional LOMA, conditional LOMR, or conditional LOMR-F if
HUD or the responsible entity's approval is subject to the requirements
and conditions of the conditional LOMA or conditional LOMR;
(9) Issuance or use of Housing Vouchers, Certificates under the
Section 8 Existing Housing Program, or other forms of rental subsidy
where HUD, the awarding community, or the public housing agency that
administers the contract awards rental subsidies that are not project-
based (i.e., do not involve site-specific subsidies);
(10) Special projects directed to the removal of material and
architectural barriers that restrict the mobility of and accessibility
to the elderly and persons with disabilities;
(11) 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; and
(12) The approval of financial assistance for restoring and
preserving the natural and beneficial functions and values of
floodplains and wetlands, including through acquisition of such
floodplain and wetlands property, but only if:
(i) The property is cleared of all existing structures and related
improvements;
(ii) The property is dedicated for permanent use for flood control,
wetlands protection, park land, or open space; and
(iii) A permanent covenant or comparable restriction is placed on
the property's continued use to preserve the floodplain or wetlands
from future development.
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. Amend Sec. 55.20 as follows:
a. Revise the introductory paragraph;
b. Revise paragraph (a);
c. Revise paragraphs (b) and (b)(3);
d. Revise paragraphs (c), (d), and (e);
e. Revise paragraphs (f), (g)(1), and (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 when
addressing floodplains and wetlands. The steps to be followed in the
decision making process are as follows:
(a) Step 1. Determine whether the proposed action is located in
wetlands or the 100-year floodplain (500-year floodplain for critical
actions). If the action does not occur in a floodplain or wetland, then
no further compliance with this part is required. The following process
shall be followed by HUD (or the responsible entity) in making wetlands
determinations.
(1) Refer to Sec. 55.28(a) where an applicant has submitted with
its application to HUD (or to the recipient under programs subject to
24 CFR part 58) an individual Section 404 permit (including approval
conditions and related environmental review).
(2) Refer to Sec. 55.2(b)(11) for making wetlands determinations
under this part.
(3) For proposed actions occurring in both wetlands and a
floodplain,
[[Page 77173]]
completion of the decision making process under Sec. 55.20 is required
regardless of the issuance of a Section 404 permit. In such a case, the
wetlands will be considered among the primary natural and beneficial
functions and values of the floodplain.
(b) Step 2. Notify the public and agencies responsible for
floodplain management or wetlands protection 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 wetlands and involve the
affected and interested public and agencies in the decision making
process.
* * * * *
(3) A notice under this paragraph shall state: The name, proposed
location, and description of the activity; the total number of acres of
floodplain or wetlands involved; the related natural and beneficial
functions and values of the floodplain or wetlands that may be
adversely affected by the proposed activity; the HUD approving official
(or the Certifying Officer of the responsible entity authorized by 24
CFR part 58); and phone number to contact for information. The notice
shall indicate the hours and the HUD or responsible entity's office,
and any Web site 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.
(1) Except as provided in paragraph (c)(2) of this section, HUD's
or the responsible entity's consideration of practicable alternatives
to the proposed site selected for a project should include:
(i) Locations outside and not affecting 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 proposing the
occupancy or modification of floodplains or wetland.
(2) Practicability of alternative sites should be addressed in
light of the following:
(i) Natural values such as topography, habitat, and hazards;
(ii) Social values such as aesthetics, historic and cultural
values, land use patterns, and environmental justice; and
(iii) Economic values such as the cost of space, construction,
services, and relocation.
(3) For multifamily projects involving HUD mortgage insurance that
are initiated by third parties, HUD'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 associated with the occupancy or modification of the 100-year
floodplain (or the 500-year floodplain for a critical action) or the
wetlands and the potential direct and indirect support of floodplain
and wetlands development that could result from the proposed action.
(1) Floodplain evaluation: The focus of the floodplain evaluation
should be on adverse impacts to lives and property, and on natural and
beneficial floodplain values. Natural and beneficial values include:
(i) Water resources such as natural moderation of floods, water
quality maintenance, and groundwater recharge;
(ii) Living resources such as flora and fauna;
(iii) Cultural resources such as archaeological, historic, and
recreational aspects; and
(iv) Agricultural, aquacultural, and forestry resources.
(2) Wetlands evaluation: In accordance with Section 5 of E.O.
11990, the decision maker shall consider factors relevant to a
proposal's effect on the survival and quality of the wetlands. Among
these factors that should be evaluated are:
(i) Public health, safety, and welfare, including water supply,
quality, recharge, and discharge; pollution; flood and storm hazards
and hazard protection; and sediment and erosion;
(ii) Maintenance of natural systems, including conservation and
long-term productivity of existing flora and fauna; species and habitat
diversity and stability; natural hydrologic function; wetland type;
fish; wildlife; timber; and food and fiber resources;
(iii) Cost increases attributed to wetland-required new
construction and mitigation measures to minimize harm to wetlands that
may result from such use; and
(iv) Other uses of wetlands in the public interest, including
recreational, scientific, and cultural uses.
(e) Step 5. Where practicable, design or modify the proposed action
to minimize the potential adverse impacts to and from the 100-year
floodplain (or the 500-year floodplain for a Critical Action) or the
wetlands and to restore and preserve its natural and beneficial
functions and values.
(1) Minimization techniques for floodplain and wetlands purposes
include, but are not limited to: the use of permeable surfaces, natural
landscape enhancements that maintain or restore natural hydrology
through infiltration, native plant species, bioswales,
evapotranspiration, stormwater capture and reuse, green or vegetative
roofs with drainage provisions, and Natural Resource Conservation
Service conservation easements. Floodproofing and elevating structures,
including freeboarding above the required base flood elevations, are
also minimization techniques for floodplain purposes.
(2) Appropriate and practicable compensatory mitigation is
recommended for unavoidable adverse impacts to more than one acre of
wetlands. Compensatory mitigation includes, but is not limited to:
permitee-responsible mitigation, mitigation banking, in-lieu fee
mitigation, the use of preservation easements or protective covenants,
and any form of mitigation promoted by state or Federal agencies. The
use of compensatory mitigation may not substitute for the requirement
to avoid and minimize impacts to the maximum extent practicable.
(3) 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:
(i) Preparation of and participation in an early warning system;
(ii) An emergency evacuation and relocation plan;
(iii) Identification of evacuation route(s) out of the 500-year
floodplain; and
(iv) Identification marks of past or estimated flood levels on all
structures.
(f) Step 6. Reevaluate the proposed action to determine:
(1) Whether the action is still practicable in light of exposure to
flood hazards in the floodplain or wetland, possible adverse impacts on
the floodplain or wetland, the extent to which it will aggravate the
current hazards to other floodplains or wetlands, and the potential to
disrupt the natural and beneficial functions and values of floodplains
or wetlands; and
(2) Whether alternatives preliminarily rejected at Step 3
(paragraph (c)) of this section are practicable in light of information
gained in Steps 4 and 5 (paragraphs (d) and (e)) of this section.
(i) The reevaluation of alternatives shall include the potential
impacts avoided or caused inside and outside the floodplain or wetlands
area. The impacts should include the protection of human life, real
property, and the natural and beneficial functions and
[[Page 77174]]
values served by the floodplain or wetland.
(ii) A reevaluation of alternatives under this step should include
a discussion of economic costs. For floodplains, the cost estimates
should include savings or the costs of flood insurance, where
applicable, flood proofing, and elevation to at least the base flood
elevation for sites located in floodplains, as appropriate. For
wetlands, the cost estimates should include the cost of filling the
wetlands and mitigation.
(g) Step 7. (1) 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:
(i) The reasons why the proposal must be located in the floodplain
or wetland;
(ii) A list of the alternatives considered in accordance with Sec.
55.20(c)(1) and (2); and
(iii) All mitigation measures to be taken to minimize adverse
impacts and to restore and preserve natural and beneficial functions
and values.
* * * * *
(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 (or on the responsible entity authorized by 24
CFR part 58) and the recipient (if other than the responsible entity)
to ensure that the mitigating measures identified in Step 7 are
implemented.
Sec. 55.21 [Amended]
14. Amend Sec. 55.21 by removing the term ``grant recipient'' and
adding in its place the term ``responsible entity.''
15. Revise Sec. 55.24 to read as follows:
Sec. 55.24 Aggregation.
Where two or more actions have been proposed, require compliance
with subpart C of this part, affect the same floodplain or wetland, and
are currently under review by HUD (or by a responsible entity
authorized by 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.
Sec. 55.25 [Amended]
16. Revise Sec. 55.25 as follows:
a. Remove, in paragraph (c), the term ``grant recipient'' and add
in its place the term ``responsible entity''; and
b. Remove in paragraph (d)(2) the term ``grant recipients'' and add
in its place the term ``responsible entities.''
17. In Sec. 55.26, revise the introductory paragraph 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 either or both of the executive orders
by another agency, including HUD or a different responsible entity,
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 or wetlands protection;
* * * * *
18. Amend Sec. 55.27 as follows:
a. Revise paragraph (a);
b. Remove, in paragraph (b), the term ``grant recipient'' and add,
in its place, the words ``responsible entity'' and;
c. Remove, in paragraph (c), the term ``grant recipients'' and add,
in its place, the words ``responsible entities'', to read as follows:
Sec. 55.27 Documentation.
(a) For purposes of compliance with Sec. 55.20, the responsible
HUD official who would approve the proposed action (or Certifying
Officer for a responsible entity authorized by 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 most appropriate to the
proposed action. Actual sites under review must be identified and the
reasons for the nonselection of those sites as practicable alternatives
must be described; and
(2) Under Sec. 55.20(e)(2), measures to minimize the potential
adverse impacts of the proposed action on the affected floodplain or
wetland as identified in Sec. 55.20(d) have been applied to the design
for the proposed action.
* * * * *
19. Add new Sec. 55.28 to read as follows:
Sec. 55.28 Use of individual permits under section 404 of the Clean
Water Act for HUD 11990 processing where all wetlands are covered by
the permit.
(a) Processing requirements. HUD (or the responsible entity subject
to 24 CFR part 58) shall not be required to perform the steps at Sec.
55.20(a), (b), (c), (d), and (e) upon adoption by HUD (or the
responsible entity) of the terms and conditions of a Section 404 permit
so long as:
(1) The project involves new construction on a property located
outside of the 100-year floodplain (or the 500-year floodplain for
critical actions);
(2) The applicant has submitted, with its application to HUD (or to
the recipient under programs subject to 24 CFR part 58), an individual
Section 404 permit (including approval conditions) issued by the Army
Corps of Engineers (USACE) for the proposed project; and
(3) All wetlands adversely affected by the action are covered by
the permit.
(b) Unless a project is excluded under Sec. 55.12, processing
under all of Sec. 55.20 is required for new construction in wetlands
that are not subject to USACE jurisdiction and for new construction for
which the USACE issues a general permit under Section 404.
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. Revise Sec. 58.5(b)(2) to read as follows:
Sec. 58.5 Related federal laws and authorities.
* * * * *
(b) * * *
(2) E.O. 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.
* * * * *
22. Add Sec. 58.6(a)(4).
Sec. 58.6 Other requirements.
* * * * *
(a) * * *
(4) Flood insurance requirements cannot be fulfilled by self-
insurance except as authorized by law for assistance to state-owned
projects within states approved by the FEMA Administrator consistent
with 44 CFR 75.11.
* * * * *
23. Revise Sec. 58.35(a)(3)(i) to read as follows:
Sec. 58.35 Categorical exclusions.
* * * * *
[[Page 77175]]
(a) * * *
(3) * * *
(i) In the case of a building for residential use (with one to four
units), the density is not increased beyond four units, and the land
use is not changed;
* * * * *
Dated: November 14, 2011.
Mercedes M. M[aacute]rquez,
Assistant Secretary for Community Planning and Development.
[FR Doc. 2011-31629 Filed 12-9-11; 8:45 am]
BILLING CODE 4210-67-P