[Federal Register: September 29, 2003 (Volume 68, Number 188)]
[Rules and Regulations]
[Page 56115-56131]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29se03-32]
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Part V
Department of Housing and Urban Development
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24 CFR Part 50, et al.
Environmental Review Procedures for Entities Assuming HUD's
Environmental Responsibilities; Final Rule
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 50, 58, 574, 582, 583, and 970
[Docket No. FR-4523-F-02]
RIN 2501-AC83
Environmental Review Procedures for Entities Assuming HUD's
Environmental Responsibilities
AGENCY: Office of the Assistant Secretary for Community Planning and
Development, HUD.
ACTION: Final rule.
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SUMMARY: This final rule updates the list of programs and statutory
authorities in HUD's environmental regulation for which other entities
may assume HUD's environmental responsibilities. This rule makes other
changes to update these regulations that address the assumption of
HUD's environmental responsibilities. This final rule also makes
conforming changes to the affected environmental provisions contained
in various program regulations. This final rule follows publication of
a June 26, 2002, proposed rule and takes into consideration the public
comments received on the proposed rule.
DATES: Effective Date: October 29, 2003.
FOR FURTHER INFORMATION CONTACT: Richard H. Broun, Director, Office of
Community Viability, Office of Community Planning and Development, Room
7244, Department of Housing and Urban Development, 451 Seventh Street,
SW., Washington, DC 20410-7000. For inquiry by phone or e-mail, contact
Walter Prybyla, Environmental Review Division, Office of Community
Planning and Development, at (202) 708-1201, extension 4466 (this is not a toll-free number), or mail to: Walter_Prybyla@hud.gov. Hearing-
impaired or speech-impaired individuals may access the voice telephone
number listed above by calling the toll-free Federal Information Relay
Service at 1-800-877-8339.
SUPPLEMENTARY INFORMATION:
I. The June 26, 2002, Proposed Rule
On June 26, 2002 (67 FR 43208), HUD published a proposed rule that
would make a number of changes to HUD regulations at 24 CFR part 58.
For the convenience of the reader, the Department summarizes here some
of the details of the proposed rule published in the preamble to the
proposed rule. Readers are referred to the Supplementary Information
section of the preamble of the published proposed rule at 67 FR 43208-
43210 for a fuller explanation of the rationale or justification for
the various revisions in the rule.
The regulations at 24 CFR part 58 implement statutory authorities
that permit certain entities other than HUD to assume HUD's
environmental responsibilities for various HUD programs. The proposed
rule advised that the Department would (1) update the list of programs
and statutory authorities covered by part 58, and (2) make conforming
changes to environmental provisions in certain program regulations to
include a cross-reference to part 58. In addition, the proposed rule
would make conforming changes in HUD's regulations at 24 CFR part 50,
which govern when HUD is responsible to perform environmental
responsibilities in accordance with the National Environmental Policy
Act (NEPA) (42 U.S.C. 4321 et seq.), the Council on Environmental
Quality Regulations (40 CFR parts 1500-1508), and other environmental
requirements (as specified in 24 CFR 50.4).
The proposed rule described the additional programs that would be
added to the list of programs in Sec. 58.1. Among these programs are
(1) Grants provided to private nonprofit organizations and housing
agencies under the Supportive Housing Program and the Shelter Plus Care
Program authorized by Title IV of the McKinney-Vento Homeless
Assistance Act; (2) Assistance provided under the Native American
Housing Assistance and Self-Determination Act of 1996 (NAHASDA); (3)
Indian Housing Loan Guarantees under section 184 of the Housing and
Community Development Act of 1992; (4) HOPE VI grants for FY 1999 and
earlier and HOPE VI grants under section 24 of the United States
Housing Act of 1937; and (5) Housing Opportunities for Persons With
AIDS (HOPWA) grants under the AIDS Housing Opportunity Act.
The proposed rule also advised that the Rental Rehabilitation
Program and the Housing Development Grant Program authorized by section
17 of the United States Housing Act of 1937 (42 U.S.C. 1437 et seq.)
are no longer in use and would be removed from paragraph (b)(2) of the
list in 24 CFR 58.1.
The proposed rule further indicated that the Department would add a
new Sec. 58.1(c) and Sec. 58.1(d) to Title 24. New Sec. 58.1(c)
clarifies that activities assisted with repayments to a revolving loan
fund initially assisted with HUD funds are subject to environmental
requirements only if HUD program rules treat the activity assisted with
repayments as being subject to federal requirements. New Sec. 58.1(d)
clarifies that the Assistant Secretary for Community Planning and
Development, to the extent permitted by applicable laws and the
regulations of the Council on Environmental Quality (CEQ), may, for
good cause and with appropriate conditions, approve waivers and
exceptions or establish criteria for exceptions from the requirements
of this part.
The June 26, 2002, rule proposed changes in Sec. 58.2 to the
definitions of ``recipient'' and ``responsible entity'' (RE). A new
Sec. 58.4(c) was proposed to clarify that under NAHASDA and the
Section 184 program, Indian tribes have a choice whether or not to
assume environmental responsibilities under 24 CFR part 58.
The rule also proposed updating the list of NEPA-related
environmental authorities in Sec. 58.5 to add new requirements similar
to those identified in 24 CFR 50.3(i), which apply when HUD performs
the environmental review for a project. The proposed rule indicated
that environmental reviews for multifamily housing with five or more
units (including leasing) and non-residential property must include
evaluation of previous site uses and other evidence of contamination on
or near the site.
Further, the proposed rule noted revisions to Sec. 58.11 to
exclude the term ``Indian Housing'' recipient and to add the term
``HOPWA'' recipient. Additionally, the rule announced that Sec.
58.22(a) would be revised to make it clear that all participants in the
development process are subject to the provisions of part 58.
The proposed rule added a new paragraph to Sec. 58.22 to permit an
organization, consortium, or affiliate under the Self-Help
Homeownership Opportunity Program (SHOP) to advance nongrant funds to
acquire land prior to completion of the environmental review process.
The rule also detailed revisions to be made to Sec. 58.33(b) and
Sec. 58.35, along with conforming changes to 24 CFR part 50. In
addition, the proposed rule included revisions to Sec. Sec. 58.34(b),
58.45, 58.72, and 58.75. An additional proposal in the rule would add
language to 24 CFR parts 574, 582, 583, and 970 to make conforming
amendments to reflect the applicability of part 58 procedures.
The proposed amendments to Sec. Sec. 58.34(b) and 58.35(d)
regarding the timing of environmental documentation have been omitted
from the final rule.
The proposed amendments to Sec. Sec. 50.20(a)(2)(i) and
58.35(a)(3)(i) regarding conditions for eligibility for a
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categorical exclusion for rehabilitation of buildings for residential
use (with one to four units) are modified in the final rule. The
threshold that ``the dwellings do not result from a conversion of use
from a non-residential use'' is revised in the final rule to read ``the
land use is not changed.'' The threshold that ``the footprint of the
building is not increased in a floodplain or in a wetland'' is added to
the final rule.
The final rule updates the reference to the FHA Multifamily Housing
Finance Agency Pilot Program by removing the word ``Pilot'' because the
program is now a permanent program. The term ``Pilot'' appears in the
current regulation and the proposed rule at Sec. 58.2(a)(5)(vii) and
(6).
The Department has decided not to adopt the revisions to 24 CFR
970.4 as published in the proposed rule, in favor of making a simple
cross-reference to part 58. The Office of Public Housing Investments,
an office under the Office of the Assistant Secretary for Public and
Indian Housing, plans to cover the removed guidance in an internal
notice dealing with demolition or disposition of public housing
projects pending issuance of a broader amendment to part 970 itself.
II. This Final Rule
This final rule follows publication of the June 26, 2002, proposed
rule and takes into consideration the 64 public comments received on
the proposed rule. The public comment period on the rule closed on
August 26, 2002. Comments were received from a federal agency, local
housing and community development authorities, housing professionals,
an Indian housing authority, city and county governments, housing
associations, home inspection services, and several private
individuals. In accordance with the consultation provision of the CEQ
regulations at 40 CFR 1507.3, HUD submitted for CEQ review and comment
the proposed amendment to part 58. The final rule implements HUD's
responsibility to identify and regulate HUD-assisted activities subject
to NEPA. Section 102 of NEPA requires that all agencies of the federal
government identify and develop methods and procedures, in consultation
with the CEQ, which will ensure that presently unquantified
environmental amenities and values may be given appropriate
consideration in decisionmaking along with economic and technical
considerations.
In response to the public comments, the following revisions,
summarized here and discussed more fully in Part III, are made to the
proposed rule.
Section 58.1(b)(10) is revised by adding the new program for Native
Hawaiian Housing Block Grants authorized under title VIII of the Native
American Housing Assistance and Self-Determination Act of 1996
(NAHASDA), in accordance with section 806 (25 U.S.C. 4226).
Section 58.2(a)(5)(ix) is revised by adding as a recipient, the
Department of Hawaiian Home Lands with respect to NAHASDA assistance
under Sec. 58.1(b)(10).
Section 58.2(a)(7)(ii) is revised by adding as a responsible
entity, the Department of Hawaiian Home Lands with respect to
environmental responsibilities under NAHASDA, when the Department of
Hawaiian Home Lands is the recipient.
Section 58.35(a)(3)(i) is revised to clarify the conditions for a
categorical exclusion for rehabilitation proposed in the case of
buildings for residential use (with one to four units). The conditions
are that the density is not increased beyond four units, the land use
is not changed, and the footprint of the building is not increased in a
floodplain or in a wetland. The effects of this provision are that: (1)
It corrects in the current rule at Sec. 58.35(a)(3) the apparent
omission of the topic of ``buildings for residential use (with one to
four units)'' by including an explicit reference to this topic in the
listing for building rehabilitation activities, because the current
listing cites categorical exclusions only for multifamily and non-
residential buildings. Although under current regulations neither part
58 nor part 50 refers to the topic of rehabilitation proposed in the
case of buildings for residential use (with one to four units), the
topic was considered under part 58 as an ``individual action,'' whereas
under part 50 it was covered under the generic topic ``rehabilitation
of structures.'' The final rule removes this ambiguity; (2) it removes
the proposed rule reference at Sec. 58.35(a)(3)(i) to ``dwellings do
not result from a conversion of use from a non-residential use'' and
substitutes ``the land use is not changed'; (3) it eliminates the need
to perform environmental assessments by removing thresholds listed in
the current regulations under both parts 50 and 58; (4) it adds a
cross-reference within the individual actions criteria at Sec. Sec.
58.35(a)(4) and 50.20(a)(3) to exclude rehabilitation of buildings for
residential use (with one to four units) from the thresholds for
individual actions; and (5) this categorical exclusion continues, as in
the current and proposed regulations, to be subject to the Sec. Sec.
58.5 and 58.6 provisions. In addition, this rule amends Sec.
50.20(a)(2) with identical language that applies when HUD itself
performs the environmental review under part 50.
III. Discussion of Public Comments Received on the June 26, 2002,
Proposed Rule
Comment: HUD should mandate radon testing and remediation, if
necessary, of every home, because the Department's failure to enforce
the environmental responsibilities required by the rule is contributing
to thousands of preventable lung cancer deaths. Specifically,
commenters noted that 24 CFR 50.3(i)(1) states HUD's policy that all
property proposed for use in HUD programs be free of hazardous
materials and toxic substances, among other things, where a hazard
could affect the health and safety of occupants. They stated that radon
is a carcinogen, which can be inexpensively remediated, yet most home
purchasers, in spite of the EPA recommendation, do not order a radon
test.
Many commenters cited 24 CFR 50.3(i)(1) in arguing that HUD should
enforce the regulation and mandate a radon test of residential property
for it to qualify for a Department of Veterans Affairs (VA), Department
of Housing and Urban Development (HUD), Federal National Mortgage
Association (Fannie Mae), or Federal Home Loan Mortgage Corporation
(Freddie Mac) mortgage. Commenters noted that the Government Sponsored
Enterprises (GSEs) (regulated by HUD) are the largest source of housing
finance in the country. They remarked that industry experts agree that
once HUD imposes mandatory testing of radon hazards, the majority of
primary market mortgage originators will follow suit.
HUD Response: After a careful review of the comments, the
Department has decided not to revise the proposed rule. Mandatory
testing of homes for radon hazards under HUD's mortgage insurance
programs for single-family home loans is outside the scope of this
rulemaking. This rule deals primarily with HUD's grant programs for
which HUD's environmental review responsibility is assumed by state,
local, and tribal governments for compliance with NEPA and the related
laws and authorities.
The Department would add that conforming Sec. 58.5(i) in this
final rule to the existing language in Sec. 50.3(i)(1) signals its
policy of establishing a uniform standard for dealing with toxic
hazards in cases where an environmental review is required to
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comply with NEPA and/or the related laws and authorities cited at Sec.
58.5. As stated above, a requirement for mandatory testing for radon
hazards for single-family homes is not within the scope of this rule.
Nonetheless, the new language in Sec. 58.5 reflects HUD's policy that,
regardless of whether the environmental reviews are performed by HUD or
by the responsible entity, the same standards would be used. Further,
the conforming provision requires that the environmental review of
multifamily housing with five or more dwelling units (including
leasing) and non-residential property, must include the evaluation of
previous uses of the site and other evidence of contamination on or
near the site, to ensure that the occupants of proposed sites are not
adversely affected by any of the hazards listed in Sec. 58.5(i)(1).
The provision requires that particular attention should be given to any
proposed site on or in the general proximity of such areas as dumps,
landfills, industrial sites, or other locations that contain or may
have contained hazardous wastes. The new conforming provision would
apply to addressing radon hazards within the context of the
environmental review whenever it is known or suspected that such
hazards exist.
The Department also notes that there is no HUD review or approval
before the completion of construction or rehabilitation and the loan
closing for single-family homes whose mortgages are endorsed by the
FHA. Consequently, the program is excluded from environmental review
regulations under part 50 (see Sec. 50.19(b)(17)). However,
environmental underwriting criteria for FHA mortgage insurance programs
are listed elsewhere at 24 CFR 203.12(b), relating to ``Builder's
Certification of Plans, Specifications and Site'' (Builder's
Certification) for mortgage insurance on proposed or new construction
of single-family homes. The Builder's Certification form covers ``Other
foreseeable hazards or adverse conditions.'' (See 24 CFR
203.12(b)(2)(vi)).
Comment: HUD should remove from the rule the language in part 58
that makes units of general local government, counties, and states
responsible for environmental review of HOPE VI projects. The commenter
recommended that HUD directly perform environmental review of HOPE VI
projects and other projects undertaken by public housing agencies
(PHAs) under the programs listed in Sec. 58.1(b). The commenter stated
that imposing environmental review responsibilities upon non-recipient
entities for such projects diverts limited administrative staff time
not only to conduct the environmental review, but also to negotiate
agreements with recipients regarding the environmental review work. The
commenter noted that these agreements may need to be approved by one or
more legislative bodies. The commenter also noted that the statutory
authority under which HOPE VI is proposed to be added to part 58 does
not require HUD to delegate environmental responsibilities to the non-
recipient entities listed in Sec. 58.2(a)(7).
HUD Response: The Department has carefully considered this comment,
but declines to change the rule. Accordingly, the final rule is
unchanged from the proposed rule on this issue. At this time, many more
responsible entities perform environmental reviews for their own
complex capital projects and have sufficient experience to be able to
do so for other HUD-assisted recipients within their area. Where the
responsible entity staff lacks time or skills, then services of
consultants are recommended. Consultant support is also recommended in
order to support certain kinds of technical environmental analysis.
Generally, negotiating agreements is an established operating
practice and need not be viewed as a burden, but as an opportunity to
partner. HUD expects responsible entities to reach out to partners and
to readily negotiate agreements with public housing agencies and
private non-profit organizations seeking environmental services of the
responsible entity for their HUD-assisted project or activity. HUD
understands that such agreements must comply with state and local laws
and in some cases may need approval of the legislative body, as pointed
out by respondents.
This rule is an environmental rule and therefore does not cover
findings of consistency with the Consolidated Plan; however, such
findings are required for the HOPE VI Program listed at 24 CFR
91.2(b)(12), Revitalization of Severely Distressed Public Housing. HUD
has the discretion to perform environmental reviews, but such
performance would be inconsistent with HUD's general direction to
devolve this federal function for its grant programs to state, local,
and tribal governments. HUD believes that effective environmental
review and administration is best performed by the responsible entity.
While HUD encourages units of general local government, counties, and
states to perform environmental reviews for HOPE VI projects, such
governments are not required to do so when they are not the recipient
of the HOPE VI assistance. HUD does not believe it advisable to
prohibit any unit of a local government, county, or state from
performing environmental reviews for PHAs under part 58 when many are
willing to do so.
Comment: A commenter objected to the proposed change in Sec. Sec.
58.1 and 58.2 that would make a governmental jurisdiction that is not
providing the federal funding responsible for the environmental review
for the assisted project. The commenter expressed concern that this
rule change could force a certifying officer into court to defend a
project in which the officer has no influence. The commenter asserted
that effective environmental review and administration lies solely with
the funding agency.
HUD Response: The final rule makes no change to the proposed rule
in response to this comment. Generally, environmental litigation
results from failure of the project managers to perform the requisite
environmental review or to address environmental impacts
satisfactorily. HUD believes that certifying officers, who are
generally the top elected officials of the jurisdiction, are in a
better position than the funding agency alone to guide and defend
projects within their jurisdiction. The certifying officers live in
their jurisdictions and are involved with governing their
jurisdictions--including sitting on or appointing directors to boards
of public housing agencies and private non-profit organizations.
Responsible entities and their certifying officers, in performing
environmental reviews under part 58, have no less authority than HUD
under part 50. Either party is under the same legal duty to ensure full
compliance with statutory and regulatory requirements for environmental
quality irrespective of the type of HUD-assisted recipient, developer,
or project.
HUD disagrees with the comment that effective environmental review
and administration lies solely with the funding agency. HUD, as the
funding agency, has a partnership role to play, but HUD partners with
the local government that has jurisdiction and competency. At the
project level, the responsible entity is the local government that
``governs'' by providing land use planning and consolidated planning;
by permitting, through zoning, building, and building occupancy
approvals for projects that are assisted by HUD; and by supplying
infrastructure support for these projects. Thus, HUD believes the
certifying officers and responsible entities are already involved with
HUD-assisted projects.
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The assumption of federal environmental responsibilities by tribal,
local, and state governments is virtually unique among federal
agencies. This assumption reflects the transfer of full authority to
local, state, or tribal governments for environmental quality and
protection for HUD-assisted projects, including the monitoring and
implementation of any mitigation that the responsible entity requires.
HUD believes that effective environmental review and administration is
best performed by the responsible entity and not by the federal funding
agency.
Comment: HUD's Office of Native American Programs requested the
addition to Sec. 58.1(b)(10) of the Native Hawaiian Housing Block
Grants program authorized by section 513 of American Homeownership and
Economic Opportunity Act of 2000 (Pub. L. 106-569, approved December
27, 2000) and section 203 of the Omnibus Indian Advancement Act (Pub.
L. 106-568, approved December 27, 2000), each of which amended NAHASDA
by adding a new title VIII. Section 806 of NAHASDA, as amended,
authorizes HUD to permit the Director of the Department of Hawaiian
Home Lands to assume environmental review responsibilities.
HUD Response: The final rule adds the Native Hawaiian Housing Block
Grants program to Sec. 58.1(b)(10).
Comment: Several commenters felt that an American Society for
Testing and Materials (ASTM) Phase I assessment is a possible means for
complying with Sec. 58.5(i). As an alternative, some commenters
suggested a simple ``reasonableness'' test and recommended that the
regulation provide that grantees must determine to a reasonable level
of certainty, as determined by the grantee, that sites are free of
hazardous materials and other deleterious substances. One commenter
wrote that the proposed amendment would create significant new cost and
other burdens for Community Development Block Grant (CDBG) and HOME
grantees. Another commenter wrote that requiring properties to be free
of hazards without providing a safe harbor leaves a governmental
jurisdiction potentially liable for damages caused by unknown or
undiscovered hazards.
HUD Response: The final rule makes no change to the proposed rule
in response to this comment. The policy in proposed Sec. 58.5(i)
requires due diligence in accordance with the language in that section,
but is not intended to suggest any liability for damages caused by
unknown or undiscovered hazards where an appropriate review has been
performed. In addition, the policy that sites be free from hazardous
materials, etc., does not require a complete absence of such materials,
but only that the property be free of hazards where the hazard could
affect the health and safety of occupants or conflict with the intended
utilization of the property. The policy also does not prescribe any
specific form of remediation, which may vary depending upon the nature
of the hazard.
With respect to the issue of costs, in most cases, the cost of the
environmental study is eligible for HUD funding as administrative or
project costs. The potential remediation costs to owners of existing
property who are primarily interested in doing rehabilitation work or
facade-type improvements are all costs that are eligible for HUD
funding as project costs or for funding under other federal programs.
There should be no financial burden to affected property owners
benefiting from federal financial assistance to identify and remediate
environmental hazards on their property. Significant benefits accrue to
the value and desirability of the property. Generally, the benefits of
remediation outweigh the costs. Remediation provides a safer
environment, which the final rule advances in support of meeting a
national goal of a suitable living environment expressed in housing and
NEPA legislation.
The criteria in Sec. 58.5(i) rely on a general performance
standard. Section 58.5(i) does not require a Phase I environmental
assessment for toxics (American Society for Testing and Materials, ASTM
E 1527). Certainly, a Phase I report or equivalent analysis is a
possible means for complying with Sec. 58.5(i). Some HUD programs
already require a Phase I report, a standard of private real estate
transactions. Visual inspection of the property may not disclose enough
information to ascertain toxic contamination. Permission of the
property owner is a routine procedure for examining or testing on-site
of a site that is not under the control of the prospective purchaser or
environmental reviewer. Such permission includes testing, if the site
is suspected or known to contain toxic contaminants. Checking existing
federal, state, or local databases is routine procedure for the
environmental review, but such databases are not all inclusive and up-
to-date. Due diligence is required in making such determinations.
When HUD itself is responsible for performing the environmental
review, the policy under Sec. 50.3(i) is not to approve the provision
of financial assistance to residential properties located on
contaminated sites that are not found to meet the criterion in current
Sec. 50.3(i)(1). Sites known or suspected to be contaminated by toxic
chemicals or radioactive materials include, but are not limited to,
sites which: (1) Are listed on an Environmental Protection Agency (EPA)
Superfund National Priorities list or the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et
seq.) (CERCLA) list or equivalent state list; (2) are located within
3,000 feet of a toxic or solid waste landfill site; or (3) have an
underground storage tank that is not for residential fuel. For any of
these conditions, the recipient provides HUD with an American Society
for Testing and Materials (ASTM) Phase I environmental assessment for
toxics report or equivalent analysis.
Comment: Some commenters objected to the provision in Sec. Sec.
58.5(i)(2) and (3) requiring environmental review of multifamily
housing and non-residential properties to include evaluation of
previous site uses and other evidence of contamination on or near the
site or in the general proximity. Commenters said that it is not
possible to identify hidden conditions such as drug labs or other
hazards out of plain sight. Five commenters recommended that the
requirement should be limited to a reasonable determination of
potential hazards that might include checking existing federal, state,
and local databases that contain information on contaminated
properties.
HUD Response: The final rule makes no change to the proposed rule
in response to the commenters' objections. In general, multifamily
housing refers to five or more units within one building. Properties
are to be ``free'' of hazards that affect the health and safety of
occupants or conflict with the intended utilization of the property.
The rule sets a performance standard that includes evaluation of
previous uses of the site and evidence of contamination on or near the
site, to assure that occupants of proposed sites are not adversely
affected by the hazards. Unacceptable sites are to be disapproved,
unless the site can be made acceptable by the remediation of the toxic
contaminants. Due diligence is the norm. The rule does not create a
basis for liability of responsible entities for contamination or the
effects of contamination that are not discovered as the result of the
exercise of due diligence. Certainly, checking federal, state, and
local data banks on toxic hazards is necessary, but the absence of the
property in such data banks is not always conclusive on the hazards
issue.
[[Page 56120]]
Comment: Some governmental jurisdictions may determine that under
the Sec. 58.5(i) standards, the potential legal or financial exposure
is too high and would limit the range of activities they fund with CDBG
and HOME funds. The commenter was of the opinion that property owners
are unlikely to enter into purchase agreements that include
contingencies allowing on-site testing of their property by a
prospective purchaser or environmental reviewer to determine the
presence or absence of toxic contamination.
HUD Response: Among HUD's missions is promotion of the national
goal that every American family be able to afford a decent home in a
suitable environment, and HUD's CDBG and HOME programs support that
national goal. Accordingly, we disagree with the commenter's opinion
that the potential legal or financial exposure is too high and would
limit the range of activities that local governments fund with CDBG and
HOME funds, should HUD implement Sec. 58.5(i). That section simply
conforms part 58 with identical policy at Sec. 50.3(i), which, since
1996, HUD itself applies when HUD staff perform environmental reviews
under part 50.
HUD does not share the commenter's opinion that property owners are
unlikely to enter into purchase agreements that include contingencies
allowing on-site testing of their property by a prospective purchaser
or environmental reviewer to determine the presence or absence of toxic
contamination for a HUD-assisted project. The federal subsidy is a
significant incentive to ensure the cooperation of most property owners
in this matter.
Comment: A commenter questioned the rationale for not requiring
site evaluation for residential buildings with fewer than five units.
The commenter wrote that a contaminated site would present
environmental issues regardless of the number of people who will be
served by the site.
HUD Response: The final rule makes no change to the proposed rule,
but in response to the comment, HUD provides this clarification. The
final rule renumbers the section in question. Section 58.5(i)(2)(i) of
the final rule applies to all properties (i.e., ``covered'' properties)
that are being proposed for use in HUD programs covered under Sec.
58.1(b) (i.e., ``covered'' programs). Section 58.5(i)(2)(ii) applies
specifically to multifamily residential properties and to non-
residential properties proposed for use in ``covered'' programs; and it
requires an evaluation of previous uses of the site or other evidence
of contamination on or near the site. HUD clarifies that the language
of Sec. Sec. 58.5(i)(2)(iii) and (iv) is not limited in its
application to multifamily residential properties and to non-
residential properties, but applies to all ``covered'' properties,
including buildings for residential use (with one to four units). The
language of Sec. 58.5(i)(2)(iii) requires that particular attention
should be given to any proposed site on or in the general proximity of
such areas as dumps, landfills, industrial sites, or other locations
that contain, or may have contained, hazardous wastes. The language of
Sec. 58.5(i)(2)(iv) requires the responsible entity to use current
techniques by qualified professionals to undertake investigations
determined necessary. In addition, HUD clarifies that all ``covered''
properties may include those properties subject to a categorical
exclusion under Sec. 58.35(b) in cases of extraordinary circumstances
in accordance with Sec. 58.35(c).
Comment: Not enough emphasis is made in the proposed rule on the
high level of priority that should be placed on expediting
environmental reviews, since the environmental review process can be a
lengthy one that slows the funding and expending of HUD grant funds.
The commenter suggested that the rule provide positive incentives to
expedite the environmental review process as HUD adds new programs and
entities to part 58.
HUD Response: The most significant incentive is intrinsic in the
current part 58 regulations, because delays can be prevented by the
recipient responsible entity since the calendar and pace of performing
the environmental procedures is under the control of the responsible
entity itself. With respect to non-recipient responsible entities, the
final rule makes no change to the proposed rule to provide additional
incentives to expedite the environmental review process as HUD adds new
programs and entities to part 58. HUD believes that the current
regulations provide the following incentives: (1) Sec. 58.23 provides
that the environmental review costs are eligible costs to the extent
allowable under the HUD assistance program regulations. The assurance
of payment for work performed is an incentive in expediting
environmental reviews. Also, Sec. Sec. 58.34(a)(1) and (3),
respectively, exempt from environmental review procedures both
``environmental and other studies'' as well as ``administrative and
management activities.'' This exemption extends to the costs of
environmental consultants and/or payments to local governments for this
service; (2) The regulations provide an opportunity for closer
partnering arrangements among all local partners providing housing and
economic opportunities to achieve the responsible entity's Consolidated
Plan targets. HUD's local partners include local governments, public
housing agencies, private non-profit and for-profit organizations. Such
local arrangements should provide for time-efficient management of
environmental reviews; (3) The regulations provide policy guidance to
private non-profit organizations and public housing agencies requiring
them to supply the responsible entity with all available, relevant
information necessary for the responsible entity to perform for each
property any environmental review required under part 58; (4) This
rulemaking would expedite environmental reviews by simplifying the
provision that provides a categorical exclusion for rehabilitation
assistance in the case of a building for residential use (with one or
four units) and a categorical exclusion for the approval of
supplemental assistance to a project previously approved under this
part; and (5) Often overlooked is the provision in the CEQ regulations
that requires responsible entities to integrate the NEPA process with
other planning ``at the earliest possible time'' to ensure that
planning and decisions reflect environmental values, to avoid delays
later in the process, and to head off potential conflicts (40 CFR
1501.2).
Section 58.30(b) states that the environmental review process
should begin as soon as a recipient determines the projected use of HUD
assistance. The prohibition on commencing choice-limiting activities
under Sec. 58.22 and CEQ regulations at 40 CFR 1506.1 until after the
environmental review process is completed may be an additional
incentive to expedite the review.
Comment: The term ``any participant in the development process'' is
not defined in the rule. The commenter observed that proposed Sec.
58.22 would prohibit any participant in the development process from
committing non-HUD funds or undertaking an activity on a project that
would have an adverse environmental impact or limit the choice of
reasonable alternatives prior to release of funds. The commenter
recommended limiting the application of the prohibition to
subrecipients and adding the cited term to the definition of
subrecipient in Sec. 58.2(a)(5).
HUD Response: The Department did not incorporate this
recommendation in the final rule. HUD does not believe that the phrase
``any participant in the development process'' needs further
[[Page 56121]]
clarification. The phrase covers the recipient's clients and partners
that are project participants, such as public or private, non-profit or
for-profit entities and their contractors. To narrow the application of
this phrase to subrecipients is contrary to the intent of this
provision to provide a broad and all-inclusive application of the
phrase. The final rule would continue the generic usage contained in
the proposed rule.
Comment: The rule should allow responsible entities approving
supplemental assistance to a previously approved project to treat such
projects as categorically excluded and not subject to Sec. 58.5
authorities when the part 58 review and approval was conducted by a
different responsible entity from the one that conducted the
environmental review on the original project.
HUD Response: Section 58.35(b)(7) in both the proposed and final
rule requires that the approval for the supplemental assistance be made
by the original responsible entity. The original responsible entity has
the environmental review record for the project and is more
knowledgeable about the original project. For that reason, HUD believes
that the original responsible entity can best judge whether
supplemental assistance is eligible to be treated as a categorical
exclusion not subject to the related laws, particularly since this
judgment requires a determination by the original responsible entity
under Sec. 58.47 as to whether re-evaluation of the original
environmental findings is required. Additionally, the Department views
all the participants in the process as partners.
Comment: The existing requirement in Sec. 58.22 restricting
development before HUD approvals are received as ``choice-limiting''
actions is unworkable and most likely is misinterpreted. The commenter
recommended modifying the restriction on ``committing'' HUD funds to a
project until HUD has approved a Request for Release of Funds (RROF).
The commenter said that many projects may have already been approved by
other environmental processes and that construction may be underway
before HUD funding is ``committed'' to the project. The commenter
suggested substituting the word ``expended'' for the word ``committed''
to denote that while allocation of HUD funds is permissible, the actual
expenditure of HUD funds is not permissible until the RROF has been
approved.
HUD Response: The final rule makes no change to the proposed rule
in response to this comment. The term ``commit'' is broader and
includes the meaning of the term ``expend.'' The intent in using the
term ``commit'' is to prevent any ``choice-limiting'' action from
occurring prior to HUD or state approval of the environmental
certification of compliance and the request for the release of funds
for the HUD-assisted project. This provision does not affect the
recipient's general allocation of funds, but only restricts commitment
of such funds to choice-limiting actions, for example, site-specific
activities such as real property acquisition, leasing, demolition,
rehabilitation, and related site improvements.
The commitment to a HUD-assisted project of HUD and non-HUD funds
by the recipient and its partners prior to completion of the
environmental review and submission and approval of the recipient's
environmental certification of compliance and request for the release
of funds inherently diminishes and biases objective consideration of
alternative locations for the proposed project (including a no action
alternative). The Department believes that the consideration of
alternatives is fundamental to the environmental review process for
HUD-assisted projects complying with the procedures of part 58.
CEQ regulations at 40 CFR 1502.2(f) require that agencies not
commit resources prejudicing selection of alternatives before making a
final decision. The regulations at 40 CFR 1506.1 address limitations on
actions during the NEPA process. Applicable statutes and regulations
set decision points for environmental review and compliance for the
various authorities at Sec. Sec. 58.5 and 58.6. This standard is not
in any way diminished by the participation of non-federal funding of
the project.
As more programs are added to Sec. 58.1(b) where the recipient is
different from the responsible entity, and based on HUD's recent
program experience, it is necessary for HUD to be clear in the
rulemaking regarding this important environmental compliance issue.
This demonstrates the need for responsible entities and recipients
other than responsible entities to help each other perform timely
compliance with part 58 with all partners selected to implement HUD-
assisted projects. Substituting the words ``not expend'' for the words
``not commit'' as suggested by the respondent would not address HUD's
concern. The restriction on undertaking or committing funds for choice-
limiting actions does not apply to undertakings or commitments of non-
federal funds for a development by a party before the party applies to
the part 58 recipient for federal funds for the project. Thus, a third
party may begin a project in good faith as a private project and by so
doing is not precluded from later deciding to apply for federal
assistance. However, when the party applies for federal assistance, it
will generally need to cease further choice-limiting actions on the
project until the environmental review process is completed in
accordance with procedures under part 58.
Comment: The ``choice-limiting'' requirements in 24 CFR 58.22 are
overly restrictive. Two commenters wrote that there may be numerous
``choice-limiting'' requirements imposed upon a development even before
HUD funding is available. The commenters want a distinction made in
Sec. 58.22 to recognize that ``choice-limiting'' requirements may not
always be negative. For example, the imposition of requirements under
the Endangered Species Act before the approval of the RROF should not
be considered as limiting environmental choices. Further, Sec. Sec.
58.22(a) and (c) would restrict development with non-HUD funds if an
application for HUD funding was under consideration and the grantee was
aware that some ``choice-limiting'' was going to or had already taken
place. The commenters argued that the recipient has no way of knowing
until the approval process is complete whether a particular application
will or will not be funded. Additionally, the recipient has no legal
authority to stop or limit development by an applicant before HUD funds
have been committed to the activity. Also, many of the ``choice-
limiting'' conditions would most likely be imposed upon the development
anyway. The commenters recommended that HUD reconsider its policy of
defining land acquisition as a ``choice-limiting'' activity, asserting
that neither NEPA nor the CEQ regulation at 40 CFR 1506.1 defines
``choice-limiting'' activity.
HUD Response: The Department declines to adopt the commenters'
recommendation here. Use of the term ``choice-limiting'' in this
regulation does not apply to mitigation measures, as implied in the
comment. The term applies to limitations on actions during the
environmental review process as prescribed by the CEQ regulations for
implementing the procedural provisions of NEPA (40 CFR 1506.1(a)).
HUD has reviewed court decisions on whether land acquisition or
similar actions are choice-limiting activities under NEPA. Six federal
circuit courts including the DC Circuit Court have
[[Page 56122]]
considered this issue. All six have ruled that land acquisition is a
choice-limiting activity under NEPA. Two of these cases were appealed
to the Supreme Court, which denied certiorari both times. Accordingly,
the provisions of Sec. 58.22 prohibiting the commitment of HUD or non-
HUD funds for acquisition of property to be used in a HUD-assisted
project before an environmental review is completed reflect existing
case law on this point, which is law in all of the federal circuit
courts that have ruled on this point and law that the U.S. Supreme
Court has twice declined to overturn.
Comment: Four commenters wrote that any restriction on the ability
to invest HUD funds in developments that are already underway could
have a harmful effect on a grantee's ability to comply with CDBG
program requirements for timely expenditure of grant funds.
HUD Response: The final rule is unchanged from the proposed rule
with respect to this issue. In most cases, the cause of the delay in
the recipient's expenditure of grant monies may be attributed to
factors other than that of compliance with environmental review
processing under part 58. Part 58 allows state, local, and tribal
governments and other recipients to set and manage the schedule of
their environmental review processing. CEQ regulations at 40 CFR 1501.2
require agencies to integrate the NEPA process with other planning at
the earliest possible time. This requirement is intended to ensure that
planning and decisions reflect environmental values, to avoid delays
later in the process, and to head off potential conflicts.
Moreover, as noted in response to a previous comment, the
restriction on undertaking or committing funds for choice-limiting
actions does not apply to undertakings or commitments of non-federal
funds for a development by a party before the party applies to the part
58 recipient for federal funds for the project. Where a third party has
begun a project in good faith as a private project, the part 58
recipient is not precluded from considering a later application for
federal assistance for the project, but must advise the third party
applicant to cease further choice-limiting actions on the project until
the environmental review is completed.
Comment: The final rule should clarify the term ``nominal'' as used
in current Sec. 58.22 for real estate options. The commenter asked
whether it is a percent of the purchase price.
HUD Response: The final rule makes no change to the proposed rule
in response to the commenter's request for clarification. Real estate
options are subject to the conditions regarding environmental
acceptability and nominal price at Sec. 58.22(d). The provision allows
some flexibility regarding the term ``nominal'' and any reasonable
interpretation is acceptable. In most instances, the deposit is not
refundable if the property buyer fails to exercise the real estate
option by purchasing the property within the defined time period.
Comment: The final rule should eliminate the proposed changes to
Sec. 58.22, because the changes would place unenforceable burdens on
recipients to police the actions of subrecipients during the
application phase. The commenter objected to the proposed changes for
two reasons. The first concern is that recipients would be expected to
analyze whether potential subrecipients are ``about to take an action
within the jurisdiction of the recipient that is prohibited by Sec.
58.22(a).'' The second concern of the commenter is the requirement that
if the recipient becomes aware that a subrecipient is about to take a
prohibited action, ``the recipient will take appropriate action to
ensure that the objectives and procedures of NEPA are achieved.'' It is
unclear, in the view of the commenter, what would constitute
``appropriate action'' and what the recipient's actual responsibilities
would be under this requirement. Some nationwide recipients are not in
a position to determine NEPA's objectives at the local level nor to
enforce them with their subrecipients. A recipient of HUD funds can
ensure that its own and its subrecipients' actions conform to the HUD
environmental review process once a legal relationship exists and HUD
funds have been allocated and disbursed. But, wrote the commenter,
recipients lack both the jurisdiction and enforcement power that would
be required by proposed Sec. 58.22(c) during the application phase.
HUD Response: The final rule makes no change to the proposed rule
with respect to the commenter's first concern. The disqualification for
the use of HUD assistance for violation of the limitation on activities
pending clearance itself serves to influence the behavior of potential
subrecipients. In fact, the rule provides the requisite power to
enforce appropriate action. The final rule at Sec. 55.22(c) states
that ``if a recipient is considering an application from a prospective
subrecipient or beneficiary and is aware that the prospective
subrecipient or beneficiary is about to take an action within the
jurisdiction of the recipient that is prohibited by Sec. 58.22(a),
then the recipient will take appropriate action to ensure that the
objectives and procedures of NEPA are achieved.'' To enforce compliance
with this procedure, the final rule requires that recipients, whether
responsible entities or recipients other than responsible entities, be
effectively responsible for establishing internal controls. The
controls would prohibit the recipients' public and private development
partners from the commitment and expenditure of HUD and non-HUD funds
to implement a HUD-assisted project prior to compliance with part 58.
These controls should apply to applicants, potential awardees, or
development partners selected by the recipient.
The Department also carefully considered the commenter's second
point, but declines to change the proposed rule in response to the
comment. As stated earlier, HUD believes that the recipient has both
the jurisdiction and the power to act under this provision. In the
first place, the recipient, when seeking prospective applicants or
potential developers, has the authority to market its relationship with
conditions. The recipient may mandate that no implementation of the
project to be assisted with HUD funds is to occur until there is
compliance with part 58. During and after the application phase,
recipients must refuse HUD assistance to an applicant or developer who
has violated the provision for limitations on activities pending
environmental clearance. HUD looks to recipients to enforce this
provision as they approve or disapprove either applications for HUD
financial assistance or partners in the development of HUD-assisted
projects. The provision in Sec. 58.22(c) simply serves to emphasize a
provision in the CEQ regulations (40 CFR 1506.1(b)) that already
applies to responsible entities under part 58, and also to apply these
responsibilities to recipients regardless of whether they are the
responsible entity.
Comment: Four commenters suggested that HUD should not amend the
public comment periods in Sec. 58.45 to reflect that the periods are
minimum periods. The commenters objected to the proposed amendment on
the basis that a person who fails to respond within the 15-day period
could conceivably persuade a court that the comment period for a
specific project was not long enough. Thus, if no maximum period is
stated, a court could determine that the comment period could be any
length of time. The result would be to delay needed development and
negatively impact CDBG timeliness
[[Page 56123]]
requirements. Another commenter suggested eliminating the word
``minimum'' to avoid confusion that may be caused by the different
interpretations of the word.
HUD Response: The Department was not persuaded to make changes to
the proposed rule on this matter. The provision requires the minimum
number of days for public comment periods. The rule does not require
any longer comment period, but provides the responsible entity with the
authority and flexibility to extend the number of days for public
comment beyond the minimum number of days. The Department does not
share the commenters' view on the possible actions a court may take.
Comment: Proposed Sec. 58.75 language should be revised to
parallel the prohibition in Sec. 58.22 so that the basis for an
objection is clearly limited to projects that have an adverse
environmental impact or limit the choice of reasonable alternatives.
The commenters wrote that the proposed rule would allow objections on
the basis of a recipient or other participant having incurred costs or
committed funds even if there was no actual adverse environmental
impact or no actual limitation on the choice of reasonable
alternatives.
HUD Response: The final rule makes no change to the proposed rule
on this matter. The objection in Sec. 58.75(e) as stated in the
proposed rule is similar to the current regulations, because the
limitation on activities pending clearance applies to both HUD and non-
HUD funds for HUD-assisted projects. In contrast, the reference in the
last sentence of Sec. 58.22(a) on limitations on actions that have an
adverse environmental impact or limit the choice of reasonable
alternatives is too restrictive to be repeated as a more general basis
for objection in Sec. 58.75, because the language applies only to
limitation on the use of non-HUD funds. The basis for objection in
proposed Sec. 58.75(e) does not refer to all incurring of costs or
commitment of funds, but specifically refers only to those commitments
of funds, incurring of costs and undertakings ``not authorized by this
part.''
Comment: The commenter welcomes the proposed change that clarifies
the categorical exclusions for (1) rehabilitation of one to four family
units, and (2) individual actions on one to four family units.'' The
commenter wrote that the intent to identify the rehabilitation of 1-4
unit residential buildings within this exclusion is a welcome
clarification, which codifies a practice HUD has endorsed for years.
The commenter wrote that it is not clear from the reading of the
proposed language whether this means all rehabilitation of buildings
for residential use (with one to four units) is categorically excluded,
or whether rehabilitation of these units needs to be less than 75
percent of replacement value, as the current threshold is for
multifamily dwellings (or meet some other threshold value). The
commenter wants the Supplementary Information reference to ``minor
rehabilitation'' clarified in the final rule.
HUD Response: The final rule is not changed in response to the
comment. With respect to environmental review procedures for all
rehabilitation of buildings for residential use (with one to four
units), the final rule allows a categorical exclusion subject to Sec.
58.5 except that an environmental assessment is required only in the
following circumstances: (1) the density is increased beyond four
units; (2) the land use is changed; (3) the footprint of the building
is increased in a floodplain or in a wetland; or (4) there are
extraordinary circumstances (Sec. 58.35(c)). Under the final rule, the
limitation on rehabilitation costs to 75 percent of replacement value
applies only to multifamily residential buildings and non-residential
structures, and does not apply to rehabilitation of buildings for
residential use (with one to four units).
The final rule replaces the following criterion contained in the
proposed rule: ``* * * the dwellings do not result from a conversion of
use from a non-residential use'' (proposed rule at Sec. Sec.
50.20(a)(2)(i) and 58.35(a)(3)(i)) with a criterion that ``the land use
is not changed.'' HUD wishes to clarify the application of the
provisions regarding ``change in land use'' found in the final rule at
Sec. 50.20(a)(2)(ii)(B) and (iii)(B) and its counterpart in part 58 in
the current regulations, redesignated in the final rule as Sec. Sec.
58.35(a)(3)(ii)(B) and (iii)(B). As a condition of eligibility for this
categorical exclusion, the proposed project or activity must meet the
condition that there will be no change in land use. When one reads the
``categorical exclusion'' sections of parts 50 and 58, the existing
land use of the property and not its future land use is always the
threshold to be used for determining eligibility for categorical
exclusion. Any conversion or ``change in land use'' made to an existing
property is ineligible for a categorical exclusion for rehabilitation
and a full environmental assessment is required. The environmental
assessment itself focuses its evaluation primarily on the future land
use of the property and the prospective and potential impacts resulting
from the proposed land use.
Comment: The final rule should clarify the terminology in
Sec. Sec. 58.35(a)(3)(i) and (4). One commenter wrote that using the
two phrases, ``single-family residential building'' together with ``one
to four units'' conflicts because standard planning terminology
suggests that a single-family residential building is one family per
building. This term should be changed to read ``Single buildings for
family residential use (with one to four units)''.
HUD Response: The final rule revises the phrase published in the
proposed rule to read ``a building for residential use (with one to
four units)'' in Sec. 58.35(a)(3)(i) and its counterpart Sec.
50.20(a)(2)(i). The rule removes from usage the phrase ``one-to four-
family dwelling'' appearing in the current regulations at Sec. Sec.
50.20(a)(3) and 58.35(a)(4). Generally, HUD considers five or more
units within a residential building as multifamily housing, a term
established for the internal administration of its mortgage insurance
programs. Fewer than five units within a residential building are
generally considered single-family housing. This explains the origins
of the terms in HUD environmental and program regulations. The final
rule replaces the term ``one-to four-family dwelling'' that is used in
the current regulation.
Comment: The final rule should clarify the proposed language at
Sec. Sec. 58.35(a)(4)(i) and (ii) with respect to exclusion of an
``individual action'' on a one-to four-unit dwelling when there are no
more than four dwelling units on any one site, whether in one or
multiple buildings. According to the commenter, this particular
categorical exclusion is unwieldy to apply in the field. A clear
definition is needed regarding what an ``individual action'' is on a
one-to four-family dwelling. The commenter asked the question, ``Is it
only new construction or new construction and substantial
rehabilitation (depending on the intent of Sec. 58.35(a)(3)(i))?'' The
commenter also wrote that the proposed language does not account for
circumstances in a program of ``scattered sites'' where sites may be
widely dispersed, but where there may be a limited number of homes that
happen to be within 2,000 feet of each other. If the project is
classified as categorically excluded, does the project sponsor have to
guarantee that every site will be more than 2,000 feet apart? The
commenter suggested adding the following language to Sec.
58.35(a)(4)(ii) ``or there are not more than four units within 2,000
feet of each other.''
[[Page 56124]]
HUD Response: In response to this comment, the final rule amends
the proposed rule language of the Sec. 58.35(a)(4) and 50.20(a)(3)
provision for ``individual actions'' by adding a cross-reference to the
end of Sec. Sec. 58.35(a)(4) and 50.20(a)(3) to exclude rehabilitation
of a building for residential use (with one to four units) from the
thresholds for individual actions. As discussed earlier, Sec. Sec.
58.35(a)(4) and 50.20(a)(3) of the final rule will no longer apply to
the rehabilitation of buildings for residential use (with one to four
units), because the topic is covered under a new, separate provision at
Sec. Sec. 50.20(a)(2)(i) and 58.35(a)(3)(i) located with related
rehabilitation thresholds for categorical exclusions pertaining to
multifamily residential buildings and non-residential structures.
Sections 58.35(a)(4) and 50.20(a)(3) of the final rule will continue to
apply to all other types of individual actions (including, but not
limited to, new construction, development, demolition, and acquisition,
disposition, or refinancing regardless of future use) with respect to
dwelling or housing units that meet the conditions in Sec. Sec.
50.20(a)(3)(i) and (ii) and Sec. Sec. 58.35(a)(4)(i) and (ii).
Although the 2000-foot standard was questioned, no other standards
were suggested in any of the comments. The rationale for this threshold
for an environmental assessment is based on the principle of
aggregation and the need to examine the cumulative environmental
effects (40 CFR 1508.7) of scattered site housing construction taking
place in close proximity. This is consistent with the current provision
in Sec. 58.32, which calls for project aggregation of activities that
are related either on a geographical or functional basis, or are
logical parts of a composite of contemplated actions.
Comment: The Environmental Protection Agency (EPA) requested that
HUD encourage responsible entities to limit distribution of the
Findings of No Significant Impact (FONSI) notices to EPA regional
offices, and not to send copies to EPA Headquarters in Washington, DC.
The EPA also made two recommendations: (1) That HUD's formats for
FONSIs add provisions to improve the description of the project and a
good map; and (2) that HUD clarify that the EPA may review HUD
environmental assessments, but that EPA does not reach a determination
on the grant application; however, EPA may provide its views on the
environmental document to the responsible entity or HUD.
HUD Response: Section 58.43(a) of the current rule remains
unchanged. However, in response to the EPA comment, HUD will
incorporate in guidance addressed to HUD staff and program participants
the following information: (1) When sending FONSI notices and Notices
of Intent to Request the Release of Funds (NOI/RROF) to EPA,
responsible entities are not to send copies to EPA Headquarters in
Washington, DC, but only to regional offices of the EPA having
jurisdiction over the responsible entity; (2) notices sent to EPA
regional offices should include a full description and location of the
project; and (3) responsible entities are discouraged from requesting
that the EPA serve as a lead or cooperating agency in preparing
environmental assessments and impact statements for HUD-assisted
projects. The role of the EPA is not to prepare, but rather to evaluate
and comment on these documents.
Comment: The EPA suggested that HUD further define the categorical
exclusion in Sec. 58.35(a)(3)(i) by adding the following language at
the end of Sec. 58.35(a)(3)(i): ``and which exterior building
dimensions are not increased in a floodplain or in a wetland.''
HUD Response: HUD agrees, but has substituted the wording ``and the
footprint of the building is not increased in a floodplain or in a
wetland'' in lieu of EPA suggested wording. The wording ``and the
footprint of the building is not increased in a floodplain or in a
wetland'' is added to the final regulation at Sec. 58.35(a)(3)(i) for
the environmental review of proposed rehabilitation of buildings for
residential use (with one to four units). The added language serves as
a threshold for requiring an environmental assessment so as to evaluate
and alleviate the environmental effects in cases where rehabilitation
assistance is proposed for expanding the footprint of buildings for
residential use (with one to four units) where such expansion is
located within or would enter the floodplain or wetland. The added
language is directly relevant in the case of minor repairs or
improvements to one-to four-family properties that are currently
excluded from HUD floodplain management decision-making procedures
under 24 CFR 55.12(b)(2). The exclusion allowed at Sec. 55.12(b)(2)
does not apply to financial assistance for proposed rehabilitation of
multifamily residential buildings and non-residential buildings. The
exclusion is limited to ``[f]inancial 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)(8).''
Comment: Partially exempt projects in Sec. 50.20 should be exempt
from all federal environmental laws and should be moved to Sec. 50.19.
The commenter asserted that since these uses of federal funds involve
no significant changes to structures that already exist, a presumption
should apply that their repair or purchase cannot affect any federal
environmental interest protected by federal law. The commenter said
that compliance with the numerous laws listed in Sec. 50.4 imposes a
significant and costly administrative burden on Indian tribes that
assume NEPA responsibilities. The commenter recommends moving to Sec.
50.19 the categorical exclusions in Sec. Sec. 50.20(a)(2) and (a)(4)
when there is no change in the use of the structure, and revising Sec.
50.19 to require compliance with the Historic Preservation Act only if
the structure is over 50 years old.
HUD Response: The final rule makes no change to the proposed rule
in response to this comment. First, HUD notes that part 58--not part
50--is applicable to Indian tribes that assume NEPA responsibilities.
Under Sec. Sec. 58.34 and 58.35(b), HUD has excluded from review those
actions that by their nature do not trigger compliance requirements
under NEPA and related authorities listed in Sec. 58.5. However,
environmental laws listed in Sec. 50.4 and Sec. 58.5 can apply to the
actions listed in Sec. Sec. 50.20(a)(2) and (4) and the comparable
actions in Sec. Sec. 58.35(a)(3) and (5). HUD lacks the authority to
provide exemptions and exclusions from applicable statutory
requirements and therefore cannot do what the commenter suggests under
either part 50 or part 58. Compliance is mandatory whenever HUD funds
are proposed for projects and activities subject to any of the related
federal environmental laws and authorities cited in Sec. Sec. 58.5,
58.6 and 50.4 ``as applicable.'' To the extent that HUD has authority,
the rule provides relief in the case of categorical exclusions from the
environmental assessment required under NEPA as allowed by the CEQ
regulations. However, there are certain national objectives that each
of the related federal environmental laws and authorities is designed
to achieve at the project level through the support of federal
financial assistance. The national objectives cover historic
preservation, protection from toxic chemicals or radioactive materials,
protection from flood hazards, protection of wetlands and coastal
barrier resources, protection of endangered species, protection of sole
[[Page 56125]]
source aquifers, environmental justice, environmental standards, and
others.
The current provision at Sec. 58.34(a)(12) allows an exemption for
any categorical exclusion listed in Sec. 58.35(a), provided that there
are no circumstances that require compliance with any other federal
laws and authorities cited in Sec. 58.5. A recipient does not have to
submit an environmental certification and request for the release of
funds, and no further approval from HUD or the state is needed by the
recipient for the drawdown of funds to carry out exempt activities and
projects. However, the responsible entity must document in writing its
determination that each activity or project is exempt and meets the
conditions specified for such exemption under Sec. 58.34. The
conversion to exempt status does not remove the need to comply with the
other requirements at Sec. 58.6 ``as applicable.''
Comment: The final rule should clarify the phrase ``except in
extraordinary circumstances'' as used in proposed Sec. 58.22(b).
HUD Response: The final rule makes no change to the proposed rule
on this matter. The phrase ``except in extraordinary circumstances'' is
taken from CEQ regulations (40 CFR 1508.4) and is already defined at
Sec. 58.2(a)(3) of the current regulations. The term means a situation
in which an environmental assessment (EA) or environmental impact
statement (EIS) is not normally required, but due to unusual
conditions, an EA or EIS is appropriate. Indicators of unusual
conditions are: (1) Actions that are unique or without precedent; (2)
actions that are substantially similar to those that normally require
an EIS; (3) actions that are likely to alter existing HUD policy or HUD
mandates; or (4) actions that, due to unusual physical conditions on
the site or in the vicinity, have the potential for a significant
impact on the environment or in which the environment could have a
significant impact on users of the facility.
Comment: Regarding Sec. 582.230(b), the restrictions on a
recipient and others limiting proposed acquisition for a project under
Shelter Plus Care until HUD approves the recipient's environmental
certification of compliance and request for the release of funds would
totally restrict a housing authority's ability to move forward with a
project. The commenter asserted that this will defeat HUD's stated
desires to achieve a speedy start-up in Shelter Plus Care projects,
will discourage the housing authority's partners from participating in
such endeavors, and is an unwarranted incursion into their rights to
perform standard business activities.
HUD Response: The final rule makes no change to the proposed rule
in response to this comment. It appears that the commenter incorrectly
construed the provision. The added language makes conforming amendments
to the Shelter Plus Care program regulations, which do not currently
adequately reflect the applicability of part 58 procedures (see Sec.
58.1(b)(3)). Also, the Shelter Plus Care program is designed to link
rental assistance to supportive services for hard-to-serve homeless
persons with disabilities. The current regulation excludes tenant-based
rental assistance from any environmental review. Other eligible
activities may be subject to reviews. Moreover, the restriction on the
recipient, project ``partners'' and their contractors' undertaking or
committing funds for acquisition and development actions does not apply
to undertakings or commitments of non-federal funds for a development
by a party before the party applies to the Shelter Plus Care recipient
for federal funds for the project. Where a third party has begun a
project in good faith as a private project, the recipient is not
precluded from considering a later application for federal assistance
for the project, but must advise the third party applicant to cease
further choice-limiting actions on the project until the environmental
review is completed.
IV. List of HUD Programs Covered by 24 CFR Part 58
For ready reference and convenience of the reader, the below list
indicates the HUD programs that are covered by 24 CFR part 58 by
program name, program regulation, program office, and OMB number found
in the Catalog of Federal Domestic Assistance. This list is not
exhaustive as other programs may be added in the future. The final rule
at Sec. 58.1(b) includes the references to the statutory authorization
of assumption of HUD environmental responsibilities by state, local,
and tribal governments.
----------------------------------------------------------------------------------------------------------------
OMB number Name of program Regulation citation Program office
----------------------------------------------------------------------------------------------------------------
14.188............................... Housing Finance Agencies 24 CFR part 266........ Housing \1\
Risk Sharing Project.
14.218............................... Community Development 24 CFR part 570........ CPD \2\
Block Grants/Entitlement
Grants.
14.219............................... Community Development 24 CFR part 570........ CPD
Block Grants/Small
Cities Program.
14.225............................... Community Development 24 CFR part 570........ CPD
Block Grants/Special
Purpose Grants/Insular
Areas.
14.228............................... Community Development 24 CFR part 570........ CPD
Block Grants/State
Program.
14.231............................... Emergency Shelter Grants 24 CFR part 576........ CPD
Program.
14.235............................... Supportive Housing 24 CFR part 583........ CPD
Program.
14.238............................... Shelter Plus Care........ 24 CFR part 582........ CPD
14.239............................... HOME Investment 24 CFR part 92......... CPD
Partnerships Program.
14.241............................... Housing Opportunities for 24 CFR part 574........ CPD
Persons with AIDS.
14.246............................... Economic Development CFR: N.A. [NOFA \3\ CPD
Initiative Grants. references 24 CFR part
570].
14.246............................... Brownfield Economic CFR: N.A. [NOFA CPD
Development Initiative references 24 CFR part
Grants. 570].
14.246............................... Economic Development ....................... COD
Initiative--Special
Projects
(Congressionally
earmarked).
14.247............................... Self-Help Homeownership NOFA................... CPD
Opportunity Program.
[[Page 56126]]
14.248............................... Community Development 24 CFR part 570........ CPD
Block Grants/Section 108
Loan Guarantees.
14.249............................... Section 8 Moderate 24 CFR part 582........ CPD
Rehabilitation Single
Room Occupancy.
14.850............................... Public Housing Operating 24 CFR part 990........ PIH
Fund Program.
14.862............................... Indian Community 24 CFR part 1003....... PIH \4\
Development Block Grant
Program.
14.865............................... Loan Guarantees for 24 CFR part 1005....... PIH
Indian Housing.
14.866............................... Demolition and NOFA, 24 CFR part 970.. PIH
Revitalization of
Severely Distressed
Public Housing.
14.867............................... Indian Housing Block 24 CFR part 1000....... PIH
Grants.
14.869............................... Title VI Federal 24 CFR part 1000....... PIH
Guarantee for Financing
Tribal Housing
Activities.
14.871............................... Section 8 Project-Based 24 CFR part 983........ PIH
Voucher Program.
14.872............................... Public Housing Capital 24 CFR part 905........ PIH
Fund.
14.873............................... Native Hawaiian Housing 24 CFR part 1006....... PIH
Block Grants.
14.900............................... Lead-Based Paint Hazard NOFA................... OHHLHC \5\
Control in Privately-
Owned Housing.
----------------------------------------------------------------------------------------------------------------
\1\ Office of Housing--Federal Housing Commissioner.
\2\ Office of Community Planning and Development.
\3\ Notice of Funding Availability.
\4\ Office of Public and Indian Housing.
\5\ Office of Healthy Homes and Lead Hazard Control.
Findings and Certifications
Environmental Impact
A Finding of No Significant Impact with respect to the environment
for this rule was made at the proposed rule stage in accordance with
HUD regulations at 24 CFR part 50, which implement section 102(2)(C) of
NEPA. 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
Regulations, Office of the General Counsel, Department of Housing and
Urban Development, Room 10276, 451 Seventh Street, SW., Washington, DC
20410-5000.
Executive Order 12866, Regulatory Planning and Review
The Office of Management and Budget (OMB) reviewed this rule under
Executive Order 12866, ``Regulatory Planning and Review.'' OMB
determined that this rule is a ``significant regulatory action'' as
defined in section 3(f) of the Order (although not an economically
significant regulatory action under the Order). Any changes made to
this rule as a result of that review are identified in the docket file,
which is available for public inspection in the Office of Regulations,
Office of the General Counsel, Department of Housing and Urban
Development, Room 10276, 451 Seventh Street, SW., Washington, DC 20410-
5000.
Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
establishes requirements for federal agencies to assess the effects of
their regulatory actions on state, local, and tribal governments and
the private sector. This final rule does not impose a federal mandate
on any state, local, or tribal government, or on the private sector,
within the meaning of the Unfunded Mandates Reform Act of 1995.
Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed this rule before publication and by
approving it certifies that this rule would not have a significant
economic impact on a substantial number of small entities. There are no
anti-competitive discriminatory aspects of the rule with regard to
small entities, and there are not any unusual procedures that would
need to be complied with by small entities.
Executive Order 13132, Federalism
Executive Order 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 the rule preempts state
law, unless the agency meets the consultation and funding requirements
of section 6 of the Executive Order. This final rule does not have
Federalism implications and does not impose substantial direct
compliance costs on state and local governments nor preempt state law
within the meaning of the Executive Order.
List of Subjects
24 CFR Part 50
Environmental impact statements.
24 CFR Part 58
Community Development Block Grants, Environmental Impact
Statements, Grant programs--housing and community development,
Reporting and recordkeeping requirements.
24 CFR Part 574
Community facilities, Grant programs--health programs, Grant
programs--housing and community development, Grant programs--social
programs, HIV/AIDS, Low and moderate income housing, Reporting and
recordkeeping requirements.
24 CFR Part 582
Grant programs--housing and community development, Homeless, Rent
subsidies, Reporting and recordkeeping requirements.
24 CFR Part 583
Community facilities, Grant programs--housing and community
development, Reporting and recordkeeping requirements.
24 CFR Part 970
Grant programs--housing and community development, Public housing,
Reporting and recordkeeping requirements.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance numbers are 14.165-
18.900.
[[Page 56127]]
Also see section IV of the Supplementary Information.
0
Accordingly, for the reasons described in the preamble, the Department
amends 24 CFR parts 50, 58, 574, 582, 583, and 970 as follows:
PART 50--PROTECTION AND ENHANCEMENT OF ENVIRONMENTAL QUALITY
0
1. The authority citation for part 50 continues to read as follows:
Authority: 42 U.S.C. 3535(d) and 4332; and Executive Order
11991, 3 CFR, 1977 Comp., p. 123.
0
2. Amend Sec. 50.19 by revising paragraph (b)(15) to read as follows:
Sec. 50.19 Categorical exclusions not subject to the Federal laws and
authorities cited in Sec. 50.4.
* * * * *
(b) * * *
(15) Activities to assist homebuyers to purchase existing dwelling
units or dwelling units under construction, including closing costs and
downpayment assistance, interest buydowns, and similar activities that
result in the transfer of title.
* * * * *
0
3. Amend Sec. 50.20 by revising paragraphs (a)(2), (a)(3), and (a)(4),
to read as follows:
Sec. 50.20 Categorical exclusions subject to the Federal laws and
authorities cited in Sec. 50.4.
(a) * * *
(2) Rehabilitation of buildings and improvements when the following
conditions are met:
(i) In the case of a building for residential use (with one to four
units), the density is not increased beyond four units, the land use is
not changed, and the footprint of the building is not increased in a
floodplain or in a wetland;
(ii) In the case of multifamily residential buildings:
(A) Unit density is not changed more than 20 percent;
(B) The project does not involve changes in land use from
residential to non-residential; and
(C) The estimated cost of rehabilitation is less than 75 percent of
the total estimated cost of replacement after rehabilitation.
(iii) In the case of non-residential structures, including
commercial, industrial, and public buildings:
(A) The facilities and improvements are in place and will not be
changed in size nor capacity by more than 20 percent; and
(B) The activity does not involve a change in land use, such as
from non-residential to residential, commercial to industrial, or from
one industrial use to another.
(3)(i) An individual action on up to four dwelling units where
there is a maximum of four units on any one site. The units can be four
one-unit buildings or one four-unit building or any combination in
between; or
(ii) An individual action on a project of five or more housing
units developed on scattered sites when the sites are more than 2,000
feet apart and there are not more than four housing units on any one
site.
(iii) Paragraphs (a)(3)(i) and (ii) of this section do not apply to
rehabilitation of a building for residential use (with one to four
units) (see paragraph (a)(2)(i) of this section).
(4) Acquisition (including leasing) or disposition of, or equity
loans on an existing structure, or acquisition (including leasing) of
vacant land provided that the structure or land acquired, financed, or
disposed of will be retained for the same use.
* * * * *
PART 58--ENVIRONMENTAL REVIEW PROCEDURES FOR ENTITIES ASSUMING HUD
ENVIRONMENTAL RESPONSIBILITIES
0
4. The authority citation for part 58 is revised to read as follows:
Authority: 12 U.S.C. 1707 note, 1715z-13a(k); 25 U.S.C. 4115 and
4226; 42 U.S.C. 1437x, 3535(d), 3547, 4332, 4852, 5304(g), 11402,
12838, and 12905(h); title II of Pub. L. 105-276; E.O. 11514 as
amended by E.O 11991, 3 CFR 1977 Comp., p. 123.
0
5. Amend Sec. 58.1 by removing paragraph (b)(2) and designating it as
``reserved,'' redesignating and revising existing paragraph (b)(3) as
paragraph (b)(3)(i), adding paragraph (b)(3)(ii), revising paragraphs
(b)(6)(i), (ii), and (iii), deleting ``and'' at the end of paragraph
(b)(8), replacing the period at the end of paragraph (b)(9) with a
semicolon, and adding new paragraphs (b)(10), (11), (12), and new
paragraphs (c) and (d), to read as follows:
Sec. 58.1 Purpose and applicability.
* * * * *
(b) * * *
(2) [Reserved]
(3)(i) Grants to states and units of general local government under
the Emergency Shelter Grant Program, Supportive Housing Program (and
its predecessors, the Supportive Housing Demonstration Program (both
Transitional Housing and Permanent Housing for Homeless Persons with
Disabilities) and Supplemental Assistance for Facilities to Assist the
Homeless), Shelter Plus Care Program, Safe Havens for Homeless
Individuals Demonstration Program, and Rural Homeless Housing
Assistance, authorized by Title IV of the McKinney-Vento Homeless
Assistance Act, in accordance with section 443 (42 U.S.C. 11402);
(ii) Grants beginning with Fiscal Year 2001 to private non-profit
organizations and housing agencies under the Supportive Housing Program
and Shelter Plus Care Program authorized by Title IV of the McKinney-
Vento Homeless Assistance Act, in accordance with section 443 (42
U.S.C. 11402);
* * *
(6)(i) Public Housing Programs under Title I of the United States
Housing Act of 1937, including HOPE VI grants authorized under section
24 of the Act for Fiscal Year 2000 and later, in accordance with
section 26 (42 U.S.C. 1437x);
(ii) Grants for the revitalization of severely distressed public
housing (HOPE VI) for Fiscal Year 1999 and prior years, in accordance
with Title II of the Departments of Veterans Affairs and Housing and
Urban Development, and Independent Agencies Appropriations Act, 1999
(Pub. L. 105-276, approved October 21, 1998); and
(iii) Assistance administered by a public housing agency under
section 8 of the United States Housing Act of 1937, except for
assistance provided under part 886 of this title, in accordance with
section 26 (42 U.S.C. 1437x);
* * *
(10) Assistance provided under the Native American Housing
Assistance and Self-Determination Act of 1996 (NAHASDA), in accordance
with:
(i) Section 105 for Indian Housing Block Grants and Federal
Guarantees or Financing for Tribal Housing Authorities (25 U.S.C. 4115
and 4226); and
(ii) Section 806 for Native Hawaiian Housing Block Grants (25
U.S.C. 4226);
(11) Indian Housing Loan Guarantees authorized by section 184 of
the Housing and Community Development Act of 1992, in accordance with
section 184(k) (12 U.S.C. 1715z-13a(k)); and
(12) Grants for Housing Opportunities for Persons with AIDS (HOPWA)
under the AIDS Housing Opportunity Act, as follows: competitive grants
beginning with Fiscal Year 2001 and all formula grants, in accordance
with section 856(h) (42 U.S.C. 12905(h)); all grants for Fiscal Year
1999 and prior years, in accordance with section 207(c) of the
Departments of Veterans Affairs and Housing and Urban Development, and
Independent Agencies Appropriations
[[Page 56128]]
Act, 1999 (Pub. L. 105-276, approved October 21, 1998).
(c) When HUD assistance is used to help fund a revolving loan fund
that is administered by a recipient or another party, the activities
initially receiving assistance from the fund are subject to the
requirements in this part. Future activities receiving assistance from
the revolving loan fund, after the fund has received loan repayments,
are subject to the environmental review requirements if the rules of
the HUD program that initially provided assistance to the fund continue
to treat the activities as subject to the Federal requirements. If the
HUD program treats the activities as not being subject to any Federal
requirements, then the activities cease to become Federally-funded
activities and the provisions of this part do not apply.
(d) To the extent permitted by applicable laws and the applicable
regulations of the Council on Environmental Quality, the Assistant
Secretary for Community Planning and Development may, for good cause
and with appropriate conditions, approve waivers and exceptions or
establish criteria for exceptions from the requirements of this part.
0
6. Amend Sec. 58.2 by revising paragraphs (a)(5)(v) and (a)(5)(vii),
adding new paragraphs (a)(5)(ix) and (x), revising paragraphs (a)(6),
(a)(7) introductory text, (a)(7)(i) and (a)(7)(ii) introductory text,
and removing paragraphs (a)(7)(ii)(D) and (E), to read as follows:
Sec. 58.2 Terms, abbreviations and definitions.
(a) * * *
(5) * * *
(v) With respect to Public Housing Programs under Sec.
58.1(b)(6)(i), fiscal year 1999 and prior HOPE VI grants under Sec.
58.1(b)(6)(ii) or Section 8 assistance under Sec. 58.1(b)(6)(iii), a
public housing agency;
* * *
(vii) With respect to the FHA Multifamily Housing Finance Agency
Program under 58.1(b)(8), a qualified housing finance agency;
* * *
(ix)(A) With respect to NAHASDA assistance under Sec. 58.1(b)(10),
the Indian tribe or the Department of Hawaiian Home Lands; and
(B) With respect to the Section 184 Indian Housing Loan Guarantee
program under Sec. 58.1(b)(11), the Indian tribe.
(x) With respect to the Shelter Plus Care and Supportive Housing
Programs under Sec. 58.1(b)(3)(ii), nonprofit organizations and other
entities.
(6) Release of funds. In the case of the FHA Multifamily Housing
Finance Agency Program under Sec. 58.1(b)(8), Release of Funds, as
used in this part, refers to HUD issuance of a firm approval letter,
and Request for Release of Funds refers to a recipient's request for a
firm approval letter. In the case of the Section 184 Indian Housing
Loan Guarantee program under Sec. 58.1(b)(11), Release of Funds refers
to HUD's issuance of a commitment to guarantee a loan, or if there is
no commitment, HUD's issuance of a certificate of guarantee.
(7) Responsible Entity. Responsible Entity means:
(i) With respect to environmental responsibilities under programs
listed in Sec. 58.1(b)(1), (2), (3)(i), (4), and (5), a recipient
under the program.
(ii) With respect to environmental responsibilities under the
programs listed in Sec. 58.1(b)(3)(ii) and (6) through (12), a state,
unit of general local government, Indian tribe or Alaska Native
Village, or the Department of Hawaiian Home Lands, when it is the
recipient under the program. Under the Native American Housing
Assistance and Self-Determination Act of 1996 (25 U.S.C. 4101 et seq.)
listed in Sec. 58.1(b)(10)(i), the Indian tribe is the responsible
entity whether or not a Tribally Designated Housing Entity is
authorized to receive grant amounts on behalf of the tribe. The Indian
tribe is also the responsible entity under the Section 184 Indian
Housing Loan Guarantee program listed in Sec. 58.1(b)(11). Regional
Corporations in Alaska are considered Indian tribes in this part. Non-
recipient responsible entities are designated as follows:
* * * * *
0
7. Amend Sec. 58.4 by revising paragraph (b)(2), removing paragraph
(b)(3), and adding a new paragraph (c) to read as follows:
Sec. 58.4 Assumption authority.
* * * * *
(b) * * *
(2) States must exercise HUD's responsibilities in accordance with
Sec. 58.18, with respect to approval of a unit of local government's
environmental certification and RROF for a HUD assisted project funded
through the state. Approval by the state of a unit of local
government's certification and RROF satisfies the Secretary's
responsibilities under NEPA and the related laws cited in Sec. 58.5.
(c) Particular responsibilities of Indian tribes. An Indian tribe
may, but is not required to, assume responsibilities for environmental
review, decision-making and action for programs authorized by the
Native American Housing Assistance and Self-Determination Act of 1996
(25 U.S.C. 4101 et seq.) (other than title VIII) or section 184 of the
Housing and Community Development Act of 1992 (12 U.S.C. 1715z-13a).
The tribe must make a separate decision regarding assumption of
responsibilities for each of these Acts and communicate that decision
in writing to HUD. If the tribe assumes these responsibilities, the
requirements of this part shall apply. If a tribe formally declines
assumption of these responsibilities, they are retained by HUD and the
provisions of part 50 of this title apply.
0
8. Amend Sec. 58.5 by revising paragraphs (a)(1) and (i) to read as
follows:
Sec. 58.5 Related Federal laws and authorities.
* * * * *
(a) Historic properties. (1) The National Historic Preservation Act
of 1966 (16 U.S.C. 470 et seq.), particularly sections 106 and 110 (16
U.S.C. 470 and 470h-2).
* * * * *
(i) HUD environmental standards. (1) Applicable criteria and
standards specified in part 51 of this title, other than the runway
clear zone notification requirement in Sec. 51.303(a)(3).
(2)(i) Also, it is HUD policy that all properties that are being
proposed for use in HUD programs be free of hazardous materials,
contamination, toxic chemicals and gases, and radioactive substances,
where a hazard could affect the health and safety of occupants or
conflict with the intended utilization of the property.
(ii) The environmental review of multifamily housing with five or
more dwelling units (including leasing), or non-residential property,
must include the evaluation of previous uses of the site or other
evidence of contamination on or near the site, to ensure that the
occupants of proposed sites are not adversely affected by any of the
hazards listed in paragraph (i)(2)(i) of this section.
(iii) Particular attention should be given to any proposed site on
or in the general proximity of such areas as dumps, landfills,
industrial sites, or other locations that contain, or may have
contained, hazardous wastes.
(iv) The responsible entity shall use current techniques by
qualified professionals to undertake investigations determined
necessary.
* * * * *
0
9. Revise Sec. 58.10 to read as follows:
[[Page 56129]]
Sec. 58.10 Basic environmental responsibility.
In accordance with the provisions of law cited in Sec. 58.1(b),
except as otherwise provided in Sec. 58.4(c), the responsible entity
must assume the environmental responsibilities for projects under
programs cited in Sec. 58.1(b). In doing so, the responsible entity
must comply with the provisions of NEPA and the CEQ regulations
contained in 40 CFR parts 1500 through 1508, including the requirements
set forth in this part.
0
10. Amend Sec. 58.11 by revising paragraph (b) to read as follows:
Sec. 58.11 Legal capacity and performance.
* * * * *
(b) If a public housing, special project, HOPWA, Supportive
Housing, Shelter Plus Care, or Self-Help Homeownership Opportunity
recipient that is not a responsible entity objects to the non-recipient
responsible entity conducting the environmental review on the basis of
performance, timing, or compatibility of objectives, HUD will review
the facts to determine who will perform the environmental review.
* * * * *
Sec. 58.17 [Removed]
0
11. Remove and reserve Sec. 58.17.
0
12. Revise Sec. 58.18 to read as follows:
Sec. 58.18 Responsibilities of States assuming HUD environmental
responsibilities.
States that elect to administer a HUD program shall ensure that the
program complies with the provisions of this part. The state must:
(a) Designate the state agency or agencies that will be responsible
for carrying out the requirements and administrative responsibilities
set forth in subpart H of this part and which will:
(1) Develop a monitoring and enforcement program for post-review
actions on environmental reviews and monitor compliance with any
environmental conditions included in the award.
(2) Receive public notices, RROFs, and certifications from
recipients pursuant to Sec. Sec. 58.70 and 58.71; accept objections
from the public and from other agencies (Sec. 58.73); and perform
other related responsibilities regarding releases of funds.
(b) Fulfill the state role in subpart H relative to the time period
set for the receipt and disposition of comments, objections and appeals
(if any) on particular projects.
0
13. Revise Sec. 58.22 to read as follows:
Sec. 58.22 Limitations on activities pending clearance.
(a) Neither a recipient nor any participant in the development
process, including public or private nonprofit or for-profit entities,
or any of their contractors, may commit HUD assistance under a program
listed in Sec. 58.1(b) on an activity or project until HUD or the
state has approved the recipient's RROF and the related certification
from the responsible entity. In addition, until the RROF and the
related certification have been approved, neither a recipient nor any
participant in the development process may commit non-HUD funds on or
undertake an activity or project under a program listed in Sec.
58.1(b) if the activity or project would have an adverse environmental
impact or limit the choice of reasonable alternatives.
(b) If a project or activity is exempt under Sec. 58.34, or is
categorically excluded (except in extraordinary circumstances) under
Sec. 58.35(b), no RROF is required and the recipient may undertake the
activity immediately after the responsible entity has documented its
determination as required in Sec. 58.34(b) and Sec. 58.35(d), but the
recipient must comply with applicable requirements under Sec. 58.6.
(c) If a recipient is considering an application from a prospective
subrecipient or beneficiary and is aware that the prospective
subrecipient or beneficiary is about to take an action within the
jurisdiction of the recipient that is prohibited by paragraph (a) of
this section, then the recipient will take appropriate action to ensure
that the objectives and procedures of NEPA are achieved.
(d) An option agreement on a proposed site or property is allowable
prior to the completion of the environmental review if the option
agreement is subject to a determination by the recipient on the
desirability of the property for the project as a result of the
completion of the environmental review in accordance with this part and
the cost of the option is a nominal portion of the purchase price.
There is no constraint on the purchase of an option by third parties
that have not been selected for HUD funding, have no responsibility for
the environmental review and have no say in the approval or disapproval
of the project.
(e) Self-Help Homeownership Opportunity Program (SHOP). In
accordance with section 11(d)(2)(A) of the Housing Opportunity Program
Extension Act of 1996 (42 U.S.C. 12805 note), an organization,
consortium, or affiliate receiving assistance under the SHOP program
may advance nongrant funds to acquire land prior to completion of an
environmental review and approval of a Request for Release of Funds
(RROF) and certification, notwithstanding paragraph (a) of this
section. Any advances to acquire land prior to approval of the RROF and
certification are made at the risk of the organization, consortium, or
affiliate and reimbursement for such advances may depend on the result
of the environmental review. This authorization is limited to the SHOP
program only and all other forms of HUD assistance are subject to the
limitations in paragraph (a) of this section.
(f) Relocation. Funds may be committed for relocation assistance
before the approval of the RROF and related certification for the
project provided that the relocation assistance is required by 24 CFR
part 42.
0
14. Amend Sec. 58.33 by revising paragraph (b) to read as follows:
Sec. 58.33 Emergencies.
* * * * *
(b) If funds are needed on an emergency basis and adherence to
separate comment periods would prevent the giving of assistance during
a Presidentially declared disaster, or during a local emergency that
has been declared by the chief elected official of the responsible
entity who has proclaimed that there is an immediate need for public
action to protect the public safety, the combined Notice of FONSI and
Notice of Intent to Request Release of Funds (NOI/RROF) may be
disseminated and/or published simultaneously with the submission of the
RROF. The combined Notice of FONSI and NOI/RROF shall state that the
funds are needed on an emergency basis due to a declared disaster and
that the comment periods have been combined. The Notice shall also
invite commenters to submit their comments to both HUD and the
responsible entity issuing the notice to ensure that these comments
will receive full consideration.
0
15. Amend Sec. 58.35 as follows:
a. Redesignating paragraphs (a)(3)(i) and (a)(3)(ii) as paragraphs
(a)(3)(ii) and (a)(3)(iii);
b. Adding a new paragraph (a)(3)(i);
c. Revising paragraphs (a)(4) and (a)(5); and
d. Adding a new paragraph (b)(7).
The additions and revisions read as follows:
Sec. 58.35 Categorical exclusions.
(a) * * *
(3) * * *
[[Page 56130]]
(i) In the case of a building for residential use (with one to four
units), the density is not increased beyond four units, the land use is
not changed, and the footprint of the building is not increased in a
floodplain or in a wetland;
(ii) * * *
(iii) * * *
(4)(i) An individual action on up to four dwelling units where
there is a maximum of four units on any one site. The units can be four
one-unit buildings or one four-unit building or any combination in
between; or
(ii) An individual action on a project of five or more housing
units developed on scattered sites when the sites are more than 2,000
feet apart and there are not more than four housing units on any one
site.
(iii) Paragraphs (a)(4)(i) and (ii) of this section do not apply to
rehabilitation of a building for residential use (with one to four
units) (see paragraph (a)(3)(i) of this section).
(5) Acquisition (including leasing) or disposition of, or equity
loans on an existing structure, or acquisition (including leasing) of
vacant land provided that the structure or land acquired, financed, or
disposed of will be retained for the same use.
* * * * *
(b) * * *
(7) Approval of supplemental assistance (including insurance or
guarantee) to a project previously approved under this part, if the
approval is made by the same responsible entity that conducted the
environmental review on the original project and re-evaluation of the
environmental findings is not required under Sec. 58.47.
* * * * *
0
16. Revise Sec. 58.45 to read as follows:
Sec. 58.45 Public comment periods.
Required notices must afford the public the following minimum
comment periods, counted in accordance with Sec. 58.21:
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
(a) Notice of Finding of No Significant Impact (FONSI).. 15 days when published or, if no publication, 18 days
when mailing and posting
(b) Notice of Intent to Request Release of Funds (NOI- 7 days when published or, if no publication, 10 days
RROF). when mailing and posting
(c) Concurrent or combined notices...................... 15 days when published or, if no publication, 18 days
when mailing and posting
----------------------------------------------------------------------------------------------------------------
0
17. Amend Sec. 58.72 by revising paragraph (b) to read as follows:
Sec. 58.72 HUD or State actions on RROFs and certifications.
* * * * *
(b) HUD (or the state) may disapprove a certification and RROF if
it has knowledge that the responsible entity or other participants in
the development process have not complied with the items in Sec.
58.75, or that the RROF and certification are inaccurate.
* * * * *
0
18. Amend Sec. 58.75 by revising paragraph (e) to read as follows:
Sec. 58.75 Permissible bases for objections.
* * * * *
(e) The recipient or other participants in the development process
have committed funds, incurred costs or undertaken activities not
authorized by this part before release of funds and approval of the
environmental certification by HUD (or the state).
* * * * *
PART 574--HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS
0
19. The authority citation for part 574 continues to read as follows:
Authority: 42 U.S.C. 3535(d) and 12901-12912.
0
20. Revise Sec. 574.510 to read as follows:
Sec. 574.510 Environmental procedures and standards.
(a) Activities under this part are subject to HUD environmental
regulations in part 58 of this title, except that HUD will perform an
environmental review in accordance with part 50 of this title for any
competitive grant for Fiscal Year 2000.
(b) The recipient, its project partners and their contractors may
not acquire, rehabilitate, convert, lease, repair, dispose of,
demolish, or construct property for a project under this part, or
commit or expend HUD or local funds for such eligible activities under
this part, until the responsible entity (as defined in Sec. 58.2 of
this title) has completed the environmental review procedures required
by part 58 and the environmental certification and RROF have been
approved (or HUD has performed an environmental review and the
recipient has received HUD approval of the property). HUD will not
release grant funds if the recipient or any other party commits grant
funds (i.e., incurs any costs or expenditures to be paid or reimbursed
with such funds) before the recipient submits and HUD approves its RROF
(where such submission is required).
(c) For activities under a grant to a nonprofit entity that would
generally be subject to review under part 58, HUD may make a finding in
accordance with Sec. 58.11(d) and may itself perform the environmental
review under the provisions of part 50 of this title if the recipient
nonprofit entity objects in writing to the responsible entity's
performing the review under part 58. Irrespective of whether the
responsible entity in accord with part 58 (or HUD in accord with part
50) performs the environmental review, the recipient shall supply all
available, relevant information necessary for the responsible entity
(or HUD, if applicable) to perform for each property any environmental
review required by this part. The recipient also shall carry out
mitigating measures required by the responsible entity (or HUD, if
applicable) or select alternate eligible property.
PART 582--SHELTER PLUS CARE
0
21. The authority citation for part 582 continues to read as follows:
Authority: 42 U.S.C. 3535(d) and 11403-11407b.
0
22. Revise Sec. 582.230 to read as follows:
Sec. 582.230 Environmental review.
(a) Activities under this part are subject to HUD environmental
regulations in part 58 of this title, except that HUD will perform an
environmental review in accordance with part 50 of this title prior to
its approval of any conditionally selected applications from PHAs for
Fiscal Year 2000 and prior years for other than the SRO component. For
activities under a grant to a PHA that generally would be subject to
review under part 58, HUD may make a finding in accordance with Sec.
58.11(d) and may itself perform the environmental review under the
provisions of part 50 of this title if the recipient PHA objects in
writing to the responsible entity's performing the review under part
58. Irrespective of whether the responsible entity in accord with part
58 (or HUD in accord with
[[Page 56131]]
part 50) performs the environmental review, the recipient shall supply
all available, relevant information necessary for the responsible
entity (or HUD, if applicable) to perform for each property any
environmental review required by this part. The recipient also shall
carry out mitigating measures required by the responsible entity (or
HUD, if applicable) or select alternate eligible property. HUD may
eliminate from consideration any application that would require an
Environmental Impact Statement (EIS).
(b) The recipient, its project partners and their contractors may
not acquire, rehabilitate, convert, lease, repair, dispose of,
demolish, or construct property for a project under this part, or
commit or expend HUD or local funds for such eligible activities under
this part, until the responsible entity (as defined in Sec. 58.2 of
this title) has completed the environmental review procedures required
by part 58 and the environmental certification and RROF have been
approved or HUD has performed an environmental review under part 50 and
the recipient has received HUD approval of the property. HUD will not
release grant funds if the recipient or any other party commits grant
funds (i.e., incurs any costs or expenditures to be paid or reimbursed
with such funds) before the recipient submits and HUD approves its RROF
(where such submission is required).
PART 583--SUPPORTIVE HOUSING
0
23. The authority citation for part 583 continues to read as follows:
Authority: 42 U.S.C. 3535(d) and 11389.
0
24. Revise Sec. 583.230 to read as follows:
Sec. 583.230 Environmental review.
(a) Activities under this part are subject to HUD environmental
regulations in part 58 of this title, except that HUD will perform an
environmental review in accordance with part 50 of this title prior to
its approval of any conditionally selected applications for Fiscal Year
2000 and prior years that were received directly from private nonprofit
entities and governmental entities with special or limited purpose
powers. For activities under a grant that generally would be subject to
review under part 58, HUD may make a finding in accordance with Sec.
58.11(d) and may itself perform the environmental review under the
provisions of part 50 of this title if the recipient objects in writing
to the responsible entity's performing the review under part 58.
Irrespective of whether the responsible entity in accord with part 58
(or HUD in accord with part 50) performs the environmental review, the
recipient shall supply all available, relevant information necessary
for the responsible entity (or HUD, if applicable) to perform for each
property any environmental review required by this part. The recipient
also shall carry out mitigating measures required by the responsible
entity (or HUD, if applicable) or select alternate eligible property.
HUD may eliminate from consideration any application that would require
an Environmental Impact Statement (EIS).
(b) The recipient, its project partners and their contractors may
not acquire, rehabilitate, convert, lease, repair, dispose of, demolish
or construct property for a project under this part, or commit or
expend HUD or local funds for such eligible activities under this part,
until the responsible entity (as defined in Sec. 58.2 of this title)
has completed the environmental review procedures required by part 58
and the environmental certification and RROF have been approved or HUD
has performed an environmental review under part 50 and the recipient
has received HUD approval of the property. HUD will not release grant
funds if the recipient or any other party commits grant funds (i.e.,
incurs any costs or expenditures to be paid or reimbursed with such
funds) before the recipient submits and HUD approves its RROF (where
such submission is required).
PART 970--PUBLIC HOUSING PROGRAM--DEMOLITION OR DISPOSITION OF
PUBLIC HOUSING PROJECTS
0
25. The authority citation for part 970 continues to read as follows:
Authority: 42 U.S.C. 1437p and 3535(d).
0
26. Amend Sec. 970.4 by revising paragraph (b), removing paragraph (c)
and designating it as reserved, to read as follows:
Sec. 970.4 General requirements for HUD approval of applications for
demolition or disposition.
* * * * *
(b) Environmental review. Activities under this part are subject to
HUD environmental regulations in part 58 of this title. However, HUD
may make a finding in accordance with Sec. 58.11(d) and may itself
perform the environmental review under the provisions of part 50 of
this title if a PHA objects in writing to the responsible entity's
performing the review under part 58.
(c) [Reserved]
* * * * *
Dated: September 15, 2003.
Mel Martinez,
Secretary.
[FR Doc. 03-24265 Filed 9-26-03; 8:45 am]
BILLING CODE 4210-29-P